They are expert at producing mouth-watering marketing campaigns and drawing consumers’ attention to their latest products. Many of their marketers boast high-level qualifications and professional knowledge of their craft. But when it comes to commissioning market research (MR), many brand owners behave like struggling amateurs, unable to tell the difference between a focus group and an ethnographic study, according to sources in market research agencies.
One senior marketing director, who has led some of the UK’s biggest brands, claims that he pays little heed to market research, preferring to work on gut instinct. Research, he says, “is boring”.
Agency insiders believe that this view contributes to brand owners wasting money on commissioning research without having a clear idea of what they want to discover from it. Some marketers view MR as merely a box-ticking exercise, something they need to do for appearances’ sake when in fact they know better than any focus group.
And even worse, some brand owners are then having to commission extra research to give a greater focus to the initial work.
Part of the problem stems from the fact that the managers commissioning the research are often procurement providers, who are not experienced in developing brands and the role played by research in the process.
The procurement providers often have a shallow understanding of exactly how the research should be structured and what questions need to be asked of participants. Many of them are not trained researchers themselves, but junior managers with little experience.
As NestlÃ© head of consumer insight Jo Pabari says: “Market research is an area where you need someone who knows what they are talking about to commission studies. It is not about finding the lowest price – that could turn out to be a false economy. It is about ensuring the study matches the brand’s objectives. You need to achieve actionable results.”
NestlÃ© has some 25 market researchers across each of its ten divisions and these are intimately involved in brand development, since they are imbedded in the brand teams, says Pabari.
She believes this means that at the moment of truth, when market research needs to be done, “they are fully up to speed” with brands and projects. If they were further removed from the process, they would have to be briefed by the marketers and a game of Chinese whispers would begin.
For about three years now, NestlÃ© has had these researchers translating the research agencies’ findings and reporting back to the brand teams. This offers the advantage of ensuring that the research is interpreted in ways that are relevant to the company.
“An in-house researcher understands the politics and internal brand situation and the relationships with the headquarters in Switzerland, but an external agency will never know all that information. For the final translation you need someone in house.”
But in many companies a marketer will brief a research procurement department before a product is due to be launched or when a new product is being developed. Then someone from the department will commission an agency to carry out the research.
The agency itself often briefs the marketing department about the findings of the research, but agencies say it is all too common for these findings to be communicated to the procurement department and then relayed back to the marketers, meaning there is a greater chance of wires getting crossed.
As Nick Coates of research agency Fresh Minds, says: “In the great game of procurement, the research brief can become a second- or third-generation bootleg: the song is recognisable, but the all-important details and colour are obscured or distorted in the copy.”
He says research providers should forge partnerships with brand owners, helping to advise on appropriate solutions that answer business questions, not just providing something the buyers think they ought to have. “In any research activity, you have to get under the skin of the problem,” says Coates.
“All too often, MR is treated as an afterthought, divorced from business or strategic considerations, a technical exercise which need only concern itself with the what and the how, not the why,” he adds.
Agencies complain that MR has a relatively low status within brand owning companies compared to other outsourced areas, such as strategic planning carried out by management consultancies. Many MR agencies also feel their reputations are tarnished by being lumped together with some opinion researchers that indulge in “sugging”, where they phone people on the pretext of conducting an opinion survey and end up trying to sell them a product.
Coates stresses that the situation “is not going seriously wrong”, but says there are cases where classic MR is viewed as a low-status activity, so the agency does not need to understand the business context of what it is doing.
The procurement process can be a headache for some organisations, particularly those in the public sector, which are obliged under European Union rules to run tenders for MR agencies. BBC controller of audience research Chris Mundy says the organisation has just been through a tender process in which 100 agencies applied. These were narrowed down to some 15 or so qualitative agencies.
In the balance
“It is a delicate balancing act. If you cut the agency roster too much you lose creativity and specialism. The hardest part was the qualitative roster and specialists in television programme research. There is tension between needing a small number of roster agencies to get the maximum discount against getting the most creative people. One problem of procurement is it precludes you from testing and trialling agencies,” says Mundy.
If you choose a non-roster agency, you have to be able to explain very clearly why you did it, he adds.
But the nature of qualitative research is that there are many small agencies with a floating pool of research “geniuses”. Having a roster means you might miss out on using a specialism developed by one of these people for a particular use that you want to try out.
Meanwhile, Ideas Bazaar researcher Dr Simon Roberts also complains that MR departments are often dislocated from the everyday workings of a business. “They are often structurally and physically distant from the rest of the business.”
Ensuring that researchers and their findings are in tune with the needs of the business is no easy job. Procurement departments tend to push responsibility for commissioning research away from the business to a separate research division.
“This structural separation is then further exacerbated by the fact that the communication of research is focused on those within ‘research’ – those who speak the language of research, rather than the language of business,” says Roberts.
He believes this means research becomes inward-looking with discussions about language and methodologies, while on the agency side, people complain that they are not listened to and are marginalised. He thinks it ironic that in some businesses, the MR department is called “‘consumer closeness’, when in fact that closeness should be core to the business”.
There are cases where clients have to commission new research to make sense of the research they have already conducted because it has left fundamental questions unanswered. The “try it and see” approach proves costly and inefficient. Clients need to learn how to get the best from their researchers.
As Steve Mattey, a partner at research agency Tree, says: “More onus should be placed on the person commissioned to provide strong guidance and a clear outcome. I also believe you should not expect too much of your research – a single-minded task will yield good results, but complicating that with numerous added questions or findings will dilute everything.”
Research procurement is becoming ever more tightly controlled says Rachel Turner, a director at Link Consumer Strategies. It is still usually the insight or research department that buys research, but they are put under great pressure to cut back on costs and find greater value for money.
This can have damaging consequences for agencies, she says. “In one instance recently, we pitched for a project along with others. The client then devised its own research plan (the best of what it had seen in the proposals) and asked us all to cost for exactly the same method – in effect choosing the cheapest but using the best approach recommended by other agencies.”
She says that on top of underhand treatment such as that, procurement departments push for volume discount agreements. This may work for continuous research projects, such as market share data provided by the likes of IRI, but it is a problem for agencies hired ad hoc, with no guaranteed flow of work.
To combat the worst effects of this, Turner says: “We offer our clients more for their money rather than the same for less money. This means doing bespoke pieces that fuse thinking around a hot topic for a client each year, or exploring work we have done ourselves in relation to the client’s brand or category. Senior clients find this much more useful to their business than simply getting a good discount.”
This involves spotting issues that someone senior should be made aware of, so if very little cohesive thinking is occurring between departments, then that’s the time to get the senior team involved. “They are in a unique position to be able to see across business areas or brands to make the best use of research and take it forward into actions,” she says.
As brand owners look to make ever greater savings from their marketing budgets, MR agencies will have to get used to devising strategies for dealing with tightening purse strings.
Many researchers believe one of the most effective means for getting value for money in this area is by undertaking research earlier in the brand development process. All too often, brand owners wait until the process is almost complete before setting out to discover the nature of the demand for the product – and in many cases finding out that no one wants it.
Brand owners must also realise that the only route to efficient cost savings is through using specialist knowledge to find the most effective forms of research. By saving money on MR, it could ultimately be the brand that ends up being cheapened.