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Market Research Prices - A Global Comparison, Part I

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ESOMAR’s latest Prices Study, the seventh such study conducted by the organisation since 1982 and its most extensive to date, reveals some interesting trends in market research pricing globally.

The report obtained responses from 592 market research agencies in 95 countries, with enough data being obtained from 63 of these nations for reliable international comparisons to be drawn. Quotations were received from agencies for eight hypothetical research projects, each with a specific methodology. In addition, tariff data was also sought for the daily charge per junior and senior researcher, as well as the cost of an hour’s use of a call centre.

In the first of a two-part post detailing the main findings of the report, we look firstly at variations in market research prices from one nation to another, and at how local conditions can have a marked impact upon costs:

The highest and lowest

The Prices Study contains a wealth of information about eight projects, and specific activities, across 63 countries. Nevertheless, there will always be interest in which countries are the most and least expensive. Despite this being an easy question, the answer is not easy to provide. To compare countries one first has to pick a type of project, for example focus groups with consumers, or a telephone tracker with businessmen. The most expensive country for four focus groups was USA, with the UK second. However, the most expensive country to conduct a Usage and Attitude study online is Finland, followed by France.

In order to create an overall ‘Global Index’, a composite score was calculated using a representative quantitative and qualitative study, where an index value of 100 represents the mid-point. The index is based on averaged indices from the cheapest option in each country for the Usage and Attitude project and the focus group project which were the two projects with the most responses to reflect prices for relatively typical quantitative and qualitative projects. The tables below detail the 20 most expensive and 20 cheapest countries for research:

Not uniform

No global research project is truly uniform in the way it is undertaken in each market. The Prices Study highlighted a number of factors, which will be familiar to those who regularly conduct international research.

Many markets do not yet have online as an option, and some do not have telephone as an option yet. In some markets telephone is in decline because fixed phones are in decline, particularly in countries like Finland where about 50% of homes are mobile phone only. In Australia and USA most agencies were not able or willing to quote for door-to-door research, whilst in Singapore door-to-door is preferred to Central Location Testing. In some countries it is normal to specify that one moderator will conduct all the focus groups (if the number is small), but in other countries the moderator has to be of the same gender or group as the participants.

The message from the research is clear. The cheapest way to conduct a global research project is via multiple modes, varying by country. Any attempt to fix on a single methodology will result in much higher costs, and may not be possible.

The above article orginally appeared in the October 2007 edition of Research World

Posted in International Market Research, Market Research, Articles |
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The Market Research Industry in India - Part II

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Continuing our post from yesterday, we look in further detail at current issues in Indian market research. This concluding part examines the role of technology as well as what the future holds for the industry in the country:

TechTalk

Ironically, India is a software powerhouse - but Indian market research has yet to catch up on the technological front. Markey research firms still use basic software tools, and that too is only on a need-to basis.

India is still face-to-face dependent, but that is changing gradually. CATI is prevalent but online is still a nascent area as internet penetration is low. Panel firms are already entering India in a big way, setting the stage for the e-wave to sweep across in due course.

The needs of market research agencies are still evolving in terms of newer applications; there seems to be no significant difference in the use of technology in the past and the present; evolution in technology is seen more in terms of version upgrades, automation and processing speed. The bulk of small and medium sized market research firms are still tied to the traditional tech tools and are yet to experiment with new modes, though a few have dabbled with the online platform. The big players on the other hand are moving forward with handheld terminals and mobile surveys.

The trend in technology in client organisations seem to have undergone a sea change; they are looking at shorter innovation cycles, real-time service of queries, transparent status reading systems, end-to-end interaction with consumers using enhanced technology; and technology is expected to take them a step ahead - from analysis to modelling.

Boom Boom: The way ahead

Client organisations are more receptive to applying DW & BI and Data Mining. These services will soon be embraced by the research organisations, leveraging on the availability of a good education pool. Just as product companies go through the evolution lifecycle, the research service industry also needs to upgrade and come up with newer client servicing options - like branded market research agencies setting up in-house research divisions for larger corporations (this will ensure data security, real time data available at every stage).

The future of Indian research from a market opportunity point of view is very bright simply given the growth in economy and the increasing need for consumer insights for sound decision-making. This includes Multinational corporations and the new Indian ventures on the retail, realty and hospitality front. What will determine success or failure is how the agencies can transition themselves and put in structures and technology in place to tap the opportunity.

Globalisation will continue to drive the research standardisation wave and the time to get involved with Indian research is… NOW.

This article originally appeared in the Oct/Nov issue of BIG times

Further details about conducting market research in Asian markets such as India can be found at the website of our Asian office, at www.b2binternational.com.cn.

Posted in Online Research, Market Research India, Market Research China, International Market Research, Market Research, Esurveys, Articles |
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The Research Process

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The Harvard Business School believe that market research is a seven-step process. Researchers and the intended user of the research should collaborate in each step as follows:

1. Be very clear about the problem that you are asking market research to solve. If you get this step wrong, the remaining steps will waste time and energy.

2. Determine the type of information needed to solve the problem you identified in step 1.

3. Select the most appropriate research tool for getting the information you need. You may need more than one.

4. Design your tools to fit the situation. For example, if a focus group is the best tool, determine which people you’ll invite to participate, how you’ll direct your inquiry and so forth.

5. Apply your research tool with objectivity and integrity. Don’t skew it to confirm a preconceived idea of the “right� data.

6. Analyse the data objectively.

7. Communicate your findings to the people who need it and who can apply it.

Posted in Market Research, Articles |
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Researching The B2B Marketing Sector

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B2B marketing sector worth £10 billion yet still undervalued, says Cicero report.

Cicero has conducted and released a significant new study into the world of B2B marketing.

The major piece of market research, carried out in conjunction with industry publication B2B Marketing, gathered detailed data directly from senior practitioners in the field of B2B during 2006.

Cicero managing director Danny Turnbull says, “This is almost certainly the first, and definitely the most in-depth study of its kind ever to probe into the UK B2B landscape, which our data shows is an industry turning over just under £10 billion a year.

“It is long overdue, as B2B marketers have been keen for many years to demonstrate that we are a viable and distinct audience, and cannot simply be dismissed as an adjunct to the higher-profile consumer marketing sector.�

The report, which is now on sale, will prove invaluable to B2B marketers themselves as they seek to make sense of the various challenges confronting them in their daily roles, and to the service sector of agencies and suppliers, seeking to meet the needs and objectives of this audience.

Turnbull continues, “The report in places makes for disquieting reading, as it shows marketing to be undervalued in British businesses, with 37% of respondents even stating that marketing was seen as a cost rather than a value contributor within their business. This is very much at odds with the often-espoused view that marketing should be at the heart of every organization.

“But armed with the new knowledge gleaned from this research, I hope that as an industry we can meet the challenge to balance the need for short term, easy to measure response with a more holistic approach to building business brands and to put marketing where it belongs at the heart of organisation strategy.�

Summary and highlights of the research

It was agreed that one of the main problems the sector had was the low level of understanding and visibility in the wider marketing world. This was hindered by a lack of meaningful, thorough and reliable insight. Therefore the research set out to address this by producing the first comprehensive analysis of the UK B2B marketing industry, the practitioners within it and how it is evolving.

The objective was to help raise the profile of the industry by facilitating greater understanding of its size, scope and the issues that are shaping it, and to further shape and define the B2B community. It was aimed to provide a reliable document that practitioners from all areas of the B2B sector could use as a touchstone to help contextualise their activities, learn from trends in the wider community, and ultimately drive more success in their marketing.

What did we want to know?

There were a number of questions that we wanted to answer through this research.

1. How big is the B2B marketing sector? How many people does it encompass and how much money do they spend?

2. Who are B2B marketers? What are their backgrounds and how has this influenced their thinking going forward?

3. What are the current trends in B2B marketing? Which media are being used for which purposes?

4. How are they investing their budgets and selecting service providers?

5. How is the B2B marketing sector likely to evolve?

Target audience

In order to get an accurate picture of the B2B marketing space, we felt it was important that we only spoke to marketing decision makers; in other words marketing managers or above, but marketing directors wherever possible.

Methodology

Participants were recruited during September 2006 via a telemarketing campaign to a database of B2B marketers, and promised their choice of voucher (from a limited selection) in return for completing an online questionnaire. In all 147 people completed the questionnaire, from a wide range of different companies, in different industry sectors.

Size and scope of the market

The research produced a number of key insights into the B2B marketing sector. The first amongst these was the most accurate indication yet for its size and scale, both in terms of amount of annual spend and number of practitioners.

· Estimated expenditure on B2B marketing communications during 2005: £9.8 billion

· Estimated number of practitioners with marketing in their job title focusing purely on the B2B sector: 176,000

· Estimated number of practitioners with marketing in their job title for whom B2B is at least part of their remit (along with B2C): 272,000

(For more information on how these figures were attained, see the main report.)

These figures confirm that the B2B sector is a significant audience within its own right, and that it should not be seen as simply a subdivision of the overall marketing community. The ‘poor relation’ tag must finally be recognised as unwarranted, and should be discarded.

Key findings

The research also identified some important trends, issues and concerns underlying the B2B marketing sector, which will all have considerable impact on its future development.

1. B2B is a booming market.
Ninety three percent of respondents described themselves as ‘very’ or ‘fairly’ confident about the future economic climate for their organisation. Meanwhile, 90% expected their marketing budget to increase or remain constant in the next two years, and 56% saw it increase in the previous two years.

2. Beyond a website and basic email marketing, use of digital marketing techniques is limited.
Only 52% of companies are currently investing in search marketing, less than 10% have used viral and five percent podcasts/webinars. Despite the hype, actual exposure to and through these channels is very limited, and it is likely that companies are missing opportunities.

3. Email will be the single biggest growth channel in B2B.
This is despite warnings regarding spam, inbox overload and general erosion of response rates. 49% of respondents said they were expecting to invest more money in email during this period, against the next most popular medium, direct mail, on 33%. ‘Awareness raising’ is seen as the primary objective for emarketing.

4. Agencies are not seen as essential.
Over a quarter of B2B practitioners do not currently use any agencies for their marketing, although 40% use three or more. Only 20% of agencies are used in a strategic capacity.

5. B2B marketers are poorly educated.
Only around 50% of B2B marketers have any form of marketing qualification. Three quarters of respondents believe that existing courses are biased towards B2C activity, whilst over half of companies have no budget for training. Only 30% plan to undertake any further marketing-related studies.

6. There is a serious recruitment problem in B2B marketing.
Experienced B2B marketers are difficult to recruit, according to the overwhelming majority of practitioners who have any experience of doing so. Only 40% of B2B marketers followed a marketing career path; the majority transferred from other professions.

7. Trade bodies are failing B2B marketers.
Less than half of practitioners interviewed are members of any of the marketing trade bodies.

Conclusion
For the first time, we can see that B2B marketing is a distinct, sizeable and identifiable community, and one that it is both vibrant and buoyant. However, it faces its own set of challenges for the future, many of which relate to education and ensuring its practitioners are equipped for all possible eventualities.

Posted in Quantitative Research, Advertising Research, Market Research, Articles |
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Conducting Business-to-Business Research In China - Part 1 of 7

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By Matthew Harrison, Director of B2B International

Introduction

The growing importance of the Chinese economy is no secret. This huge country of over 1.3 billion people (one fifth of the world’s population) has an economy that is now the fourth largest and has recorded an average growth rate of around 10% for the last two decades, making China a leading economic power on the world stage.

The huge importance of China has had an impact across industries, and the market research industry is no different. Market assessment research briefs which 10 or even 5 years ago might have ignored Asia completely, or perhaps asked for a passing glance at Japan, are now routinely including China as a country where opportunities must be assessed. Medium-sized companies are beginning to establish a presence in China, whilst the multinationals, many of whom still have a limited sales presence rather than a meaningful penetration in the country, are asking how their rep offices and loose distribution networks can be turned into a more entrenched presence.

The message for market research companies is therefore clear – there is now a serious and extensive requirement for information on Chinese business-to-business markets, and this requirement is certain to grow.

This white paper seeks to provide the reader with a picture of how business-to-business research is conducted in China, and the issues that should be borne in mind when commissioning projects in the country. We also seek to dispel some of the half-truths and urban myths that have built up around the Chinese and Asian research industries.

Note: For the purposes of this paper, we will define business-to-business research as market research in which the views of businesspeople are sought, in order to facilitate a business decision. We include not only ‘businesspeople’ in the traditional sense, but also anyone else who contributes to a study in the context of their employment. We therefore include, for example, projects in which the views of Government officials are sought (of which there are many), and medical or pharmaceutical projects in which organisations seek the views of physicians or surgeons.

Who Is Conducting Market Research In China?

The value of ‘pure’ business-to-business research in China is estimated at around $USD50 million, a figure which is more than doubled when projects exploring the views of doctors, Government officials and other non-consumer research is included. This figure of $USD50 million is growing at around 25% per annum, meaning that it will double within 4 years. As a point of comparison, the Chinese market for consumer research is estimated to be growing at 17%-18% per annum. The huge growth in business-to-business research reflects the facts that Chinese companies are increasingly open to the idea of obtaining the views of businesspeople, and Western companies more and more hungry for Chinese business opinion.

In such a young and evolving industry, it is perhaps not surprising that the providers in the market are extremely different in their origins and business models:

Medium-sized and large Chinese market research agencies
Medium- and large-sized Chinese agencies (those with a turnover of over $US1.5 million, most of whom are members of ESOMAR) have many years’ experience of conducting market research in China. Most of these companies’ clients are Chinese businesses, or foreign businesses with an established presence in China. The individuals purchasing the research are almost exclusively Chinese. When it comes to Western clients based outside China, Chinese research agencies’ activities are largely limited to interviews and desk research - they are conducting almost no ‘added value’ services such as analysis, statistics and presentation development. Hence, most foreign clients outside China are foreign market research agencies.

These Chinese research agencies also conduct a small amount of international work, mainly by subcontracting to foreign agencies. However, the price of conducting research in the West is prohibitive to most Chinese clients; therefore this type of project takes place very infrequently.

It is worth noting that these medium- to large-sized agencies are relatively few in number – in fact there are no more than 20, and this number may well decrease as industry consolidation continues to occur.

Small Chinese research agencies
Smaller Chinese research agencies, that is those that turn over less than USD$1.5m, are almost exclusively fieldwork-only agencies, carrying out data collection for the larger agencies in China. These companies number around 1,200 and are an invaluable base for the industry as a whole, in that they are geographically dispersed and can gain information from the remotest areas of the country.

At present, most requests for business-to-business research are focused on China’s first- and second-tier cities, meaning that most business-to-business work is conducted by the big city agencies. Concerns by business-to-business agencies about quality, coupled with businesspeople’s increasing willingness to provide information over the telephone, mean that in-depth telephone interviews (rather than local agencies) are increasingly used to gain information from businesspeople in relatively remote areas.

Foreign research agencies
Foreign research agencies have operated in China for almost 2 decades, following the arrival of AC Nielsen in the 1980s. In fact, around half of all full service agencies are subsidiaries and joint ventures of foreign companies. This can be a real advantage to Western clients, who want not only Western style information delivery, but also client liaison capability within the same time zone as them. Hence projects conducted jointly between the ‘Chinese’ and ‘home’ offices are common. Foreign agencies conduct a great deal of work for foreign businesses outside of China, and also compete with the higher quality local agencies when it comes to working for Chinese branches of foreign companies.

Over the past 3 years foreign business-to-business research specialists (such as Psyma Business Research and B2B International) have started to arrive in China, whilst larger, more general agencies, such as Synovate have increased their business-to-business focus. These players have positioned themselves at the high end of the market; indeed both Synovate and B2B International position (and staff) themselves to a large extent as consultants. This reflects the fact that so much business research in China is market entry and market assessment focused, requiring action-oriented conclusions, firm recommendations, and ultimately access to lawyers and accountants who will guide companies through the market entry/expansion process.

Over 90% of the business of foreign business-to-business agencies is from Western clients, be they located in China or abroad. However a small number of Chinese clients now have the budgets to commission Western agencies to conduct export studies in Western countries, and this trend is expected to increase over time.

Foreign consultancies
So much work from Europe and the US is market-entry based, and therefore strategic in its nature, that management consultancies offering a high value added service have added some market research to their portfolio. Conversely, foreign research agencies (such as Synovate Business Consulting and B2B International) have focused on recruiting consultant-researchers who can focus on adding value and advising on market entry at the end of a project.

Market entry specialists
Companies and organisations focusing on the legal and transactional aspects of market entry have positioned themselves as providers of market research to new entrants, albeit much of the market research is sourced through the market research agencies and consultancies. A good example of an organisation offering access to market research in the context of more general market entry services is CBBC (China-Britain Business Council) – see www.cbbc.org and click on ‘Market Intelligence’.

What does this mean for Western research buyers?
It is clear that there is a good range of organisations capable of providing information and intelligence in relation to Chinese markets. It is equally clear that different types of organisation are set up for different client bases. Our advice to the Western buyer - unless your company already has a strong understanding of the Chinese market and a Chinese-speaking in-house manager – would be to target the Western-owned market research companies located in China. Such companies have experience not only of Chinese markets, but just as importantly experience at examining those markets through the eyes of a Western business. They also have the linguistic capabilities and understanding of Western clients’ requirements that makes them easy to use as information providers.

A summary of the market for business-to-business market research in China is provided below:

Figure 1 – Which agency to use, and when

Posted in Market Research China, White Papers, Industrial Research, Market Assesment, International Market Research, B2B News, Market Research, Articles |
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