Small market research players find bit parts are profitable

Cheaper prices and niche services have helped small market research firms survive and sometimes prosper during a nation-wide economic slowdown. "We are one of the smallest firms in the market," said Jacek Chołoniewski, owner of market research firm Estymator. "Last year we had a very good year, in fact we had the best year, and this year we hope will be equally good. "This is thanks to the fact there is a crisis, and companies are looking for smaller and cheaper firms. I only need to attract a small percentage of the firms that leave the big market research firms to make a profit."

Specialized services have also helped small firms attract business. "We are a typical example of a smaller firm and one of few with a … specialization," said Elżbieta Syrda, president of ASM Centrum Badań i Analiz Rynku. "In the United States many specialize but here the big companies tend to do everything. … Because we have chosen specific markets and have always worked according to our niches, we were not affected much by the downturn, because those sectors faired well and we were able to sustain a profit." The market research sector saw an overall 5% rise in profit from 2000 to 2001, despite the slow economic growth, according to the Organization of Market and Opinion Research Firms (OFBOR). Small companies were responsible for much of that growth. "Generally 2001 was a difficult year for everyone," said Michalis Michael, general manager of MEMRB International Poland, one of the market's larger firms. "I didn't expect that clients would cut back their market research that much." Small- and medium-sized enterprises cut market research the deepest, according to Eugeniusz Śmiłowski, president of Pentor Institute.

"The last year for the industry was characterized by three things," Śmiłowski said. "The industry was hit by the economic slowdown, the dynamic of growth was smaller - thank God it was there at all - and the activity of small- and medium-sized companies evidently cutting down on their use of market research. The price war also started last year on a big scale, which the small firms always have a better chance to survive as their costs are smaller." But some small companies still saw drops in business despite lower prices and specialization. Mareco Polska, founded in 1993, saw orders decrease despite its niche position as a member of the Gallup International Association. "The market is very partial to the big players," said Marek Fudała, the company's director. "Despite the specialization of small firms, big firms do come in and take away clients." But according to Przemysław Budziło, marketing director of BBS Obserwator, small companies never really have to compete with the big firms, especially as they tend to specialize in ad hoc research. "They (larger companies) work on different types of services," Budziło said. "Tracking and continuous research is done more by big companies and ad hoc by smaller ones and there hasn't been much competition in the ad hoc area between big and small firms," he said. "But this year will probably turn everything upside down as companies will count their money and go for more competitive companies. Small companies will have more opportunities as they are cheaper and can offer more services as well as offer a closer client-company relationship."