Some companies, however, make costly mistakes by either conducting the wrong type of market research, asking the wrong questions, or not doing enough research altogether.

Here are some examples of how some well-known marketing disasters could have been avoided:

1. Get specific

In 2004, Coca-Cola took launched a new sub-brand called ‘C2’, a mid-calorie, low-carb beverage. Despite a $50 million marketing budget, the product launch failed miserably.

C2 was backed by a lot of market data about diet trends and target audience preferences. So where did the product go wrong? Coca-Cola failed to ask the right questions of the right audience.

The right questions are ones that identify not only what people like, but also what they don’t like. Asking the right questions help to create a more specific picture of who the target audience is and exactly what they are looking for. 

2. Consider the competition

Capturing information about your competitors is just as important to your product strategy as gathering data from your customers. This is particularly when it comes to identifying how your product will sustainably differentiate itself in the market.

Zune, Microsoft’s attempt at competing with the iPod, targeted a very narrow market and appeared to have very little difference to their competitor. Microsoft discontinued the failed product in 2011 after losing hundreds of millions in investments.

3. Cultural differences

Tesco’s attempt to win over America with their new supermarket “Fresh & Easy” unfortunately flunked.

From the misleading name (their products were apparently less than fresh), to their unwillingness to embrace the essential American “coupon culture”, Fresh & Easy clearly didn’t do their research. It is essential, especially when branching out to other countries, to fully research your target market. This includes researching any cultural differences.

4. The right type of research

Many companies often rely on quick and easy surveys and focus groups which are low effort and inexpensive.

However, the issue with focus groups is that they cannot always provide reliable insights into whether a new development becomes profitable. For example, the group dynamics can create a bias, as some participants may be louder than others who end up keeping their real opinions to themselves. Often, people do not always express their true views in order to fit with the majority, or are not even aware of how reliable their values are.

Some participants may be overly sceptical, rejecting new products unless they have been tried and tested by others already. Emotions also play a huge role on purchasing decisions, which artificial survey situations cannot address.

Finally, the focus group moderators may have intentional interviewer bias. This unfortunately leaves these explicit research methods redundant and unreliable.