Abstract:

The significance of marketing and market research within financial institutions increased in the mid and late 1980s as a result of the increased competition brought about by de-regulation and growing financial sophistication on the part of the consumer. During that time marketing functions grew in terms of staffing and spend on all aspects of marketing, including research. This paper looks at the extent to which the role and influence of marketing and market research within financial services companies has been affected by the recession which followed the period of expansion of the late eighties and which has hit companies in the financial service sector particularly severely. The papers findings are based on twenty face-to-face interviews with research managers in financial institutions. The paper concludes that, whilst marketing functions within financial institutions have been affected by the cost control and cost-cutting programmes that companies have adopted as a means of off-setting a poor financial performance, market research functions within financial service companies are in reasonably good shape and that their longer term prospects are good. Market research has proved its value and, in many companies, market research is being used to look at personnel and organizational, as well as marketing, issues. That is not to say that research has not been affected; many researchers report budgets being maintained in absolute terms at last year’s levels and a ban on recruitment. In order to offset the effects of less money being available for research, market research managers are prioritising research requirements and there has been a move away from research undertaken for tactical short term reasons to research of strategic and long term significance. In some respects this greater discipline is welcomed by researchers. Researchers, working within marketing functions where there is a ban on recruitment, feel their role is more compromised by reduced staffing levels than budget restrictions. Moreover, whilst many were coping well with budget restrictions, there was less evidence that strategies were being developed to cope with increased time pressures. This has potentially more critical and long term consequences because lack of time is preventing senior researchers from developing the role of research within business planning, where many believe that the long term future of research lies.