Company market research departments

Date of publication: September 1, 1994

Author: Margaret Holmes

Abstract:

At this time of recession, it is more common to hear of reductions than of expansion in company research departments. It seemed an appropriate time to conduct a quantitative study among major European companies to discover whether this is a general pattern, and if so how serious it is. In interviewing 300 of the largest European companies, we found that almost half of them now rely on outside agencies for their research and that a third of those with research departments have considered closing them: reasons were almost entirely to do with cost, and it was stated bluntly that the research department was the first to go. A silver lining did emerge: where the research department provided input to strategic planning which proved valuable to the marketing department and which could not so readily be obtained elsewhere, it was likely to be seen as indispensable and to remain secure. If all that was provided was information, however well interpreted and presented, there was a risk that outsiders could perform the function equally well. To secure its survival, the company research department has always had to offer expertise on top of that available from outside suppliers. Now, however, it seems that this expertise must be more comprehensive than ever before, ranging from highly sophisticated modeling and forecasting to discovery of new, possibly niche, markets through a diversity of approaches to consumer segmentation. But most crucial of all, the information gathered and analyzed must be distilled into clear, precise recommendations, and eventually into numbers in marketing strategy documents. It was our conclusion that managers in today's research departments may need a much broader skills base than in the past and perhaps a different academic background, more akin to that of the marketing staff they report to.

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