Do research companies market themselves effectively?
In mature markets, where marketing has penetrated all layers of society, the benefits of market research are generally understood. But what is the situation in emerging markets such as Central and Eastern Europe and the Middle East? Do these regions’ research suppliers promote their skills sufficiently?
In emerging markets the marketing aspect of the industry is often underdeveloped, as Jiří Michal found out. Michal is manager consumer insights and strategy at Kraft Foods in the Czech Republic. “Unfortunately,” he says, “the marketing of the majority of Czech research agencies is extremely inadequate.” He gives us some recent examples of how well-known research agencies approached him. “A potential partner took a lot of effort explaining all the tools he could offer. I had to stop him after ten minutes, asking for examples of potential business issues we might face, and how they could help us with these. But all they could talk about were tools, not business.”
Other suppliers were trying to sell Michal neuroscience, eye tracking and TVC testing, stressing how these were better, quicker and cheaper. “Again, completely misunderstanding the way I would approach these techniques as a buyer. For me, these fields are definitely interesting, but only as complementary to broader business solutions.”
What left Michal speechless was the one agency – a member of Czech market research association SIMAR – that explained how lower margins had forced other agencies to jeopardise data quality. “They even said they considered launching a big campaign about this alarming topic. I was completely astonished! They use a sales pitch in which they challenge the data quality of their top peers? I take data quality in this country for granted. Their message would completely undermine that trust. Instead, they should focus on my client needs and cooperate within SIMAR to improve the perception of the industry as a whole.”
In Romania, Alina Serbanica, senior vice president of global RAES at Ipsos Interactive Services, signals quite the opposite. “Providers work together to educate clients on the benefits, added value and strengths of consumer research.” Over the last 20 years, she has seen her industry improving, using cutting-edge research methodologies and techniques. “Despite the Romanian economy lagging behind, and the big gap between urban and rural areas, all market research players do their utmost to embrace innovation and promote high-quality market research services.”
Over in the Middle East, one of the few remaining growth regions, several international and many boutique agencies have invested and opened in the region over the past several years, reports Steve Hamilton-Clark, CEO for TNS Middle East & North Africa. “Competition has increased, and this is good – it has made all players work harder and smarter at positioning themselves intelligently, showing how each can and does add value.” However, he adds that over the past three years or so this has been diluted by a focus on pricing to win (and protect) share, diverting attention away from an added-value proposition.
As one of the oldest democracies in the region, Lebanon is a fairly mature research market, with agencies publishing reports on political, social and economic issues. This has familiarised most Lebanese with market research, observes Tarek Ammar, CEO and co-founder of ARA Marketing Research & Consultancy. “Many colleagues are now considered TV stars.” However, he adds that sometimes over-usage of research data is hurting the industry. For example, a ‘brand of the year’ logo appears on many FMCG products, implying that the consumer chose these brands. “But many of these brands had just been introduced and were not well known. The selection was limited to brands that paid to join the poll! In this case, publicity for market research failed to create value for our profession.”
Ideas and inspiration
Serbanica is happy to report that more and more clients in Romania understand and recognise the importance of market research. “Since the economic crisis, more clients – including local Romanian ones – better understood the need for exploring consumer insights as their needs, consumption and expectations changed as well.”
From a client perspective, Michal confirms that market research can definitely bring added value for companies like his. But, he adds, “Unfortunately, not many research agencies are able to do that. We are searching for partners to solve business issues, who can bring challenging ideas and inspiration.” Most of all, Michal wants his research providers to become business partners. For this, they need to hire people with new skills, influences, and a business background. He feels that suppliers should also focus on building long-term relationships, and that they should synthesise all the knowledge they have and share it with their clients.
Prove our value
Some sectors have embraced market research more than others. In Romania, automotive and construction simply cannot afford to invest more, says Serbanica, as they have been significantly impacted by the economic crisis. She adds that all sectors are challenging the research agencies to revamp their services to fit into budget limitations. “This might explain why online, CATI and CAPI studies continue to increase.”
In Lebanon, Ammar witnesses a growing uptake of research on the part of Lebanese companies across all sectors. However, many industries are not yet heavy users of research, including (the government-owned) telecom, ISPs, hotels, service sectors (including the many resorts) and even real estate (the second largest economic sector in Lebanon). “I believe it is our role as research professionals to show and prove the value of our work to these industries,” he says. He also blames quick and dirty research for damaging his industry’s reputation.
Although the multinationals in the FMCG sector have always embraced market research as a core part of the marketing mix, it’s the more recent users in the Middle East – financial, telecom and automotive – that are getting the most from their research programmes, according to Hamilton-Clark. “Tier two and local FMCG companies are the most creative in professionalising and growing their businesses through the intelligent application of consumer research programs.” The one core sector yet to be fully leveraged is media research – specifically, television audience measurement.
Despite all the progress, the market research volume is still very modest in Lebanon, with an estimated US $5 million (excluding work outside of Lebanon) – almost US $1 per capita. “There is still long way ahead for our industry,” admits Ammar. As for the other Arab countries, he observes that they haven’t had real elections yet, and opinion polling is still in its early stages. Overall, Ammar feels that the reputation of market research in Arab countries is slowly improving. What’s needed first, he urges, is a professionalisation of the industry. “It is important to position market research as a profession and a recognised business. Today, anyone can open a market research company, but not an accounting firm.”
Competition has increased in the Middle East, observes Hamilton-Clark, not just in market research, but across all sectors. Many local and regional companies are increasingly using consumer research, and more recently the government sector, especially in the UAE, is measuring, monitoring and managing change through large-scale customer satisfaction research programmes. “Overall,” he concludes, “marketing research is accepted as a way to create value for users.”
Jiří Michal is manager consumer insights and strategy at Kraft Foods in the Czech Republic. Steve Hamilton-Clark is CEO of TNS Middle East & North Africa. Alina Serbanica is senior vice president of global RAES at Ipsos Interactive Services. Tarek Ammar is CEO and co-founder of ARA Marketing Research & Consultancy
On the 17th and 18th March in Prague ESOMAR is holding the second annual Central and Eastern European Research Forum if you are interested in attending or want to find out more information about the event programme you can visit the ESOMAR Event Pages.