Three lessons from the history of market research

Over the last decade a lot of work has been done on the history of market research. But you couldn’t be blamed for remaining unaware of these recent academic advances: market researchers – us at Ground Truth included – just almost never discuss the history of their industry. 

Reflecting on this ahistorical disposition led us to an article from 2022 by Professor of Advertising at RMIT, Robert Crawford. In ‘Seeing the Bigger Picture: Why Market Research History Matters’, Crawford argues that knowledge of the history of market research isn’t only for academics, but can also help practitioners to critically examine current practices. First, with a more historicist attitude towards our industry, we can more confidently identify appropriate points for change and progress. Second, we can of course learn from past setbacks and corresponding developments.

So, with Crawford’s advice in mind, for this article we’ve picked out three fascinating, and productive, moments in market research history! For each, there’s a moral to the story – a lesson still relevant to market researchers today.

1. When focus groups dismissed Baileys as a ‘girly’ drink that tastes like morphine

In 2003, Frank Fenn, chief executive of R&A Bailey & Co, with the six millionth box of Baileys Irish Cream in Dublin. Photo: Alan Betson.

In 1973 drinks inventor David Gluckman had a brief from an Irish beverage company… so he invented Baileys Irish Cream. He sloshed together whisky, cream, sugar and cocoa powder. ‘It tasted really good.’ In a few minutes, Gluckman was in a cab with the ‘murky brown liquid in its recycled bottle’ driving across town so that his business partner, Tom Jago, could try it out. ‘It tasted extraordinary.’ But – before presenting the goods to the Irish company which would, they hoped, buy the product – Gluckman and Jago decided to measure their enthusiasm against the more objective judgements of some focus groups.

The drink was poo-poohed by the potential customers. In the men’s group a dominant participant dismissed it as ‘a girl’s drink’ – and all the others fell into line. In the women’s group, Bailey’s Irish Cream got compared to diarrhoea medication: apparently it tasted like Kaolin & Morphine. What could these self-assured inventors do next? Believing that it didn’t capture just how ‘earth-shattering’ their idea was, Gluckman and Jago buried the market research report. As Gluckman recounted in 2017: ‘It stayed in my briefcase until 1984 when I unveiled it at the 10th anniversary party. It got a huge laugh. The “Kaolin & Microphone flavoured girly drink” had sold about four million cases (48 million bottles) that year.’

Importantly: this story isn’t straightforwardly one of market research failure. Yes – the work of the market research agency failed to show the huge potential market value of Baileys. Only a handful of focus groups were held, social dynamics within the groups were inadequately managed, and participants were too much taken at their word. However, if we comb through Gluckman’s story, we can see how the two drink inventors themselves undertook qualitative research – but with more astute, flexible and experimental techniques than those employed by the 1970s MR agency. 

Gluckman and Jago did not merely rely on their tastes and intuition. They made two crucial observations. First, the focus group participants said one thing, but did another: all glasses were empty at the end of each session. Second, the inventors had displayed a bottle of Baileys behind the bar at their local: a couple of policemen asked to try it one night, and drank the lot. 

2. When the first Australian market researcher, Sylvia Ashby, met industry legend and Freudian savant Ernest Dichter

Ernest Dichter leading a focus group in 1960. Photo: Susan Fauldi. 

Did you know that the first independent market researcher in Australia was a woman? Sylvia Ashby founded the Ashby Research Service in 1936. Robert Crawford’s article (which inspired us to write this one) focuses on the part Ashby played in the history of market research. Ashby was a qualitative researcher – but one who understood the importance of quantitative or empirical work and stressed the importance of scientific method. In the late 50s she registered her disdain for market researchers who did not hold themselves to the standards of science: 

At this point I should record that any Research work done by Ad Agencies in NY is looked upon askance by Research scientists of the higher order in USA – the element of bias constantly rears its head. 

Ashby was uniquely familiar with the global state of market research. Throughout her career, she had made several international trips – not to meet clients but to visit legendary industry figures.

Ernest Dichter, a refugee of Nazi Germany, was a psychologist and the founder of ‘motivational research’. With a background in Freudian psychoanalysis, Dichter sought to discover the unconscious motivations of consumers. An infamous example of his work: for a campaign for Ivory Soap he advised Procter & Gamble that there was a repressed sexual aspect to bathing – ‘one of the few occasions when the Puritanical American was allowed to caress himself or herself’. 

Ashby flew to New York in 1958 to see what she could learn from Dichter. She wrote of her disappointment in her diaries. Ashby’s line of questioning revealed the shallowness of Dichter’s evidence base. Dichter, it appeared to her, relied less on subtle observations from in-depth interviews or anthropological methods than on a mix of his intuition and static Freudian theory.

The lesson for market researchers today? Ashby didn’t reject the idea of latent motivations nor Dichter’s program of motivational research. But she reminds us – crucially – that qualitative research needs to be empirically rigorous and, to use a Freudian concept, we need to be wary of projecting our desires onto the consumers we are researching. 

3. When Coca-Cola tried to make a ‘change for the best’

One of the posters for the launch of New Coke in 1985.

In the early 1980s Coca-Cola was losing ground to PepsiCo. Marketing vice president Sergio Zyman had a sensible and radical solution: coke with a new, better flavour. A sweeter recipe was trialled in taste tests across America. Almost everyone preferred it. So in the summer of 1985 – 83 years after the only other change to the formula, the removal of cocaine – Coca-Cola launched New Coke and took old Coke off the shelves. 

But the people didn’t want that kind of change… The Coca-Cola consumer hotline was receiving thousands of complaints a day. Hoarding of old stock began. Even Fidel Castro commented that New Coke was ‘symptomatic of American decay’. After a few months old Coke was reinstated.

Where had Zyman gone wrong? Coca-Cola’s marketing department focused too much on the simple quality of the product (how much people liked the taste) and ignored other essential consumer tastes (their taste for tradition say). For us, it’s a reminder that while flavour, for example, is crucial – as the story of Baileys Irish Cream shows us – just as important is the emotional investment consumers have in products. Rigorous motivational research could have saved Coca-Cola millions.