Lausanne World Pulse – Research Articles – Beyond the Numbers: The Five Facets of Good Analysis

By Scott Friderich

In my experience, many organizations approach research as a necessity but remain blind to its benefits or utility to the business. Research becomes a chore and seldom adds value to the enterprise at hand. As a result, time and resources are often wasted as data is simply gathered, stored and usually misused if it is used at all. This is often because there is poor analysis of the data.

Analysis is simply taking apart the information in order to understand its meaning and relevance. As a result, good analysis should provide a bridge between information and strategic action. But research is often abused in the absence of analysis. I have witnessed numerous situations where data is simply used to justify activity instead of guiding activity. There are five facets to the process of good analysis: understanding your vision, using appropriate methods, understanding the value of the data, understanding the meaning of the data and understanding the relevance of the research.

1. Understanding Your Vision
In business, it is always easiest to move forward with our strengths. This seems like a natural course of action, but it can sometimes lead to devastating results. This is especially true in research. The temptation is to take a “proven” approach in finding answers with little thought to its relevance to the vision of the enterprise and the current situation at hand. Standard instruments such as surveys and focus groups are familiar, but will they deliver the right answers? More importantly, are you even asking the right questions?

Analysis has to happen before research even begins. Important questions to ask include:

• What is our vision?
• What is keeping us from achieving our vision?
• What do we really need to know to overcome these obstacles?
• What questions should we be asking to understand these obstacles and how to overcome them?

2. Using Appropriate Methods
Coca-Cola’s market share had been in a steady decline from the end of World War II to the early 1980s. Coke’s chief rival Pepsi began to outsell the beverage maker. The ubiquitous “Pepsi Challenge” taste test campaign seemed to be working. The United States public was showing a preference for a sweeter cola. As a result, the company changed the formulation of their flagship beverage and launched “New Coke” in 1985. The launch was well supported by a battery of research results. The new, sweeter formulation consistently beat Pepsi and the old Coke formulation in taste testing. There was also a consistent vocal minority of detractors in focus groups; however, this only represented ten percent of the respondents. The data seemed to indicate that people would like “New Coke” more than Pepsi.

The real purpose of Coca-Cola was not to deliver the best tasting cola but to sell more cola than its rivals. The leadership of Coca-Cola came to realize the importance of other issues such as branding and perception.

The launch went well for the first week; there was a noticeable increase in market share. However, by the next week market share returned to pre-launch levels. After that, public opinion turned on Coke. People began to ridicule the company and demanded a return to the old formulation. In less than three months Coca-Cola re-instated the original formulation of their classic beverage, losing millions of dollars in the process.

The real issue was not which cola tasted better, but which cola was preferred: a subtle but vital difference. The market researchers at Coca-Cola were measuring a secondary issue—taste—instead of the critical issue—preference. The real purpose of Coca-Cola was not to deliver the best tasting cola but to sell more cola than its rivals. The leadership of Coca-Cola came to realize the importance of other issues such as branding and perception.

Scott Friderich has over twelve years of product and religious research experience in North America, Europe, Central Asia and the Pacific Rim. In July 2006 he founded Clarity Research to continue his work in research consultancy. He can be contacted at [email protected].