Market Research: a thriving, but expensive, marketplace

27/03/2015

The market research environment, of unquestionable relevance for global success in the modern world, counts dozens of specialised companies, of various nature and size. Their extension has naturally a decisive influence on the operative range, but even more important, on the operative costs.

A relevant demonstration comes from UK market analysis about IT expenditure. The results are, in some ways, surprising. Generally, the smaller the company, the higher the costs to sustain, but the most astonishing part is that market research companies expenses tend to overcome, sometimes by far, even the outlays of the whole set of other companies, to any sector these belong.

Have a look at the following graphs:
 

Small market research companies spend almost double money on telecommunication services than the average of all the other organisations. The difference thins with increased dimensions, up to achieve equality when it's about massive companies. [Source: IT & Telecom Spend - 80 Industry Sectors (www.kewassociates.co.uk), July 2014]

Regarding the investments to develop operative instruments, the smaller market research enterprises expense is far away higher than the one of all UK companies, but it tends to become stable for companies over 50 employees, while the national average knows a steady increase for the biggest businesses, exceeding the researchers for the first and only time. [Source: IT & Telecom Spend - 80 Industry Sectors (www.kewassociates.co.uk), May 2013]

Ignoring the computer service companies, that have IT as their natural reason for existence, and consequently must have high expenses about these, market research companies are again at top outlay level among other purposes companies as a ratio of  their employee turnover. [Source: IT & Telecom Spend - 80 Industry Sectors (www.kewassociates.co.uk), March 2011]

Incredibly, spending on computer skilled customer service personnel is at the lowest level for market research companies, probably as a result of the necessity of continuous direct interaction which requires the constant presence of specialised figures in perpetual relationship with their target audience/client/sector. This may mean that, even in large companies (100-999 employes), the portion of environmental analysis and assistance covered by each employee itself could be significantly bigger than the specialists of other firms. [Source: IT & Telecom Spend - 80 Industry Sectors (www.kewassociates.co.uk), April 2013]


In case of overspending, how should a market research enterprise cope with it?

1) Undertake strong two-way partnerships with the closest or the most relevant business figures which company is dealing with. This is the easiest operative way to share the expenses or to cut useless costs, but could be hard to realise which companies are more worthy to stay with, and actualise the process.

2) Reduce the range, both geographically and environmentally. Specify more detailed targets and invest more time in preliminary research than in actual market research.

3) Why don't try a self research procedure? Utilising the background research skills already held, a market research company could see itself as the target market and start a procedure of internal research, before actually moving to the outer environment. Extremely useful for this purpose may be the SWOT analysis tool.


In conclusion, nobody have ever said that is easy or cheap to be a market research company, and maybe being a freelance researcher as I aim to be is even more difficult, but isn't it true that the more complicated is an objective, an achievement, a purpose, the more valuable it is?

That's the Importance of Being a Market Researcher.
That's this blog.

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GIANLUCA NOCENT