People-Watching With a Purpose

When it comes to maintaining brand profitability, in-depth market research and insight mining are indispensable. Even the savviest market-researchers face the inevitable question – Is this respondent really giving us an accurate account of what transpired?  Whether due to fuzzy-memory, nervousness, brand bias, omission, or other unintentional/deliberate factors, research respondents often cannot fully articulate reality when participating in market research.  While frustrating, this conundrum has been a leading driver in the evolution of research methodologies, and has resulted in some of the most effective qualitative techniques we use today.

One increasingly popular way for retailers and consumer goods firms to become intimately familiar with consumer behavior is through in-depth observations.  Essentially, this insight mining boils down to people-watching performed through a marketing lens.  Companies have traditionally utilized internal observations in the form of secret-shoppers and asset protection, but in-depth observations are now being harnessed as a technique to optimize anything from store layout to product placement. The following example is a testament to how valuable such a technique is for the innovative marketer.

In 2004, Frito-Lay was a clear market leader in the salty-snacks market and was contributing to nearly half of its parent company PepsiCo’s profits.  The company faced a problem most firms would like to face; how to not only maintain market leadership, but to achieve continual significant growth.  In an effort to better understand their consumers, Frito-Lay turned to observational research.   Market researchers viewed camera footage of consumers in convenience stores and analyzed their purchasing behaviors.   Until this research had been conducted, Frito-Lay had been operating on status-quo assumptions by focusing placement of product displays as close to cash registers as they could in an effort to shore up impulse buys.  The research, however, pointed out a startling fact:  Frito-Lay consumers were not necessarily engaging in impulsive behavior as once thought.  In fact, consumers were often viewed entering stores and heading straight for a seemingly predisposed location to pick up their snacks.  The room for growth that Frito-Lay was looking for had been uncovered.

Even at the most basic level, the logic is sound as to why observations can be so effective.  Gaining insights from consumers in a natural environment (as opposed to in a focus room or survey intercept location) can provide authentic accounts for what is actually happening.  In a hyper-competitive marketplace where good insights are often hidden in the fray, the in-depth observation is another effective way to uncover the gems.

By M. Gauzens

Frito Lay info sourced from:
Hidden in Plain Sight: How to Find and Execute Your Company’s Next Big Growth Strategy, by Erich Joachimsthaler .  Ch3, pp. 59-69

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