S&R Blog


How to use market research in a recession

Everywhere you turn you’re bound to hear about how the recession has put a death grip on the wallets of consumers and has refused to let go for any extended period of time. As a result, products are staying on the shelves longer, profits are going into the red, and marketing budgets are being chopped with ginsu-like precision.

As mentioned in an earlier post, cutting budgets may not be the way to recession-proof your brand in this time of uncertainty. But should you need to reduce your marketing budget, John Quelch (Harvard Business School) gives a few pointers on how to get the most for your dollar when it comes to finding the right data and insights for your brand.

Stay focused. Savvy marketers focus their research on the products, brands, and markets that are key to their marketing strategy. In a recession, it’s essential to get a clear read on existing core customers, including those who are most loyal to the brand and those who are most profitable, rather than fritter away research resources on potential or peripheral consumers.

Enlist trusted partners. Marketers and research suppliers who trust each other and have established long-term relationships can jointly plan how to extract more insights and make better decisions based on fewer expenditures.

Value experience and judgment. CMOs should tap the knowledge and intuitions of managers and researchers who’ve lived through previous recessions. In setting prices, for example, such insight can help calibrate the optimal level of price promotion offers.

Seize opportunities overseas. Some large multinational marketers, such as Unilever, are shifting research expenditures away from Western Europe and toward emerging markets in Asia and Latin America. Relative to the developed economies, the costs of research in emerging economies are less and the payoff from incremental insight can often be greater.

Go online with a dash of skepticism. Online research is cheap, fast, and the wave of the future. Tools like SurveyMonkey allow non-expert users to create custom surveys in minutes. As an alternative to offline focus groups, custom online panels of consumers can be formed for qualitative research on new product ideas or new ads.

Don’t cut across the board. Just as important as knowing where to cut research is knowing where not to cut. When marketers are creating fewer new ads and introducing fewer new products, it is doubly important to use rigorous pretesting to select the strongest alternatives.

Keep an eye on the new consumer. No one has a perfect record of predicting the future, and the recession is making it harder for consumers to envision or articulate their needs. Even so, and despite budget pressures, smart marketers devote a portion of their market research to getting a handle on future changes in consumer behavior.

The full article can be found here.

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