Wednesday, December 1, 2010

"The mind knows not what the tongue wants"



If I told you that data is the critical tool in how industries make you consume and saturate the markets with products. You most likely would say "no shit Sherlock". However, if I told you this, you wouldn't think that data is the tool to make people happy. A tool to horizontally reach demographics and create new business strategies and marketing styles.That one way of using data allows for organizations or companies to make people happy by giving them "something expensive, something to inspire to, to make them turn their back on what they think like now...". However, on a horizontal scale industries can use data to discern that there is the different kinds of mustard for different kinds of people. Data can demonstrate patterns and trends allowing industries to transform from good-to-great as Jim Collins says. Data can allow industries to change their tactics, and approach to a consumer base. It can dictate how research and development begins to progress for future product lines. Data is everything boys and girls. But enough generalities I will give some example to demonstrate my point. While watching the online video of Malcolm Gladwell he articulates how data can change corporate strategy. He illustrates how data can eliminate universals thus leading to horizontal market saturation. That horizontal saturation is a product from understanding data. That data showed it was worth wild and their was the ability to foster growth through the understanding of variables and veritably. He explains this by telling the story of Howard Moskowitz. Who is most famous for re-inventing tomato sauce.

Howard Moskowitz was approached by Pepsi. His task was to find the best diet Pepsi between 12% and 8% band of aspatain. After the data came in Howard realized that the data was a mess. While prior to Howard most corporations would just take an educated guess and market based off it. However, Howard suggested and in fact did break the data down into clusters and realized that the data showed something interesting. He realized that the question wasn't whats the best "pepsi", rather the question is what are the best "pepsis".

He then was approached to consult for vlasic and showed how they needed to be looking for the perfect pickles. He told vlasic they needed to not only improve their normal pickles but create a zesty pickle. Then he began to consult for campbells soup. He told them they needed to categorize and vary the sauces. He said they needed to vary them "according to every conceivable way that you can vary tomato sauce. By sweetness, by level of garlic, by tartness, by sourness, by tomatoey-ness, by visible solids." Then he took all the tomato sauces on the road to New York, Chicago, Jasksonville, and Los Angeles. Then he gave ten bowls of tomato sauce to people over a 2 hour period, after which they rated the sauces from 0 to 100. Once he had the data he didn't' look for one point of popularity, rather he looked at all the clusters and attempted to sort the clusters into marketable segments.

He realized Americans fell into three groups: sauce plain, sauce spicy, and sauce extra chunky. And of all three facts the third was the most significant. Specifically because in the 1980s you would not find extra chunky tomato sauce. Prego (campbell) said to Howard" you telling me that one third of Americans crave extra-chunky spaghetti sauce and yet no one is servicing their needs." To which Howard replied in the affirmative. So Prego went back reformulated their tomato sauce. After they released their extra-chunky tomato sauce it took over the spaghetti sauce industry.

"And over the next ten years they made 600 hundred million dollars off the line of extra-chunky sauces." Howard's astute idea of perfect pepsis, pickles, etc in combination with his poignant examination of data demonstrated that horizontal was the way of the future. People all over the industry realized that their approaches were all wrong. The other food corporation began to emulate this tactic to promote and stimulate growth. For example there were "14 different kinds of mustard, 71 different kinds of olive oil..."

Now you why is that important? It is important because "Howard fundamentally changed the way the food industry thinks about making you happy." It dispelled "assumption number one in the food industry." It "used to be that the way to find out what people want to eat--what will make people happy--is to ask them." However, the focus groups Prego and Ragu did for years did not reflect the data mostly because "people don't know what they want." Malcolm Gladwell quotes a phrase Howard loves to say: "The mind knows not what the tongue wants."

Howard made people realize they don't know what they want. To which Malcolm demonstrates (with some deal of levity) discussing how people really like their coffee versus how they request and say they like their coffee. Secondly Howard demonstrated the importance of horizontal segmentation. He dispelled the traditional practice of using data. It dispelled the notion that to make people happy you had to do it by giving them "something expensive, something to inspire to, to make them turn their back on what they think like now...". His deconstruction of the vertical model, and his vehement illustration of how all mustards, tomato sauces and so on existed on a horizontal plane. Thus eliminating the notion that "there is no good mustard, or bad mustard. There is no perfect mustard, or imperfect mustard." Howard asserts that "there are only different kinds of mustards that suit different kinds of people" Howard "fundamentally democratized the way we think about taste."

The third thing Howard did (articulated by Malcolm) was the deconstruction of the "notion of the platonic dish." He dissolved the idea that there is a perfect way to make a dish. He, Howard, eliminated the ought to be mentality in the food industry all from an examination of data. Howard's use and examination of data changed how the entire food industry operated and produced products. Howard broke the traditional methods thus created growth and development for an industry. He asserted that you should not use the data to attempt to find the "one thing" that a large amount want. Rather he suggested that the industry examine the data and find different varieties of a good that covered everyone in the market, for total saturation.

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