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Case Study
A rice seller aimed to sell rice to garment workers of a particular area. He discovered that more than three thousand workers lived in that congested area who were mostly female. He opened a new outlet in the midst of the area and did extensive advertising to grab the attention of the workers. Unfortunately, he failed to sell any rice despite having a variety. The seller decided to understand his customers’ want by conducting a survey. He learned that garment workers start their duties at 8 AM daily which gave them a very limited time to prepare their meals, leading the workers having a time constraint for cooking. Another thing was that their salary was so low that they had to consider consumption of gasoline for cooking. The workers wanted something that could be cooked in a short time as well as with little gasoline. This insight was totally bolt from the blue for the seller, and he wasted no time in developing a product responding to demand. Finally, the seller introduced half-boiled rice, which became very popular in that particular area as half-boiled rice generally takes less time to be cooked than conventional rice.
This case gives a better understanding about the usage of consumer insights.
Introduction
This case study explores the role of consumer insights in product development within the rice retail industry. Consumer insights demonstrate a deep understanding of consumers' preferences, behaviors, demands and motivations. Obtaining consumer insights requires multiple surveys, various research methods, interviews, social media analysis, customer satisfaction surveys, purchase behavior analysis, etc. The goal of consumer insights is to develop new products and make actionable business decisions. Consumer insights are not limited to surface-level data. It always goes beyond by drawing relationship among insights and breaking data into actionable information. This deeper understanding helps businesses understand consumer needs and tailor their offerings accordingly.
Components of Consumer Insights
Behavioral data: It discusses how consumers interact with products and services. It includes historical data on purchase behavior, Usage patterns and brand loyalty
Demographic data: Demographic data is statistical information of targeted customers about their age, race, gender, income and education level, etc.
Psychographic data: Psychographic data mainly refers consumers' lifestyle, attitude towards product and services and values.
Feedback & opinion: These are some direct inputs from consumers through survey, comments and interviews about the product quality and major lacking.
How Consumer Insights Help in Product Development?
Product development decision is not something to take lightly as it costs continuous effort, financial assistance and time. Organizations generally try to be cost efficient as well as innovative. So, failure in their product development stages costs them huge but proper utilization of consumer insights increases the chances of developing a product which can cater market gaps efficiently. Followings are the areas where consumer insights become blessing for organizations in product development,
Minimize cost
Since product development costs time, efforts and money, it's not meaningful to develop a product that can't compete with existing products. It will also question the ability of innovation of an organization which will lead that organization to downfall. Rather an organization can research for gathering convenient consumer insights to understand the potentiality of a product before developing it. It'll help to select the correct product to fulfill market gaps. Ultimately, it will save organizations from wastage in product development stages.
Feature selection
A product can be designed in a variety of feature combinations. Each feature including quantity, weight, outlook, sustainability can insist customer preference. Consumers also demand various combinations of feature in a single product so that the product can comply with their budget and preferences. Careful research of consumer insights gives organizations ideas about the combinations that customers are looking for. Understanding perfect combination helps organizations select feature for the product.
Facilitate marketing
Marketing process deals with numerous statistical information to reach the target customers. It should always be done carefully as it connects products with consumers. Most of the time marketing fails to reach target customers if consumer insights are not used accordingly to understand core consumer base.
Phases of Product Development
Product development is not something that happens overnight. It takes multiple stages to be completed. Product development requires research and innovation because product demand will be changing with the change of generations. Only innovative organizations can grasp the opportunity of this divulging nature of product development. Organizations never know which product will be demanding in future but they can predict and can get prepared for future demand using consumer insights. Organizations usually follow the following steps while developing a new product.
Discovery and exploration
At this stage, Organizations decide who their target customers are and what their demographics are to understand for whom product will be developed. Once target customers are set, organizations start to discover their needs, wants, preferences to justify the investment in product development. Exploring pain points of target customers is the core task of this stage.
Concept screening
when organizations get a concept, they go through this step to collect feedback from the end users. Organizations try to know which parts of the concept consumers are liking the most and what are their concern about the concept. It helps to rethink about the concept. After the screening process, organizations will remain with more concrete concept that stand out. On the other hand, if organizations fail to identify the prospective concept and fund without using customer insights, the result is always awful for any organization. If we look at startup failure rates in the whole world, we'll get an idea about how many businesses are failing within one year of entering the market. The rate is 90% approximately. Core reason of their failure is lack of consumer insights which means lack of proper screening.
Feature and benefit validation
This stage is also known as value proposition stage where organizations become ready to present what value they are adding to consumers' life. After developing a clear concept about the product, organizations dive into breaking-down the feature and benefit so that the product can meet demand in most comfortable way. When there are competitors and multiple choices available in the market, consumers try to find most comfortable and updated product. In this stage organizations have to design the product in a way such that it ensures availability of all relevant feature to cater consumers' desire.
Launch
In this final phase, organizations now have a final product to launch but they have to think about strategic decisions regarding market entry. If product has competitors, launching requires a strategic adaptation to stand out. Organizations observe price elasticity and bundle choices mainly in this stage. Organizations try to set a price which seems logical to the customers for the value propositions as well as they try to create bundles of different price levels to ensure encountering purchasing decision variability. Before launching, optimal packaging is another concern for product development.
How consumer Insights Facilitate Product Development Phases?
Consumer insights primarily help in identifying consumers' pain points and desires. They help to find gaps in the market and develop products that address those gaps. These gaps are the base of exploration that drives to discovery of a new product. Concept testing is another stage of product development where consumer insights help test the initial concept before finalizing a product. Insights also help in feature and benefit validation because organizations get to know the desired features after analyzing consumers' need. From discovering and exploration to launch, all stages are facilitated by consumer insights. Finally, consumer insights also impact the post-launch improvement through continuous analysis of consumer feedback.
Tips for New Businesses
New businesses and startups always find it difficult to collect consumer insights to develop initial products because traditional consumer insights collection process costs much money. Facing lack of data, they design products depending on hypothesis which is the reason behind higher failures rate (around 90%) of startups. Using the following free methods can help collecting insights.
Website analytics: Free website analytics tool like "Google Analytics" provides insights about user demographic, behavior and interest.
Freemium tools: Basic consumer insights can be collected by using the freemium version of Hootsuite for social media analytics and BuzzSumo for content insights.
Conclusion
From our discussion, it's clear that all the stages of product and service development are greatly facilitated by consumer insights. Consumer insights play a key role not only in assuring market demand but also in fostering strong customer loyalty. Nowadays, markets are so evolving that consumers have multiple options and using consumer insights can help businesses stay relevant and competitive in this market.
Reference
The Farnsworth Group | Home Improvement Research. (n.d.). https://www.thefarnsworthgroup.com/
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