22 Nov 2012
Observe Your Way To Success
Ethnographic research for product development, innovation, branding strategies etc is underused in India
Varsha Chitale & Nidhi Purohit
While office and home furniture has changed dramatically over the years, classroom furniture has undergone little or no structural change, though methods of learning have evolved. While students were earlier taught through “instruction” - where the teacher instructs and students take notes - today’s classrooms engage in a wider range of learning activities such as presentations, group discussions and enactments. The above research helped Steelcase develop ‘Node’, a new classroom furniture range with many features that enable easier learning.
The research technique employed to develop ‘Node’ is ethnographic research. It is a branch of anthropology that studies groups of people (subjects) in their native environments. These groups can be characterised by various parameters such as belonging to the same region, culture, economic strata or even being in the same classroom. Ethnography is an approach used to interpret cultural, behavioural and lifestyle aspects of people. It stresses understanding the cultural nuances of preference, habits and behaviours. The main objective of ethnographic research is to study and observe the target population in a natural and relaxed environment.
Ethnographic research is applied for various purposes such as criminology, social behaviour study, communication and linguistic studies, socio economic studies, geography, history, religious studies, business research, and so on. Businesses most commonly apply it to product development, innovation, understanding unmet needs, and for developing communication and branding strategies.
The intent of ethnographic research is to go beyond the tangible, to explore the deep and inherent attitudes and preferences of individuals. It provides answers to the question ‘Why do people behave and act this way?’ Proponents of ethnography believe that traditional research methods with questionnaires and surveys are not successful in developing insights since people find it difficult to accurately verbalize their preferences and, more importantly, to identify the reasons behind those preferences.
For example, the care giver in a family would like to believe she is making healthy meals a preference for the family. However, in reality, she may be making unhealthy choices due to various practical limitations or compulsions. She may not even be overtly aware of all the factors that affect her final choices. While market research will classify her family as a health conscious one, ethnographic research will reveal whether they actually eat healthy, and why.
When Kraft Foods launched their popular US product ‘Oreo cookies’ in China in 1996, they were surprised that the cookie did not do as well as expected. Research into Chinese tastes and preferences revealed that the Chinese liked their cookies smaller and not as sugared, so the company accordingly created a smaller packaging and a less sweet version of the original. This successful strategy led to the company introducing more popular variants in flavours like green tea, raspberry, orange, mango and blueberry. China is now the second largest market for Oreo after the US.
Business ethnography has been invaluable in the field of product innovation. In 2004, IBM was involved in creating a new handheld device for traders at stock exchanges. The New York Stock Exchange traded large volumes of shares each day, and even though online transactions had been introduced, 80% of them were still handled in paper format. A wireless system had been installed on the floor of the stock exchange enabling PDAs or similar devices to allow for phone booking and online transactions. These devices had been developed based on the needs specified by the exchange - large screen, day-long battery life, and access to the network throughout the exchange. However, they were cumbersome and not very popular with the traders, so they did not replace paper transactions in a significant way. IBM collaborated with the stock exchange to observe the traders in action. Based on this observational research, the company developed a more efficient and convenient device which satisfied all the needs of the traders.
In its early days, ethnographic research was primarily applied to understand ‘exotic’ cultures and new markets. While this continues to be its main application, today researchers also employ it to study urban groups such as retail and online shoppers, coffee drinkers, phone users, etc.
Like many other emerging markets, India provides a prime location for applying ethnographic research as a tool for developing product and communication strategies. Due to the high level of diversity, many companies find it necessary to create different strategies for success in urban and rural markets, and in different regions within the country.
Foreign companies entering India find ethnographic research particularly valuable. Kellogg’s breakfast cereals failed to catch the fancy of Indian consumers when they were first introduced in 1994. The company later learned that Indians did not like cold milk in their breakfast and the cornflakes were not crunchy when eaten with hot milk. Kellogg’s then reintroduced a product that would not become soggy when mixed with hot milk.
Launched in late 2003, the Nokia 1100 mobile handset, ranked as one of the top all-time sellers in consumer electronics history, was developed through ethnographic observation to suit the needs of the rural consumer in India. This basic handset had a long battery life to accommodate frequent power outages, a rugged and dustproof structure, and a torch. These features made it popular in rural India and have been successful in other similar global environments.
The efficacy of ethnographic research is not limited to large multinational corporations. A charitable trust sought to address the veterinary needs of rural farmers around Pune in India. Here ethnographic research was invaluable for ensuring optimal use of their funds to set up veterinary care for farm animals. When researchers observed how the farm animals were treated, they found that farmers were reluctant to transport their animals to veterinary hospitals, as the cost of doing so was high - it was more cost effective for the veterinary doctor to visit and treat the animals on the farm itself. The organisation subsequently decided to invest in vans converted into mobile clinics that would go to the farms directly to treat the animals.
Ethnographic research has value not only for B2C businesses in India, but also for business-to-business (B2B) transactions. For example, a significant difference exists between the way industrial machinery is handled in an Indian factory versus a European factory. European users invest much time and money in maintaining the machinery, which gives it a longer life. On the other hand, in India the machinery goes through rough use with less attention on maintenance, thereby shortening its life. The machinery may then be refurbished to extend its life. This has significant implications for European machinery manufacturers selling into India – their product positioning, after sales service, structuring of annual maintenance contracts, pricing of the product and its spares, and so on.
There are many more areas of business where ethnographic research can be leveraged for formulating winning strategies. Surprisingly, it is a methodology that is by and large underused in India.
The business environment in India in particular, and emerging markets in general, is becoming increasingly competitive, thanks to the unfavourable economic climate and increased focus of global businesses on the few pockets that are growing at a higher rate. As corporations fight for the consumers’ wallet share, they are likely to look for more effective ways of understanding and meeting their needs. Ethnographic research will command a greater importance in the researchers’ toolkits.
(Varsha Chitale is a Director of ValueNotes (www.valuenotes.biz), a provider of market intelligence, research and consulting. She leads the competitive intelligence practice at the firm.
Nidhi Purohit is a Masters in Biophysical Chemistry from the University of North Carolina, Charlotte, NC, where she was awarded the Thomas Walsh Fellowship.)