In business, especially businesses that market things to the general public, it is common practice to hire a panel of random people to review products before they are released to the public as a whole. The purpose of this is to get feed back from would be consumers so that the company can refine their product to make it better and increase future sales before it is released. These panels are typically referred to as focus groups. In theory this is a very good idea. Having the public have a say in what you are selling them, letting them tell you what they want, should make products better and consumers happier. Unfortunately, this doesn't always work out.
A perfect example of this can be seen in the auto industry. Car companies are increasingly worried about the greying of their consumer base. The average car buyer age for most major automotive brands keeps increasing. In order to combat this greying, many of these auto companies are creating youth focused brands or youth focused cars. These companies have been talking to younger adults and trying to create vehicles that meet their needs. Apparently, what their research shows is that young people want cars that can haul their stuff, have lots of tech features, and not be too expensive. The end result are divisions such as Toyota's Scion and cars like the Kia Soul.
Unfortunately, these attempts have completely failed. As cataloged recently by The Wall Street Journal here: http://online.wsj.com/article/SB10001424127887323971204578628233538218960.html , the actual consumers of these vehicles have been seniors and baby boomers. 42% of all sales of these "youth" cars are going to baby boomers while a mere 12% are being sold to their target audience. While sales, regardless of who to, are always a good thing for the company selling them, it is hard to ignore the fact that this is essentially a complete failure in marketing. So the question then follows, why did the focus groups so completely fail?
The first, and most obvious, problem is that the younger generations have been hit hardest by the economic down turn of the last 5 years, with minority youths being the most effected (as measured by unemployment rates). When you are unemployed or under-employed, you tend to not be in the market for new cars. Until the job market actually heats up (and don't be fooled by unemployment rate declines caused by people leaving the workforce, or by people being forced by necessity to take poorly paid part time work, I mean real improvement in full time employment as measured by the labor participation rate) you will not see the percentages of young new car buyers increase.
The second is that companies are remarkably bad at breaking down consumers into functional focus groups. When looking at the car buying public, it is important to note that not everyone wants to buy the same car for the same reasons. A family looking for a people mover is going to be looking for a very different car than a weekend warrior looking for a track day car. Yet we see, especially in youth brands and youth vehicles, a mix of features aimed at appealing to both buyers in the same car. While this may appeal to a company looking for as broad a market for their products as possible, they risk alienating both buyers by making them pay for features that they do not want. The family looking for a people mover likely does not care about sporty rims, customizability or loud exhaust notes. Similarly, the weekend racer will care very little about trunk space, comfortable seating for large numbers of people or how many cup holders the vehicle has.
If car makers want to better tailor a car to the people who might actually buy it, they need to tailor the focus group in a similar manner. Get a bunch of sports car guys together to focus group sports cars, get a bunch of parents together to discuss family transportation, get a bunch of off roading enthusiasts to discuss the next 4x4. Also, understand that you can't pigeon hole people by age. Not all twenty somethings want the same thing in a car. Just because they are young doesn't mean they want the same thing.
Also, this doesn't apply to just the automotive market. Television programming is another area where they try to market one size fit all consumers and have been rewarded with dwindling market share for years. If you keep repackaging the same crap, people are going to stop watching. In an era where almost every popular old show is available online for public consumption, repackaging the same stuff over and over again doesn't work. Why watch another Friends or Seinfeld rip off when you can watch the original? You need to look over the market, find people who watch different types of shows, and cater to their needs. The TV viewer who likes Simpsons, American Dad, Family Guy and Archer will likely not be the same person who obsessively watches The Real Housewives. So trying to make a show that pleases both demographics will likely fail spectacularly.
It is an old adage, but knowing your customers really does help in selling them products. And while focus groups are a wonderful tool for helping to tailor products to consumers, you need to tailor the focus group to actually fit the product you are selling. Because if you do not, the end result will be youth divisions that sell primarily to retirees and TV shows that have no audience.
No comments:
Post a Comment