Editor’s note: For his annual contribution to our international research issue, our West Coast ad rep/roving reporter Lane Weiss traveled to England, Scotland and Ireland to interview principals of research firms in those countries. In England he spoke with John Kelly, CEO of IRB International, London. In Scotland he talked to Menekse Suphi, managing director of Scott Porter Research and Marketing, Edinburgh. And in Ireland he interviewed Ian McShane, managing director of Market Research Bureau of Ireland, Dublin.
What are the public perceptions of marketing research in your respective countries?
Kelly: In the U.K., if you asked someone what marketing research was, they might say it was an opinion poll. Or they might now say it’s a focus group, since focus groups have had a great deal of publicity as the new Labor government has used them. Opinion polls probably account for no more than 2 percent of research revenues but 98 percent of market research publicity. There have been some issues in the past where pollsters didn’t get results right and that has had a negative impact on the reputation of market research but the vast majority of commercial market research isn’t understood by the public.
Suphi: In urban areas in Edinburgh and Glasgow people are much more exposed to it. It’s difficult to judge but there isn’t a negative impression. People will participate if they have time. There is suspicion about telephone research as there have been a lot of unethical companies using research to get sales information. So they can be difficult to reach that way because people are getting tired of receiving sales calls under the guise of research.
McShane: For many years people would think of marketing research as public opinion polls and over the last 20 years public opinion polls have begun to be taken as gospel. Some members of the public and some pressure groups have problems with public opinion polls and how they influence social change.
In the last five or six years a lot of Irish newspapers and TV magazine shows have started doing stories that focus on consumer marketing, so you will see stories on the latest beer brand or mobile telephony and how research may have played a role in their development.
What marketing research methods are most commonly used in your respective countries and why?
Kelly: If you look at the U.K., the main means of data collection is face-to-face in-home interviews. Phone research is popular and probably accounts for 20 percent of marketing research.
We have an approach similar to mall research which is central location tests or hall tests in which we hire a hall in a village or a township and recruit people to come to the hall for research.
The main difference is that we don’t have the issues of personal security that people have in the U.S, so it’s still possible for strangers to knock on people’s doors and ask them questions and also to stop them in the street.
Suphi: Scottish companies use a variety of techniques. The most popular qualitative techniques are focus groups and depth interviews. On the quantitative side, street interviews and telephone interviews are popular, as are in-home interviews.
McShane: Five years ago the answer to that question would have been face-to-face, probably in-home, accounting for 80-90 percent of the research done. The main reason was that telephone penetration was quite low, maybe 70 percent four to five years ago. Now it’s at 90 percent so you can draw representative samples. In Ireland at this stage my hunch is that it’s 65-70 percent face-to-face and the rest telephone. Of the face-to-face research, it’s mostly in-home with CAPI technology.
Is Internet research becoming more popular and more feasible?
Kelly: It’s certainly becoming more popular and, if you’re researching a business audience, it’s very feasible. For consumers, it’s not yet possible to get a representative sample. About 20 percent of homes have Internet access. The figure for people who have Internet access at home or at work is about 40 percent and if you come back in two years it could be 60 percent.
A lot of companies are putting together Internet panels like those in the U.S. and we expect in the next few years to see an explosion in Internet research. It is the hot topic at the moment.
Suphi: At this point, there isn’t a big demand from the Scottish customer base for it. But it will come. The focus at the moment is on the drawbacks and the difficulties with the technique. So while it can give you easy access to people it’s still very, very new and we’re watching it carefully.
McShane: There is some interest in it. In the past 18 months in-home Internet usage in Ireland has gone from almost nothing to 20 percent of the population. Clients will approach us with a view to researching their portal site and we will pull together a Web clinic and have respondents look at the site. We’re just now at the point where pop-up surveys are becoming more prevalent.
How will the Internet affect marketing research?
Kelly: I think first of all we have to determine what approaches we should use. We have to be careful to not merely transfer from one medium to another without using the benefits of the other medium. It is possible to put a paper questionnaire on the Internet but that doesn’t take advantage of the Internet’s capabilities. The industry has to learn how to use it properly.
Suphi: Potentially it could make marketing research easier. It certainly has the potential to make turnaround quicker and make the research cheaper. It has a lot of potential but it also has a lot of limitations.
McShane: You can approach it from a number of angles. From the broader point of view, the advent of online research has opened the market to a huge range of practitioners who wouldn’t previously have been considered marketing research practitioners. As we conduct research online, the issue of self-selection comes up. And internationally more and more people are expecting to be incentivized for online research.
What are some of the problems facing research in your respective countries and around the world?
Kelly: I know what the problems are but couldn’t begin to tell you how to solve them! In the U.K. there is the issue of data protection. We have very stringent rules in Europe about what you can and cannot divulge about people. If you hold information about them you can’t have their name and address attached to it. We’re going through a new round of negotiations with the office of the data protection registrar, which is an official body over here, to ensure that marketing research knows what it can and cannot do and so the registrar knows what marketing research is, which is the anonymous collection of data and the presentation of that data.
Other things are perhaps more parochial, having to do mainly with social chapter legislation coming out of Europe, which affects that way you employ people. The vast majority of marketing research interviewers are self-employed workers and what is happening at present is that European legislation is bringing people in line so that they are entitled to the same holidays and sick pay as full-time workers. This obviously has an impact on the cost of marketing research and the content of marketing research. It could change the relationship of market research firms and their interviewers.
Suphi: From a qualitative perspective, one of the big issues, and this has been ongoing for several years, is recruiting problems and the quality of respondent we’re getting. In the U.K. we use a network of recruiters who are contracted to find respondents for us under a specified sample quota. There have been a lot of problems with verifying the quality and genuineness of some of the respondents. I don’t wish to tar all the recruiters with the same brush but there are times when you’re not sure if the person you’re talking to really is buying that brand of coffee and is the right age, etc. It’s something that the industry has been looking to address very seriously in the last couple of years.
The recruiting system is a very valuable one because it enables us to reach people we might not otherwise be able to and perhaps the way to address the issue is to look at each company training their own recruiters to their own standards, which is a very tall order.
McShane: One of the areas where I think we face a challenge is the whole area of relationship marketing and the move by some of our larger clients toward database-related relationship marketing and the challenges that that presents us. If we’re to, for example, take a client’s database and attempt to conduct research on that database with a view to giving them a standard research report, that raises all sorts of ethical issues. We have the data protection act, which means that everybody must be written to beforehand to get their permission to be interviewed. And organizations like ESOMAR will not stand for marketing research being spoken in the same breath with words like telemarketing and database marketing.
It’s possible for a researcher to wear a couple of different hats but if we are involved in relationship marketing research whereby we are going to research named individuals who gave their name to the client in the first place, I think it may warrant conducting that research through a separate entity, making it quite clear that it’s a marketing or telemarketing organization.
How has the consolidation of marketing research firms affected the industry?
Kelly: The headlong pursuit of consolidation isn’t stopping. People see globalization as a thing to aim for. What that means for companies like ours, who are in the middle, is that we are getting squeezed. We’re not large enough to be able to compete with the big guys but we have the infrastructure and overhead commensurate to our size so we can’t compete with the little guys, the boutiques. I don’t think all of this consolidation is necessarily for the good of the industry because you end up really with very few suppliers.
Suphi: What we have here is a number of very large companies with multinational links who have began to dominate the industry in the clients’ minds because they can [publicize themselves] a lot and they can offer an integrated network to address client needs across the world. They can also put a lot of money into developing techniques and methodologies. But on the downside it has meant that a lot of the smaller independent companies have closed or been swallowed up by larger firms.
We have seen that some clients are starting to turn away from always choosing the large firm and are starting to look at smaller firms. So it’s been good for clients because the larger firms can offer them a network of companies around the world but on the other hand it has focused attention on smaller agencies and the advantages of dealing on a more personalized level. With smaller agencies the client can deal with representatives at a very senior level all the way through their project. They’ll be sure that it isn’t a junior person who does the work and the senior person who just comes in and presents the results.
McShane: Having come myself from a small agency to a large multinational one, I have to say that from the client’s point of view, consolidation has to be good! I know that large groups have inherent problems in terms of efficiencies and bureaucracies. But what has happened in our instance and I presume elsewhere is that the larger the group becomes, the more resources get put into research and development and the more new techniques we’re able to offer to the clients.
Do clients seems to have reasonable expectations about what they can do with or learn from research? Do they make effective use of the information they obtain from marketing research?
Kelly: That’s a difficult question to answer. If you went back 10-15 years, the person buying the research on the client side would probably be a market researcher so he probably wouldn’t know much more about the company’s business. But now those who are buying research are not necessarily just marketing research professionals. They are people in these companies charged with buying marketing research and they have a much broader picture of the importance of the data that’s been collected. So I would hope that market research is now being more widely used within companies but if it doesn’t fit with the story, it doesn’t get used.
I think it is incumbent on us as marketing research suppliers to look more into the businesses we’re working for to make ourselves more rounded so we can, dare I say it, add value. Everyone is trying to add value, though I’m not sure many people do and I think it’s because marketing research has been too concerned with the process rather than the impact of the data.
Suphi: We have a mixed client base. Some are large, sophisticated clients and they have been dong research for a long time so their expectations are very realistic and their appreciation of what they can do with it and expect are fairly accurate and fairly good.
On the other hand, we have small clients who have never done research before. They are just beginning to recognize the value of doing research and they need a lot of handholding.
The less sophisticated clients will put themselves in your hands and let you guide them. There are others feel that they still want to be in control and our role is to provide guidance on how to take the research further.
On the whole we find in Scotland that clients take research seriously and do see the value in it and are often surprised by the added value they get.
McShane: I think the clients would break down into two camps. In Ireland, the economy has taken off in the past few years and people who heretofore hadn’t done marketing research are now tripping over themselves to do it. That brings problems in that there are a large number of people who, through no fault of their own, don’t understand marketing research and who need a certain amount of basic handholding. Then we have our larger clients who have been doing research for years and have their own departments.
I think it’s a matter of setting the parameters from day one. So if someone calls up and says they want to do two or three focus groups to get a little understanding of what the reaction might be to a new concept, you make it clear to them that that’s exactly all they’re going to get: just a little understanding.
What can research firms do to help clients get more from research data?
Kelly: We really need to know more about the industry we’re working for and not be process-driven. We know that we can collect the data and we know how to use it but then it depends on the client allowing us enough information to be able to help. We sometimes suffer from only getting part of the story. So it’s two-way street: If they were to impart a bit more information we would certainly be able to make the data we collect for them much more valuable.
Suphi: My view is that there is a lot of value in working on a consultancy basis with clients. Rather than just giving them the data, the research companies are much more integrated into the aims of what the project is trying to accomplish and getting to the point where the client sees you as a part of the team rather than just a supplier of information.
McShane: I think easy-to-use software packages, which are offered to the client as an add-on so they can work with the data themselves, would be helpful. If you are doing a large U&A study of a couple thousand interviews, the chances are that no matter how tuned-in the clients and the researchers are, you’re never going to get to the bottom of every single question. So by empowering the client with easy-to-use software packages, especially one available online, they can get more out of the research data.
What are some of the trends you see in the marketing research industry? Are more companies doing research? Are some industries doing more or cutting back?
Kelly: In the past several years we have seen the impact of customer satisfaction research. A lot of banks and other service industries are doing a lot of CSR.
In the U.K., the vast majority of research is bought by a small number of companies so research really hasn’t really penetrated the SME (small, medium enterprise) sector. And in way you can understand why because research is expensive and, in the case of these smaller companies, they want a $50,000 project but they only want to pay $5,000 for it.
Food companies, IT, telecom, entertainment industry, high-tech, all are doing a lot of research. But over here the dot com companies aren’t doing a lot of research, at least not as commensurate with their value.
Suphi: Over the longer term there has been much more recognition of the value of qualitative research. Traditionally people have been interested in the statistics from quantitative research but over the past 10 years there is a noticeable increase in firms doing qualitative research, not as a precursor to quantitative but as a standalone project that can give them the kind of insights into consumer behavior that they can’t get from a bunch of questions over the telephone.
In terms of sectors in Scotland, the financial sector has always been at the forefront and they continue to do a lot of research. The food and drink firms have been doing more marketing research, and that includes a lot of the smaller food producers and manufacturers who are recognizing, either on their own or through their umbrella organizations, the value of marketing research. There is more research being done in the non-profit sector.
McShane: There is a lot of research being dong in the FMCG (fast-moving consumer goods) area on category management. All of the FMCG companies have a category management department, all of whom are developing a colossal amount of resources to defining the categories and the decision tree and applying that to the retail outlet. So that’s one area where we are doing a huge amount of qualitative and also quantitative.
Are the research departments in the client companies growing or shrinking? Are clients looking at research companies as partners in information management as opposed to providers of data?
Kelly: In general, in-house market research departments are shrinking. In theory they are looking for partners but in practice I’m not sure they allow us to be that. A lot of the jobs are ad hoc custom research and you may win a project now but not get another one from the same client, so it’s very difficult to build up a relationship. What they often miss is that they may save $1,000 on this bid but by taking someone who is $1,000 cheaper they probably wasted the $50,000 they spent with the first company because they’ve lost all that learning.
Suphi: There is a general move toward partnership-making. There is a lot of value to forming a longer-term relationship so whilst you are not part of the research department as such there is an ongoing working relationship.
McShane: Research departments are growing and that is a function of existing departments growing. But more often than not, client companies which never had a research function are now getting one.
How has the globalization of the world economy affected research? Will more companies use a global research and/or marketing approach or tailor their approach to each country?
Kelly: I think they probably pay lip service to the “think global, act local” idea because you see so many international ad campaigns that have been obviously dubbed and they don’t work. They may well have been researched but they don’t work.
We in the U.K. have been fortunate because we have been seen as coordinators of international research for years, principally because the biggest buyers of international research have been U.S. companies and since we nearly speak the same language we have had an advantage since we have been able to represent a coordinating facility.
Globalization with carry on. It will be the shibboleth for some time until something else comes along.
Suphi: I can only speak from the perspective of the clients that I work with, but I think there was an initial phase to try to encompass everything with a single brush stroke. But there has been a move toward recognizing the individual markets with their own needs. A number of lessons have been learned in trying to do the same thing in the same countries.
In important overseas markets clients have been moving toward researching them as individual entities and in some cases have been surprised by the differences the research has highlighted and that has had a dramatic impact on their marketing strategies.
McShane: It’s difficult to get a sense of where the large multinationals are going. You’ll hear that one group is going to roll out a global marketing campaign and you’ll hear another group is planning to do localized direct marketing. We have conducted research for multinational companies who are pursuing a global marketing strategy and the research methodologies and approaches have been dictated from on high, right down to the questionnaire design. I know that some clients in those instances have been a bit disappointed that the findings, while directly comparable between France, Belgium, and the States, for example, aren’t quite as incisive as they might have been since the questions haven’t been tailored for the local marketplace.