Mick Gordon heads the India operations of Synovate, the market research arm of global marketing communications group Aegis Group Plc., which provides consumer insights to clients to help them market their products and services more effectively. As managing director of Synovate India Pvt. Ltd, one of his key responsibilities is to develop and implement a comprehensive business plan to optimize growth in this high potential market. “In India, growth rates have been in excess of global rates and will be again in 2009,” he says.
In an interview, Gordon talks about his plans for the India business, the opportunity in terms of outsourcing of projects from matured markets to India and new market research tools developed by Synovate. Edited excerpts:
What has been the impact of the current economic downturn on the market research business?
Market research is a dynamic industry typically growing in line (with) or faster than the global economy. According to ESOMAR (European Society for Opinion and Marketing Research), research firms have mainly reported growth in 2008, which may have somewhat slowed down due to macroeconomic factors. In India, the market still feels strong in my experience in 2009.
The sector has two distinct segments: the customized survey business and the panel-based business. The panel segment provides media audience and consumption measurement and requires upfront investment in measurement devices. Short-term economic downturns have less impact on this segment and the contracts are long-term with clients.
The customized survey segment includes qualitative and quantitative methods that provide understanding of markets and consumers. This segment is more competitive, fragmented and operates under smaller margins. It has also been seeing significant changes, including consolidation of the largest players and client contracts, and rapid growth in emerging markets. The survey business is more cyclical than the panel business as the contracts are one-offs and discretionary.
In both segments, the biggest trend is an increasingly pressurized pricing environment—it’s become very important to demonstrate real value in efficiency, and effective, actionable outputs in market research.
How big is the market research business in India and globally?
As per ESOMAR figures, the Indian market is estimated at $151 million (around Rs750 crore).
Globally, market research is estimated at $28,235 million, representing a growth rate of 6.5%. In India, growth rates have been in excess of global rates and will be again (so) in 2009.
What are the opportunities and challenges for market research agencies in India and globally?
With the recession in the West and flattened growth rates, opportunities are shifting to emerging markets. Asia-Pacific, Latin America, parts of Eastern and Central Europe, Middle East (West Asia) and Africa have been registering double-digit growth rates. Most mature research markets are growing at a slower pace.
While the growth in developed markets is slow and hard-won with intense competition and slim margins, in emerging markets, exposure to international brands is giving consumers choices like never before and the new middle class is keen to exhibit its status.
(The) Synovate global office has set up our global financial hub in Bangalore where global financial work is offshored. Through partnerships and in-house solutions, Synovate has and will continue to use the skill resources available to it in India.
There are quite a few challenges: Threat from new entrants, some movement to panel-based surveys as opposed to customized marketing surveys, clients are using (their) procurement department to negotiate contracts to maximize return-on-investments, consultancies are buying data directly from online sample providers and reselling (it) to clients at higher prices. The opportunities are to meet these challenges with quality solutions to them, leveraging our global and local expertise in a cost–effective manner for clients, providing quality research and interpretation at the right cost.
How big is your India team and business? What are your India plans?
We have a strength of 300 employees with research offices in the major metros and field offices in 14 locations. Our suite of research tools straddle qualitative, quantitative, brand and communication, customer experience, and specialized verticals like Motoresearch, health care, business consulting, etc. Synovate India is one of the top five research companies in the country, just as Synovate is one of the top five globally.
We have globally renowned experts like Jan Hofmeyr and Lawrence Crosby, who are credited with having developed a suite of MR (market research) tools relevant to marketeers in (an) altered economic environment. We are constantly bringing new and innovative solutions to the market to provide better information to our clients to drive their business decisions.
India is a very important market for Synovate and its clients. It is an importance which goes beyond the current value of the market to the potential we see in the coming years. We have ambitious plans to build the business and continue to be part of the success story of Indian businesses.
What are the new research tools you have come up with?
Thanks to some innovative research engineering, Synovate has developed proven metrics that can tell marketeers exactly what they need to know about their brands, customers and communication messages with more compact, concise surveys. Codenamed Project Nano, our newest solution suite is designed to offer absolute accuracy in less time and with efficient and effective measures. Each tool can be used separately or together and can even fit (in) with other research. Given the current economic condition, we are able to deliver more power and efficiency.
In the second half of 2008, Synovate India has seen a huge opportunity in terms of outsourcing of projects from matured markets to India—we have had to ramp up our analytical centres, computer-aided-telephonic interviewing centres (CATI) to cater to the increase in offshoring to India. Here again, we provide a cost advantage. Synovate India has also integrated its health care vertical with consumer research.
We are also launching “community panels”—a dedicated group of existing or potential customers you engage with and learn from over time through interactive surveys and discussion forums. We also provide new state-of-the-art technology-enabled delivery of data like “dashboards” (CEO-centric key performance matrix), “views summary” (real-time user reports), “fingertip reporting” (predefined tracker reports) and Synovate “client portal” (quick deploy basic portal).
Graphic by Ahmed Raza Khan / Mint