Getting to a level of understanding about what customers really want requires the ability to understand what motivates consumers, as well as how they shop and make decisions. Based on our work with leading companies and innovative insights vendors, as well as proprietary research, we have identified five research approaches that are best suited for generating the kinds of insights that lead to new growth opportunities. Observing consumers as they shop or use a product is often deeply revealing about their behaviors and motivations. This kind of research is closely tied to behavioral economics, a school of thought that seeks to understand the way consumers actually make decisions.
As business leaders think about developing an insight engine for their organization, we recommend reflecting on five questions:. One international food company, for example, was seeking to introduce European markets to a new product: a dip that could also be spread on bread. While consumer diaries—literally a written record someone creates to track their daily decisions and purchases—have been around for some time, digital advances and mobile devices have made this kind of research much more versatile, accurate, and accessible.
Typical applications include video recording, photographs, and blog posting of food or beverage consumption, media usage, patient journeys, or compliance with medical prescriptions and therapies. In a pioneering case, a maker of pharmaceuticals and medical devices used digital diaries to better understand how arthritis patients self-administered injections several times a day. Participating patients used mobile devices to film themselves performing these tasks.
Additionally, researchers observed patients at home.
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The research revealed that some patients skip injections because of the discomfort and pain they cause or the anxiety patients feel. Not all patients, however, admit such qualms to their physicians, who then will frequently prescribe higher dosages of pain medication.
Today, the mass of data about consumer behavior allows marketers to get past broad and often deceptive averages to dive into much more granular levels of insight that can unlock new opportunities. Those who invest in big data and advanced analytics often achieve up to 10 percent sales growth, up to 5 percent higher return on sales, and a margin uplift of 1 to 2 percent.
McKinsey Periscope, periscope-solutions. A next-generation car-rental company with ambitious growth plans, for example, used advanced data-mining techniques to target new customers more effectively. It started by analyzing its database of driver profiles and trips to identify distinct groups of customer archetypes. The team then pulled in external data from a variety of sources to build a scoring model to identify drivers in a given city or neighborhood who fit one of the ten archetypes the business had developed.
Netflix Case Study
They then tailored offers and communications to each of those segments. Within one year, the company grew its customer base by more than 10 percent and increased its revenues by almost 20 percent. Philips US applied advanced analytics to simulate the market potential for various combinations of price tiers, channels, and product portfolios—not at a country or even regional level, but city by city in dynamic markets. With that information in hand, the marketing team created offers that targeted the most promising segments in each city. Social media allows companies to listen in on unfiltered conversations consumers are having about their preferences, experiences, and habits.
Many services exist, such as Hyve, Winkle, BrandWatch, Synthesio, or Google Analytics, to unlock insights from analysis of online discussions, consumer reviews, topical blogs, and keyword-driven trend analysis.
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Active listening enables companies to detect relevant buzz early on be it positive, neutral, or negative , react swiftly, and unearth clues that can lead to innovations. Beiersdorf, the personal-care company and owner of the Nivea brand, tapped into an ongoing social-media conversation to develop a completely new product line. Further analysis revealed that the issue was widely discussed and that users shared advice on how to remove various types of stains.
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In response, the company developed a new type of deodorant that prevented yellow stains on white clothes. To test the concept, Beiersdorf turned to almost 2, dedicated followers of the Nivea brand. It turned out that consumers were not only concerned about yellow stains on white clothes but also about white stains on dark-colored clothes.
Swot Analysis and Case Study of Netflix
McKinsey: What is the role of nontraditional insights techniques at your company? We differentiate between exploration and assessment. The selection of research techniques depends on the research need.
For example, we frequently need to assess whether a product or a concept is relevant to consumers. We need reliable benchmarks for this purpose, which is why we run standardized quantitative tests. When it comes to generating new ideas, we use explorative techniques. These include netnography and observation. Data mining can also be explorative. Many of these techniques are well-known, but the trick is to apply them individually, in context, and creatively. McKinsey: How do you ensure your arsenal of insights techniques and approaches is always up to date?
We work with selected innovative agencies and closely monitor what is going on at the methodological front. If everyone digs in the same hole, everyone will come up with the same insights.
This is why we often approach an ideation challenge from several angles. Within our community of experts on the research team, we assign champions to every key method to make sure we are always up to date in these areas. McKinsey: How do you determine whether a new insights approach is relevant for your business?
Netflix vs Blockbuster Hbs Case Stufy - Words | Bartleby
We try to test and learn as much as we can. We run tests of competing methodologies in close collaboration with our agencies. If the research brings something new, something that goes beyond the obvious, we use it more often. When we talk about customers so we find them quite different from each other across the entire globe Gomez, Under the subscription based business model , their users were offered different packages and planes, which were based on different pricing options and features respectively.
They have been doing remarkable job by expanding their network and making sure that their exceptional one day delivery approach must work efficiently. These achievements, optimistic approaches and excellent workable strategies result in booming their net incomes. This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution. Netflix, an online movie rental subscription service, do not fight with a significant direct competition in the online DVD rental for six years until the blockbuster movie rental giant chain, entered the market in and started a price war.
Investors abdicated from direct competitors in the fields and was likely sustained reduction in the price of a hippopotamus competitor. When Amazon began signaling its intention to enter the market in , Hastings, at least, two major decisions to make: whether to cut prices to match Blockbuster, and whether this course because of its historical strategy of "business as -usual "when competitors arrived on the scene. Publication Date: January 29, Netflix Case Solution Facebook.
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