Wikipedia defines ethnography as the "...qualitative description of human social phenomena, based on fieldwork." This can include direct observation of behavior, interviews, and other techniques. You should be interested in ethnography because it represents one of the newer approaches to market innovation.
I first encountered ethnography in a project we completed with the help of the DPV Group (led by Mike Lanning). Mike's approach, detailed in his white paper and in his 1998 book, is to begin with careful observation of customers interacting with the client's products and services. The idea is to write a "script" for an imaginary video that describes the customer experience as it is today. The client's team reviews video one, looking for opportunities to make the experience better and more unique. The result of that is one or more alternate scripts for what Mike calls "video two" - the new customer experience that will be created.
As Mike sees it,
"Properly understood, business is very much about the exploration and improvement of customers’ real life experiences. The traditional concepts of “needs, requirements and benefits” share important common ground with resulting experiences. However, the differences are considerable, as the conventional concepts focus too much on what the business does or on superficial, vague ideas of benefits or needs. Managers must learn to deeply understand and decisively act on specific experiences customers would most value. "
Bob Sutton writes about his new course at the Stanford d.school called "Clicks-n-bricks: Creating Mass Market Experiences." The first design project focuses on improving the theme park experience for non-English speakers. Another example of focusing on customer experience as a differentiator.
I still have much to learn about ethnography and how to apply it to market innovation. I would love to hear from you about examples and techniques you have used (or seen) to crack this nut. You know where the "comment" button is! (Down at the bottom, where it says "Sign in." If you don't have a TypeKey account yet, it's easy and free to sign up, so please do.)