REFOCUSED MARKETING RESEARCH EFFORTS NET MUCH-NEEDED INFORMATION
by Debbie Coakley, Contributing Editor
In a down economy when companies are looking for ways to decrease expenditures, scaling back marketing research budgets may not be the best way to go, according to marketing research managers and suppliers.
John Mattingly, manager of marketing research for St. Louis-based Monsanto, says his company is still funding marketing research for its major brands and new technologies as it always has. "In fact, our research efforts have intensified for new-product launches in a competitive environment because we must have a good read on the market."
Whether companies are looking to trim marketing research budgets or are refocusing their dollars on major brands, there are cost-effective ways to conduct studies and surveys, particularly for prelaunch and pricing studies.
Prelaunch studies are becoming more prevalent as companies need to justify their proposed sales and marketing budgets before being approved.
Van Dijk says senior managers want to know if projected sales for the next two or three years are on target. "They're saying, 'Before we sign off and spend a million dollars on a campaign or add additional sales reps, where is the evidence that what you're forecasting is valid?' When times get tough, there's a greater need to know."
Tied to prelaunch studies is pricing research, whether a company is introducing a product into a market or considering a price change for an existing product. "They don't want to make the wrong decision," notes Tara Olson, co-owner of AllPoints Research Inc., Winston-Salem, N.C.
Van Dijk points out that companies faced with generics cutting into their products' share are asking Ipsos-Reid for help in determining how much their brand is worth. "Their gut reaction may be to drop their price to match that of a generic," he says. "But we need to figure out what percentage of farmers are willing to pay a premium for a brand offering more value and how much of a premium they will pay for that added value."
One way to save money on research is to piggyback additional questions on a survey. For instance, if a company is conducting a market study about corn herbicides, some questions about seed can be added.
"This can be done to a degree," Mattingly cautions. "You still have to keep the primary objectives in mind. And there's not much flexibility to go in-depth with the add-on questions."
Van Dijk says another way to decrease costs is to use smaller yet very targeted samples. "Rather than conducting a large, full-scale quantitative study, we'll interview 100 farmers to get a snapshot," he explains. "We use sophisticated modeling techniques to reduce sample size without giving up accuracy."
He notes that these snapshots work well to confirm the extent of an issue salespeople or dealers have heard rumblings about or to get a directional read regarding buying intentions.
Telephone studies continue to be another cost-effective and efficient method for conducting marketing research. For instance, AllPoints Research conducts numerous in-depth telephone interviews and telephone focus groups on a variety of topics. "Utilizing the telephone for qualitative research has resulted in a significant cost savings for our clients," Olson reports.
And while saving money is important, paying respondents for their time is a mainstay. "Their time is as valuable as that of any other professional," Mattingly says.
SHARE AND SHARE ALIKE
Many marketing research suppliers offer syndicated and shared-cost studies that can get companies the answers they need while sharing the cost with other firms.
Doane Marketing Research conducts annual syndicated studies in corn, soybean seeds and crop chemicals and a quarterly animal health market study. Tugend says companies increasingly rely on large syndicated studies to answer more and more questions about their markets. "Clients are looking for a greater depth of quantitative information from database projects than they ever have," he points out.
The company also is conducting more shared-cost studies, such as a one-time study spotlighting an issue such as incidence of and measures used to prevent and control specific animal diseases. Tugend says participating companies have the opportunity to view the draft survey before it is sent to respondents and their suggestions are then incorporated into the study.
Three or more clients typically are needed to fund a shared-cost study. "We either develop a topic to present to companies, or a firm may come to us with a proposal," says Tugend. "Participating clients need to keep in mind, however, that the information is not proprietary."
Van Dijk says while the majority of Ipsos-Reid's business is custom studies for single clients, the company also offers a series of annual multi-client/shared-cost surveys on topics such as farm management practices in the United States, Canada and Australia and canola varieties planting intentions and varieties actually planted in Canada and the United States.
"If shared-cost studies are done well, they're worth the investment," Macken points out. For instance, he notes that Doane's syndicated crop seed studies provide companies with a more economical way to obtain hybrid market share and pricing information than conducting a study on their own.
Mattingly reports that Monsanto continually uses multi-client studies. "We can glean significant amounts of information to fill many needs that our marketing managers have, including estimating market potential for new products and identifying competitive brand strengths and weaknesses," he says.
He concludes that marketing research will continue to have a strategic value for Monsanto. "Decisions can't be made without it, particularly when budget dollars are not that free." AM
Debbie Coakley is a freelance writer based in Warrenville, Ill.