Decade of market research shows maturity and potential
The 10th year since market research companies started operating in Poland is seeing a maturing industry and players boasting of continued growth. Although some sectors still underestimate the value and importance of market research, the potential for further growth appears significant, according to information provided by industry sources.
But there is still a three to five-year-long journey ahead for Polish market research companies if they want to meet Western European standards, said Wlodzimierz Daab, research director for Central Europe at Taylor Nelson Sofres and president of the Organization of Firms of Public Opinion and Marketing Research (OFBOR). "To be fully mature we need (market research companies to have) an awareness of the existence of rules," he said, referring to the absence of accepted and enforced research standards in the country's market research industry.
According to Andrzej Ludek, president of market research firm Almares, Poland is a mature market in market research terms. One sign of this maturity is the relatively large number of market research companies operating throughout the country, including a substantial number of international giants, he said.
"Supply (of market research services) exceeds demand," Daab said. Such disequilibrium favors clients because it accelerates the process of establishing quality services by eliminating weaker or less prepared companies. "The market has made a preliminary selection," Daab said.
The shift in the types of research being conducted also contributes to Poland's mature market status, Ludek said. "Ad hoc used to be the main type of market research," he said, referring to research conducted for a single order, such as when a company wants to know if clients are satisfied with its recently opened store. "Nowadays, the amount of continuous research is increasing," Ludek said. As the name indicates, continuous research is long term, involving, for example, the constant monitoring of TV viewing patterns and demographics. Daab explained the increase in continuous research as a "natural consequence" of development, since it is more convenient and meaningful for market research clients to have their studies conducted over an extended period of time by the same company with a unified methodology rather than by several, possibly uncomplimentary firms.
Another feature of the country's maturing market research industry is the increasing specialization of services, Ludek said. A growing number of companies have their own products that they have either developed themselves or for which they have purchased a license.
A good example of a company focusing on a particular kind of research, in this case retail market research, is CAL Company Assistance. "We noticed a market gap," said Agnieszka Palka, CAL's public relations director. As a result, the company designed its own research methods for analyzing who the retail players are, where sales are concentrated, how much sales amount to and what future trends will look like.
The development of products such as specialized research methodologies and periodic published reports means market research companies are increasingly selling themselves not only on the basis of their company name, but also on that of products not immediately publicly associated with the company, which produces them. "The client now faces not only the choice of a company, but also the choice of research techniques," Daab said.
Although "the period of chaotic development is finishing," the market is saturated rather than ripe, Daab said. He pointed to the lack of clear-cut rules and uniform standards within the industry for example with respect to accessibility of research techniques as a sign of unripeness. Tools are needed to verify the quality of research being done, he added.
Developing standards should improve the quality of research, and quality will be what companies need. "In relation to the saturation (of the market) quality begins to count more and more," Daab said.
The discussion of these development issues is just beginning. An overview of the market research sector as well as an indication of its growth is the First National Congress of Market and Opinion Researchers, to be held this fall. This congress will address the past, present and future role of market research companies in Poland.
Although the sector has been maturing, its clients haven't. "The culture of using economic information is not deeply rooted in Poland," Daab said. Although fast-moving consumer goods (FMCG) firms are the major client base for market research companies in Poland as well as in Western Europe, the rest of the client pie is distributed differently, Ludek said.
According to Ludek, market research still has potential for significant growth in several market sectors. For example, such research is virtually unknown in state-owned companies. The large number of state-owned companies in Poland possibly means a smaller client base for the market research industry. "Until the moment of privatization, the (state-owned) companies don't deal with market research," he said. Trade and services, traditionally important market research customers, could also increase their involvement with the industry, Ludek said.
Local government is another sector currently not utilizing market research. Unlike in Western countries, "local governments are an almost undiscovered sphere," Ludek said. "The undertaking of an investment in the West is based on research into what is needed more in the region: a hospital or a sewage treatment plant." In Poland such a practice is almost non-existent, although it might be useful and help to increase the transparency of local government efforts.
From the market research companies' point of view, there is certainly room for improvement. "Western investors, apart from locating their money on our market, bring their way of thinking here," Ludek said. "In the West no decisions are made without (prior) market research because it may cost too much." This is rarely the case here. "(In Poland) more money is still spent on advertising, and this becomes obvious given the quality of some ads, especially on the radio," Ludek said.
