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+++ S P E C I A L R E P O R T +++
"Focus Groups: What They Are and 
How to Use Them to Gain a Competitive Advantage."
by Phil Glowatz
March 17, 2000


A few days ago, George wrote me with the following query: "How about a special report on the mechanics and value of focus groups? Most folks have no idea of their value, and can't understand how three groups of eight people can represent the target market."

Well, George, let me try to answer that.

The focus group is probably one of the most misunderstood, misportrayed, and misused of market research tools. Some people expect focus groups to yield hard data. They don't. Some have heard scare stories about respondents lying (and misrepresenting the products they use and their knowledge about them) to get into focus groups. It happens, but very infrequently. Some people think one needs to conduct lots of groups, and "put up some numbers"-at great expense-before the information gleaned is of any value. You don't have to, unless you like wasting time and money.

So, here's a primer, to dispel some myths, and guide you to smart usage of focus groups.


QUALITATIVE RESEARCH

Focus groups represent one type of qualitative research. As opposed to quantitative research, which is the business of gathering projectable data-e.g., 32% of the target market likes Product Idea A-qualitative research deals in getting in-depth responses from a relatively small number of people. 

Qualitative research allows the interviewer to ask questions, and then probe the answers-in great detail, if need be. Exactly why is Product Idea A liked? Which features and benefits motivate purchase, and why? Which features and benefits are unimportant, and why? Is the package design helping or hindering purchase, and why? And so on. By asking these, and other, questions, you can get a directional sense of the opinions of your target consumer. Again, this is not statistical, but it allows you to identify areas of issues and objections, and refine/reformulate specific product features, ideas, and business concepts.

Groups can give you a tremendous leg up on your competition, particular for those business categories in which market research is not usually conducted. Because, while your competitors must rely completely on their own judgment of what will work and what will not, research allows you to shape business ideas and plans based on specific feedback from target customers. You are able to make informed decisions, not merely guesses.

For instance, we conducted a series of focus groups, for a manufacturer of industrial controls, to get reactions to several new product prototypes. Through this work, we identified essential product refinements for two of the new units, and recommended development be halted on a third; for certain reasons, customers made it clear they would never buy that third product, no matter how many refinements were made. The cost of these groups was probably less than 10% of the product development funds that would have been further expended on that third prototype alone, not to mention the considerable marketing funds that would have been put behind it. And the company was able to proceed with versions of the other two products that addressed important target customer needs.


WHAT CAN FOCUS GROUPS ACCOMPLISH?

Focus groups can give you directional information on a range of brand and product/service issues, including the following:

- Perceptions of particular products and brands. You can gauge overall feelings, identify the important (perceived) benefits, and get views about product reliability, durability, pricing, etc.. You can also get a sense of how the brand is perceived versus its key competitors.

- Reactions to ideas/concepts for new products and services, and reactions to prototypes of products in development.

- Reactions to advertising-including television and radio spots, print ads, direct mail offerings, brochures, etc.-potential positioning themes, strategies and tactics.

- Reactions of point-of-purchase, and other, merchandising materials.


WHAT CAN FOCUS GROUPS NOT ACCOMPLISH?

As mentioned above, focus groups cannot yield you specific data--e.g., percentages of consumers who like or dislike a product, or who consider a particular attribute important-which can be projected to a larger target audience. However, the results of focus groups are often used to craft quantitative survey questionnaires, because important issues are identified ahead of time. Indeed, very often, a good quantitative study cannot be fielded without prior qualitative work.


HOW FOCUS GROUPS ARE SET UP.

A typical focus group has 6 - 10 people in it. Small groups of three and four-mini-groups-are in vogue in certain quarters, but I am not a fan of them; one of the strengths of groups is the give and take among participants, and that dynamic is weakened in small groups. Respondents are usually paid a cash incentive for participating. A group usually runs for about two hours.

Groups are held in special facilities designed to host them; most big cities have several facilities. There is an interview room, in which the group takes place, and an observation room, from which clients watch the group. Usually clients watch through a one-way mirror (they can see respondents, but respondents cannot see them), or they observe on remote video monitors. 

STEP 1. To set up groups, the first step is to meet with a moderator and agree on objectives for the groups, and on exactly what the action plan is for what you will learn. The latter point is key. You need a clear sense of what you wish to do with the results, and that objective will shape the issues explored, methods used and types of consumers/customers interviewed.

STEP 2. Then, you will create specifications for the people you wish to interview, and for the cities in which you want to conduct your groups. For instance, you may wish to have groups with users of products in a particular category, or even with users of a particular brand. We generally recommend interviewing the heavy users of a particular product category or brand, as they tend to be the most in touch with problems and needs. For each segment interviewed-perhaps you want to talk with the segment of women, 25 - 39, who use a particular product, and also with the segment of women, 40 - 54, who have never tried the product- we recommend two or more groups, as issues tend not to be clarified after only one group.

Make sure you specify exactly and in detail the types of consumers you want in the groups, as the wrong respondents can mislead you mightily. So, for instance, if you are looking for reactions to your new product ideas, make sure you specify that all respondents have to be purchase decision makers for products in that category. Interviewing someone who is not a decision maker will probably be a big waste of time and money. 

Also, be sure to guard the door. For security reasons, screen out advertising, marketing, and media (reporters) people. Also, screen out those who will never buy your product; e.g., people with conflicting lifestyle attitudes (you would not want couch potatoes in a group for outdoor camping gear), or those negatively predisposed to future purchases of your brand.

Following are some sample recruiting specifications for a series of groups we conducted to get reactions to proposed new styles and features for a well-known brand of handbags. For these groups, we were looking for women who had purchased the brand recently as well as for those who had not. We conducted these groups in two markets, Chicago (where the brand was very strong) and New York (where the brand was less strong).

SAMPLE RECRUITING SPECIFICATIONS

Group 1, 3:30 PM, Day 1, Chicago
- All are female heads of household.
- Spread of ages: 40 - 54. 
- Mix of working and non-working.
- Minimum HH income: $40M for single income HH; $55M for dual income HH.
- All claim to purchase at least one handbag per year.
- All have purchased a handbag for $60 or more in the past year.
- All are aware of Client brand.
- No one who has purchased a Client handbag in the past year.
- No one negatively predisposed toward a future purchase of Client brand.
- No focus group participation in past six months.
- No focus groups ever on handbags or leather accessories. 


Group 2, 6:30 PM, Day 1, Chicago
- All are female heads of household.
- Spread of ages: 25 - 39.
- Mix of working and non-working.
- Minimum HH income: $35M for single income HH; $50M for dual income HH.
- All claim to purchase at least one handbag per year.
- All have purchased a Client brand handbag in the past year.
- No one negatively predisposed toward a future purchase of Client brand.
- No focus group participation in past six months.
- No focus groups ever on handbags or leather accessories. 

Group 3, 3:30 PM, Day 2, New York
- All are female heads of household.
- Spread of ages: 25 - 39.
- Mix of working and non-working.
- Minimum HH income: $35M for single income HH; $50M for dual income HH
- All claim to purchase at least one handbag per year.
- All have purchased a handbag for $60 or more in the past year.
- All are aware of Client brand.
- No one who has purchased a Client handbag in the past year.
- No one negatively predisposed toward a future purchase of Client brand.
- No focus group participation in past six months.
- No focus groups ever on handbags or leather accessories. 

Group 4, 6:30 PM, Day 2, New York 
- All are female heads of household.
- Spread of ages: 40 - 54.
- Mix of working and non-working.
- Minimum HH income: $40M for single income HH; $55M for dual income HH
- All claim to purchase at least one handbag per year.
- All have purchased a Client brand handbag in the past year.
- No one negatively predisposed toward a future purchase of Client brand.
- No focus group participation in past six months.
- No focus groups ever on handbags or leather accessories. 

For those groups, we also screened out anyone who worked for, or who had immediate family working for, a company that made accessories of any kind (e.g., handbags, wallets, key cases/fobs, briefcases, etc.) or worked for a department store.

STEP 3. Working with you, the moderator will plan out a discussion guide-which he/she will use during the groups-containing all the key issues you want discussed. 

STEP 4. A focus group facility will recruit respondents to your specifications, and for the dates and times chosen. Groups are always audio taped. Videotapes of groups are also available, and some facilities include them at no additional charge. 


COSTS. Focus groups conducted by an experienced moderator may cost anywhere from $4,000 - $8,000 each. Total costs depend on several factors:

- Specifications for respondents. Recruiting costs vary depending on who you wish to interview. Finding women, 25 - 39, who have children living at home, and purchase yogurt, would cost less than finding women, 25 - 39, who purchased a particular brand of handbag in the past year. And professionals (e.g., marketing executives, doctors, engineers) are more difficult and expensive to recruit than ordinary consumers.

- Incentives paid to respondents. Consumers may be paid $50 - $75 for their attendance, while professionals are typically paid $200 or more.

- The cities in which groups are held. For example, Los Angeles focus group facilities are generally more expensive than those in Chicago.


GETTING THE MOST OUT OF GROUPS

While insights into customer attitudes are valuable, the art of insight (and it IS an art, not a science) is not easy. Here are some suggestions that may make you a better artist while observing behind the mirror at focus groups:

1. Listen With Your Eyes.
Observe body language and facial expressions. When respondents say they'll buy your product, do they seem truly excited? When they reject a concept, do they show any emotion, suggesting you've touched a nerve, or do they just look bored? Do their faces suggest they understand your copy, or are there wrinkled brows? These observations often count for more than consumers' actual spoken words.

1a. Watch the Hands Speak.
Consumers are often promiscuous when they "vote" for concepts in focus groups. So, we've learned to watch how the hands go up when we gauge purchase interest. Here are a few of the types of hands we've seen:

- The Slow Hand. This hand takes its time going up, or goes up only after several others have been raised, and may mean commitment is minimal, or has been affected by group dynamics.

- The Twitchy Hand. This hand rotates back and forth at the wrist as it's being raised--often slowly--so chances are this consumer really means "I'm not sure."

- The Fast Hand. This hand shoots up quickly, and may reveal excitement. Fast Hands are the types of positive responses you have to see??across several groups??before you can judge a concept truly well-received.

2. Don't Tune Out Too Early.
After a focus group, keep watching until all respondents have left the room. That's because they may approach the moderator and make a meaningful "off the record" comment. Or they may try to get another taste of that food prototype they liked. It all happens after the tape stops rolling, yet it might be more telling than anything in the previous two hours.

3. Don't Take "Yes" For An Answer.
If all--or nearly all--of the consumers in a group say they want your product, someone might be lying. Near-unanimous purchase interest simply doesn't exist in the real world. So, make certain your moderator challenges positive reactions. Are the respondents sure they want your product? If it's similar to other products, why do they need yours? Challenging purchase interest may make you feel uneasy in the viewing room, but you'll feel even worse if your product flops in the marketplace.

4. Listen To Your Inner Voice.
Take consumers' assertions of their behavior with a big grain of salt. What they claim and what they really do are often at odds, so using your marketing knowledge is key. For instance, if all those who claim they floss their teeth regularly actually did so, the floss category would be many times its size. Again, have the moderator challenge to get closer to the truth.

###

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+ E-Tailer Resources
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Subject: An Interview With...

Today we have an interview with Phil Glowatz. I had the distinct pleasure working with Phil with a focus group he did for us. So, let's get to the interview.

1. What is your organizations name?

Phil Glowatz & Associates.

2. What do you do? 

We help companies with new product development and we provide various market research services, such as the conducting of focus groups. 

3. What is the benefit of using your products or service?, i.e., what can I hope to accomplish if I use it?

We will help you develop new products and services that have compelling benefits for target consumers. We can also help you assess a range of marketing issues and develop successful marketing strategies.


4. Why are you better than the competition?

We get results. In the past 10 years, we have helped get products and services to market for a range of clients, including Procter & Gamble, NutraSweet, Nabisco, Pfizer, Sprint, Godiva Chocolatier, Reynolds Metals, American Home Products, Donnelley Marketing, and others.


5. How long has the service been in existence?

12 years.

6. How do you market the service? 

Much of our business comes through referrals. We also use direct mail a couple of times a year.


7. What does it cost?

Each project is customized for the specific needs of the client. 


8. How do I sign up?

Give Phil a call at (718) 343-6535.


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