Following yesterdays post on ‘Market Research In A Recession’ is today’s post detailing the seven steps to minimize the impact of reduced market research spending. These steps from John Quelch (a professor at Harvard Business School) confirm a lot of what we have learnt in business to business markets over the last few months:
- Stay focused. Savvy marketers focus their research on the products, brands, and markets that are key to their marketing strategy. In a recession, it’s essential to get a clear read on existing core customers, including those who are most loyal to the brand and those who are most profitable, rather than fritter away research resources on potential or peripheral customers. When times are good, there is budget available for increased research on secondary products or customers. Now, nice-to-knows that are not essential will have to wait.
- Enlist trusted research partners. Marketers and research suppliers who trust each other and have established long-term relationships can jointly plan how to extract more insights and make better decisions based on fewer expenditures. For example, combining data sets may reveal new leading indicators of changes in customer behavior. Tracking studies may have an edge over one-off projects. CMOs who trim costs by consolidating their budgets with an integrated research supplier should insist that the supplier aggressively explore synergies across its various component agencies as well as eliminate research redundancies.
- Value experience and judgment. CMOs should tap the knowledge and intuitions of managers and researchers who’ve lived through previous recessions. In setting prices, for example, such insight can help calibrate the optimal level of price promotion offers. Experience also reveals proxies: in tough times, some marketers use research results from Sweden as a proxy for Scandinavia, rather than conducting the same research in all Scandinavian countries.
- Seize opportunities overseas. Some large multinational marketers, such as Unilever, are shifting market research expenditures away from Western Europe and toward emerging markets in Asia and Latin America. Relative to the developed economies, the costs of research in emerging economies are less and the payoff from incremental insight can often be greater. Brand preferences and consumption levels in emerging markets such as China, India and Brazil tend to be more fluid. Customer research is therefore critical to aid marketers trying to cement brand preferences early on as these economies develop.
- Use online market research with a dash of skepticism. Online research is cheap, fast, and the wave of the future. Tools like SurveyMonkey allow non-expert users to create custom surveys in minutes. As an alternative to offline focus groups, custom online panels can be formed for qualitative research on new product ideas or new ads. Taking the do-it-yourself approach rather than outsourcing to a market research firm is attractive in a cost-cutting era, but you risk getting no more than what you pay for. The opinions of convenience sample of an enthusiastic online brand community may not represent all users.
- Don’t cut market research across the board. Just as important as knowing where to cut research is knowing where not to cut. When marketers are creating fewer new ads and introducing fewer new products, it is doubly important to use rigorous pretesting to select the strongest alternatives. In categories where the bases for customers’ value judgments are changing, modest expenditures on copy research can prevent blowing much more money on ineffective messaging. Adding a few questions to standard tracking studies is a low-cost way to shed light on changes in customer attitudes and purchase behavior. For key products, running conjoint studies to check on shifts in price elasticities of demand and price-attribute tradeoffs can usefully improve the profitability of pricing decisions at a time when cash is king.
- Keep an eye on the new customer. No one has a perfect record of predicting the future, and the recession is making it harder for customers to envision or articulate their needs. Even so, and despite budget pressures, smart marketers devote a portion of their market research to getting a handle on future changes in customer behavior. Are customers of your brand going to revert to previous consumption patterns when the recession ends? Or are they developing coping mechanisms that will endure, especially if the recession is lengthy? What new products and services will customers be open to embracing? If, as in the financial services category, customer confidence and trust in brands have been seriously eroded, how long and what steps will it take to regain them? Eventually, the recession will end, and future success depends on being well-positioned, based on sound research, when it does.
To view the latest marketing strategies of large multi-national corporates in a recession, click here.
Original article viewed at http://blogs.harvardbusiness.org/
This entry was posted
on Thursday, July 30th, 2009 at 6:06 pm and is filed under Economic Downturn, International Market Research, Market Entry, Market Intelligence, Market Research, Recession.
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