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Market Research is Still Too Predictably Rational

Dan Ariely often gives market research a hard time, and it’s easy to understand why in reading an interview with him in the latest edition of Research World.  You will learn even more if you listen to the podcast of the interview (link here) which is a much extended version of the article, or even better read his blog (danariely.com).  The interview touches on many topics that we have written about here and at Dr Disruption’s blog, although I would like to highlight three key take aways to consider.

1) Market research assumes a very rational view of human behaviour which is not supported by the evidence.  Most behaviour and choices are emotionally driven (often subconsciously), and then post-rationalised.  Whatever we would like to do, if our emotions take over, then our behaviour is not predictable.  Market research, even most qualitative market research, tends to focus on the superficial rationalisations that participants give, instead of real behaviour and reactions.

2) People’s intuitions (for example, attitudes) are very poor indicators of what drives their behaviour and we can learn much more by observing reactions and analysing behavioural (eg transactional) data than we can ever obtain from asking directed questions (especially when we ask particpants to explain why they do what they do).  Consumers understand what they do, but do not understand why.

3) Context is critical to all behaviour.  Much of the work in behavioural economics by Dan Ariely and others demonstrates that minor changes in the environment can trigger major changes in the judgements and choices that consumers make.  For market research this means that we have to pay close attention to context – the environment of an interview or discussion, the situation we describe in a questionnaire or discussion.  Dan Ariely mentions two very clear examples.  Firstly, the difference between social norms (the impact of relationships on our behaviour) and market norms (the impact of money on our behaviour) is profound: if you have a relationship with a person or organisation then your behaviour is not the same as when your decision is purely a trade off between price and benefits.  Secondly the impact of question context: one example Dan Ariely mentions is the focus conjoint and trade off techniques place on comparison rather than the expectations and experience of product (or service) use.  When you pay more for something then your experience is more enjoyable, but when you are asked what you will pay for something, you will of course want to pay as little as possible.

I recommend anyone working in market research to listen carefully and consider how we can all make market research less predictably rational.

REFERENCES

Connecting the Dots, Research World, September 2010

http://danariely.com/ Dan Ariely’s blog

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