WORKING AS A TEAM
OUTSIDE RESEARCH SUPPLIERS PLAY A MORE CRITICAL ROLE IN DELIVERING TIMELY, ACTIONABLE INFORMATION
Debbie Coakley, Contributing Editor
Editor's note: As the market research staff at many agribusiness companies continues to shrink, outside suppliers are becoming a valuable extension of their clients' research department. More than ever, researchers are being relied upon to take part in a company's planning stages and then work all the way through to showing them how to implement the recommendations.
Below, three market researchers and a manager of marketing research reveal how clients and suppliers are working together to achieve cost-effective, efficient and value-added research, while at the same time being sensitive to the needs of those participating in studies.
Offering their insight are: Dale Longfellow, president, Cambridge Research Inc., Minneapolis; Dave Tugend, vice president of client services, Doane Marketing Research Inc., St. Louis; Arn Vogt, manager of marketing research, Novartis Crop Protection Inc., Greensboro, N.C.; and Tammy Wise, vice president, Burke Marketing Research, Walton, Ky.
AM: What hot topics are being researched in agriculture today?
Longfellow: During the past year, there's been a lot of interest in finding out farmer and dealer attitudes and the use of e-commerce. Agribusiness companies know it's inevitable, and they want to find out how farmers plan to purchase products or sell their crops online. Focus groups and one-on-one interviews work well to research e-commerce issues. These days, in every study we do, the client asks about their use of or interest in e-commerce or which Web sites they visit.
Three years ago, the hot issue was how producers were going to use GMO crops. Now the concern is about how they can market them, considering the resistance of the European and Japanese toward purchasing genetically altered crops.
Tugend: We've received quite a few client requests to study farmers' usage of GMOs. We're doing so through AgroTrak, our syndicated market research study that tracks usage of crop protection products, as well as our syndicated corn seed and soybean seed market share studies.
Vogt: Like many other agribusiness entities, we have put considerable emphasis on e-commerce opportunities, biotechnology, customer segmentation, product and service solutions and product defense, as may be required under implementation of the Food Quality Protection Act (FQPA). This differs from years ago because the business paradigm and regulatory environment for our industry have changed quickly and substantially during the past three to five years.
While new product research, product positioning and pricing, competitive tracking, advertising testing and all the other staples of agribusiness marketing research are still necessary for business success, they're no longer sufficient. Our customers are becoming skilled and comfortable with new technologies that range from using genetically modified and value-traited seed to buying on the Internet. Our challenge in marketing research is to be increasingly forward-looking - not just one step, but several steps ahead of customers in terms of anticipating and satisfying their needs and offering them new opportunities for success. After all, our success and theirs is a shared goal. Marketing research focused on customer segmentation and profiling, business solutions and innovation in products, services and delivery systems helps Novartis achieve this goal.
Wise: Because markets are increasingly competitive, we're seeing more research in the area of pricing and value-added pricing. The research must be actionable and take into account things outside the normal frame. For instance, we need to factor in the impact of changing or additional marketing channels, introduction of generics, resistance to technology.
The time frame to introduce a new product has shortened considerably, and we need to turn around research much quicker. While in the past we might have had a couple of years to do all of the research involved in bringing a new product to market, today that time has been compressed to less than a year to obtain the same level of information.
AM: What research techniques commonly are being used?
Longfellow: More research is being done via the Internet. My concern is that only a small percent of producers are actively online every day. That does not represent a random sample for most of the research studies we do.
E-mail surveys work well for a quick survey of dealers about which incentive programs attract them, a GMO question or which weed problems are cropping up, for example. Response rates have been as high as 90 percent, partly because the dealers were told by a company to complete the survey.
The use of in-depth interviewing also is on the rise. Hour-long interviews are not atypical when companies are trying to understand key drivers on topics such as why a producer is using certain cultural practices, where he sees new technology headed or his attitudes toward incentive programs.
With research dollars shrinking as a result of "merger mania" and declining response rates to the traditional 20-minute phone interview, in-depth interviews are gaining favor. To achieve good results, researchers need to set up appointments to conduct the interview and be sensitive to when the respondents are available to be interviewed, not just when it is convenient for us.
Tugend: We're receiving more requests from clients to do quick reads on a market. They're often crop oriented, animal species-specific or focused on a particular geography. For instance, they may want to know what brands of injectable antibiotics producers are using during the spring months when beef cows are birthing their calves. We can gather that information quickly because of our beef cow/calf producer database available in our syndicated animal health market study.
Telephone focus groups work well for quick-read studies. Some advantages of doing focus groups by phone are: We can turn around the project in a short time; it's easier to get a good geographic dispersion, if that's what the client wants; participants do not need to travel; and clients can listen in from any place in the country. In addition, telephone focus groups cost 20 percent to 30 percent less than traditional in-place focus groups.
When conducting a focus group by phone, we recruit the producers, dealers or veterinarians ahead of time and always provide an incentive. If participants need to see a visual, such as for changes in product packaging, we send them material to review prior to the focus group.
Clients also are interested in using the Internet as a means of conducting market research. But they need to understand that there are some biases. If we're trying to provide them with a good estimate of markets or conditions, respondents who answer an e-mail survey, for example, may not necessarily represent the total target audience. In some cases, clients may want to target "e-mail" types, and then Internet research works well.
Vogt: The greatest changes in marketing research in recent years have not been so much in techniques or methodologies, but in technologies and applications. We're well past the time when "Market Research Law" required pure, random representative sampling by either personal or telephone interview. Many prospective respondents have gravitated to specific communications tools such as e-mail and the Internet and grown comfortable with them - and many still refuse to be interviewed at all.
Today, we conduct surveys to obtain information from growers, dealers and other agribusiness influencers via e-mail, Web site, fax, cell phone, teleconferencing and satellite video-conferencing. The challenge for researchers is to make sure that judicious utilization of techniques and technologies adds up to relevant, reliable, timely and actionable information about the respondent universe or segments of interest to our business.
Where appropriate, we have utilized computer-driven advertising and product concept testing, e-surveys and Web site data collection. However, traditional techniques such as telephone and mail surveys and personal interviews are still used in much of our work because the respondent bases we require are not fully reachable by the Internet or satellite.
Methodologies such as disaggregate discrete choice (DDC) modeling and segmentation techniques are finding increased application in our business as we become more end-user focused. DDC models developed from traditional phone-mail-phone surveys enable more efficient and cost-effective evaluation of respondents' reactions to a broader range of multiple attribute product and service concepts than conjoint or trade-off analyses.
In layman's terms, we can test more variations of product-service offers at more levels of pricing using DDC than with other more simplistic techniques. Respondents need only rate or evaluate an assigned selection of variables in the survey, not all variables. Models then simulate what results would be if all respondents had worked with all variables. Similarly, segmentation models are finding increased importance as we develop databases to facilitate customer acquisition and retention and launch new products and services.
Wise: Marketing research seems to be evolving toward a "permission-based" system, where a respondent agrees ahead of time to be contacted for research purposes. The utilization of panels, as well as databases of respondents who have agreed to participate in research projects, is becoming an increasing common means of surveying various populations. Permission-based research and Internet data collection can complement each other quite nicely. While by no means the predominant data collection method today, Internet data collection, coupled with a permission-based sample, is continuing to show rapid growth.
Here's how permission-based systems work: Respondents are given an 800-number so they can call an interviewer or participate in an automated telephone interview (using a touch-tone phone) at a time that is convenient to them. Or they can choose to be contacted directly by an interviewer. Additionally, they can be sent an e-mail containing a link to the survey, if they prefer.
The message companies are sending is: "Your time is valuable, and your opinions are important, so please interact with us in whatever form is most convenient for you." The effect of this practice, in addition to providing more convenience to the respondent, is to increase cooperation and lower non-response error. Marketers can avoid been viewed as harassing with the traditional method of multiple telephone calls and voicemails, and instead be seen as being sensitive to a respondentís time.
AM: How is the role of the market researcher changing?
Longfellow: We're being looked on more as members of the company team rather than as suppliers. Companies that had six people in their market research group five years ago may have only two today. They are requesting more help with research, including how to implement the recommendations. We're no longer just research suppliers; we're an extension of their staff.
Tugend: During the past five years, the staff devoted to providing market research services within agribusiness companies has been shrinking. Combined with the consolidation that has taken place in the agricultural company supply industry, the number of people working full or part time in market research is really getting smaller.
What does this mean for a market research supplier? We are being asked to provide more flexible support as result of this shift. For example, some clients have asked us to consider providing "semi-dedicated" personnel to help them with customized data runs utilizing AgroTrak, our syndicated crop protection product usage tracking study. Were considering offering this extended service option for the year 2001. A client would contract with us for a person on our staff to work specifically for that company for a certain number of hours per year.
Vogt: The role of the market researcher is changing everywhere, not just in agribusiness. The real-time speed in which decisions are made today requires real-time information. To meet these demands, client-side researchers must have expertise in information development with applications for the business, as well as be able to satisfy their customers' needs quickly and effectively. This requires a depth of understanding about the capabilities and workings of outside providers of research. We strive to build good relationships and networks with those providers who can do the job efficiently and cost effectively and who add value in the process.
At Novartis, the role of the internal researcher is that of business consultant to decision-makers. We build knowledge for the firm. To accomplish that, we expect outside providers of research to be committed to our own personal success and that of our company. Novartis sets a high bar for its employees. Those of us in marketing research set the bar high for the providers we utilize in terms of value added, speed and cost-effectiveness.
Wise: As a company's market research staff shrinks or disappears altogether, outside suppliers are becoming more a part of the client's team. Burke has provided on-site research support for several clients. We're getting involved early on in the planning stages and becoming ad hoc members of a company's marketing or communications department. Weíre helping design studies from the ground floor up rather than responding to a market research request proposal. AM
Debbie Coakley is a freelance writer based in Warrenville, Ill.