Playing mind games

Understanding consumer trends has never been so critical or important for marketers. Consumers today are more demanding more sophisticated, individualistic and knowledgeable about the choices they make and the brands they buy.

But while understanding consumer knowledge, or more simply knowing what people want, may seem relatively simple, it is actually a mind game that few are truly capable of playing.

Taping into your consumers emotional landscape is not easy and market research plays an important role in the way marketers decipher the needs of the increasingly elusive and hard-to-reach consumer.

While some may frown on market research, marketers both large and small are investing significant amounts of money into research and in turn, are getting a return on their initial investments.

Matthew Carr, research director of Illuminas Asia Pacific, says research has evolved and abandoned its "ivory towers". He says that the industry's focus on producing insightful outcomes rather than theories and methodologies are now paying off.

But he warns that being obsessed with risk-reduction may lead companies to misuse research and lead to poor thinking.

Kevin Reagan, executive vice president of the Research Pacific Group, argues research has been historically treated as mere data, but that the beauty of research lies in its interpretation.

"Interpretation goes a long way in how you apply data and understanding the needs and concerns of various stakeholders is of immense benefit in interpreting information in a relevant way," he says.

Consumer insights or picking a consumer's brain goes a long way to creating new product solutions, facilitate market entry and help brands understand their place in the market. Research also helps companies assess the risk factor and ensures that marketing dollars are not wasted.

Glenys Taylor, Asia Pacific marketing director of Watson Wyatt, believes it is one of the company's primary foundation stones. The firm conducts a broad range of research, particularly for market entry in countries like Bangladesh and Vietnam. While it is self-evident that no one methodology works across all markets, she argues that some research methods work better in certain countries. For example, online research may work well in developed markets like Hong Kong, but face-to-face interviews may work better in North Asian countries.

A large part of research success has to do with cultural sensitivities and the nature of the research conducted. Simultaneously, research questionnaires would have to be formulated in an interesting manner to help cull out the best responses.

Jill Telford, CEO of Synovate North Asia, says it takes a lot of effort and skill to get questionnaire right that it is usually collaborative effort between research firms and their clients.

But as consumers become more sophisticated and clients more demanding, another major trend according to Grant Bertoli, managing director of TNS Singapore, is the increasing specialisation across both categories and functions. Researchers are expected to not only understand a specific industry but to be very knowledgeable about it. Having said this, many of the large research firms are investing in recruitment and training with different interviewers designated for different tasks. For example, The Research Pacific Group gives employees interacting with clients the opportunity of participating in an online marketing research certification programme conducted by the University of Georgia.

Bertoli also identifies a certain pressure on research firms to contribute more than "purely survey data driven research". This could account for insight driven methodologies that no longer focus on qualitative or quantitative research alone. While the "old favourite" or focus group, as Telford puts it, is still alive and well, ethnographic studies help one understand consumers by studying them in their homes or as they shop. Dominic Lefebvre, regional director The Leading Edge, says ethnography "provides a truer in-situ picture of consumer behaviour" but traditional research methodologies continue to provide the fundamental insights that drive marketing and business strategies.

Research group Aviva Asia relies on the traditional market research model, conducting both quantitative and qualitative research. Tim Beardsall, marketing director for Aviva Asia, explains that the quantitative part of it gives them insights on where they are today, whereas the qualitative aspect of it adds value to the business.

Traditional models may prevail but technology has left its imprint on market research. It may not be possible to define online as a valuable tool, as Telford says, but it is "simply a reality today and one of the many methods available to them". Often the method used depends on a marketer's objectives, the target audience and the country in question, but online facilitates data collection. Bertoli explains how report automation technology has vastly increased the speed and accuracy of report generation, allowing for larger projects to be conducted in shorter periods of time.

Chris Farquhar, managing director Cimigo, says the move to online research continues to be in fits and starts, but some organisations can immediately see the application and are ready to jump in.

"They understand the immediacy of this new medium for reaching consumers and how it can help us effectively measure reactions to communications and product design," he says.

"Others are very much old school and wouldn't be caught dead as innovators. The reality is that all methodologies have issues and the clients who view online as another tool, rather than decrying it as flawed, seem to have the more dynamic brands. 

But despite the changes,  Farquhar argues the craft of market research remains the same.

"Except we now have an additional tool. It is great news for our industry as we now have another means to explore consumer behaviour," he adds. 

Online is also used to target higher socio-economic groups and young people who have more access to the internet, Travyn Rhall, CEO at Millward Brown Asia Pacific and Africa, says. Carr says the web is a fantastic tool when used appropriately, but warns it is generally not suitable for studies looking at any aspect of channel preference.

Like any other methodology, it is bound to have its flaws but its interactive nature may prove advantageous. Discussions can be held with target groups sitting at home or work through the internet and often with people who shy away from face-to-face contact. Traditionally, research has been done by "interruption", Bertoli says. Online research, when conducted through "managed" online access panels can take away the interruption from the picture. Bertoli says this is an advantage as people answer questions based on their convenience, leading to higher response rates and better quality.

While Roger Moy, regional research & planning manager for Yahoo! Southeast Asia, argues that online research is still very much in its infancy in this region, others point to a 400% year-on-year increase in its usage. So should everyone ride on the online wave? Not necessarily, says Rhall.

"An online survey of older people for a category that is targeting down market groups done online could be very biased."

Other methods being tested include SMS, blogs and social networking. Carr also talks about really new techniques such as eye-tracking technology and Functional Magnetic Resonance Imaging (FMRI) that are still in a early development stage. But what could work well is combining a variety of techniques to approach different sets of consumers.

Media company Dow Jones is using its own market research tools to provide business clients with relevant information about the market trends. Bruce MacFarlane, managing director Dow Jones Asia Pacific, says this enables traditional market research to play its purer role. One of its solutions, Factiva Insight provides analysis of mainstream media, websites and consumer generated media. This enables companies to track their brand as it is being told in a world of social branding.

While traditional market research may never lose its foothold, the need to respond to market trends is being pushed towards the end user, MacFarlane argues. Social networking is now a big part of most marketers vocabulary, with consumers tasked with monitoring brand movement or brand equity. The world of social networking is also throwing up new target groups like the savvy prosumers. Prosumers also set trends and are considered to have tremendous influence, but as Lefebvre puts it, "anybody can be a prosumer depending on the category we are in."

While the focus may be shifting from traditional target groups to prosumers and bloggers, one can't ignore the AB demographic or the baby boomers. The AB demographic is often broadly applied to those with the most disposable income, the top 10% to 20% of the population in terms of income. Often a group targeted in developed markets, it is seen as an increasingly important segment within Asia.

As the number of high net worth individuals increases exponentially in Asia, Lefebvre identifies a greater focus at the top end of this segment.

While a significant force in many western countries, baby boomers may not really apply to Asia. Lefebvre explains that in many developed countries, "baby boomers stand to inherit the greatest transfer of intergenerational wealth in history". He feels that in developing markets, "it is the aspiring generation of the 70s that will immediately reap the benefits of a buoyant economy".

Another main reason why baby boomers may not apply is the relatively young Asian population, with marketers laying emphasis on those aged 25 to 40. Interestingly, a growing target is the ‘silver market', particularly within the financial services industry in both Singapore and Hong Kong.

Different target audiences and studies require different methods, so how reliable are the methods currently available and those still in their infancy? "If a researcher tells you what the most reliable method is for your category before you have asked them a question...do not hire them, they are not listening", Carr of Illuminas says.

Reliability would also depend on one's target audience and market as much as the methodology, so they'd all need to work as one. When discussing reliability of research, it may be important for clients to define their objectives right from the start so the survey makes sense. Another important component linked to reliability is that of data and its interpretation when conducting a study.

As most of market research is about interpretation, it may not be 100% accurate. Reagan of The Research Pacific Group highlights that "while quantitative research may be more reliable when done correctly, qualitative research can actually yield more rich insights."

So what are some of the big challenges facing the market research sector and what emerging trends should marketers lookout for?

Fanny Chan, managing director ACNielsen, says as far as clients are concerned, respondent rates and multinational clients tapping into local knowledge are two fundamental concerns.

She says global research groups are now looking to acquire local research houses in an effort to gain a strong local foothold.

"Clients also want research services that go beyond data to provide more insights and solutions," she says. "They want research agencies to know their business and their needs better."

Chan adds that respondents rates have dropped but new technologies can help to get around the challenge.

"The internet in particular presents a new media for marketing, data capture, service delivery and client interface and from our point of view, lessens need for on the ground field force," Chan says.

"There has been tremendous growth in online research around the world and we have witnessed this trend in Hong Kong since last 18 months and believe it will prevails in the coming years."

With response rates on the decline and consumers becoming more knowledgeable about research, comes the issue of privacy and respect for those lending themselves to research study. Industry standards set by ESSOMAR define a code of conduct that makes it essential to respect the privacy of consumers. Privacy is a big concern in this field and particularly across certain markets like Australia, Korea and Japan. Raising the professional standards of research is a necessity, particularly with the way data gets sifted around. While consumers may worry about their privacy, most of them love to be heard and view research as a way of voicing concerns and sharing opinions.

It's fair to say that good marketers can sense the market and may only need research for certain areas and concepts that they don't understand. Even researchers don't know every market trend or every single mindset. This makes the job of a researcher a fascinating one and that of the marketer a challenge. Be it for product development, testing, advertising or brand awareness, there's always something new on the horizon.

What differentiates valuable research from one that isn't, is its capacity to help marketers find their feet and glean insights that could help them craft future marketing plans. Neither could exist without the other and no theories can help the researcher probe a person's mind. Many marketers believe that behavioural analysis and understanding a person's needs, wants and desires may simplify reaching out to them. But sometimes, the subject of study may be simpler than it seems on the surface. Good research should delve deep enough to gain insights but not rock the balance of things. After all, too much knowledge can be a dangerous thing.

 

Box out

A quick history of the research industry

Founded in the 1920's and rooted in top level strategic consultancy work such as markets and consumers

Got lost in data collection and branded products (pre-internet era)

Merger mania and industrialisation in the 1990's

Large agencies struggle to retain their key staff- results in a plethora of smaller firms

Client requirements move from reportage to insight...and on a global scale. Small agency structure more suited to deliver this - but no global coverage

Online research- data collection is now fast, cheap and easy in many markets

Source: Matthew Carr, research director, APAC, Illuminas