[MUSIC] The purpose of this particular module is to identify frameworks for understanding customer needs and customer problems. We're trying to get insight to how the customer thinks through various research techniques. And what we'll provide in this module is the framework for determining the appropriate techniques that might be useful in getting the types of information that you're looking for. So the customer insight research is a guide towards how to conduct the research in a systematic way, so that you're collecting the information to make sure you have the right information with the decisions that you're about to make regarding your new product or service that you're developing. So it's not anything new, and there's many examples of how different organizations and firms conduct customer insight research. You have Fisher Price, a well-known toy maker. And one of the things they do is just observe kids in using their toys. Fisher Price looks at how long the customer may play with a toy as an indication of the enjoyability of the toy. Kodak, when it was in business, analyzed photographs as a way of looking at how customers use their products. And we see that now similarly with different types of phones, in terms of the pictures that people take on their phones, to determine what are the different types of setting. And as a result they can increase the effectiveness of how you take pictures based upon those pictures that they evaluate. And it could be something as simple as Marriott checking out the competition, going to other hotels to figure out what services they have. Or Amazon, which is big today. They analyze the purchase patterns of their customers. Based upon the previous history, they can create product bundles that are targeting that particular customer, or even developing and adding to their product line based upon those types of products that customer faces. And we can continue this with other examples throughout the world. In terms of Walmart, they do studies of people's baskets when they are shopping at the grocery store. Or the firms in Japan that looks at lead users. So, for example, if they're evaluating certain types of consumer products, that says beverages, candies, cosmetics, they look for as teenage girls, and then you could see situations where many firms are collecting data even as you're using their services, through a customer survey. But customer research is more than just conducting surveys. It's developing a profile of your customers based upon the information that you receive. And that information that you're receiving should be at different touch points throughout the interactions that you may have with the customer. And that may be before they purchase the product, as they're purchasing the product, or even after they're purchasing the product. The idea of customer insight research is to gain that insight, such as you would be in a better position to provide solutions to the customer's problems that they're having. We talked about the process of customer insight research coinciding with the process of product development. And the types of research that you would do would be a function of what stage you are in that process and the type of information that you have. So you may recall from previous modules, we talked about a new product development process consisting of six steps. Ideation, concept generation, concept testing, design of the product, prototyping, and eventual launching of the product. But each of those stages require different information to make informed decisions about how feasible your product or service is from the market, from the technical, and from the economic standpoint. So if you're interested in understanding what the customer is doing and how they use your product, you have a different set of techniques than if you're looking to describe how they use the product. Or if you're looking at predicting how they may react to your product, each of those are different techniques that you may use one or more across the objectives of understanding, describing, and predicting customer behavior. As we think of our customer insight research program, we need to think of this as a tool kit that we can draw upon for the specific stage in the product development process that we're in. There's a relationship between the problem you identify and the research question that you develop. And you want to make sure that you first are clear on what your information needs are, based upon the problem that you're trying to resolve. For example, let's say you have your product already developed and you're ready to launch it into the marketplace. But you want to evaluate what's the appropriate package in terms of the size of the package, in terms of the colors associated with the package. So your decision that you're trying to make is, which of these packages should you develop for your new product? Well, in this case, your research problem is evaluating alternative package designs. Now given that research problem, can that be achieved better from a qualitative, quantitative, or predictive standpoint? Do you just want to understand, describe, or do you want to predict? If we want to predict, then we may create a market situation where we have different sizes of the product at different prices, and have customers evaluate their perception of value based upon the size and the price that's on the product. So our decision problem is that we're trying to develop this package. But our research problem is, how do we best evaluate alternative package design? And that would be true for any type of decision problem that you develop. Remember we talked about the food truck earlier on. So let's say you have had your food truck on a particular location for a couple of weeks, and you're beginning to see the number of customers coming by decreasing. Your decision problem is, how do you increase traffic at the food truck? One research problem might be, well, maybe what you're offering in your menu is not correct. And you have to evaluate different menu offerings. Alternately, one research problem might be, well, are you at the right location? And should you move to a new location to increase the number of people who have not tried your food truck? So this is a critical step in the process of determining the appropriate research technique that you'll use for gaining customer insight. We need to clearly describe the decision problem so that we can identify the research problem to make sure that we use the appropriate tools. Let's think in terms of if we wanted to use qualitative research. Qualitative research deals primarily with words, images, and are more subjective than it is predictive. This cartoon just is a play on qualitative techniques. The take says free ice cream and the response is, Only one in 30 to take the free ice cream. Interesting. What do you feel when you saw the free ice cream? Excited, a little scared, and why was that? So their responses are based upon the observation that not all people accept free ice cream. So if only 30% only accepted ice cream, there's some reason why. So you want to understand better as to why that was the case. So we use a qualitative technique to identify the problem and then respond in kind with questions in a more detailed fashion to get more insights as to why the customer is behaving that way. So when we look at the differences between quantitative and qualitative techniques, again, qualitative techniques when you're using observation. And basically you're using your sight, hearing, taste, touch or smell to observe the customer in the context in which they are actually using or buying the product. Quantitative techniques is using data. We're trying to measure our observations for the purposes of comparison, for the purposes of quantifying those reactions, so that we can make more informed decisions. The process that we use will help guide us towards whether we should use quantitative or qualitative, or when to use quantitative and qualitative. Based upon that problem that we've identified, the decision problem, and we convert that to the research problem, we now have a better idea what our objectives will be in terms of gaining the information that we need. That information may lead to more of a questionnaire, or it may lead to actually developing other survey techniques to get the data that we need. But in developing those techniques, we need to be able to visualize what type of data we will get as result of that technique. And we kind of go back and forth in this process before we decide on a course of action. One of the options that you have is not necessarily to look at this as a either, or decision. There is a relationship between the various approaches to doing the research. Maybe you're not clear on what the research problem is and you want to do Exploratory Research to better define the problem. So once we've done the Exploratory Research, that may lead to more Descriptive Research. So we have a better idea of what the problem is. But now we want to really use a more descriptive technique, and the research objectives and the research questions will change. Now, once we have that descriptive research, we then may want to do more predictive research trying to determine cause and effect relationship. If we do this, if we price our product at this level, what is their likely customer reactions? And then once we get the feedback from the Causal Research, we might go back to exploratory. Because even in that descriptive research or causal research, we are not fully getting the information that we need. So you have to think of the research process as an iterative process, where you're consistently going back from exploratory to descriptive to causal or back and forth between one to all three of the techniques. Remember, the objective is to get information so that you can make informed decisions. And the better your research questions have defined what your objectives are, the type of research that you may use may change or you may get more information from different types of techniques. If we're defining the research problem, then that first step is critical to determining what's the appropriate research technique we should have. So one way of doing that is to interact with your customers, okay? So you might do exploratory research, just a conversation where your purpose is not necessarily to identify a specific research question. But you want to get a better handle on what's the priority of the research problems you're dealing with. By dealing with the customers, you may understand the problem better than the symptoms. So you may identify multiple symptoms that leading to the problem that the problem that customer may have may be deeper than the symptoms that you identify. Then once you have that research problem identified, you'd start that process we talked about earlier. Research objectives, detailing those objectives, being very specific about what's the information that you're trying to achieve. And maybe even writing out the objectives to allow you a better understanding. So if we were using this food truck as our example, and we have different interactions with our customers. As we're interacting with the customer, we might also gather information about, well, what do they think about the food items? But we're getting information not so much to react on but to get a feel for what are the problems that the customers may be having. We could do the same in terms of any of the other products we've talked about. But the key here is identifying what type of information you want and what's your research objective. So sometimes we're collecting information just as we're interacting with the customer with non-specific research objective in the mind, but trying to identify what problems we may be facing. And we want to then identify the research objective after that particular point. If you're trying to assess the consumer reaction to your menu on your food truck, there's a number of different ways in which you can do it. You can do it based upon which items the customers are buying. And so as a result of that, you may then conduct a research project that looks specifically at what are the preferences for your customers for certain types of products. Maybe their preferences change from lunch time to evening time. And you can see that not only in terms of the items that they buy, but also in the traffic that comes to the food truck. So maybe the types of food you're serving are more focused on the lunch crowd than it is the dinner crowd. But your objective might be to gain information about how they're buying your product. But your primary objective is to determine how the customers are reacting to the products, your food items that you have on the product. Going back to, as we started before, how do we convert that Decision Problem into a Research Problem? The decision, in this case is, should the food truck invest in different types of cuisine or specialize in one type of cuisine? Your research problem might be multiple questions that you have to ask. Do you have a understanding of who your customers are and why they're buying your products at this particular point? What are the demographic and psychographic characteristic of the customers that are coming there? Can they be segmented into different markets? So maybe the lunch crowd is different from the dinner crowd. Or maybe there's a younger crowd versus an older crowd. Maybe there's a work crowd versus a casual crowd. All those are questions that may be generated when you're informally trying to decide upon the research problem there. But each research problem may lead towards a different set of tools that you use to gain the insights that you're looking for. So the decision problem may often be converted into multiple research problem. And you don't want to Combined all of those research problem into just one study or one technique, but look at each of those problems as a separate issue. And the appropriate technique may be different based upon how you define the research problem. Once we have the research problem in place, the next step is to determine what questions do we need to ask? And how do we get those answers to those questions? One general question will be well, what are consumer attitudes towards food trucks in general? You're going to get a general response like they like them or they do not like them. But that's not going to provide you with the information that you need to make decisions about the product. So what you want to provide in terms of developing a question is questions that will lead to answers regarding the types of behaviors you're trying to elicit. For example, how likely is it that consumers will purchase seafood from a food truck? So the specifics of this question is, you determine whether or not seafood is something that would be sellable on a food truck. And also, is this something that consumers would consider purchasing? Now seafood on a food truck may carry different connotations than it would in a restaurant. Well, how fresh is the seafood? How do they keep the food? How do they prepare the seafood? So the more specific here research question is the better the information is that you'll get. Alternatively, we could look at well, how similar is the food truck service to existing restaurants in the area? And do people prefer to go to the existing restaurant if they're buying seafood? But if they're going to shop at the food truck, maybe there are other types of food items. So it could be a market situation that's affecting the sale of your product. And then finally, are there differences among the customers that you're serving in reactions to their purchasing food on the food truck? So here in this case, you might survey customers going to a restaurant as well as customers going to a food truck to determine what are the differences. And how consumers are viewing restaurant services versus food truck services or purchasing food at a food truck versus purchasing food at a restaurant. So once we have the specific research question in mind, then we can look at our set tools that determine whether or not we should be doing exploratory research, descriptive research, or more causal research. Exploratory, we are just trying to find in general about what they're thinking. What do customers need? Whereas a descriptive research, we're looking at their behavior specifically. Who are the customers that are buying our product? And calls of research might be, we switch up the items and determine which of the items that customers prefer. So, each of those research techniques or research design will lead to different information. But the research questions that you have may also dictate what type of research design that you should use. So in deciding to conduct your research, you want to make sure that you are in the position to benefit from the research. And often people do not use research or conduct research for reasons beyond just the fact that they are not getting their information. In deciding to use customer research, people may not use research for a number of reasons. And then a survey done to determine the most often stated reasons, lack of resources was one of the first things that came up. Lack of resources could be lack of funding, okay. But you have to look at it differently in terms of, are you forgoing the opportunity to save money by making more informed decisions, even if you expend the money on doing the research? The second most often objection is that the results are not useful. And this is not because the results itself are not useful, it may be because the question that was asked was not useful. That it was not the right question so you didn't get the appropriate information that you were looking for. In addition to these top two reasons, there are other reason that are listed but these top two are typically the reasons that most people will forego research and make the decisions regardless. But that we know based upon previous information we get from research studies, the more informed decisions that you make, the greater chances that that decision will lead to a successful product. So you should make use of the tools that you have and make sure that you use the appropriate research design so that you're getting the information that you're looking for. You're going to ensure that the resources that you invest will pay off in the long run. So if you spend time thinking about the research and the appropriate technique, it's going to likely lead to more useful information and you will see that it's beneficial in the long run. So just remember that the research techniques we talk about here are a set of tools. And you're not limited to what tool you should use. But you need to know how to use that tool to get the information that you're looking for. Better information leads to better informed decisions which will lead to a likelihood of new products success. [MUSIC]
