BELOW THE SURFACE

When Melville Stone founded the Chicago Daily News in the late 1800's (he also started the Associated Press), all newspapers sold for a nickel.

He thought there was a market for a penny paper. After appropriate market research and a trial issue, the new paper was launched.

It quickly grew to 9,000 copies-making it a huge success for it's time. (Melville was turning down ads for lack of space!).

Suddenly the growth stopped dead. Unable to figure out why, Melville hit the streets and started asking. The answer became obvious: No one had any pennies.

Because merchandise was priced to the nickel, there simply weren't very many pennies in circulation.

So Mr. Stone ordered barrels of pennies from the federal mint. He then visited merchants and convinced them that 49 cents sounded much more appealing than 50 cents. He was right, and this pricing strategy became widespread.

And soon almost everyone on Chicago had at least one penny in their pocket as they left any store in town.

The rest, as they say, is history.

Whether this story is literally true or a piece of corporate folklore, doesn't really matter. The point that "the brass" need to be out on the street seeing what's happening, does.

Determining the reasons people will or won't buy something often requires an insight from below the surface of market research and customer scorecards.

When instant coffee was coming on the market, one manufacturer had mountains of taste test data proving it was just as good as fresh brewed. Despite heavy advertising, they also had lousy sales.

Eventually somebody rounded up a group of neighbourhood ladies, gave them a grocery shopping list, and asked them to describe the woman who wrote the list. There were two identical lists, except for the coffee choice.

Out came the answer.

The woman planning to buy instant coffee was seen as lazy, neglectful of her family, and derelict in her homemaker duties by resorting to such a short-cut! (Don't have a politically correct fit on me - it was a long time ago).

After banks spent a fortune on sophisticated ATM's they discovered that people were perfectly happy taking money out of a wall, but simply were not going to deposit any into it.

One survey reports that 97% of all VCR's are used solely to play rented movies.

Recently Media Watch in consultation with Simon Fraser University surveyed women about advertising.

A shocking 53% have refused to buy products whose ads offended them with a blatant "sex-kitten decoration" portrayal of women.

While 21% had complained to the advertiser, 76% had discussed their perception with other women.

What do you do every month to keep your personal, live ear tuned to what's happening below the surface in your marketplace?