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One Brand That Used Market Research to Crush the Competition

I’m going to let you in on a deep, dark secret: there are still companies who do not conduct market research. They actually launch new products without having the research to back up their assumptions. Now, don’t ask me to try to explain their rationale, as it it far too crazy for me to comprehend, but I can say with confidence that I’m fairly certain these companies aren’t growing by leaps and bounds. Now for a company who does use market research.

Nest was co-founded by former Apple employees, Tony Fadell and Matt Rogers. The first Nest product was a home thermostat, which they chose after conducting market research. Upon doing research, Fadell said,

“Wait a second. There’s a quarter of a million thermostats in the U.S. alone? Well, if there’s that, what’s the replacement rate?” And I looked and it was over 10 million a year for just residential and light commercial thermostats. I was like, “Wait a second. 10 million? That’s more than game machines! That’s more than washers, dryers, stoves, and ovens. That’s a big market.”

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Secondly, he found that 70% of thermostats were sold through wholesale, and weren’t being designed for people to use. They were being designed for installers to install and sell. It had nothing to do with the consumer’s needs. Had he not conducted market research, he may have launched a product that didn’t fill a void in the market.

From thermostats on, Nest has become a company that reinvents home products with the consumer’s needs in mind. To gain insight into the consumer’s mind, the company uses surveys to conduct market research. Their surveys include questions about how their current products function, and what they would like changed in order to improve the product. By giving consumers the opportunity to give their feedback, Nest can tailor their products to the consumer’s needs and wants. For example, one question they have asked their customers is “how high is your ceiling?”, in order to get an average by which they could use for their future products.

One month after Nest’s thermostat release, it was sold out in their online store. Three years later, in 2014, Google bought the company for $3.2 billion. Before Nest, I think most homeowners would be hard pressed to tell you the name of the company that manufactured their thermostats. Now, the brand is a household name synonymous with smart home and AI. All due to a little market research.

LEARN ABOUT: Market research industry

Synonymous to the above example, there are multiple successful enterprises who understand the importance of market research. Conducting market research using powerful market research survey software which provides features such as a unique sample of respondents from across the globe, robust analytics, ready-made survey templates, etc has enabled them to make strategic business decisions, which in turn helped them to grow by leaps and bounds.

QuestionPro Audience provides our clients with access to more than 5 million active consumer respondents, who are pre-screened and qualified candidates for high-quality data collection. Our Consumer Panel is carefully recruited to target all type of users, but also taking into consideration certain key industry trends, such as online store preference, physical store preference, actual systems, reasons to purchase, etc. With industry knowledge, innovative tools, and purchasing power, QuestionPro Audience always meets the rigorous demands of our clients. By implementing various recruitment methodologies, we make sure to provide the right kinds of respondents for your research.

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About the author
Rudly Raphael
Rudly has more than 15 years of experience in the market research industry, implementing primary and secondary research for a number of high profile clients. He's a frequent blogger and has published a number of articles in various online journals, magazines, and other publications.
View all posts by Rudly Raphael

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