Saucy Choices

Volume 16 Letter 3

Campbell’s had a problem. Focus group after focus group told them that their Prego spaghetti sauce tasted better than the competitor’s Ragu Spaghetti Sauce. On every aspect, consumers told Campbell’s that Prego was better. The taste was better, the colour, was better, the texture was better! When you poured Prego on the spaghetti it sat on top of the spaghetti while the competitor’s sauce drained through onto the plate like watery ketchup. Yet Ragu still outsold Prego!

Totally frustrated Campbell’s turned to Howard Moskowitz, a research scientist from Harvard, to help them understand the market. Howard formulated 45 different kinds of spaghetti sauce and went out on the road crisscrossing the country asking people which spaghetti sauce they liked best.

When the taste tests were complete and the results tabulated Dr. Moskowitz met with Campbell’s – Here’s what he found. When it comes to spaghetti sauce the American population is equally divided into three groups: those who like Plain spaghetti sauce, those who like Spicy spaghetti sauce and those who like Chunky sauce. Campbell’s was stunned. They asked Moskowitz; You mean to tell us that 1/3 of Americans want chunky spaghetti sauce? And Moskowitz said “yes ……and no one is making it”. Based on that information Campbell’s developed “Chunky” Prego Spaghetti Sauce and took over the spaghetti sauce market!

So why is this story so important to us? It drives home the point that people don’t know what they don’t know! This is why focus groups don’t work! In all the focus groups that Campbell’s held never did anyone ever stand up and say they wanted Chunky Spaghetti Sauce!

Does this mean we need to make 45 versions of our new products and test them with customers? Unfortunately, the answer is Yes. The truth is you can actually do better than 45 different product versions. You can simulate up to 162 distinct product choices in a Customer inSight (Conjoint) Study. These studies take five minutes to complete and are 95% accurate in predicting an actual purchase decision which is better than Dr. Moskowitz could guarantee. What can we learn:

  1. Focus groups don’t work! Customers don’t know what they don’t know!
  2. Customers must be presented with a real choice in order to make a real decision
  3. Customer inSight Studies can simulate a real choice by presenting hypothetical products or services
  4. Doing the research pays off in spades – Prego took over the Spaghetti market

Stop guessing about your new product launches – do the taste test!

1. Prego vs Ragu Story from TED Talk by Malcolm Gladwell author of Tipping Point

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