Customers and market research

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It can be hard to use market surveys to make certain types of decisions, especially when it involves something new - whether that something is a software product, an engineering project, etc.

... this fundamental precept - that marketing research done for a product that does not yet exist is useless.

Hammer, M., & Champy, J. (1993). Reengineering the corporation. New York: HarperBusiness., p. 93.

One example is the introduction of Sony Walkman. Another example is the Pennsylvania Turnpike.

More: Books: Reengineering

Yet, market surveys of this type continue to be done.

The example used by Hammer was/is the Sony Walkman. A market survey would not have been of much use because the product was revolutionary, a completely new product.

What do many (e.g., fast-food) companies really do?

Ask customers which product they would buy.
Test market the new product in a selected/limited area.

Most people will try new things at least once, if the cost is not too high.

Jim McCarthy: Customers often won't tell you what they really want, particularly if it goes against conventional wisdom. Because they're insecure, they'll tell you instead what they think they're supposed to say they want. McCarthy, J. (1995). Dynamics of Software Development. Redmond, WA: Microsoft Press., p. 74.

Why are tickets sold for events when the event could be done for free?

Selling tickets is one way to get a more accurate count of who will actually attend the event.

Jon Bentley says that users will ask for a certain amount of capacity, but then use the system with much more capacity, as much as 10 times the capacity.

His classic example is the Pennsylvania Turnpike.

Before building the PA turnpike in the late 1930's, extensive surveys were done in order to predict customer demand and usage for the new turnpike.

The next milestone occurred in 1937 when Representative Clifford S. Patterson sponsored the Pennsylvania Turnpike authorization, launching the nation's first superhighway.

http://www.legis.state.pa.us/WU01/VC/visitor_info/hello_pennsylvania/powering.htm

What happened? Once they introduced the turnpike, people started using it for things they never imagined, like visiting relatives many hours away.

So, even though they built it to handle about 10 times the traffic from the survey, it was used about 10 times as much as was planned for.

Customer's expectations changed.

Some people say, "Give the customers what they want." But that's not my approach. Our job is to figure out what they're going to want before they do. I think Henry Ford once said, "If I'd asked customers what they wanted, they would have told me, 'A faster horse!'" People don't know what they want until you show it to them. That's why I never rely on market research. Our task is to read things that are not yet on the page. Steve Jobs (1955-2011)

Started Apple computer. Changed the computer industry.
Introduced the MacIntosh computer: Changed the computer industry again.
Introduced the Apple LaserWriter: Changed the publishing industry.
Started Next computer: failure.
Started Pixar: Changed the move and animation industry.
Started iTunes: Changed the music industry.
Started iPad: Changed the tablet industry.
Restarted Apple: Used Next techonogy to change the computer industry again.