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From Cooper's treatise on separating the winners from the losers:

"Superior and differentiated products--ones that deliver unique benefits and superior value to the customer--is the number one driver of success and new product profitability. Their success rates are reported to be three to five times higher than for "me too," copycat, reactive, and ho-hum products with few differentiated characteristics." (Cooper, 2005, p. 4)

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Courtesy of Ralph Grabowski's research consider the following excerpts from his paper:

"Understanding a company's place in its market is the fundamental intellectual discipline underlying the creation of effective business strategy. If the board is to be ultimately concerned with strategy, and it should be, then the board must be concerned with the amount and relevance of the company's market research activities. Strategy must be based on facts, not on wishes." (Unger)

"Market research enables direction." (Grabowski, 1998)

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What about short cuts, like exploiting the competition's research and following them?

First, how do you expect to standout from the crowd and compete on something other than price?

Second, you also don't know if your competition has done the work either so you may just be repeating their mistakes.

Taking the time for the up front customer research allows R&D to focus on fewer but higher value projects that support higher margins. Less congestion in the product pipeline also speeds things up.

This reaches far beyond specific product development projects. It means being able to see where you are going when you set a strategic course.

(cont'd above right)

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Is the focus on customer needs just tactical or does it have strategic value?

Why would knowing what your customers want, and what they don't want, not have strategic value? Of course it does. This gives you clues about unmet needs and coming trends before any macroscopic market study could pick them up.

"Successful companies think of marketing as the essence of strategy rather than as a sales and advertising function." (Nevins, 1984)

(cont'd right >>>)

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Why is it that companies that spend a lot on market research still fail frequently?

Wrongly applied, market research can lead you to failure as well.

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Does spending more on market research guarantee product success?

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