When I was a young man, learning to fly with Britain's RAF, our instructors drummed one lesson home: "In poor visibility trust your instruments, not your senses".
In fog, in cloud, at night don't believe what you see and feel outside the cockpit; believe the instruments in front of you.
They told us horror stories of young pilots unwittingly flying upside down in cloud, pulling back on their control column to gain altitude and finding themselves in a dive to earth when they emerged into the sunlight below the cloud.
And we learned the RAF mantra: "There are old pilots and there are bold pilots but there are no old bold pilots".
John F Kennedy Jr.
apparently crashed and died, along with his wife, because as a relatively inexperienced pilot he trusted the evidence of his senses on a straightforward night flight.
This has a lesson for research.
Using focus groups, for instance, is to trust your senses, not your instruments.
I was reminded of the RAF flying training when I carried out some research six years ago.
Commercial confidence prohibits me from identifying the product but it was a product brand new in the market.
There was no direct existing competitor.
Once the client's product was tested for consumer acceptance and the flavours to launch were decided on, the producer then wanted to establish what price he should charge.
A range of prices from about $1.
60 to $1.
90 cents per pack was tested using trade-off analysis (conjoint methodology).
The analysis showed that the product had an inelastic demand curve.
Whatever price was charged in the range 60 to 90 cents, projected market share remained the same.
The client could not believe this and came back with a graph from AC Nielsen that plotted sales (warehouse withdrawals) against price for the Competitor product.
I found another three instances when the price was $1.
64 a pack and sales volume was much lower than the peak.
There were also two other occasions when the volume was relatively high despite a unit price of $1.
85.
Taking all the data together, all 23 data points, I calculated the correlation between price and volume and found a small, a very small and non-significant negative correlation.
In other words, there was no significant relationship between price and sales volume.
The demand curve was inelastic over all the data.
I was very pleased by this.
It is not often one receives instant confirmation of one's predictions.
In fact I wondered why we had bothered with the previous pricing research, which was of course hypothetical, if the client already had the concrete Nielsen data to hand.
The client was, at first, unwilling to give up the evidence of his senses for what the statistical instruments told him, despite the fact that he could charge the top price without jeopardizing the market share of his brand new product.
Your senses and your instincts will mislead you, conjoint analysis will not.
Michael Petty Ph.
D.
In fog, in cloud, at night don't believe what you see and feel outside the cockpit; believe the instruments in front of you.
They told us horror stories of young pilots unwittingly flying upside down in cloud, pulling back on their control column to gain altitude and finding themselves in a dive to earth when they emerged into the sunlight below the cloud.
And we learned the RAF mantra: "There are old pilots and there are bold pilots but there are no old bold pilots".
John F Kennedy Jr.
apparently crashed and died, along with his wife, because as a relatively inexperienced pilot he trusted the evidence of his senses on a straightforward night flight.
This has a lesson for research.
Using focus groups, for instance, is to trust your senses, not your instruments.
I was reminded of the RAF flying training when I carried out some research six years ago.
Commercial confidence prohibits me from identifying the product but it was a product brand new in the market.
There was no direct existing competitor.
Once the client's product was tested for consumer acceptance and the flavours to launch were decided on, the producer then wanted to establish what price he should charge.
A range of prices from about $1.
60 to $1.
90 cents per pack was tested using trade-off analysis (conjoint methodology).
The analysis showed that the product had an inelastic demand curve.
Whatever price was charged in the range 60 to 90 cents, projected market share remained the same.
The client could not believe this and came back with a graph from AC Nielsen that plotted sales (warehouse withdrawals) against price for the Competitor product.
I found another three instances when the price was $1.
64 a pack and sales volume was much lower than the peak.
There were also two other occasions when the volume was relatively high despite a unit price of $1.
85.
Taking all the data together, all 23 data points, I calculated the correlation between price and volume and found a small, a very small and non-significant negative correlation.
In other words, there was no significant relationship between price and sales volume.
The demand curve was inelastic over all the data.
I was very pleased by this.
It is not often one receives instant confirmation of one's predictions.
In fact I wondered why we had bothered with the previous pricing research, which was of course hypothetical, if the client already had the concrete Nielsen data to hand.
The client was, at first, unwilling to give up the evidence of his senses for what the statistical instruments told him, despite the fact that he could charge the top price without jeopardizing the market share of his brand new product.
Your senses and your instincts will mislead you, conjoint analysis will not.
Michael Petty Ph.
D.