It’s Thursday, so this must be Chile. But after a fleeting glimpse of the mountains that surround the city of Santiago, I found myself back in familiar territory – a conference room. This one was large enough to hold the 1,500 people attending the annual ICARE conference. So my mind has been focused on marketing matters, not scenery. And the conference has forcefully reminded me that lesson No. 1 in marketing is to really understand the needs and desires of your customer.
The conference started with a spirited presentation by Sergio Melnick, Presidente de Anticipa S.A., on the implications of technological change and its impact on consumer behavior. Everything, it seems, will be different, and those who do not keep up will be left behind. Those of you who read this blog on a regular basis will know that I don’t subscribe to the notion that "everything" is changing, and that I think proponents of this idea confuse changes in technology with changes in fundamental human motivations.
In my own presentation, I tried to set the record straight. People’s desire for the 3 Cs - Convenience, Connection and Creativity – is just as strong now as it was in the Stone Age. Human motivations remain unchanged; new technology simply facilitates new mechanisms to express them. Facebook is simply the modern-day version of sitting around the fire exchanging stories.
The trouble with focusing on surface trends without digging deeper is that we risk misunderstanding what is really going on. Significant mistakes can be made as a result. Intriguingly, one of the presentations that followed mine made a similar point.
Hugo Covarrubias, CEO of Soprole, presented a case study of Soprole’s probiotic yogurt brand, Next. Originally launched in 1995, Next did not become truly successful until 2005. During the intervening 10 years, the brand was relaunched three times, each time using a different approach and appealing to a different target group. (One can only applaud the company’s persistence.)
1995: Next was first launched, positioned as being healthy for the whole family. The brand did not succeed and was withdrawn after two years.
2000: Next was relaunched with an aspirational appeal to women, using advertising featuring a famous ex-Chilean model.
2002: Relaunch No. 2 featured a modern urban lifestyle positioning intended to appeal to both men and women.
2005: Relaunch No. 3 occurred after extensive research focused on women’s lives and needs. Next 0% was positioned as the solution to a common problem with an ad titled "Me Siento Huchiada" ("I feel bloated").
As Covarrubias admitted, it was not until the company stopped marketing to stereotypes and took the time to really understand their consumers that the brand took off. Then, finally, the brand became a value generator rather than a value destroyer (due to the wasted investment in the brand). After 2005, the brand was extended to milk, margarine and cheese, then soft drinks and juices. The brand promise had become a platform that appealed across multiple categories.
Another example of the need to understand consumers came up when I chatted with Guillermo Aguero and his colleague Cristobal Lira over lunch. It turns out that prior to starting his current business, Guillermo was CEO of Homecenter Sodimac, the brand which successfully fought off Home Depot when that brand launched in Chile. I asked him what factors had allowed a local company to see off a global giant. He listed three things:
1. Respect for the competition, not fear
2. A focus on the customer, not the competitor
3. Recognition that it was going to be a long fight, not one that would be over in a single round
Guillermo suggested that one of the most important factors in the success of Sodimac was that Sodimac was closer to the needs and desires of Chilean consumers than the foreign company. When Home Depot made mistakes due to lack of knowledge of the local market, Sodimac was able to seize the advantage.
Overall, the message is clear. Whether you are a global brand or a local one, make sure you understand the needs and desires of consumers. Don’t assume you know what they like or what they want.
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June 4th, 2008 at 9:16 am
Great post. Understanding needs and desires of consumers is key. Always? Well, I have been thinking about this for a while and here are some thoughts from my blog (http://www.outoftheborders.com)
Listening to what people have to say. Or not.
“Is it generally a good idea to listen to your customers?” Sounds like a silly question… after all the customer is the King.
Right?
I was thinking about this last night, after a discussion that I had with a client. Then, I saw an interesting post this morning, explaining how hard it is to listen to your customers and I couldn’t help but agree (I have spent many years doing marketing research, including customer satisfaction surveys)
Nevertheless…, I also felt like challenging the premise that we always need to listen to our customers. (I am not suggesting that we shouldn’t, but there is more to it, please bear with me for a minute)
Have you heard of Vitaly Komar and Alex Melamid and their Most Wanted painting research?
Well here is what they did: they went out to to discover what a true “people’s art” would look like, and they conducted a poll… The result was America’s Most Wanted and America’s Least Wanted paintings, which were exhibited in New York at the Alternative Museum under the title “People’s Choice.”
Since most people preferred outdoors scenes, it was a landscape. Since most people liked lakes or rivers or oceans, and another large percentage liked forests and fields, the painting included a wooded area and a grassy verge near a large body of water. The painting’s predominant color was the one nearly everyone preferred — blue sky and blue water. Since people liked wildlife in their paintings, two deer gamboled in the water. The answers were mixed as to whether there should be human figures in the painting, and whether those figures should be contemporary or historical, so the final work included small human figures dwarfed by the landscape: three children, and, standing off to the side, George Washington…
So here is the question:
What would art look like if it were to please the greatest number of people? Or conversely: What kind of culture is produced by a society that lives and governs itself by opinion polls? Stagnant, boring and flat if you ask me.
Back to our discussion: I feel that the extent to which we need to listen to our customers (by that I mean how much, how often and in what way) is very much related to the business that we are in and to our objectives. If you have a functional product or service, then understanding problems and receiving feedback is critical. If, on the other hand, you are in the business of “sparkling magic”, then its a different story. You need to stand out, challenge and innovate. You need to combine structure and creativity. Its like listening and asserting in a way, probably more asserting than listening in this case.
But then again you need to have something interesting to say.