As far as Procter and Gamble is concerned, focus groups are out. Jim Stengel, the company's chief marketing officer, is relying on one-on-one research instead. He believes the obvious needs of consumers have already been met -- and the real challenge lies in defining unarticulated needs. "I'm a big observational guy," says Stengel, in a recent profile in Fortune.

He now encourages his marketers to invest a great deal of time observing consumers -- watching them wash clothes, clean floors and change diapers. A few years ago, they spent four hours a month with consumers. "It's at least triple that now," he says.

By observing dozens of young mothers close-up in an on-site diaper-testing center, P&G's baby-care division learned how frustrating extended periods of toilet training can be to these moms. Based on that insight, P&G is launching a new line of diapers, Feel 'n Learn Advanced Trainers, that are designed to stay wet for two minutes, encouraging children to use the toilet. Rather than focusing on having the driest diapers, the company has reframed its positioning to focus on "helping moms with baby's development." Having launched an array of products with this in mind, P&G is now gaining market share against Kimberly-Clark's Huggies for the first time in a decade.