Alert! Magazine February 2013 - Will Marketing Research Skip a Data Collection Methodology in Emerging Markets?

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Will Marketing Research Skip a Data Collection Methodology in Emerging Markets? (Open this article in the February 2013 PDF)

By Ben Leet

The marketing research industry is in danger of forgetting that different countries evolve at different speeds, and technology adoption varies country to country. Even today, face-to-face is a preferred methodology by many researchers collecting data in emerging markets because it’s the only reliable way to get a representative sample of the population of that country and in some cases, it’s the only way to collect any data at all. With Internet penetrations considerably lower than 50 percent in many countries and with concerns over fraudulent respondents still very much dominating online methodology, it’s no surprise to see that online research in emerging markets accounts for a much lower percentage of overall marketing research spending than in developed economies.

Collecting data in emerging markets is often more expensive and time consuming than in western markets, and the net effect of this is that many research buyers have been discouraged from buying research in those countries, preferring instead to focus their energy (and cash) on developed economies, which can be done more inexpensively. This should come as no surprise, since the vast majority of marketing research conducted is around “consumerism”; products, brands, perceptions, market shares, shelf placements, etc. are all geared towards brands maximizing their product sales, and consumerism has historically been linked to the western world. In other words, up until now we’ve had equilibrium – a harmony across the industry whereby the most cost effective research can be done in the countries that require the most researching.

But this is all changing. In the consumer world, many of these so-called emerging markets are catching up, and catching up quickly. People are hungry for the latest brands, fashions and technologies, and the companies that produce these goods are investing heavily in new markets as a means to continue their brand growth. With that growth comes the need for research; but these research buyers are now accustomed to lower cost data collection, so high cost face-to-face methodologies are going to conflict with current expectations. The result of which will see many researchers faced with an ethical dilemma – trying to fit the square peg of online methodology into the round hole of a country with low Internet penetration, or to pass up the revenue with the knowledge that their methodologies are safe and sound, but their competitors are increasing their revenue base. Neither scenario is particularly appealing.

 The industry has a great chance to solve this conundrum by bringing a new equilibrium into play. The new balancing tool is an obvious one: Mobile Devices. It’s almost a self-fulfilling prophecy; with increased consumerism comes an increase in smart phone penetration, and with it, the ability for researchers to reach new audiences. Smart phones are top of the list of “must have” gadgets in most countries, including emerging markets, and penetration is increasing dramatically due to the availability of new, low-cost smart phone options. It’s self-fulfilling because an increase in smart phone penetration brings with it an increase in consumerism – greater access to the Internet, brands, online shopping, and consumer behavior that was once only evident in the western world, but is now evident in almost every country.

What is mobile methodology though? As an industry we talk about “mobile” all the time, but in reality mobile can mean many things. Mobile devices can download apps, which can be programmed to deliver specific surveys to specific audiences, to create geo-fences, collect GPS coordinates, utilize other features of the handset such as the camera, or a range of other things, many of which are still not even invented. Mobile devices can also send and receive SMS messages, irrespective of whether the device is a smart phone or not. Smart phones can of course browse the Internet, which for emerging markets means bringing the Internet to a whole new audience that has never had access to this until now. On top of all this we seem to forget that these devices are phones – people can make and receive calls on them!

The chart tells the most significant story of all. In May 2012, Internet traffic from mobile devices surpassed Internet traffic from desktop devices for the first time, and this trend will only grow as we move into the mobile Internet age. Countries like India will quickly see much higher penetration levels of smart phones to “traditional” Internet access devices, or computers as they are more commonly known, and with that comes the ability to survey these countries in a whole new way.

With the current state of the world economy covered, I believe the top trends to watch out for in the next 12 to 18 months are:

  1. “Mobile” as a singular methodology will evolve into multiple methodologies standing on their own two feet:
  • App-based mobile surveys will work incredibly well in densely populated, smart phone heavy areas where utilizing other functions of the device – GPS, camera, etc. – are crucial to the research methodology. There are already major moves in this area, with many of the industry’s major players developing solutions for this segment. Geographically, the majority of this work will focus on the western economies, in traditionally marketing research heavy countries.
  • The mobile Web will spring to prominence in emerging markets, where online surveys can be adapted to fit smart phone screens and the devices are used as nothing more than an Internet access port. This should be relatively cost effective compared to offline methodologies and will certainly be more statistically robust and representative than using a pure online methodology.
  1. Emerging markets get a lot more attention than ever before, and more research spending is diverted to them. Mobile Web methodology will have a big part to play, as the technology will enable the methodology much like the evolution of the Internet enabled online methodology. In essence, online methodology could easily be skipped straight over. The companies that succeed will be the ones that are able to get the most amount of insight from the shortest amount of questionnaire time – 30 minute Web surveys will still not be viable to take on a smart phone, so companies understand less is sometimes more will be the ones to thrive. Especially since in the case of emerging markets, short surveys and small numbers of data points will still be more than zero data that exists today in many cases.
  2. End clients, predominantly consumer brands, will be the drivers behind this change. They will demand more research than ever before in emerging markets, but they will expect cost levels equivalent to western markets where they currently buy their research. This squeeze will force the hand of the researchers, where online is not a viable methodology and yet other methodologies are too expensive and slow to fit the purpose. We could even experience a shift whereby end clients take more control of their data collection methodologies, enforcing their wishes onto their selected agencies in order to remain dynamic.

To summarize – as with every industry, at the heart of change is always the consumer. And consumers are changing fast; none more so than in emerging markets, where they are trying desperately to play catch up with the western world. Where consumerism leads, brands follow, and where brands go, so marketing research goes. It’s beautifully simple; a self-fulfilling model, with mobile devices at the heart of it. A new era of research is upon us.

Ben Leet is Sales Director of uSamp UK, a technology and online sample company providing global survey panelists and an innovative sampling platform for use in marketing research.