Discovery of consumer needs

When a manager has an idea for an innovation, they may only know the most basic parts of the proposed product or service: its area or market of use, and its job in broad terms. The manager still has to decide what features it should have, and it is these features that distinguish it in the market and determine whether a consumer will buy it rather than a competitor’s product or service. The features should satisfy consumers’ needs, which are what consumers want the product or service to do. This blog post describes how a manager can find consumer needs and express them in a way that helps to develop a product or service that satisfies them.
 
To discover consumer needs, a manager can take a series of actions. The manager starts by collecting data from consumers about their preferences for products or services that are similar to the proposed one. Then the manager writes the consumers’ data in terms of what the proposed product or service does, which gives a list of consumer needs. Next, the manager groups similar needs, and finally the manager establishes the importance of needs [1].
 
The actions will be shown in a series of steps using the example of a hotel manager finding out what guests want from a reception service. An improved reception service was identified in the last blog post as a potentially successful idea for an up-market hotel in Kinshasa, Democratic Republic of the Congo.
 
Actions to discover consumer needs
Collection of consumer data
The discovery of consumer needs starts with the collection of data from consumers describing their preferences for products or services that are similar to the proposed one. The collection aims to get responses that reflect a wide range of consumer needs, and can be used to design a product or service that at least some consumers like. There are several questions for a manager to consider when deciding how to collect the data: who provides the information? How is the information collected? What is asked?
 
Who provides the information?
The manager should collect information from groups of consumers in every major segment that is part of the market for the proposed product or service. An example of these groups for a Kinshasa hotel could be business travellers, holidaymakers, domestic travellers, and international travellers. Some of these groups may overlap; for example, business travellers who are also international travellers. The manager should collect information from consumers in each group until the information from additional consumers is much the same as information already provided by other consumers.
 
The manager can also collect information from extreme users, who use the product or service in an unusual way. For example, an extreme user in a hotel could be someone who lives there permanently. The manager can additionally collect information from lead users, who have needs for new types of product or service earlier than other users. For example, a lead user in a hotel could be someone who requires the fastest internet connection available, or someone who uses hotels often and so experiences needs sooner than less frequent guests. The manager can identify extreme and lead users prior to the information collection, or can identify them when collecting information from general users and then question them in more detail.
 
The aim of the collection is to find many of the different needs that may be expressed. If the expressed needs differ substantially across the groups in each major segment of the market, then one reasonable method is to collect from within each group to ensure that all needs are represented. A more precise alternative method is to divide people into small groups based on their detailed characteristics, estimate which groups are likely to have similar needs relating to the product or service, and then combine these small groups with similar needs into larger groups for the purpose of information collection. A manager who is seeking precision may also collect information from people who use their product or service in any way, even if they are not the end consumers. For example, a hotel manager may also collect information from travel agents, not just from hotel guests.
 
How is the information collected?
There are various ways to collect the information. Collection may be done passively with little interaction between the manager and the consumer. One way this can be done is by observing consumers using the product or service. For example, a manager could observe hotel guests using a reception service, and find that they are waiting for a long time. The implied consumer need is that they want to wait for a short time, if at all. In another method of passive collection, a manager experiences the same product or service as the consumers, and records their opinions of the experience. For example, a manager could stay as a hotel guest, and note their opinions of the reception service. A further method of passive collection is to collect data about the consumer needs expressed on the internet. For many goods and services, there are so many reviews available on the internet that it can be a reasonable source of information.
 
Collection may also be done actively, where the manager and consumer interact to some degree. One way is to give or send potential consumers a written survey for them to complete. Another way is to use a focus group where consumers are gathered together and asked questions, and they can interact with each other when responding. A focus group collects information from many people at once, so can speed up information collection. It can also encourage people to express themselves more freely by reducing the impact of the person collecting the data on people’s responses. A further way of active collection is to conduct individual interviews. Interviews are easier to conduct than a focus group, and can be more flexible in the way they are done, with the potential to be cheaper as a result.
 
A focus group or interview session is more likely to be successful if the manager follows some guidelines aimed at ensuring that consumers express many of their preferences about the proposed product or service. The manager can keep the consumers focussed on this topic by clearly stating it at the start of session and as the session progresses. If the discussion strays from the topic, for example to consider the technology that will be used inside a product, the manager can direct the discussion back to the consumer preferences. The manager can provide sample products or services that are similar to the proposed product or service, or they can provide descriptions of them. The similar products or services can be very close to the proposed product or service, or a little more different. The manager can also provide descriptions or samples of the proposed product or service. Further, the manager can describe scenarios in which the product or service is used, both familiar ones and less familiar ones. These products, services, descriptions, and scenarios aim to remind the consumers about the product and service, and the situations in which it could be used. Different products and services as well as less familiar scenarios can encourage discussion of a wider range of needs, and when unusual needs are expressed, the manager can ask for further details and discuss the product or service or the scenario further until no additional unusual needs are expressed.
 
Some further guidelines can help the manager collect the needs that the consumers have generated. The manager can ask the consumers directly to describe their needs, or to show how they would use a similar product or service. The manager may also observe any non-verbal communication that expresses needs, such as apparent like or dislike of a feature.
 
Table 1 shows the collection methods and reasons to select them, and table 2 summarises the guidelines for interviews and focus groups.

Table 1: Collection methods and reasons to select them

Table 2:  Guidelines for focus groups and interviews

 
What is asked?
The questions aim to find out consumers’ preferences when they are buying the proposed product or service, or using it. The manager should ask consumers what they want when they purchase a similar product or service. The manager should also ask consumers what they like and dislike about the proposed product or service, or similar ones, and what they would add or remove to make it or them better. Additionally, the manager should ask how consumers use similar product or services.
 
The manager should also ask questions about consumers’ use of similar products or services. These questions will help to identify extreme and lead users.
 
When a passive collection method from table 1 is used, such as observation of consumers, the manager probably won’t be able to get exact answers to all the questions. Instead, the questions are a guide for the sort of information that should be collected, as far as possible. For example, the manager should aim to assess the features that are important when a consumer is using a product or service, as an indicator of things that consumers consider important when using and buying it.
 
Table 3 presents questions to ask.

Table 3: Questions for finding consumer needs relating to the proposed product or service

 
The expression of the consumers’ data as needs
The manager now has data that expresses consumer preferences, but for development it would be useful to express those preferences in terms of needs - product or service characteristics that are what consumers want the product or service to do. So the manager should write each piece of consumer data as a need, and the manager should not mention any particular technology or method used to perform the task. For example, a hotel guest may say that they don’t like to queue at the reception, and the manager could write this as “the reception responds quickly to guests”, but not as “the reception responds quickly to guests by having three members of staff on duty at all times”.
 
Grouping of similar needs
The manager may have identified hundreds of needs. To bring them into a form that can be used for comparing proposals for innovative products or services, the needs are grouped next. The manager starts by combining identical needs into a single need. The manager then identifies needs that are similar to each other, and gathers them into a group. The aim is to form around 10 to 20 groups, with a label for each group that summarises the needs in it. This stage may be done by a team of people to help increase the accuracy of the grouping.
 
Establishment of the importance of groups of needs
The development of products and services has trade-offs ; a manager usually cannot develop a product that fully satisfies all consumer needs at a reasonable cost. If the relative importance of the needs are identified, the manager can focus on the most important ones during development. So the manager establishes the importance of groups of needs to consumers. The manager or their team may decide on the importance themselves if they can assess accurately, for example by adapting and completing the general survey in appendix 1 on behalf of a typical consumer. If the manager or their team cannot decide on the importance, they can ask consumers, for example by sending them the survey in appendix 1. The importance of a group is then the average value of the numeric responses. A survey works best when very many consumers are surveyed, but it is still effective if only 20 consumers are surveyed.
 
Flowchart of the steps for discovery of consumer needs
The flowchart in figure 1 summarises the above steps for discovery of consumer needs. The flowchart is also available as a pdf download at the end of the post.

Figure 1: Flowchart for the discovery of consumer needs

Example: discovery of guest needs for a hotel reception service
The example in this section shows the discovery of guest needs for an up-market hotel reception service in Kinshasa. It follows the stages in the flowchart from figure 1.
 
1. Manager wants a list of consumer needs assessed for importance
I will act as the manager.
 
2. Identify groups of people in each of the major segments of the product’s or service’s market. Include people who use it often or in an unusual way, if possible
Groups of people in major segments for an up-market hotel in Kinshasa are business travellers, holidaymakers, and international travellers. Congolese travellers may also be in a major segment, although the people in the D.R.C. with sufficiently high disposable income for an expensive hotel may already have a residence in Kinshasa.
 
3. Use table 1 to select the collection method
I consult table 1, and choose collection of internet reviews because I want low cost and easy access. I use the travel site hotels.com, which has a very large number of hotel reviews. Reviews relating to up-market hotels in Kinshasa will be examined to find what guests to these hotels want from their receptions. Reviews for hotels in Paris, France will also be examined, because the different country context may lead to expression of a wider range of opinions, and because they include opinions from people who have not been guests at Kinshasa hotels but who could become guests in future.
 
Hotels.com contains information identifying a guest’s nationality, and many reviews contain information identifying whether their trip was for business or tourism. It is convenient to collect reviews from business travellers, holidaymakers, and international travellers at the same time. Of the hotels.com reviews for the hotels that we examine, none are posted by guests identified as Congolese nationals.
 
4. Use table 2 to identify questions to ask
The questions to be asked are in table 2. As I collect internet reviews rather than interviews or consumer surveys, the questions act as a guide for the sort of information to be collected, such as the features of receptions that guests like, or the features that influence their decision to use the hotel in future.
 
5. Select one of the groups not yet examined
The group selected is business travellers.
 
6. Collect information from a person in the group, and
7. Have more than five people provided information? and
8. Is the information from additional people the same as information already provided by other people?
9. Have all the groups of people been examined?
Information is collected from individuals until the information from additional people is much the same as information already provided by other people. Because the online information from each individual is a paragraph or less, their reviews may not state all of their needs. So I checked the reviews of hundreds of guests to get fuller information, and stopped only when tens of additional guests didn’t have any new information to add.
 
Over two hundred pieces of consumer data were collected, describing what guests like and dislike about hotel receptions. Example responses are “the credit card machine was not working when I checked out”, “the staff were very attentive”, and “it took two hours for someone to fix the leaking bathroom”.
 
10. Write each piece of collected data as a need, which describes something the product or service does
In the next step, I wrote each piece of collected data as a guest need, describing something that the reception does. Example needs are “the reception allows people to pay bills using their credit cards”, “the reception is attentive to guests”, and “the reception responds quickly to plumbing problems”.
 
11. Combine identical needs into a single need
12. Form about 10 to 20 groups each with similar needs in it
13. Give each group a label that summarises the needs in it
I combined identical needs into a single need; for example, many people had a preference for friendly reception staff. I then grouped similar needs, forming 16 groups, and then gave each group a label describing its contents. For example, the needs “the reception has a list of available items if guests want them”, “the reception provides information about facilities available”, and “the reception can provide guests with information about the area” are grouped together, and given the label “the reception staff can supply information about the hotel and region”.
 
14. Can the manager assess the importance of the need groups to consumers?
15. Use appendix 1 as a survey template
16. Assess the importance of the need groups to consumers
In the final step, I assess the importance of the need groups to guests. I do this myself, using my own knowledge and assumptions about guests. The results are shown in table 4, which completes the assessment of guest needs.

Table 4: Assessment of the importance of need groups to consumers

 
17. Manager has a list of groups of consumer needs assessed for importance
All done.
 
Footnotes:
[1] The actions are like those in Ulrich, K.T., Eppinger, S.D., Yang, M.C. (2019), Product Design and Development. 7th edition. McGraw Hill, and in Griffin, A., Hauser, J.R. (1993). The Voice of the Customer. Marketing Science 12(1), 1-27.]

Appendix 1: Survey for features of product or service X
Suppose you are using product or service X, and you see that it has the features listed below.
Please read the following descriptions, and tick the box that best describes each feature.

1. The feature makes X worse
2. The feature does not make X better or worse
3. The feature makes X slightly better
4. The feature makes X much better
5. The feature is essential for X

Thank you!

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