Asia Pacific region - aprc-research

FEATURE
Current market research
awareness and usage
However, in a recent survey of 200 local fast moving consumer
goods (FMCG) SMEs in Ho Chi Minh and Hanoi, conducted by
FTA Marketing Research, less than 30 per cent had a separate
marketing department. None had a functional market research
department.
Therefore, it is not surprising that only half of these SMEs agree
that market research is the tool for understanding target consumers.
Only about 45 per cent agree that market research should be
the foundation for business strategy. Only 30 per cent agree that
market research should be used to improve current product offers
or develop new products.
Fifty one per cent had never used services from a market
research agency. Instead, they used mostly information from their
sales force, from staff, from informal talk with consumers at point
of sale or with others in the same industry. They relied on business
owners’ experience and learning from trial and error.
While 49 per cent reported they had tried outsourcing market
research services in the past three years, nearly half were not
satisfied. The top three reasons for being dissatisfied and saying
they are not likely to use market research again were:
1. Did not provide value for money
2. Did not solve business problem (after doing the research, the
owners received only general results and recommendations
from research agencies that were considered as too broad, not
practical and not particularly feasible to their business)
3. Based on inaccurate information (as a result of inappropriate
research design, from talking to the wrong target, or from not
asking the right questions).
Key barriers to usage
The most significant barrier to research usage among SMEs in
Vietnam is that it is perceived to be a cost item, not an investment.
This is the result of not being able to see the benefits of research,
nor seeing the linkage between market research and business
success and failure.
The second barrier comes from the low awareness of what
research is and how it could be used. Technical research terms
such as qualitative, quantitative, usage and attitudes (U&A), concept
test, price sensitivity and retail audit could be hard for SMEs (with
no research background, no marketing background and even no
formal business training background) to understand.
If market research products could be seen to help generate
sales reports, consumer feedbacks reports, promotion preference
reports, product rating reports and so on, then SMEs could link
these to the immediate benefits of using research.
The third most serious barrier is SMEs’ management vision.
Usually, if the owners do not trust market research agencies (as
a result of either perception or past trial experience), then this
would largely result in limited resources (people to absorb and use
research) and limited or no budget for research.
On the other hand, agencies need to better demonstrate their
ability to understand SMEs’ business, background, structure,
people, and financial resources. Research products and models that
are used for multinational corporations might not be appropriate
in the SME sector.
To be more relevant, there needs to be a shift from research
language to business language. Not only does the research product
name need to change, but also the research tools need to be
relevant to SME’s day-to-day business. These are the outcomes
SMEs want to see:
• Sales reports
• Distribution updates
• Sales intelligence
• Consumption trends
• Product benchmarking
• Price intelligence
• Promotion plan
• Investment maximisation
• Growth maximisation
• New market / product development (associated with new
risks, far away from experience and core expertise).
Key drivers
Among SMEs interviewed in the survey, the most important
driver of market research usage was the expectation that
research should clearly identify SME’s strategic direction and
also how to reach the end goal – the destination. They expect
to see the researcher’s ability to act as a business and marketing
consultant. Not only do they expect to hear ‘what to do’,
they also want to hear ‘how others did’. For them, research
is a fact based business solution, thus research must show
how it could actually solve the business problem. They expect
researchers to show experience and real market validation
from servicing other big multinational clients and explain how
the big fishes did it.
Researchers need to conduct comprehensive pre-research discussions
and effectively act as an internal research department.
Adoption process
Key decision makers for marketing strategy and market research
remain the SME’s owner, the managing director and the marketing
director (normally head hunted and hired from multinational
companies).
Over the past five years in Vietnam, many SME owners have
attended practical training courses in marketing and market research.
They, in turn, send their marketing staff to these courses.
As a result, they are getting to know about marketing and market
research concepts and services.
In our recent survey with SMEs, the top source of research awareness
and adoption is training. Usually, SMEs talk to the trainers for
advice and also seek marketing consultant from this source.
In many other SMEs, the restructuring processes to cope with
growth results in the employment of experienced marketing seniors
(who used to work for multinational companies) and this also facilitates
the adoption of market research. These are often SMEs that
sell, process and export raw materials. Now they are focusing more
on domestic market, which requires serious brand building. They are
seeing opportunities in the domestic growth but also seeing strong
competition from multinationals. They feel the risk is high, they are
now pulled out of their comfort zone and realise that relying on their
own experience isn’t enough.
SMEs (in particular those operating in the FMCG sector) represent
an area of potentially strong growth for those operating in the
Vietnamese market research industry. This segment is not easy to
penetrate, with many barriers for research agencies to overcome.
However, once SMEs trust and adopt research, a research agency
could win a full annual research package and an exclusive deal.
Tran Ngoc Dung (executive director, FTA Marketing Research)
and Tuong Tuan Thong (FTA Marketing Research) will present
their paper titled ‘Market research for local SMEs in less
developed countries’ at ESOMAR APAC 2011. The presentation
will include a case study illustrating how Vietnamese company
Nutifood used market research to grow its business.
Tran Ngoc Dung
Tuong Tuan Thong
Research News March 2011 17