8 July 2011

Is the Market Research SWOT mostly wrong?

Is the Market Research SWOT mostly wrong?: "

Earlier this week I ran a “Where next for market research?” session with a group of senior players from 15 different organisations in the UK. Yesterday, I reported back on the issue “Are Surveys a thing of the past?”. Today I am going to look at MR’s self-image.


In the ESOMAR 2010 Global Report there is a SWOT analysis of Market Research. The SWOT was partly created collaboratively by people adding their suggestions via an online discussion – so it clearly represents a constituency of thought within MR. As part of our session this week the thought leaders were tasked in looking at the SWOT critically, for example to see if they could argue why the strengths were not strengths, the weaknesses were not weaknesses and so on. This was done as a loosening up exercise before we moved on to looking at the future, however, it produced some very interesting thoughts and ideas.


Just before we looked at the SWOT we had reviewed a range of evidence and data that showed:



  • A majority of clients were willing to trade-off quality against price

  • A majority of clients were willing to trade-off quality against speed

  • Over half of all research bought (by value) is provided by the top ten biggest agencies


Strengths
The top item in the strengths column was Quality. However, this means that market research is describing itself in terms of something that is not the key driver for the majority of clients. In their book ‘Simply Better’, Barwise and Meehan explore the problems of brands and organisations choosing to differentiate themselves on attributes that are not core benefits to their clients.


The second item on the ESOMAR list was Reputation, based on scientific criteria and ethical purity. But again this contrasts with client demands for insight, commercial understanding, and delivering results. We were reminded of Martin Sorrel’s comments to the MRS conference a few years ago when he made the point that it is not for market researchers to say how much quality a client should buy, the client makes that decision, the market researcher supplies the information to enable the client to make the choice, but the choice is not (should not) be the researcher’s prerogative.


Other strengths that were challenged inlcuded “Large and Growing” – the industry has recently stalled and is tiny by comparison with the newer fields of Business Intelligence and Management Consulting. The topic of Inspirational Agencies was also challenged – there are some inspirational agencies, but that is not what characterises our industry; we can’t say one of our strengths is something that does not relate to most research bought and sold, and most research bought and sold is from the big agencies (and in the SWOT the term inspirational agencies was specifically referring to the smaller ‘new wave’ agenies).


Weaknesses
In terms of weaknesses, the number one was Communicating Research’s Value – this sounds like every political party who has lost an election, we did not lose it because we were wrong, but because we did not communicate our ideas properly. This may be a weakness, but is it really one of the top problems? If we believe that communicating our strengths is the problem we won’t address the real issues.


The second weakness was Compromising on Quality. However, as explained above, this assumes that quality is the top issue, as opposed to meeting clients’ needs and expectations. Another way of expressing compromising on quality is to say Flexibility – which the SWOT claimsis a strength.


The weaknesses columns also included reluctance to change and lack of new ideas, but this potentially ignores the massive number of start-ups in (and around) the market research area and the vast number of purchases that the mainstream agencies are engaged in.


Opportunities
The largest amount of scorn from our thought leaders was reserved for the term “Value-added Research”. All research that is useful to the client is adding value, adding value is not something unique to expensive research nor consultancy.


Several of the opportunities were also seen as potential threats, which is not unusual for a SWOT, these includes Social Media, Advances in Technology, and Changing Environments.


Threats
Perhaps the craziest part of the ESOMAR SWOT (at least in our eyes) was the Threats section.


DIY Research – in essence DIY reflects where research will be done, it raises the possibility that more of it will be done inside client companies, instead of by agencies. Let us imagine a world where half the employees of agencies moved to being employed by end clients – is that a threat to market research? It might be a threat to some companies, but not to the role of market research.


Research as a Commodity – most of the big money in market research comes from turning research into a commodity. Large amounts of research are only of large ongoing value to clients when they have becomes standardised and integrated into systems. Bespoke, ad hoc, ‘value added’ research will always have a role, but the industry would be destined to become niche and boutique if the commodity trend reversed.


Alternative Data Sources – if market research does not embrace alternative data sources and add “Why?” to the mix, then alternative data sources will speed the death of MR, but they are also the biggest single opportunity for Market Research to start to grow in big and significant ways.


New Entrants – Dunnhumby is a new entrant, Synovate is a new entrant, Millward Brown (created by two planners) was a new entrant. New entrants might be bad for current agencies; they are not bad for market research. However, creating boundaries that classify some companies which offer market research as NOT market research is a potential problem.


Our Conclusions
After finishing our brainstorming on the ESOMAR SWOT we felt we were looking at an industry that was:



  1. Trying define its core benefits in a way that did not match those that its clients were most interested in

  2. Trying to define its core characteristics in terms of a minority of its activities, instead of in terms of the bulk of the industry

  3. Trying to preserve its current structure in a changing world, confusing what is good for market research with what is good for today’s agencies

  4. Seeking to protect its narrow turf instead of seeking to embrace new areas of business

  5. Reluctant to see that big data, integration, analytics were the main opportunity and that a reluctance to expand what we mean by market research is the main threat.


What do you see as the main issues for market research? What do you think the term market research should mean?


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