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I recently contracted to develop marketing strategies for a small nutraceutical manufacturer and distributor. Prior to my appointment, the firm had previously contracted a "big name" marketing and communications agency for a six-figure fee.

As one would expect, the "big name firm" conducted market studies, focus groups, surveys, product positioning, market segmentation, logo and tag line for the new brand. As big and professional as they purported to be, the marketing firm failed to suggest or conduct a very critical step in the research area...this would come back to haunt them and their client!

The primary distribution channel identified for my customer's product was the national supermarket retail banners. A strategy was launched to contact buyers and category managers for NHPs (Natural Health Products)on a national scale. Results were excellent - several multi-national retail chains responded, expressing interest in the brand.

The company was elated! Vendor information packages were prepared in response to the retailer's request for product information, marketing plan, sales and promotion strategies and one key area: sales forecasts for the initial trial period. This is where the company got stumped! The "big name firm" had not conducted quantitative scientific research. Namely, product usage data. This data is available from market research specialists like AC Nielsen. For a fee, one can obtain very specific usage data from product scanner data reports. Each time a product is sold, the UPC (Universal Product Code) or bar code is read by a scanner and stored. Companies such as AC Nielsen have access to this data and can "drill" based on category, segment and down to actual product sales by sales channel.

My client and their "big name" consultant, were not able to provide cogent sales forecasts to the retailers based on scientific data. They projected sales based on estimates derived from small retailers of the product category. What was missing was a coherent and cogent sales forecast, based on "scientific data". The result was an embarrassing retreat from the listing process to regroup and acquire the AC Nielsen data. Hopefully the faux pax on behalf of the vendor has not tarnished its image with the retailer.

The moral of the story: Both qualitative and quantitative market research would have benefited my client immensely. They would be in possession of a large purchase order from a multi-national retailer as we speak had they availed of the critical data from AC Nielsen!

Learn more about this author, Alan Houston.
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