
Source:
1. ESOMAR Prices Study, 2005
Perhaps it's this lack of success in convincing potential clients for research that they're likely to get a meaningful return on their investment, or perhaps it's for other reasons, but a worrying trend is currently more prevalent than ever before - price buying. Actually it's a trend which has a global as well as a local regional dimension to it, but whatever, an implicit message always in buying on price is that quality is a secondary consideration.
When a product loses its quality it becomes a commodity; and it has to be a fair bet that commodity research is much less likely to deliver telling consumer insights. A sort of Catch 22 situation?
Recently a much respected Turkish market research pioneer retired and he left behind these words: "Just as we have soap operas, we now have soap research, '' said Akin Alyanak. 'It consists of simplified shallow research, serving global goods and services. It is driven by the desire to cut costs, which inevitably also means cutting corners."
How did we get here? This is my hypothesis - how I see it. I offer it for comment.
As our Turkish friend refers to there is undoubtedly a global or more accurately a globalization effect operating here. But I think there are also more significant local factors and a local mindset at work.
After the first GULF WAR of 1991 many of the local economies slipped into deficit from the combined effects of the cost of the war, plus the erosion of their national incomes caused by a global economic slow down and falling price of oil. As a result, led by Saudi Arabia, especially in the public sector - and remember how dominant the public sector remains in many of these economies - real incomes declined and therefore consumer spending too.
Sales volumes declined for many fmcg suppliers to these markets - with the situation further exacerbated as margins came under pressure from an increase in competition and an acceleration in the shift by consumers of all nationalities towards the biggest retailer multiples. Another global trend. Globally the average price of the average fmcg product to the consumer is actually decreasing as multiples the size of WAL MARTS, or in our region, CARREFOURS, squeeze suppliers' margins - and squeeze out smaller competitors along the way.
Naturally these same fmcg suppliers looked in turn for ways to sustain margins - and cut costs wherever possible e.g. sourcing of raw materials, distribution, logistics, marketing support, etc.
Re marketing support, any of our colleagues in advertising here in the Gulf in the middle 90's will tell you that the traditional emphasis on above-the-line advertising came under serious scrutiny : media budgets were questioned, and sometimes cut or redirected into more through-the-line campaigns.
But the international partners/owners of the region's ad agencies have all been in this situation before - and during such times have learnt to respond vigorously, as an industry, with research to show that as a supplier you reduce your ad spend at your peril as your key asset, your brand equity, stands to erode as a result, so that you have a weaker brand when the good times return.
So the clients turned as well, or perhaps as a result of the ad agencies' campaign, instead, to their MR spend.

Anne-Birte Stensgaard, Senior News Editor



