© 2016-2019 by Surveys & Forecasts, LLC

A Case of Denial

October 3, 2018

There is an old joke about sharing research results: management’s response is either “I could have told you that”, or “I don’t believe it”. Humorous, but too often true.

 

Yet if a company has spent serious money on research, perhaps management should listen more closely to the full story. As researchers, we know all too well that any research project will usually confirm some obvious things. For example, a brand’s overall position or market share, key benefits, or common usage occasions are standard by-products of many studies.

 

But what happens when we peel back the layers a little more, and drill into more subtle differences? That is where we can uncover new learning and turn doubters into believers.

 

Recently, a well-known management consulting firm was hired to develop a new growth strategy for a major pain reliever brand with over $300 million in sales and a 30% market share. The consulting firm’s research convincingly showed that 60% of the brand’s usage occasions were for muscular pain. It was therefore argued that the product should concentrate all of its advertising dollars on this single use indication. By going narrow, it was argued, we could grow huge. In doing so, it could capture the lion’s share of the muscular pain “market”. It was brilliant strategy – or was it?

 

By solely concentrating on a single indication, 40% of the business would be at risk (i.e., the non-muscle pain usage). Ad support would only be for muscle pain, leaving all other indications vulnerable and up for grabs.

 

The new campaign would, therefore, start with a significant share deficit – roughly 12% (40% non-muscle pain usage of the 30% share). It would have to make up the share loss by stealing from other muscle pain usage occasions – if that was even possible. The strategy was severely flawed.

 

My client immediately felt uneasy with the recommendation. She questioned the way in which the firm had asked its questions. The approach they used virtually guaranteed the results obtained and, in fact, it was designed to simply confirm what they had recommended.

 

We urged caution and requested resources to conduct a better-designed study. Management initially balked, saying “I don’t believe it”. But we prevailed, and showed that the pain reliever market is really a huge basket of symptoms far greater than muscular pain alone. There were many pain indications: headache, fever, menstrual pain, dental pain, fractures, flu/fever, swelling, fatigue, and more. Muscular pain was actually a smaller indication than headache or flu/fever. Our brand just didn't have as much share for these indications.

 

With the executive team’s support, the brand was successfully re-positioned as an all-purpose pain reliever. Other pain reliever brands that went the “single indication” route ended up being much smaller businesses.

 

And we don’t hear people saying “I don’t believe it” anymore.

 

 

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