Risk Living in Global Economy Recession

1. CBC Business Consulting Newsletter CBC Business Consulting Newsletter
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CBC Business Consulting Newsletter CBC Business Consulting Newsletter
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China News
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Core Business Of CBC
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Marketing Research Business Consulting
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September 2009
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CBC Marketing Research uses a variety of quantitative and CBC Business Consulting helps you to successfully setup your
Volume 2 Issue 4
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qualitative methodologies ranging from traditional focus company and find the right partners for your expansion in
is?
groups and in-depth interviews to CATI surveys and internet- China. We also provide feasibility and industry studies and
based research. offer sourcing and office-in-office services.
Quantitative Research: •
•
Market entry strategies
Industry studies
Is Marketing Switzerland China's
• Telephone interviews (CATI)
• Personal interviews (CAPI) • Location evaluation Research in Ready for Consumption
• Partner evaluation
• Street intercept interviews
• Central location testing • Company registrations a Crisis? China Recovers
• Online research • Feasibility studies
Is Marketing Research In A Crisis - Or Is
• Mystery shopping • Office-in-office
• Car clinics
Executive Search
History Just Repeating Itself?
Qualitative Research: CBC Executive Search works with a large number of companies
• Focus groups
to meet their talent and executive needs in China. We directly
• Mini focus groups
approach all our highly educated and experienced candidates
• In-depth interviews
working in different business sectors including the following.
By Clive Armstrong¹
Other: • Automobile
• Desk research • Chemicals Recently-published figures reveal that So-called ‘crises’ for market research In times of economic crisis, market re-
• Retail research • Finance the total market research turnover agencies are usually caused by one search continues but the methodology
• IT of the top-200 US ‘for profit’ market or other (hopefully not both!) of the may change. Budgets for syndicated
• Healthcare research agencies fell in real terms in following circumstances. Either an and panel studies, as well as qualitative
NEW: CBC offers movable web streaming technology in
• Retail 2008 for the first time in more than agency’s main clients are in diffi- research, are more resilient to budget
Japan and South Korea and FocusVision technology in Bern, 20 years. But the fall was (only!) 2.2%, culty and stop buying research, or the cuts than ad hoc quantitative research.
• Textile
Switzerland. a figure which I suspect many senior agency provides poor data quality, lack The role of qualitative research remains
executives in ‘real economy’ industries of service, and non-actionable results very important. Most clients recognise
such as automobiles, retail, home- (usually due to personnel problems), the value of quantitative, but given the
building and improvement, watch and its clients change to another crisis this is temporarily being cut back.
Contact The CBC Office Nearest To You: making, aviation, hotels and tourism,
etc. would gladly sign off for tomor-
research supplier. Let’s take a look at
both these possibilities in today’s eco-
Are market research
For Europe For Japan For India row! So is market research in crisis? nomic climate. agencies in crisis?
CBC Marketing Research & Business Consulting CBC Creative Assist CBC India Pvt Ltd What is a crisis? Are global research Having spent the past 40 years in the
market research industry, and survived
Marktgasse 32 HIK Building 1F 4-10-8 B-806 Sagar Tech Plaza Sakinaka Junction Next time that you find yourself with users in crisis? a number of ‘crises’ during that time,
3011 Bern Takadanobaba Shinjuku-ku Andheri Kurla Road Andheri (East) a group of people of different ages The current buzz phrase for many the basic question is “What’s differ-
Switzerland Tokyo 168-0075 400072 Mumbai and professions, try asking each one corporate marketing executives is “Get ent this time round?” Is there a real
Japan India of them to recall what was their worst more value for less (budget)”. This crisis in the market research industry,
Tel: (+41) 31 560 3000 Tel: (+86) 21 5155 2000 Tel: (+91) 22 6770 3718 crisis (in their professional rather than certainly applies within the sectors or are we just facing another “diffi-
Fax: (+41) 31 312 5886 Fax: (+86) 21 5155 2099 Fax: (+91) 22 6645 9842 personal careers!). You will almost mentioned at the beginning of this cult and challenging period”? Market
Email: cbc@cbcnow.com Email: cbc@cbcnow.com Email: cbc@cbcnow.com definitely get as many different an- article. research companies come and go - but
swers as there are people in the group. historically they keep on coming! The
But leading companies (not necessarily
For Beijing For Shanghai and the United States For Guangzhou and Hong Kong One person said he had never known annual ESOMAR members’ directory
all) in sectors as diverse as pharma/
a crisis in his profession. He was a gets thicker each year. This is due to
CBC Marketing Research & Business Consulting CBC Marketing Research & Business Consulting CBC Marketing Research & Business Consulting health care, razor blades, dental care,
gynaecologist! the relatively low barriers to entering
512 New World Taihua Office Tower CBC Building, 49a Wuyi Road Room 1901, Unit 10, 19th Floor cigarettes, food and non-alcoholic
5-5 Chongwenmenwai Dajie 200050 Shanghai Ganglü International Center CTS Center The same goes for market research beverages (and even some of the our industry (start-up investment and
100062 Beijing China 219 Zhongshanwu Road companies. Ask a sample of N mar- alcoholic brands), fast-food chains personnel training), coupled with the
China 510030 Guangzhou ket research companies if they are ‘in (hamburgers, sandwich-bars to name now-common acceptance that almost
China crisis’, and you will most probably get two), mobile communications, bicycles, nothing is done in the private or
Tel: (+86) 10 6709 1622 Tel: (+86) 21 5155 2000 Tel: (+86) 20 2227 3200 N different answers, depending on each low-cost airlines, and on-line retailing public sectors these days without an
Fax: (+86) 10 6709 1633 Fax: (+86) 21 5155 2099 Fax: (+86) 20 2227 3201 company’s client base and the strength are definitely not in a crisis situation. independent “survey” (or “audit”). An
Email: cbc@cbcnow.com Email: cbc@cbcnow.com Email: cbc@cbcnow.com of their client ‘relationships’, the sectors Nor are governmental policymaking ex-colleague once remarked that about
and geographical region they work in, and public service departments (trans- three-quarters of the market research
their degree of repeat business, and of port, education, state-owned media), companies currently listed as ESOMAR
course their underlying financial situ- political parties and large NGOs, all of members did not exist 10 years previ-
ation (was their business sufficiently whom have become significant users ously. He then went on to set up his
profitable before the present ‘crisis’?). of market research. own research company!
page 8 China News – SEPTEMBER 2009 www.cbcnow.com www.cbcnow.com China News – SEPTEMBER 2009 page 1

2. CBC Business Consulting Newsletter
CBC Business Consulting Newsletter CBC Business Consulting Newsletter
CBC Business Consulting Newsletter
The main differences which strike
one when looking at today’s market
research industry compared to that of
l ‘horizontally-oriented’ products
- customer satisfaction, brand recogni-
tion, loyalty and value, new product
research, people who have both the
intellectual ability to analyse, interpret
and present market intelligence data
Is Marketing Research In A Crisis?
the 1970s and 1980s, are:
l the domination of the pub-
lic-quoted research ‘conglomerates’,
testing, marketing media measurement
(traditional vs. Direct Marketing vs. on-
line), employee satisfaction, mystery
correctly, and who can also act as
“business consultants” because they
have taken the time to get to know
The Swiss View
which have been built up mostly by shopping, CRM, etc., which are often their client’s business in-depth by Hans-Ruedi Hertig¹
financially-driven acquisitions than marketed as ‘branded’ products (espe- l and, lastly, the ‘4 Ls’ – be-
organic growth: the top-10 research cially by the larger agencies) ing recognised as a Leader in your
companies in the US accounted for l ‘vertically-structured’ research research area, Located near to your The current crisis also high-
over 80% of total market research turn- teams – media, healthcare, retail, client, speaking the client’s Language lights structural problems.
over in 2008 travel, NGOs, etc. and, as in all walks of life, there is This applies to marketing re-
the importance of international The question is always an element of
l
"MR companies Luck! search in general and to the
research: the top-50 research com- whether, because of the
panies in the US generated just over global financial crisis, “Being more creative Swiss scene in particular.
half their total revenues in 2008 from a deep understand- come and go. But in a crisis” does not Cutbacks prove that research-
outside the US ing of the nature and
evolution of ‘Customer
historically they mean in my view that
“the client decides
ers are not among the most
l the growth of small, ‘bou-
tique’ research agencies, specialising Insights’ has suddenly keep on coming" to ask their research trusted to remedy the eco-
in certain types of market research become less necessary agency to supply them nomic downturn. Obviously,
to private sector com- only with the research
(sectorial, methodological, etc.), many some marketing research fails
of whom had a healthy growth in panies, and organisa- data, and they do the
turnover in 2008 incidentally tions in the public sector? The answer analysis and write the report them- to deliver value worth keeping
l the amount of marketing infor-
is definitely not! selves”. Nor does an experienced when budgets get tighter. This
market researcher/”business consul-
mation available, due primarily to IT So is history repeating tant” need to be told that “a good
raises the question of how val-
and the Internet itself? focus group isn’t necessarily one that id research is.
l the growth in consumer protec- says your client’s product will be a
tion legislation and the ‘blurring’ of the As in all previous ‘crises’, the future Konso is in charge of the Swiss Consumer Confidence Survey produced in the CBC Call Center
of the market research industry will success”. Both these statements were in Bern (Switzerland). This survey adheres to the strictest quality standards and – unlike many
boundary between market research made in respected market research Validity describes to which degree re-
continue to be determined by the fol- private and government sponsored surveys nowadays – is pure random sampled CATI, com-
and direct marketing methods (tele- industry journals published in 2009 search is asking the right questions in puter aided telephone survey. Konso with its unique telephone database reaches 90% of all Swiss
marketing, CRM, etc.) lowing ‘fundamentals’:
by the Customer Insight Manager of a view of a particular task. Reliability ex- households with a phone.
Overall, market research is still a very l the ability of the industry large corporation, and the head of a plains how well the chosen methodol-
competitive, and increasingly global, to adapt to new opportunity areas research agency. If they are a reflec- ogy is adequate. Representativeness
and needs in the traditional, ‘heavy- defines how sampled results can be representative and reliable are results radio and print as compared to less de-
industry, which most users agree has tion of research users’ and agencies’
research-user’ markets (e.g. media, produced that way? manding survey designs. This is unwel-
supplied good value-for-money, and attitudes towards 21st century market generalized.
automobiles, food and drink retailing, come news for media producers where
also creative products and services for
FMCGs, healthcare), and to identify
research needs, then parts of our
Generally speaking, the crisis is affect- Cost versus quality prices are based on reach. On the other
clients over a long period of time. industry could well be in ‘crisis’ - and
new markets for market research (e.g. ing the Swiss economy hardest in areas The effects of the crisis on Swiss mar- hand, reach for the new media is - as
Mainly as a result of the ‘information will remain so for quite a long time!
energy conservation, environmental exposed to the open market. However, keting research are dramatic in areas expected - out of proportion if based
explosion’, over the past 10 years, protection, customer service, social The most successful client-research many business segments in Switzerland on online panel surveys.
agency relationships are long-term exposed to competition: Consequently
market researchers, both in compa- networks) are still protected from global compe-
partnerships where the above-men- high-quality random sampled research Simple item based, scaled client and
nies and in research agencies, have tition. Furthermore, the small size of
l the need for Customer Insight tioned ‘fundamentals’ of successful is losing ground to survey panel based staff satisfaction in more or less com-
discovered that their clients’ needs Switzerland’s domestic markets fosters
Managers (both in agencies and on the market research are fully recognised research, increasingly on- petitive markets typically
(marketing, new product development, oligopolistic structures. Research insti- line and some – almost
sales, etc.) were changing. Market client side) to provide “more creativ-
ity and imagination for a fair price”,
and implemented. These partnerships tutes operating within these protected as a setback to the basics "We should not show 80% “satisfaction”.
CBC and Konso produce
researchers now have the possibility of do not wait for an economic crisis to heavens have less to fear from any crisis
collecting, analysing, and integrating rather than “squeeze more for less
budget”. There are no ‘quick-fix’ solu-
decide together what insights and mar- in the short term.
– postal. A good example
is the once prestigious
be surprised that segmented data revealing
data from an increasingly wide range ket intelligence are really critical to the that high satisfaction rates
of sources – both primary and second- tions in research, and if you decide to client’s business. Nevertheless, history reveals that pro- establishment survey for market research are also due to lowered
“pay peanuts, you will get monkeys”! tectionism and favouritism weaken the electronic media pan- expectations of clients and
ary data, from external and internal
sources (not least of which are the l the two most important things
__________________
competitive positions in global markets els which to some degree is taken less staff actually lowering the
¹Clive Armstrong is Special Advisor to uses postal interviews
client’s own customer da- in market research are data
the President of CBC, an international
in the long term. Problems also arise
now, shunning costly but seriously" competitiveness. CBC and
tabases). Market researcher
managers have become (at
"Market quality (especially true
for on-line research), and marketing research company with
when quality is at stake: As respon-
dents become increasingly unwilling
highly representative ran-
Konso are convinced that
honest research should
offices in Switzerland (where CBC
least this is what is printed research is secondly, the quality of the
partners with Konso Ltd.), China, India
to participate in surveys, institutes are
dom sampling. also deliver unwelcome news – but
with tools such as the “learning street”
research team working on
on their name cards!) ‘Cus-
tomer Insight Managers’. still a very your specific project and Japan. He is a specialist in interna-
tempted to cut the contact and inter- Professional research - in order to communicate results more
view outlay incurred by random sam-
tional marketing research, and teaches unwelcome results? efficiently and oriented towards solu-
Research agencies have
adapted to this by offering
competitive l this means at-
tracting more people with
marketing research and international pling and respondent-friendly ques-
tionnaire designs. Thus more and more Konso parallel tests illustrate how top-
tions.
marketing courses at various universi-
their clients: industry" good brains into market ties. respondents are lured onto survey pan-
els by coupons and cash. But just how
quality random samples and method- Switzerland’s market research associa-
ology show lower media reach for tv,
page 2 China News – SEPTEMBER 2009 www.cbcnow.com www.cbcnow.com China News – SEPTEMBER 2009 page 3

3. CBC Business Consulting Newsletter
CBC Business Consulting Newsletter CBC Business Consulting Newsletter
CBC Business Consulting Newsletter
community when lifestyle “changes” The crisis – a chance to
are commented at length although the
changes are basically due to the switch
from clean, random-sampled telephone
deliver value
In Switzerland – like anywhere – re-
Switzerland's SECO Offers
"Ready Ear" For Foreign
interviews to an online survey panel. search has not prevented the bubble
from forming nor from bursting. Sur-
Digging your own veys are strongest when used as a
grave
Entrepreneurs
feedback tool in order to reach stake-
holders. No doubt, better
The reluctance of respon-
dents to participate in re-
"9 out of 10 stakeholder orientation
can speed up the recovery.
search is on the increase. phone calls are However researchers need By Hans-Ruedi Hertig
This is partly due to the 9
out of 10 phone calls that not research- to design research with a
neutral view. Unfortunately
Mrs. Rühl can look back on a career in • The continuity of activities and
are not research-based, but foreign economic affairs that brought personal relationships within “mixed
are placed by telemarketers.based but even marketing research
text books consider “the
her into contact with CBC in 2005 when commissions” as institutionalised with
In addition, with numer- visiting China as an advisor to former China for decades
ous infotainment surveys are placed by support of a given opinion
Federal Councillor Joseph Deiss. Mrs. • Improving and safeguarding market
or view” as the number one
tion claims that 2/3 of all Swiss adults we should not be surprised
that market research is tak-
telemarketers" motive for commissioning
Rühl discussed Sino-Swiss economic re-
lations with Hans-Ruedi Hertig, senior
access for Swiss exporters and investors
have been interviewed in 2008. How- marketing research (Kuss’ • Private public partnerships such as
ever, many of these interviews are en less seriously. Consider client manager CBC Switzerland Mar-
from the “Freie Universität Berlin”). with OSEC, the Swiss foreign trade or-
conducted within survey panels. As a surveys such as the one about choco- keting Research and managing partner
ganization
result, it is not an increasing late Easter bunnies: “Do you start eat- CBC and Konso strongly believe that of Konso Ltd., Institute for Consumer
ing the bunny’s head or the and Social Analysis. • Standardised mutual agreements re-
amount of Swiss respondents
who are being interviewed,
"More tail first”?
the main challenge to our business
community is professionalism commit- garding investment
The interview with
but an increasingly smaller respondents One large institute even ted not only to delivering “what you
Mrs. Rühl concerned “Chinese investors protection, double tax-
ation and free trade
see” but also to what you do not see.
group of respondents who
are selling their answers are lured onto claims maximize response, it
der to
that (quote!) “in or-
After all, this has always been the basis
two SECO mandates
relating to foreign
appreciate the liberal SECO is developing
of success for Swiss quality.
many times every year. Even
survey panels is indispensable to do inter- economic policy: the Swiss labor market strategies like these
based on close con-
government surveys are now views on Sundays.” __________________ development of an
Meeting with: Ambassador and the quality of the
run in panels. by coupons An imperfect ¹Hans-Ruedi Hertig is Managing Part- Monika Rühl-Burzi, Head of
increasingly better tacts with private
partners already lo-
framework for Swiss
Survey panels and cash" market ner of Konso, Institute for Consumer
the Bilateral Economic Rela- enterprises involved educational system” cated in the relevant
and Social Analysis Ltd. Basel, Switzer-
and their mar- In Switzerland the distri- land and Senior Client Manager of CBC tions Division in the Foreign in export or invest- (foreign) markets con-
cerned, including systematic surveys as
keting hype bution of research volume is a long Switzerland Marketing Research. He Economic Affairs Directorate
ments abroad as well as the promotion
we – survey specialists – have learned
of Switzerland as an investment loca-
Survey panels are being compiled way away from the otherwise typical is active in Swiss Marketing Research with satisfaction.
competitive SME (small and medium since 1979 and has held senior posi- of SECO, the State Secretariat tion. With regard to China, the potential
with the argument that some 10 to for exports and Swiss investments is
15% non-registered phone users will enterprises) market structure: 2 insti- tions in Swiss multinational machinery, for Economic Affairs still enormous with continuing double-
Foreign economic relations are a task of
tutes account for over 50% of the mar- IT and market research companies. He the Swiss federal government – unlike
be included. But 80% of them will digit growth rates over the last 10 years
ket and 4 companies cover ca 80%. teaches strategy at the University of Swiss location promotion, in which a
be among the registered households – which is also the timeframe of CBC’s
One institute alone takes a very large Bedfordshire (U.K.) and Marketing Ex- mix of local, cantonal and federal insti-
within two years. No proof is yet in presence in China.
slice of the survey contracts placed by cellence at the Marketing and Business tutions and private public partners are
sight that households not registered
government institutions. School Zürich (Switzerland). SECO has a clear strategy with trans- involved. Mrs Rühl, however, has offered
in directories behave differently from
parent milestones: assurances that SECO has a ready ear for
those registered. Konso identifies al-
foreign entrepreneurs seeking invest-
most 90% of all Swiss households us- • Targeted cooperation, such as the
ment opportunities in Switzerland. The
ing its telephone database – including recent Sino-Swiss memorandum relating
open and uncomplicated contact with
mobile-only users. to environment technologies and the es-
Mrs. Rühl is living proof of this.
tablishment of a task force to this end
Online research –
chances and risks Sustainability, personal
With their technology and incentive-
drive and charm
based bias, consumer online research Current Vice-President of the Federal
panels will produce significantly differ- Council Doris Leuthard, Head of the
ent lifestyle structures due to the ex- Federal Department of Economic Af-
tremely small segments of the universe fairs, visited China in May 2008 and
that they represent. When recruited, then further developed bilateral rela-
only 5 to 10% will participate in an on- tions with China on the occasion of the
line survey panel, about half will click visit of Chinese Prime Minister Wen Jia-
Intensifying economic relations: Chinese Com-
the questionnaire link in their e-mail bao in January 2009 when the new bi-
merce Minister Chen Deming shakes hands
and others will not complete the sur- with Swiss Economy Minister Doris Leuthard at
lateral investment protection agreement
vey. It is embarrassing to the research a meeting in Zurich in February 2009. was signed. The memorandum relating
page 4 China News – SEPTEMBER 2009 www.cbcnow.com www.cbcnow.com China News – SEPTEMBER 2009 page 5