• Toucan Insights Staff

Why you need Marketing Research & 8 cases in which the lack of it led to failure

New coke can

This article aims to prevent you from joining the marketing failure club.

In some cases, even multinational brands have made big mistakes in their marketing that cost them millions of dollars.

Sometimes companies invest huge sums of money into an idea without properly testing it out or minimizing the risks only to take the campaign down after public or media rejection.

It can be even more dramatic for small-scale companies like start-ups that don’t have the financial means to bounce back after an unsuccessful campaign.

Depending on the magnitude of the failed marketing stunt, such companies are forced to shut down completely.

To avoid any major missteps that could ruin your company, it is important to conduct thorough marketing research.

Especially when you are launching a new product or entering a new market, you should do your homework beforehand to avoid unwanted surprises.

The next paragraphs explain what marketing research is and why it is important for your brand.

Additionally, there are also examples of what can happen when companies don’t do their research and launch campaigns that are doomed to fail.

What is Marketing Research?

Marketing research is the process of gathering information related to your target market.

It consists of different techniques that focus on understanding your audience, the various competition, and other factors that influence how well a new product will perform.

The goal is to replace any assumptions with hard facts.

Knowing this, you can develop activities grounded in factual evidence that make your outcomes more accurate and predictable.

Why is Marketing Research important?

Nowadays digital marketing revolves exclusively around your customers.

Marketing research provides a clear understanding of who your target audience is and how they would react to a new product launch.

Having the technological tools, companies can make better and more informed decisions than ever.

Benefits of conducting Marketing Research.

Understanding the reasons behind consumers’ actions

Marketing research gives you a more in-depth analysis of your results. It reveals the reason why your customers are performing a certain action.

For example, while analytics can show you how many people left the shopping cart in the last stage, marketing research finds out that people think that step is too confusing and they get frustrated by it.

It is key to understand why people do certain actions because only then you can replicate your success.

Predicting future trends

By following the developments of your target market you gain an understanding of which direction it is going.

Researching about your target audience makes it possible to forecast future scenarios allowing you to plan different strategies beforehand.

By predicting prospective revenue sources, you can focus on adapting your production to meet future demand.

Monitoring competitive environment

Conducting high-quality marketing research gives you information about your competitors and their actions.

Understanding your field of competition makes it easier for you to react fast and effectively.

For example, when other companies are having a very successful quarter, performing marketing research allows you to determine how they did it.

Then you can adapt this to your situation to replicate their success.

8 well-known marketing blunders of all time

1) New Coke - Coca-Cola

In 1985, when Coca-Cola felt the need to reinvent its formula, they conducted extensive research of what the flavor of the new Coca-Cola should be.

By then, the brand already existed for 99 years without having changed the famous recipe once.

While Coca-Cola poured in $34.6 million to promote their new Coke, their biggest rival Pepsi spent $22.4 million during the same time period.

However, the public reaction to the new soda was so negative that the company decided to bring back the classic Coke after only 2 months.

Coca-Cola realized after this huge marketing campaign blunder that they didn’t take the brand position into consideration when making this decision.

The marketers at Coca-Cola tunnel-visioned having only the flavor of the revised Coke in mind.

People bought the brand because they grew up with it and had an emotional connection with Coca-Cola.

Pepsi was quick to react as they shortly after released an ad that was mocking Coca-Cola’s decision and encouraging people to change brands.

What could they have done to avoid this mistake?

This example shows how important it is to know your target audience and what they want.

Coca-Cola failed to recognize the emotional importance of its brand to its customers.

Intangible concepts like this one are one of the biggest factors influencing our buying behavior.

While conducting marketing research for the new product, the company could have taken more variables into consideration to avoid costly surprises like this one.

2) Hotness comes in all sizes - Levi’s

In their campaign "Hotness Comes In All Shapes and Sizes", the fashion brand Levi’s Strauss wanted to appeal to a broader audience of women.

The idea was to use models with different body sizes to show that anyone can fit in their jeans.

This would have been the end of the story, however, the models that Levi’s used in their ads were well below the average body size of American women, which is between 14 and 16.

One of the ads titled "All asses were not created equal" shows a range of models with similar-looking curves which received a lot of backlashes.

What could they have done to avoid this mistake?

Companies in the fashion industry cater to different target audiences with not the same type of bodies and shapes.

If Levi’s Strauss would have put more work into their marketing research efforts, they would have avoided the criticism and effectively reached the goal of the campaign.

By using the database of their existing customers, Levi’s would have immediately identified the type of consumers that buy their products and as a result, they would have prevented this marketing error. Saving a couple of millions in the way.

3) Heineken - “Sometimes, lighter is better”

In a more recent incident from 2018, the beer company Heineken removed a new campaign from television that advertised a low-calorie version of their beer.

The reason was that the slogan they used ”Sometimes, lighter is better” was misinterpreted to promote fair-skinned people over dark-skinned people.

The ad shows a bartender sliding down a Heineken beer down the table.

On the way, the bottle passes by multiple black people until it stops at the white-skinned woman who drinks it.

The commercial received so much backlash that Heineken had to stop the campaign and apologize.

Especially in the 21st century, it is more important than ever to be politically correct, even for commercial brands.

Consumers are closely looking at the brands they purchase because they want to be represented with a brand that fits their morals and values.

What could they have done to avoid this mistake?

This could have been prevented by having a more diverse research team.

It is not difficult to spot such a critical point in an ad if a mixed variety of people would have critically observed the ad before publishing it.

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4) Mansplaining - University of Adelaide

University of Adelaide advertisement

Universities and other higher education institutions have a very sensitive nose when it comes to their public image as they want to attract the best prospective students from all over the world.

In an effort to advertise the University of Adelaide, the institution created a billboard outside of the Royal Adelaide Hospital.

The hoardings are showing five women standing around a sitting man who seems to be explaining something by using hand gestures.

Passersby criticized the ad in which the man seems to hold a lecture for the female student body.

Some people on social media used the term 'mansplaining' to describe “a man explaining something to a woman in a way that is considered patronizing, arrogant or condescending”.

Later a spokesperson from the university explained in a statement that the photo wasn’t provided by them and that it didn't represent real students:

"The photo of the hoarding has been deliberately angled and cropped to suggest that the image is directly related to the university, which it is not"

What could they have done to avoid this mistake?

Marketing research is key to prevent such inconsistencies regarding the messaging of a company or institution.

A small mistake like the one from the University of Adelaide can portray a wrong image to the target market.

Higher education institutions want to be associated with positive change and diversity in the world.

If market researchers would have compared the ad with the brand image of the university, they would have noticed a mismatch and replaced the ad with a more suitable picture.

As the progressive bodies of most societies, the communication of higher education institutions has to reflect their forward-thinking values, as it is one of their key identity aspects.

5) DiGiorno Pizza: WhyIStayed

Di Giorno Pizza tweet

In this case, the frozen pizza chain DiGiorno Pizza wanted to join the trending hashtag WhyIStayed without researching what it stands for.

WhyIStayed was first used by Beverly Gooden to express her experiences being held hostage by her abusive partner. The hashtag became a symbol for other abusive relationship victims to share their reasons why they were forced to stay in their relationship.

However, DiGiorno Pizza tweeted a post saying “WhyIStayed You had pizza.” The author of the tweet was not aware of the origin behind the hashtag and assumed it was just an innocent hashtag mentioning reasons why people stay inside.

What could they have done to avoid this mistake?

If the author of that post would have looked up the meaning behind the hashtag, then he could have avoided a big misunderstanding that brought down the reputation of the pizza chain.

Another point of marketing research includes being aware of the news revolving around trending topics. The context in which brands try to advertise themselves should be carefully verified beforehand to not follow the wrong trend.

6) Jeopardizing relations with China - Marriott International

Marriott International is one of the world's largest hotel chains with over 7000+ properties across 131 countries.

One would think that such a global brand has no issues when dealing with foreign politics, however, this example proves that even Marriott makes mistakes in its relationship with other nations.

In 2018, they sent out a questionnaire for the members of their reward program in which they listed Hong Kong, Macao, Tibet, and Taiwan as separate countries from mainland China.

In China, it is a highly sensitive topic in which the country has a strict view that the mentioned regions are part of the country.

Stating otherwise would mean rejecting their political viewpoint and questioning China’s sovereignty over these regions.

The situation was further worsened when the official Twitter account of Marriott liked a post in which the pro-Tibetan independence group thanked the hotel chain for recognizing Tibet with the other regions as independent countries.

The result was that the Marriott and Starwood websites as well as their apps went offline for one week in China, negatively impacting the operations in over 350 hotels.

The manager who was responsible for the questionnaire and liked the post explained later that he didn’t receive any training related to doing business in the Chinese market.

What could they have done to avoid this mistake?

Hotels look after their reputation as one of the most important aspects and their employees know that a minor mistake could severely harm the brand.

You have to manage a healthy relationship with your customers as well as understand sensitive local topics.

In this case, marketing research would have helped to prevent this mistake from happening.

7) The diet chips - Frito Lay's chips

In 1998 the company producing Lays, Doritos, and Ruffles introduced a new version of their chips.

They were called Wow Chips and contained no fat, which made them ideal for people who wanted to consume their guilty pleasure and not gain weight.

The secret was to replace fat with olestra, which is a molecule with the same taste as fat.

However, it was too good to be true and consumers noticed some side effects when eating too many of them. The magical ingredient olestra was responsible for it.

Because the molecule was not absorbed and processed by the human body it was immediately passed down to be excreted again.

This made it have properties of a laxative and people experienced stomach cramps and diarrhea when eating more than one ounce.

After the Frito Lay company had a successful launch bringing in $347 million that year, the media caught on to the common side-effects and the sales dropped to $200 million by the year 2000.

What could they have done to avoid this mistake?

This case shows that it is important to do extensive testing before launching a new product.

The chips company didn’t do enough research regarding product safety because the side-effects of olestra have gone unnoticed until the product was launched to the public.

Especially, when you are experimenting with new ingredients you should double-check to be sure they are not harmful.

If Frito Lays would have known the side effects, they probably wouldn't have launched the product.

By eliminating every unknown variable you can prevent uncomfortable surprises like the one from the chips company.

Innovation should always be analyzed from every possible angle in order to achieve the desired impact on the market.

In the end, they changed the name of the Wow Chips to ‘Light’ and also changed the formula again.

8) Love letters? More like stalker letters - Fiat

Fiat love letter campaign

In 1994, the Italian car manufacturer came up with a creative marketing campaign.

Fiat would send out 50.000 love letters to women all over Spain.

The letters would say:

"We met again on the street yesterday and I noticed how you glanced interestedly in my direction." or “I only have to be with you a few minutes and, even if it doesn’t work between us, I promise you won’t forget our experience together”.

It was clear that the letters had good intentions, however, sometimes that is not enough.

The letters were sent anonymously to the women who got confused and thought they came from a stalker who brought the letters to the police.

In some examples, it resulted in starting fights between couples when the woman received such a letter.

The idea from Fiat was to release the writer’s identity after 4 to 6 days of the campaign.

They stopped the campaign prematurely and apologized for the confusion.

The car company had to pay a fine for sending the letters and also financially compensate the woman who sued them.

What could they have done to avoid this mistake?

This is another example where a company didn’t know their target audience enough and didn’t test (enough) the idea beforehand.

As the spokesperson of Fiat explained:

"We thought it was a fun campaign aimed at the independent, modern working woman", the company had the wrong idea of who the people were sending the letters to.

They could have tested this campaign on a smaller scale to see if it could have been done without any issues.

This helps to get to know more variables and perspectives that could influence the outcome of the campaign.

Because Fiat didn’t have the complete picture of their target audience, they could not accurately predict the outcome which is why starting with clear marketing research is key to avoid costly and embarrassing marketing campaigns.

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