INTERNATIONAL MARKET RESEARCH

The New Horizons

Warsaw, October 17, 2003

Market Research: ADDS VALUE TO BUSINESS AND SOCIETY

• CONNECTS DEMAND & SUPPLY

– TRANSPARENCY

– EFFECTIVENESS

– EFFICIENCY

• CONTRIBUTES SOCIAL/OPINION INSIGHT TO QUALITY OF SOCIETY

The Market Research

Profession

SCIENTIFIC ROOTS …..MARKETING RESEARCH BECAME AN INDUSTRY

In 2002

• GROWTH OF WORLD MARKET TOWARDS USD 17 BILLION (EURO 18 )

• EUROPE : USD 6.3 BILLION (EURO 7.3)

• POLAND : USD 81 MILLION (EURO 86 )

• EMERGING EXTERNAL CHALLENGES

The Market Research Industry

EXTERNAL DYNAMICS DRIVE CHANGE

• INTERNATIONALISATION

• ICT/TECHNOLOGY

• DIFFERENT REQUIREMENTS

• NEW ENTRANTS/COMPETITORS

• LEGISLATIVE PRESSURE

The Market Research

Industry

TRANSFORMATION WITHIN THE INDUSTRY

• Changing hands : take overs /acquisitions (concentration)• Shifts within data collection methods

(mail /phone – down; direct registration /online-up)• Widening scope: combination/ integration of information

(re-packaging)• Increasing focus : data capture and decision making support• Growing opportunities: bundling/interpretation• Renaissance of the client side

Renaissance of the Client Side?

…radical improvements will be increasingly demand driven (“demand pull”)

• 1000 top clients already spend 80%

• 65% of their budgets go to 25 companies

• For “Best Solutions” they will not wait for a top-provider (in-house, outside, new entrants)

…pressure to adapt current MR business model

Future Developments 5 – 10 years down the road

Consulting companies will take over territory of market research providers, turning these providers into mere data-

providers

Respondent cooperation will dramatically decrease

Internet research will revolutionize the business

Market research data will be more integrated withCRM-data

Market research will become more important because ofgreater incorporation in companies strategic planning

Clients will require far more creativity and businessintelligence from providers

Providers (n=1099) Clients (n=272)

Selection of up to 3 future developments out of 12

21

27

22

24

27

48

22

24

27

34

43

51

0 10 20 30 40 50 60%

A different type of Market Research emerging…

From Risk-Aversive MR

Go/No GoType of research

MonitoringType of research

To a more Strategic one

Needs-drivenInsightfulType of research

Can We Do It? What we say will happen in next 10 years

Don't know

Traditional market research will disappear

No change and same issues as today

More partnerships between clients and providers

Division between data providers and market research consultancies

Providers (n=1099 Clients (n=272)

7

11

21

29

33

5

14

19

31

31

0 10 20 30 40 50 60%

The Current Business Model…..

Characteristics:• Huge investments in “data manufacturing”• Value based on data delivery (tracking, syndicated, simple ad hoc)

• Focus on shareholder growth/profit

* Source: The Profit Zone, Slywotzky & Morrison

The Traditional Value Chain*

rapportageonderzoek

Product/Service offering

Inputs,Raw material

Product / Service Offering

Channels The Customer

Assets/Core Competences

Traditional Phases of Development in MR (large and medium sized companies)

build up researchtechnology/

build data factory

add local/regional

competence

add domain-specific/

sector competence

add marketing competence

(pre-structured solutions/acc.mgt)

Reputation vs. Margin

Dominant Business model:• does not support “Best

Solution”/ Consulting Services if they do not help sell data.

• focuses on increasing factory load & coverage

• Helps to sell products and syndicated services

Business Insights

DataDelivery

BusinessInsights

DataDelivery

The amount of reputation

The amount of profit

…. change of rules of the game

rapportageonderzoek

Product/Service offering Channels

Product / Service Offering

Inputs,Raw material

TheCustomer

Assets/Core Competences

MR Industry to Innovate:

Improve value add ….and move to a much wider context: from data management to decision facilitation

(using variety of sources…..meeting demand for actionable insights)

Reverse value orientation: transform business model

Change in take-off phase

NEW HORIZONS

• Re-Define the Market for MR

• Develop New Business Models

• Address Industry Issues Pro-actively

Re –define the market for MRRe –define the market for MR

OPPORTUNITIESOPPORTUNITIES

OPPORTUNITY

Re-define market Explore new, wider horizons

Understand different needs

Be creative / re-position

Cooperate and/or join forces

Consumer Distribution CompaniesRepackagingResearchProcess

Develop new business models

Develop new business models

OPPORTUNITIESOPPORTUNITIES

FIERCE FIGHT FOR ADDED VALUE ACROSS THE BUSINESS SYSTEM

Consumer Distribution CompaniesRepackagingResearchProcess

-Consumers get organized

-Research providers re -define roles

-Client companies on the move

-New players focus on re-packaged insight

DEVELOP NEW BUSINESS MODELS

Addressindustry issues

proactively

Addressindustry issues

proactively

OPPORTUNITIESOPPORTUNITIES

INDUSTRY ISSUES

How to move successfully to the new era?

Relevancy? Legislative concerns? Representation public at large?

Concerted industry action? One message, one voice?

Standards of quality performance? Quality of research? A quality sample? A quality panel?

ADDRESSING INDUSTRY ISSUES?

•There is a need to address external challenges, align main players within the industry and ensure adequate standards of performance.

•Orchestration is vital: ESOMAR in the lead, close cooperation other MR organizations

•ESOMAR: European origin, scale worldwide; individual membership; focus on representation, standards, professional development and industry initiatives.

INDUSTRY INITIATIVES? THE EXTERNAL CHALLENGE

• EXTERNAL RELEVANCY/ REPRESENTATION?

• CREATION OF THE ALLIANCE FOR RESEARCH (ESOMAR, Efamro – 2002)

• OFFICE IN BRUSSELS: PROMOTING THE BENEFITS OF RESEARCH- / SELF REGULATION

The Marketing Research Industry

INDUSTRY INITIATIVES? CONCERTED INDUSTRY EFFORT

ONE INDUSTRY , ONE VOICE?

ALIGNMENT OF LEADERS & ASSOCIATIONS IN WIN (2003) “WORLD INDUSTRY NETWORK” (Facilitators: ESOMAR, ARF)

SET UP: -flexible platform, global scope-bi-annual schedule-agenda for action

(key condition for success)

The Marketing Research Industry

Clients, ProvidersAssociations

INDUSTRY INIATIVES? PERFORMANCE STANDARDS

• STANDARDS OF PERFORMANCE ARE THE LIFEBLOOD OF AN INDUSTRY, HOW TO ENSURE CONTINUITY?

• SET UP “QUO VADIS”” PROJECT (ESOMAR, IN CLOSE COOPERATION WITH INDUSTRY SPECIALISTS -2003)

• AGREEMENT ON PRINCIPLES, RE-CONFIRMATION CODE, ADAPTATION OF GUIDELINES

The Marketing Research Industry

HORIZONS/OPPORTUNITIESHORIZONS/OPPORTUNITIES

Re-define the market for MRRe-define the market for MR

Address industry issues

pro-actively

Address industry issues

pro-actively

Develop new business models

Develop new business models

Thank You !