A roundtable discussion on the past, present and future of marketing research

Marketing research: On the threshold of opportunity?

"Changes in society, family structures, and consumer attitudes have created a state of uncertainty which challenges the role of research in business as never before." These words brought over 200 marketing research professionals from across the world to La Jolla, Calif., on January 21-24, 1996, for the American Marketing Association's Attitude/Behavioral Research Conference. The theme of the conference, Leveraging Today's Knowledge for Tomorrow's Success, included sessions on global brand equity, reengineering the research function, and training issues for the future.

During the conference, on behalf of QMRR, Valerie Crane, a partner with The Capstone Group, San Diego, interviewed a panel of five senior executives of major research organizations to discuss where the industry is heading and what challenges or opportunities face us as we go down this as yet uncharted road.

The panel members were:

Diane Bowers, president, Council for Marketing and Opinion Research (CMOR) and executive director, Council of American Survey Research Organizations (CASRO).

Leona Foster, vice president marketing research, American Marketing Association (AMA).

Howard Gershowitz, president, Marketing Research Association (MRA).

David Gordon, chairman of the board, American Marketing Association.

Michael Naples, president, Advertising Research Foundation (ARF).

Crane: What are some of the challenges facing the research industry today?

Michael Naples: "The business environment is what challenges us; the lack of investment in research by certain segments; the disinvestment by downsizing the number of people. We've just come through five years of recession and less spending. We may be coming out of it and perhaps technology will help save us."

Howard Gershowitz: "One thing we're facing is privacy issues - privacy is important to the family, but what we do [as an industry] is important too. If privacy legislation comes in like it has in Europe, it'll be a challenge for this industry."

Diane Bowers: "People fear change. Fear of change, just in and of itself, will keep some people from moving. There's a group within the research industry that says, 'This is the way it should be. If we change from that, then we're destroying the integrity of the research process.' I don't agree with that. It doesn't mean that you throw away the principles. You've got to grab onto the principles that you need to carry forward, but leave some of the traditions behind that may not work in the 21st century."

Gershowitz: "Technology has allowed things to happen faster. Yet the level of stress is probably greater than ever. We've always been a knowledge-based industry. My clients are expecting the data that much quicker. There isn't a clear delineation of responsibility from the data collection perspective. We're asked to do that much more. We have the information available and available quickly. So therefore [our clients say], 'If you can give us x, why not give us x+y?' "

Leona Foster: "We're finding in our business now that our clients have been moved over from some other background and they need training - anything from the basics of sample design to questionnaire design. It's just the basics. Getting them up to speed. That's where we're spending most of our time."

David Gordon: "We've got fewer people working with more projects. The study ARF did with AMA in 1993 indicated that over a five year period budgets were up 28 percent and staffs were down 36 percent. If you divide the 128 by the 64, you find out whoever's left in the research department is being asked to do twice as much as they were five years before. Where this nets out in the training aspect is that people don't have time. It isn't even a financial issue. They don't have time to attend conferences, to go to meet with their fellow professionals through various luncheons. So there's less contact and they're less and less in touch. And to Leona's point, a lot of these people didn't work their way up the traditional research ladder. They've been moved in from some other area."

Besides the challenges are there also opportunities?

Bowers: "I think we're on the threshold of opportunity. There are two philosophies: the glass is half empty or the glass is half full. I look at it as half full. We should be taking a major leadership position in how information is accessed, how it's disseminated, how it's used, and how it balances those very critical issues of information gathering and individual privacy. So we could be right on the threshold of being considered in the forefront of leadership."

Naples: "The research provider side has developed into a much more capable part of the business. In different times there have been different parts of the business that have been stronger than others. In the early days it was the advertising agencies that really built up their capabilities. Now it's the age of the research company. To the extent that research companies can handle their part and pull this off with strong R&D, with valid techniques, and build credibility with clients, is the extent to which the business can grow."

What do you see on the technological horizon that will change how marketing research is done?

Naples: "There's a lot happening now. We're in a transition period. There's going to be a lot of opportunity for research with the Internet approach. We old-time researchers are skeptical about the extent you can use a self-selected sample and make something of it. But we're all attuned to the fact that any new capability carries with it less than complete satisfaction, like the telephone interview when it first started. But over time, the telephone interview became not just important but dominant because of its inherent capabilities. The Internet has the potential to, once it reaches critical mass, be a vehicle for certain types of research."

Gershowitz: "When computerized interviewing took hold in 1982, we were doing studies with clients where I would have a disclaimer that this was a new methodology and results may very well be different. They probably were better, but clients had to understand that you couldn't do a tracking study by changing methodologies in midstream. I think we're going to be seeing some of that with the new technologies. If it's understood up front, I think our clients will benefit from it."

How has the reengineering/downsizing of corporate America affected research professionals and budgets?

Foster: "In several instances the collective research knowledge has been lost. You start to see entire research organizations blown away or entirely revamped and we, as the research provider, are asked to recreate the entire collective knowledge. A lot of the responsibility has been put on very junior people, people who may not be ready for it, and that gets back to training."

Gordon: "More frightening than reengineering is the decentralization of research departments. It no longer enables the collective wisdom to be there for researchers to be trained in a central environment. Great research comes out when researchers begin to exchange ideas."

Naples: "Reengineering has really meant disinvestment in research. Advertising agencies virtually do not have marketing research departments any longer. The fee structure change in the ad business means that agencies are no longer compensated the way they were in the past. Therefore they're no longer investing in research the way they did in the past. They don't get credit for it, so why do it? Reengineering has basically begun to weaken the profession. I think the counterbalance is in what the research companies are doing and so my hope is with them."

Gershowitz: "From the data collection perspective, I know my clients are under more pressure in the course of reengineering. I think that part of their responsibility is to sit there and hold their client's hand through the process. The trickle-down effect is that the pressure for us to get projects through in a timely fashion is that much greater. I rarely see a document that is in its final format. I see three or four final documents. I'd like to have a dollar for every document that it suppose to be a final one."

Gordon: "The whole sensitivity is head count. You begin to wonder why a company lets go of a researcher who was making $50,000 and whatever the cost of their overhead was and then hires them back later as a consultant for 50 percent of their time and pays them $70,000. You begin to wonder if the economics of this add up. The sensitivity to head count seems to take precedence over what actually hits the bottom line. There are a lot of corporate clients now that are basically renting [researchers] from a supplier."

Bowers: "Again, that's an opportunity. It may be sad for those people who are on the cutting side, but they also should look at it as an opportunity. They can say, 'If I'm really a professional I have something to offer and sell back. I can offer that service to a corporation who doesn't want to have it internally.' "

Naples: "It doesn't really matter what the structure is [of the marketing research department]. What really matters is that the information is suitable to the corporation. What we've been finding is that reengineering and downsizing has been working to undermine the suitability and validity of research to the corporation as far as its institutional memory. We're in a transition period as to the way American companies do business. Research can't stay the same in that. What the industry needs to do is come up with the proper footing for research. This may come through technology or training or reinvestment by companies themselves realizing they're undermining their information value. We really need to stay on top of what the needs are and try to keep influencing them, and I think we are."

Gershowitz: "I'm curious to see how America is going to view research after 1995 with the market being at historical highs, with corporate profits being way up there. Is it going to be perceived that research was of value to attaining those numbers?"

With corporate emphasis on short-term gains, are companies taking the time to do long-range planning and research?

Gordon: "From my vantage point, I started seeing from about 1989 to 1993 an incredibly short-term view, more short-term than I had ever seen. To me what was taking place in that four to five year stretch was what I call band-aid research. Everyone was out for the quick fix. The general rule was that if they couldn't respond to this research and turn it into something profitable within 90 days they didn't do it. Starting around mid-'94, I've seen more of a return to strategic research. The idealistic side of me says that companies have realized their shortcomings and the importance of going out for research, while the practical and cynical side of me suggests that some have become so far removed from the market that, out of absolute necessity, they're going back out. They realize the decisions they are making are truly being done in a vacuum."

Would you advise a college student to major in marketing research?

Naples: "It's an information business and information is the revolution we're in, so why wouldn't research be a good career path? I think it can only grow in stature as time goes by. I think the fact that the research companies are coming on strong now means they will value their product more and more as they gain strength. They'll invest in their product so it'll be a better career path."

Gordon: "I would recommend with the caution that they not become a research technician. If you're going to go into research, have a good, broad, thorough understanding of marketing. There are too many people out there today who think that marketing research is totally separate from marketing. It astonishes me the number of times I hear 'I have nothing to do with that -- it's a marketing issue.' There's been too much of a barrier between marketing and marketing research."

Bowers: "I think we ought take that one step further. It's not just the interface between research and marketing, but also that creative side that gives us the uniqueness -- what they call the 'value added.' I'm afraid a lot of times researchers hold back on that because they feel the client doesn't want to hear it, that it's not applicable. But it really is."

Foster: "I think a lot of people may stumble into research. That's exactly how I did it. I think the most valuable part was having a liberal arts, broad, business degree. I think you're more successful once you get to a certain level, basically beyond the beginning analyst. If there is an option to get a heavy dose of quantitative, absolutely do it, but I'm not convinced it's the only thing that makes a difference."

Bowers: "The people in this industry are really smart. When you think about the people you've come across in a lot of other industries and you can include professions like doctors, lawyers and dentists, I think those people often have blinders on. Researchers have a much broader view. They're wonderful thinkers."