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MARKET RESEARCH PLAYS PRIZED ROLE IN COMPETITIVE MARKET
Editor's Note: Agri Marketing recently spoke with five market research managers about the role market research plays in their companies and how they get the most from it. Offering insight are:

Chuck Benson, market intelligence manager, BASF Corp., Research Triangle Park, N.C.;

Kerry Hubbard, market research manager, Bayer CropScience Inc., Durham, N.C.;

Steve Mills, market analyst, market and customer research, John Deere Agricultural Marketing Center, Lenexa, Kan.;

Jack Mitenbuler, business services manager, Dow AgroSciences, Indianapolis; and

Steve Monson, senior marketing research manager, Pioneer Hi-Bred International Inc., Johnston, Iowa.

AM: What is the role of market research in your company?


Benson:
As the competitive environment intensifies, the role of market research becomes much more critical. There is very little margin for error when developing product positions, pricing, brand value, channel support and other factors critical to overall effectiveness.

Hubbard: Market research plays a vital role at Bayer CropScience. Although the market research department is part of the marketing group, it supplies expertise to almost every department in the company.

The biggest role that market research plays is managing and directing the product life cycle. Even before a new product is developed, market research will complete a product gap analysis to determine which areas our discovery research should target - whether for an agriculture chemical or a biotech trait. Once a new product is identified, it then enters the product life cycle. Market research then begins all the studies required to ensure its feasibility in the identified markets, its correct price positioning, package testing, brand testing, formulation acceptance, etc.

As the product matures and eventually declines, market research continues to collect data to ensure it is correctly positioned in the market.

Today's marketplace is experiencing two major changes:
1. More generics chemistry is entering the traditional agriculture chemical industry, which causes a decrease in the market value.
2. Biotechnology is switching the market from agriculture chemicals to seed.

The result is a shift in how we do business, and market research has to keep pace with these changes. Tracking generics from off-shore countries, following price changes in the market, as well as conducting competitor and market analysis are now part of everyday work.

Mills: Market research allows us to get customer feedback on product and process changes. It is growing in importance for companies that want to be profitable with satisfied customers.

Mitenbuler: Marketing research - and business or competitive intelligence - keeps track of the opportunities, strengths, weaknesses and threats that exist in our marketplace. You don't often run into the "ah-ha" in market research; it adds incrementally to what you already know. We have to know what the competitive scene is to behave responsibly. We conduct primary market research and buy syndicated information to help "keep score," obtain answers to specific questions and help us to develop strategy. We have a competitive intelligence network to keep track of the here and now and to help us assess the likelihood of future developments.

Monson: The role of marketing research falls into two main areas - measuring past performance and helping to predict future behavior. Measuring past performance lets the company understand what works, while predicting future performance helps us sort through all the possible courses of action we could take and evaluate which investments and research opportunities will make us most successful.

Market research is important because it lets us understand the impact it has on the customer beyond what eventually shows up in sales totals. With effective marketing research we can understand the impact on attitudes and perceptions and hopefully predict how those impacts translate into sales. With the high levels of competitiveness in the market, compressed timelines for making decisions and the need to focus in on increasingly smaller segments of the market, it seems like the role of marketing research will continue to grow in importance.

AM: For what kinds of issues/projects do you use market research?

Benson: It is difficult to identify specific areas where we use market research. There are areas that we generally address on an annual basis such as brand share tracking and satisfaction/loyalty at both the grower and channel level. Generally more critical, though, are the issues that we identify for a specific purpose. This is likely due to the launch of a new product, evaluation of new service offers or creation of new business segments.

Hubbard: We use market research for a variety of projects, including:
  • Price sensitivity studies - quantitative phone survey
  • Product positioning studies - quantitative phone survey
  • Advertising pre-testing - focus groups, one-on-one or qualitative phone survey
  • Advertising tracking studies - quantitative phone survey
  • Package testing and design - focus groups
  • Competitor analysis - database evaluation and Internet search
  • Company benchmarking - quantitative phone survey
  • Satisfaction and brand loyalty studies - quantitative phone survey
  • Product repositioning studies - quantitative phone survey
  • Value chain analysis - personal one-on-one interviews


Mills: We use market research for product development and marketing strategies and plans. We use traditional phone, phone-mail-phone and online techniques.
Phone-mail-phone and online work best for product development projects, while phone works best for any qualitative research, including both interviews and group discussions.

Mitenbuler: We use market research for new product introductions, pricing, positioning, monitoring competing brands, tracking the competitive scene, determining value, ad testing and message testing. There is a lot of qualitative market research available to buy that gives a broad read, but we don't purchase much of this material. We often do qualitative research as a start and then follow with projectable quantitative research.

Two methods that we use are computer-aided telephone interviews and Internet surveys. For the latter, we find that a majority of our responses come in right away and then the response rate trails off quickly.

Monson: Pioneer uses marketing research for a broad spectrum of issues. Essentially anything the company does or is thinking about doing is a potential market research project. We use nearly all of the available market research tools that will work with farmers. The tool used is determined by the needs of each project. If we need to understand reasoning and thought process, we use qualitative tools such as focus groups or personal interviews. If we need to accurately measure or predict behavior, we use a quantitative tool like a phone survey.

AM: What makes a good relationship with a market research agency?

Benson: The most important aspect of a market research supplier is the ability to take relatively little direction throughout the process and still deliver high-value results. There simply is not the time available to monitor and evaluate during the execution of the actual research. My responsibility is to make sure that the objectives of the study are correct on the front side and then determine the appropriate actions that the company should take as the result of the research. During my tenure in the market research area, I have continued to narrow the number of suppliers that offer this value.

Hubbard: A good relationship with a market research company is based on trust. You need to trust that they keep your company's work highly confidential, conduct the correct market research technique for the given project, have the ability to reach the correct target audience, respond to your needs in a prompt and professional manner, and have the resources to complete your project. Last, but not least, you need to trust that they can deliver on budget.

Mills: We expect quality, on-time delivery of results at an acceptable market price. Having international connections is a plus. Companies that can provide insight into the interpretation of results are particularly valuable.

Mitenbuler: Market research firms need to be able to assess the situation, not just spit back data. They need to be able to interpret the data and not be afraid to suggest what the alternatives to action might be. Some companies don't expect that from their suppliers. But we listen to our market research firm and want to know what they think the data means. We don't necessarily have to agree, but therein lies the value: a lively discussion and debate about the interpretation of the information and the consideration of various options.

Monson: A good relationship with a market research agency is built around trust and a high level of expertise in agriculture. I need to feel comfortable that projects will be delivered on time and that all the specs will be met. Pioneer does a lot of the study design and analysis in-house, so we tend to focus on an agency's ability to collect data. That requires an extensive understanding of production agriculture and an ability to communicate effectively with all types of farmers and others in the agricultural value chain. The agencies I value most are those that can understand what a particular project is trying to accomplish and help make sure the research tools we are using will meet the objective. AM

Debbie Coakley is a freelance writer based in Warrenville, Ill.


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