(Compiled and presented by Jenny Abraham, Managing Director and Gautam Nath, Executive Vice President, TNS India).
The birth of an idea (or a brand) is often said to be mid-wifed by market research (MR). Why is then MR conveniently forgotten when the product becomes a household name? We often see the advertisements doing the rounds of the news circuit; the production house raving about how they created the advertisement and the marketing/brands team basking in the glory of success but no one wishes to know who recommended the strategy to make it a success.
Is it just the advertising idea and production quality, which decides the success of a particular brand?
It is perceived that MR will never provide all the answers but simply continue to supplement the knowledge base for an organisation. The traditional paradigm defining socio-economic classes amongst Indian consumers is also undergoing a change. Here is an instance of a rise in rural consumption of a ‘supposedly’ SEC A+ category shampoo brand. This surely is a glaring example of the redefining of the Indian consumer, thereby challenging the norms. This is where MR works! –
The new-age market researcher is more like a social scientist who probes the minds of the consumers rather than their actual needs, since people do not talk of their deepest desires in focus group discussion anymore, rather they prefer talking to the scenario planner or the social scientist who can understand their minds better. MR now identifies new ways and means of understanding the consumers better.
Discussions centred around the recent MRSI annual seminar, which focused on making market research work better by going beyond the obvious. MR is striving to become the equal partner or stakeholder in the branding / marketing process rather than just being third-party suppliers.
The future of Market Research raises questions like –
• What will be the workings of the industry in India?
Consolidation of businesses, Mergers and Acquisitions, Re-branding processes are in play. Is MR still the underdog in the branding process? Or is it coming of age? An increase in use of information technology can be attributed to its growth?
• What will the companies look like?
International exposure has led to the market being concentrated on a few players, global accounts, globally tested research models, standardised data collection.
• Where will MR be on the corporate food-chain?
MR is increasingly gaining the status of a stakeholder in branding processes or just a third-party supplier.
• Will MR be there at all?
Is there a threat to the industry if at all, from the likes of management consultancies, in-house MR at organisations and academic institutions given their growing interest in market research and to save costs.
Talking about the business, Asian MR market is growing by 10 to 11% a year and is ‘the hottest market worldwide for the market research industry’, according to Tony Cowling, Chairman of TNS. Cowling explained that, while the business is growing 5% a year on average worldwide, growth in Asia is about 11%. Australia has the largest MR sector in the region, but this is growing only 4 to 5% a year, compared with 20% growth in China and 15% growth in India. He predicts that the ‘market research industry regionally will grow twice as fast as the overall economy,' driven both by the establishment of US and European companies in Asia - particularly in China - and by local companies’ increased use of MR. TNS total billings reached £950m last year, of which 12% was from Asia. 'You have to be in Asia, be outsourcing, and using the Internet if you want to be in the future of MR' according to TNS Tony Cowling, speaking at the BMRA's annual conference recently.
Snippets to aid the article:
• http://www.mrweb.com/drno/frmemail/article4612.htm (27 Sept’05)
• (Business World – 30 Aug’04, case study analysis by Raghavan Srinivasan, DMD, TNS India)
MR works when sourced from companies with national infrastructure for data collection with a transparent and audited quality assurance programme; best research practices and methodologies/models that are proven in India and abroad; and finally, time commitment of senior research experts to help go beyond raw data and blend information.
• http://oldwww.roymorgan.com/papers/2000/2000JL1.html
Today, suppliers are critical. Tomorrow, they will be more so! And just to make things really interesting, they may be our competitors, our partners, or our competitors’ partners, or our owners.
What about alternatives and substitutes? As an industry we have typically focussed on competitors and customers, and paid little attention to alternatives and substitutes.
The obvious substitutes are BS (Bureau of Statistics), universities, and management consultants.
Even more importantly, technology ® information systems, and information is real big business.
We foreshadowed that data would be in abundance. The Internet would create the expectation of free information, and an ability to aggregate, analyse, and make sense of data, would be critical.
We foreshadowed that more sophisticated data management systems would mean that increasingly, our clients would be able to glean what they need to know about their customers from their own systems.
We were right about everything except the timing. Relative to other industries, the changes to our own industry have been gentle. We are very lucky we have been able to watch other industries, often our clients, as they have been transformed.
Of particular relevance here is the insight of Andrew Grove, President and CEO of Intel, in his recently published book "Only the Paranoid Survive". He says "There are moments in any business when massive change occurs, when all the rules of business shift fast, furiously and forever". He calls such moments "strategic inflection points".
A strategic inflection point can be set off by almost anything:
• Mega competition;
• A change in regulations;
• Even a seemingly modest change in technology.
We believe today this industry - the market research industry - is at a strategic inflection point.
The world of market research is on the cusp of a new era. This new era is one, which will be defined by globalisation, technology and communication, reduction in traditional boundaries, and a strategic focus on the use of information.
Globalisation means that efficient supply is increasingly taking precedence over geographic proximity. Global alignments are increasingly impacting on all industries including our own, and that of our clients. The virtual organisation has become a reality in technology and information based industries.
Technology has increased the precision and speed with which we do almost everything - from the precision with which data can be captured, analysed, reported and disseminated, and the speed with which a highway or a car must be built, to the speed with which new technology itself can be created. Technology has also increased both the speed and complexity with which information can be transferred and processed with dramatic impacts on the speed of communication.
If globalisation has removed or weakened traditional geographic boundaries, the combined impact of globalisation and communications/technology has weakened the boundaries, which separated industries. E.g., a credit card is now in many ways doing what a bank does; a utility company which installs a direct line to its customers is potentially in the business of telephony; a manufacturer plus internet can be a retailer; any company with a website can be a researcher; any company with a customer base can be a researcher. There are opportunities and threats in abundance.
We believe today this industry - the market research industry - is at a strategic inflection point. Today more so than ever before the industry must develop its own way. Grove points out that, managed wrongly, a strategic inflection point can mean the end of the game. Managed right, it can turn into a powerful force.
Clearly, we all want to manage it right. So how do we go forward? The value of a market research company, and therefore its survival, has always been dependent on many factors, such as:
• Cost of capturing data, analysing data, reporting data;
• Availability of smart people with the unique combination of logic and creativity;
• Demand and supply, and thus, pricing.
• Ability to interweave various data sources not all collected through MR means
Ever-improving technology and communication is increasing the efficiency of data capture, analysis and reporting. We are seeing new methods of surveying including CAPI, internet, soon WAP, ever increasing sophistication in computer modelling, data, data mining, etc, larger more cost effective database systems. This kind of change, continuous improvement, has itself become almost a constant. And most of us are going with the flow.
But as we’ve already said, the changes so far have been gentle. The dotcoms haven’t quite made it into our business yet. As they have focussed dollars and energy as chasing clicks, they have not yet turned to the data analysis – the value of the data that happens to sit behind the visitation and transactions remains potential. What about when they move?
Our clients – banks, insurance companies, telecom, retailers, are only just on the brink of where they can truly get valuable information from their customer databases. They will be dealing with a census of their customers – so many of our valued sampling, weighting and projecting skills will be redundant.
We as researchers will need to be very aware – of where our traditional skills are no longer relevant, and where they are relevant.
A lot of what we have traditionally undertaken, as projects will be tested in real life. For instance, with Internet advertising/Internet offers – you literally watch it happen.
We will need to change what we see as our business. For instance, we used to articulate our business as:
Our core activity is asking questions, counting, sorting and analysing the answers and reporting our findings.
Clearly, if that’s our business – we won’t be around for long.
We as researchers cannot be "precious". The boundaries will blur. And they will blur in areas that we as researchers hold "sacred", e.g., direct marketing and interviewing. Telemarketing companies will do a great job of conducting surveys – and they have scale.
We must be willing to embrace uncertainty, lead the industry (or at least go with the flow) and continually learn.
And remember that it’s times like these when there are threats around every corner – that there are also opportunities in abundance.
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