Magazine article Marketing

Resurgent Research

Magazine article Marketing

Resurgent Research

Article excerpt

Growth, growth and more growth. For the second year running market research firms have posted extraordinary increases in turnover.

Association of Market Survey Organisations (AMSO) members, who make up an estimated three-quarters of market research business in Britain, grew 11% in 1992 and 10% in 1993. Growth at this level outstrips that of most other UK sectors by a wide margin.

One of the prime drivers behind this surge in market research has been the increasing focus on global markets. "International research is booming, particularly for UK companies," says Peter Hayes, chairman of Research International and a council member of AMSO.

With international research growth rates of 27% in 1992 and 12% in 1993 it is easy to see what Hayes is shouting about. "These increases have kept UK market research as a whole in real money growth, and are the reason why it enjoyed twice the world's average growth in 1992," he says.

Hayes says the reasons for Britain's boom in international research include low executive and staff salaries, London's position as the major English-speaking business centre between the US and Europe and strong interest and flair for marketing services on the part of the British.

Simon Godfrey Associates is a good example of a market research company riding on the international wave of success. With growth of 51%, the highest of all AMSO companies in 1993, it shot to fifteenth place in the league table in its first year as a member of the industry association.

Growth at SGA was fuelled almost entirely by international research. "We work for clients who have become European-orientated in the past few years. They used to have market research done by individual agencies in each country. Now they want to develop pan-European brands and have their consumer research done by one agency with international capabilities," says Simon Godfrey, SGA's senior partner.

However, not all market research firms are so enamoured with the international sector. "We don't find the profit margins are as high in international research," says Janet Weitz, chairman of FDS Market Research Group. "That's why strong UK growth is more important to us. Turnover is vanity, profit is sanity," she says.

The expansion in international work has not been the sole engine of growth for the industry. Market research has broadened into new areas, thereby growing the total market. The traditional users of market research have been fmcg companies and some specialist sectors such as business-to-business and pharmaceutical companies. Now, social research and customer satisfaction measurement are providing new fields for market researchers to move in to.

Public Attitude Surveys is a case in point, despite a 5% decrease in government and public body expenditure in 1993. "Central government has always invested in social research but we are seeing local authorities buying more. They want to be seen to be listening to their constituents," says Barry Lee, managing director of PAS. "Results from social research are more representatives of what people think than information from small Town Hall meetings or inviting people to write in with their comments," he says. "I look at it as a great expansion of the democratic process rather than just relying on the ballot box."

Demand for customer satisfaction measurement surveys (CSM) also continues unabated. Not only are service industries, such as banking, insurance and retail, doing what is essentially a product test for them, fmcg companies recognise they have to manage their service levels too. Long-term relationships and loyalty are key strategies for businesses. "There is growth in CSM right now because of a general realisation that keeping your customer is fundamental to success," says Nigel Byatt, client services director at Infratest Burke. "CSM is applicable to all sectors. Infratest specialises in the methodology, not any one sector," he adds. …

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