Archive for the ‘Recession’ Category

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Business Confidence In London Is Growing

The findings of a survey into the confidence of business owners in London have just been released.  Conducted for Business Link in London by business-to-business market research and intelligence consultancy B2B International, the research highlights how the effect of the economic environment varies significantly by type of business, location and personal characteristics of owners.

The survey, commissioned to examine how to meet the business needs of a diverse marketplace, is the first of its kind and the ‘Diverse Business Confidence Index’ has been created to represent minority groups including women, ethnic/faith groups, the elderly, the disabled, and those of a particular sexual orientation.

B2B International director Nick Hague, in charge of the survey, says the survey uncovered perceived discrimination and prejudice in the business world.  “This diverse business confidence index for BLIL is a great step in finding out how business owners are coping during the recession.  Companies in the industry sectors of recruitment, property and construction have been hardest hit during the economic downturn, whilst least affected are in the health and beauty sector.  As a bonus to developing such a robust index, we also gained real insight into diversity issues in business which may be mirrored across the country, not just across Greater London.”

London’s SMEs Defy Recession

As London’s small businesses bear the brunt of the recession many are still looking to grow, according to Business Link in London’s new Diverse Business Confidence Index (the Index). The first of its kind, the Index surveyed over 3,000 small businesses in London and found that 84 per cent are planning on expanding and growing their business over the coming year. Nearly two thirds of entrepreneurs surveyed said that the recession is still affecting their business with 39 per cent saying the recession has significantly impacted overall budgets and expenditure.

Patrick Elliott, chief executive of Business Link in London, said: “This Index gives a significant insight into how London’s small businesses are impacted by, and responding to, the recession. These results are an encouraging sign in these turbulent times – but they don’t come as a surprise to us.  We regularly survey our clients on how they’re managing through the recession and we’re seeing a clear trend emerge of a sector that is refusing to get bogged down in the doom and gloom. But what’s telling from this index is that this confidence is across the board – many entrepreneurs across regional, industry, and demographic groups are responding to the recession by aggressively seeking out new market opportunities.”

Mayor of London, Boris Johnson, said: “It is extremely heartening and will inspire confidence in the strength of the capital’s economy that so many of London’s small and medium sized firms are planning to expand in the coming year. Making up nearly 99 per cent of our business sector, they create half of all the capital’s jobs and are therefore critical to its success. I will continue to do all I can to support these firms and ensure they get all the help they need to get through the downturn – they will, after all, be our spring board to economic growth and prosperity when the upturn comes.”

Maintaining and generating sales was identified as the single biggest challenge facing all businesses.  However, three quarters of those surveyed remain optimistic about their business over the next twelve months. Of those who are planning to grow, most planned to drive this through diversifying their business operation – 43 per cent plan to enter new markets, and 35 per cent are looking to develop new products and services.

Start-ups were more likely to have difficulties with accessing funding while established businesses tended to have more difficulties with generating new business.  A quarter of all pre-starts cited the falling value of the pound as the biggest impact and nearly half are revisiting their business plan projections as a result of the recession. However, despite being most affected by the recession, start-ups were the most optimistic about their business prospects with 89 per cent planning on growing their business over the next twelve months.

For more information on the Diverse Business Confidence Index please click here.

If you are a London business owner and would like to take part in future waves of the Diverse Business Confidence Index then please e-mail dbci@b2binternational.com and include your name, company name and London borough where your business is based.

Posted in Business, Business Confidence Index, Diversity, Economic Downturn, London, Recession, SMEs, Trends |
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7 Steps to Making the Most out of Market Research in a Recession

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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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/

Posted in Economic Downturn, International Market Research, Market Entry, Market Intelligence, Market Research, Recession |
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Market Research In A Recession

It won’t come as a big shock that the UK market research sector, like the majority of other industry sectors, isn’t recession proof and has been hit, at least to some extent, by the current recession.

The key takeaways from a recent ‘State of the industry survey’ by RSM are as follows:

• Six out of ten researchers have seen their budgets decline and only one in 20 has experienced an increase
• Research activity in most sectors is expected to experience a net decline, most significantly in the automotive and media sectors
• Most research methods will feel the impact of recession, with face-to-face hit hardest (48% expect to spend less on face-to-face research and only 6% expect to spend more).
• Web-based data collection will continue to increase, although at a reduced rate compared to previous years.
• The current discipline of carefully prioritising expenditure and ensuring the best possible ROI is expected by some to become common practice

This particular piece of research got us talking internally and we came up with the following trends that we have seen within our world at B2B International:

1. There are less market research specialists in corporates than ever before

Gone are the days when every corporate had a market research manager. Increasingly we are being commissioned by non-market research specialists — marketing managers, product managers, marketing directors and the like. This means that the briefs we receive are sometimes woolly and impossible to achieve (especially in timescales and costs). Timings are a real bugbear within B2B International as we never want to compromise quality although our clients often seem to be being leaned on by their management in terms of timing leaving unrealistic timescales to collect and analyse the findings. However, the recession has resulted in companies becoming keener to understand the pressures their customers are facing – a greater recognition of the interdependence of theirs and their customers’ success.

2. Every job is put out to a long tender list

Gone are the days when we used to visit a client to take a brief and proposals were submitted from just three companies. Nowadays clients bash their briefs out to (sometimes) dozens of agencies. The competition has never been fiercer and prices as a result have been driven down with clients sometimes placing too much emphasis on cost rather than quality

3. We need to be increasingly imaginative about research methods

Gone are the days when we used to do surveys based on a simple research method. Increasingly we are given complex problems that have to be answered with a range of different research tools. It is not unusual for us nowadays to mix online surveys with telephone surveys and qualitative with quantitative.

4. We are required to be strategic consultant’s as well as data collectors

Gone are the days when market researchers simply researched a market. Today, in business to business markets we are expected to be familiar with all the business and marketing frameworks that traditionally were the ground of McKinsey and Bain.

5. We are increasingly required to use multidisciplinary teams

Gone are the days when a sole researcher could carry out a market research project from beginning to end on their own. B2B International has brought together a diverse team with specialist skills ranging from pure research backgrounds through to statisticians, computer programmers and consultants that can act in an advisory capacity upon completion of a project

As usual, during any recession, research providers who supply quality and value throughout the difficult times will emerge stronger and fitter. However, with organizations continually looking to measure ROI on every pound spent, is the competitive landscape for business to business research changed forever?

Posted in B2B Marketing, Budgets, Business To Business, Recession, Return On Investment, ROI, RSM |
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Recession Clouds May Be Lifting

The Chartered Institute of Marketing’s latest Marketing Trends survey shows hints of increasing business confidence among UK marketers.

While 72% of the 1,223 marketers surveyed still do not think that the UK will completely pull out of recession by the end of this year, the number of respondents believing the situation will worsen over the next year halved – to 34% – compared to the last Marketing Trends survey conducted in autumn 2008.  35% expect business to improve throughout 2009, and more than a quarter (26%) believes the UK economy will improve over the next 12 months, a figure that compares favourably to just 11% in the previous survey.

However, almost a third of respondents are concerned over losing their jobs in the next 12 months and 18% of self-employed marketers worry that the recession may force them to close their business this year.  Nevertheless, while 2009 is still anticipated to be a tough year overall, there are definite signs that British marketers believe the worst may soon be over.

Backing this belief, a survey of global marketers recently carried out by B2B International showed almost half of the respondents (47%) to be feeling optimistic about their own organisation’s prospects over the coming year.

Meanwhile, the latest Business Trends report by accounting firm BDO Stoy Hayward LLP shows that UK businesses expect the pace of economic decline to slow markedly over the next quarter, supporting the UK Chancellor’s predictions of a recovery starting in Q4 2009.

Posted in Budgets, Business Confidence Index, Economic Downturn, Market Intelligence, Marketing, Recession |
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Short-term Strategies In The Recession

The Association of National Advertisers (ANA) has found that two-thirds of marketers have, in response to the current economic environment, shifted their emphasis to more short-term strategies.  These were some of the findings of a Brand-Building study of 129 marketers, which took the form of an online survey.

Yet in spite of the short-term tactics, marketers are already planning increased activities for when the recession ends.  68% will be increasing their media budgets, 41% increasing social networking/word-of-mouth, and 40% allocating more money to innovation and testing/learning.  Almost three-quarters of respondents admitted that they would ideally like to implement these additional marketing activities three to six months before the recession ends.

The survey found that few marketing initiatives had been postponed or cancelled outright, but many had suffered from reduced budgets.  Those activities that are being maintained during the recession include:

• Research and development (47%)
• Public relations (42%)
• Innovation/test/learn budgets (33%)
• Promotion activities (33%).

A number of activities have been increased over recent months, including:

• Pricing deals (47%)
• Social networking/word-of-mouth (26%)
• Public relations efforts (23%)

When compared to the results of previous surveys, many traditional media channels have suffered:

• Television (down from 80% in February 2007 to 64% in April 2009)
• Magazines (down from 67% to 51%)
• Radio (down from 36% to 30%)
• Outdoor (down from 35% to 26%)
• Newspapers (down from 36% to 19%)

These results are fairly representative of current sentiment in the wider marketing community.  Many organizations are shying away from traditional media and focusing on online opportunities.  Indeed, a recent survey by B2B International showed around half of marketers planning to increase their e-marketing spend in 2009, with many stating that online marketing had already proven itself to be a successful strategy in the face of recessionary pressures.  More than a quarter were planning increases in their PR activity.  On the flip side, around half planned to cut expenditure in the more traditional areas of tradeshows/events and magazine advertising.

Click here to read our white paper on Marketing Strategies in a Recession.

Posted in Advertising Research, Budgets, Business Decisions, Commercials, Marketing, Recession |
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