Market research budgets falling in Asia

17 July 2009

SINGAPORE: The market research industry is coming under increasing pressure in Asia, as brand owners cut their budgets in an attempt to reduce overall expenditure levels, a new study from Asia Research reveals.

Asia Research, a trade magazine, conducted a poll among 207 research buyers in five Asian countries, and found that the economic downturn was exerting an impact across most markets and product categories.

Of its sample, 19% of contributors had commissioned at least one piece of research over the course of the last year, while 39% had conducted between two and four such exercises.

A further 20% had undertaken between five and nine of these projects over the previous 12 months, and 22% had been responsible for more than ten such schemes.

In all, only 17% of respondents reported that their budgets for this year had increased, with all sectors from FMCG to the public sector impacted by the downward trend.

The magazine's survey also found that for many companies, and particularly outside the FMCG segment, research was seen as being "nice to have" rather than "essential".

Singapore was reportedly one of the worst hit markets, with 51% of participants in the country stating that research spending will fall in 2009, while only 9% will increase their outlay.

With regard to the type of research that has been commissioned, 70% of clients across all markets were involved in "brand image tracking", a total that fell to 59% for customer satisfaction studies.

New product development was mentioned by just 56% of contributors, while 50% were gathering competitor intelligence, and 47% were involved in "market sizing" initiatives.

A further 41% were undertaking price research, 35% were testing advertising campaigns, and 25% were using mystery shopping schemes.

In terms of future developments, only 14% of those surveyed thought their company should "invest more" in research, while 40% argued they should "commission less".

Some 76% also intend to negotiate more on prices this year, while 33% plan to use a smaller number of research firms in an effort to secure better rates with a smaller group of "preferred suppliers".

Furthermore, 60% of clients expect to do more research in-house, 57% will undertake fewer projects, and 45% will cut costs by doing more research on the internet.

Data sourced from Asia Research; additional content by WARC staff