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Market research

By The Drum, Administrator

May 5, 2005 | 7 min read

Creatives often hate it, clients usually crave it, meanwhile the man (or woman, of course) on the street may try and avoid it all together. But love it or loathe it, market research plays an important part in the creation or growth of a brand.

Despite an increasing number of marketing decisions being made by procurement departments on cost, sometimes over and above service, a tool as powerful as research can often play a defining role in the decisions made at a marketing level.

Although some clients may now look upon research as a complimentary add-on to the service that they purchased when hiring a media agency, it is proving to be an increasingly important component of the marketing mix.

Figures recently released by the British Market Research Association back this up, revealing that the market research industry’s revenues grew by almost five and a half percent in 2004 to a value of £1.29 billion, a growth well above inflation following a couple relatively flat years.

These results, in turn, highlight the importance placed on market research by businesses and organisations as they look to take advantage of an improving economic climate, to expand their range of products and services and their presence in targeted markets.

Jim Law, managing director of MR UK Research, says that those impressive figures shown by the industry in general have been reflected in the business in Scotland: “I was judging at the IPA Effectiveness Awards where I got the chance to compare notes with others in the industry. Definite trends are appearing. There has been a swing in focus towards the public sector. A majority of our recent wins have been in this area and the public sector seems to be very buoyant at present. There is an increased demand for accountability of public money, and in the run up to an election this is highlighted even more.

“The investment and communication needs to be in tune with customers, and this is driving the industry.

“Perhaps the public sector is just catching up, but it is definitely the public and not the private sector that is fuelling our own growth at present.

“The increased use of framework contracts is also benefiting the research industry,” continues Law.

“Framework contracts cut down on time-wasting and bureaucracy. Large government contracts are obliged to go through various channels when tendering, so creating a smaller retained roster cuts down on red tape.

“This cuts down on the constant treadmill of pitching for each and every individual piece of work, even after you’ve done a good job, against a large pitch list. I think this framework offers more stability to the market. Although there are no guarantees, there is a fairer chance.”

While the public sector has been healthy, it is not the sole reason for the impressive rise in figures across the research industry.

Joanna Taylor, market research manager at RFM, says: “We have noticed an uptake in public sector contracts, in particular, too. However, private sector research is still a growing area. Awareness of the importance of good research is growing and smaller companies are now also looking to source this service.

“There is a realisation that good, thorough research can really help a business or organisation target its market and tailor its product offering accordingly. It affords a level of confidence. A client may have strong instincts, but research can reassure them that they are choosing the best method to go forward with. When accountability is so important, it is vital that a client can ensure best spend for money.

“In some cases the client simply wants to rubber stamp a conclusion. In some occasions, though, a client can come to a research house with too tight a brief. But, with increased levels of dialogue a more workable solution can benefit the client, throwing up things that they might not have noticed or considered before.”

Other trends across the industry have seen the profile of market research highlighted through recent boardroom appointments, raising the profile of public opinion within organisations.

Jo Fawcett, managing director at George Street Research, says: “You only have to look at recent changes and appointments to the board at various blue-chip organisations to see just how important research is to a company. Many major firms have been introducing research people to main board positions. The importance of customer and consumer voice is being taken higher within organisations.

“One of the papers given at an MRS event in Edinburgh last year was entitled "Insight as a Strategic Asset" – the speaker was talking about the beginnings of this trend to consider directors or heads of consumer insight as appointments at board level in major organisations.

“The research profession needs to collectively support that by building and broadening its skill-base, but it is one of the reasons that I no longer think businesses are quick to cut research budgets when times are hard. They simply need to make their research budgets work harder and deliver real value.”

Although, on the whole, those commissioning research do try to use it to its full potential, some clients are more informed and enlightened to market research than others, says Chris Eynon, managing director of TNS System Three. “The more informed clients view it [market research] as an investment. But some of the less informed companies still view research as a cost.

“Research should not be about proving a point. It should be about investigating and exploring. It needn’t point to a solution, but it should be used as a tool that’s part of the decision making process. Research is most effective when it is used properly, when ideas are moved forward and implemented. It is not a commodity, though – there are enormous differences in the services on offer.”

This is a point of view supported by MRUK’s Jim Law: “Research often gets used to support a theory that’s already been found, interpreted to meet the good of the commissioning body. That is a problem. Of course, we can’t control how people use research – although sometimes I wish we could. Research should be an interrogation of the facts.

“There is no such thing as researching to a final conclusion. The results and information should be used and absorbed in the decision making process. Research doesn’t replace the decision-making process. The findings should be put into a wider context, to help understand the target audience.

“Sales are just one way of measuring impact. Brands need to develop a relationship with their customers. They need to know the thoughts and feelings of the market. They need to see a long-term dividend and investment in their brand, and know what people think about that brand. Research is the best way to gauge the thoughts and feelings of a given target market.”

“Research underpins conclusions, and gives reassurance,” concludes RFM’s Taylor. “It allows the client to consider options that may not have been available or considered before. It should provide a snap-shot in time. Speed of the research is often vital for accuracy. Clients have to be able to act on current feelings.”

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