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INTERNATIONAL MARKET RESEARCH The New Horizons. Warsaw, October 17, 2003. The Market Research Profession. Market Research: ADDS VALUE TO BUSINESS AND SOCIETY. CONNECTS DEMAND & SUPPLY TRANSPARENCY EFFECTIVENESS EFFICIENCY CONTRIBUTES SOCIAL/OPINION INSIGHT TO QUALITY OF SOCIETY.
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INTERNATIONAL MARKET RESEARCHThe New Horizons Warsaw, October 17, 2003
The Market Research Profession Market Research: ADDS VALUE TO BUSINESS AND SOCIETY • CONNECTS DEMAND & SUPPLY • TRANSPARENCY • EFFECTIVENESS • EFFICIENCY • CONTRIBUTES SOCIAL/OPINION INSIGHT TO QUALITY OF SOCIETY
In 2002 GROWTH OF WORLD MARKET TOWARDS USD 17 BILLION (EURO 18 ) EUROPE : USD 6.3 BILLION (EURO 7.3) POLAND : USD 81 MILLION (EURO 86 ) EMERGING EXTERNAL CHALLENGES The Market Research Industry SCIENTIFIC ROOTS …..MARKETING RESEARCH BECAME AN INDUSTRY
The Market Research Industry EXTERNAL DYNAMICS DRIVE CHANGE • INTERNATIONALISATION • ICT/TECHNOLOGY • DIFFERENT REQUIREMENTS • NEW ENTRANTS/COMPETITORS • LEGISLATIVE PRESSURE
TRANSFORMATION WITHIN THE INDUSTRY • Changing hands : take overs /acquisitions (concentration) • Shifts within data collection methods (mail /phone – down; direct registration /online-up) • Widening scope: combination/ integration of information (re-packaging) • Increasing focus : data capture and decision making support • Growing opportunities: bundling/interpretation • Renaissance of the client side
Renaissance of the Client Side? …radical improvements will be increasingly demand driven (“demand pull”) • 1000 top clients already spend 80% • 65% of their budgets go to 25 companies • For “Best Solutions” they will not wait for a top-provider (in-house, outside, new entrants) …pressure to adapt current MR business model
51 48 43 27 34 24 27 22 24 27 22 21 0 10 20 30 40 50 60 % Providers (n=1099) Clients (n=272) Future Developments 5 – 10 years down the road Selection of up to 3 future developments out of 12 Clients will require far more creativity and businessintelligence from providers Market research will become more important because ofgreater incorporation in companies strategic planning Market research data will be more integrated withCRM-data Internet research will revolutionize the business Respondent cooperation will dramatically decrease Consulting companies will take over territory of marketresearch providers, turning these providers into meredata- providers
To a more Strategic one Go/No Go Type of research Needs-driven Insightful Type of research Monitoring Type of research A different type of Market Research emerging… From Risk-Aversive MR
31 33 31 29 19 21 14 11 5 7 0 10 20 30 40 50 60 % Providers (n=1099 Clients (n=272) Can We Do It? What we say will happen in next 10 years Division between data providers and market researchconsultancies More partnerships between clients and providers No change and same issues as today Traditional market research will disappear Don't know
Product/Service offering rapportage onderzoek Product / Service Offering Assets/Core Competences Inputs, Raw material The Customer Channels Traditional Phases of Development in MR (large and medium sized companies) build up research technology/ build data factory add local/ regional competence add domain- specific/ sector competence add marketing competence (pre-structured solutions/acc.mgt) The Current Business Model….. The Traditional Value Chain* Characteristics: • Huge investments in “data manufacturing” • Value based on data delivery (tracking, syndicated, simple ad hoc) • Focus on shareholder growth/profit * Source: The Profit Zone, Slywotzky & Morrison
Reputation vs. Margin Dominant Business model: • does not support “Best Solution”/ Consulting Services if they do not help sell data. • focuses on increasing factory load & coverage • Helps to sell products and syndicated services The amount of reputation The amount of profit Business Insights Business Insights Data Delivery Data Delivery
Product/Service offering rapportage onderzoek Product / Service Offering The Customer Inputs, Raw material Assets/Core Competences Channels …. change of rules of the game MR Industry to Innovate: • Improve value add ….and move to a much wider context: from data management to decision facilitation (using variety of sources…..meeting demand for actionable insights) • Reverse value orientation: transform business model Change in take-off phase
NEWHORIZONS • Re-Define the Market for MR • Develop New Business Models • Address Industry Issues Pro-actively
Re –define the market for MR OPPORTUNITIES
OPPORTUNITY ResearchProcess Consumer Repackaging Distribution Companies Re-define market • Explore new, wider horizons • Understand different needs • Be creative / re-position • Cooperate and/or join forces
Develop new business models OPPORTUNITIES
ResearchProcess Consumer Repackaging Distribution Companies FIERCE FIGHT FOR ADDED VALUE ACROSS THE BUSINESS SYSTEM -Consumers get organized -Research providers re -define roles -Client companies on the move -New players focus on re-packaged insight DEVELOP NEW BUSINESS MODELS
Addressindustry issues proactively OPPORTUNITIES
INDUSTRY ISSUES How to move successfully to the new era? • Relevancy? Legislative concerns? Representation public at large? • Concerted industry action? One message, one voice? • Standards of quality performance? Quality of research? A quality sample? A quality panel?
ADDRESSING INDUSTRY ISSUES? • There is a need to address external challenges, align main players within the industry and ensure adequate standards of performance. • Orchestration is vital: ESOMAR in the lead, close cooperation other MR organizations • ESOMAR: European origin, scale worldwide; individual membership; focus on representation, standards, professional development and industry initiatives.
The Marketing Research Industry INDUSTRY INITIATIVES? THE EXTERNAL CHALLENGE • EXTERNAL RELEVANCY/ REPRESENTATION? • CREATION OF THE ALLIANCE FOR RESEARCH (ESOMAR, Efamro – 2002) • OFFICE IN BRUSSELS: PROMOTING THE BENEFITS OF RESEARCH- / SELF REGULATION
The Marketing Research Industry Clients, ProvidersAssociations INDUSTRY INITIATIVES? CONCERTED INDUSTRY EFFORT ONE INDUSTRY , ONE VOICE? ALIGNMENT OF LEADERS & ASSOCIATIONS IN WIN (2003) “WORLD INDUSTRY NETWORK” (Facilitators: ESOMAR, ARF) SET UP: -flexible platform, global scope -bi-annual schedule -agenda for action (key condition for success)
The Marketing Research Industry INDUSTRY INIATIVES? PERFORMANCE STANDARDS • STANDARDS OF PERFORMANCE ARE THE LIFEBLOOD OF AN INDUSTRY, HOW TO ENSURE CONTINUITY? • SET UP “QUO VADIS”” PROJECT (ESOMAR, IN CLOSE COOPERATION WITH INDUSTRY SPECIALISTS -2003) • AGREEMENT ON PRINCIPLES, RE-CONFIRMATION CODE, ADAPTATION OF GUIDELINES
Re-define the market for MR Develop new business models Address industry issues pro-actively HORIZONS/OPPORTUNITIES