Mike Kirkham, the former CEO of TNS the global market research agency tells On Device Research why businesses looking to develop in emerging markets, should consider mobile as a research tool.
An article in the FT on 24th August reported growing efforts by SME’s in the UK to expand into overseas markets, as Economic slowdown at home and in the Eurozone is providing a stimulus to look elsewhere for opportunities.
Like larger western-based companies they are increasingly looking to emerging economies in Asia, Latin America and in Africa. In these countries economic growth means rising demand for energy, technology and for consumer products.
But exploiting such opportunities requires an understanding of these markets. They are different in many ways from the familiar developed markets of Western Europe. There are differences in business practices, in regulation, in infrastructure and so on. And for consumer-led companies one of the major differences is in the nature of the population. In almost all cases the people in emerging markets are much younger.
This is illustrated by looking at the percentage of the population aged less than 25:
The average for Western Europe is 27% and in Germany it is as low as 24%.
This has huge implications for the type of products which are and will be in demand in emerging economies, particularly youth and fashion-based products like music, clothing , cosmetics etc.
In many of these countries growing prosperity is leading to improvements in education. Reliable comparative data is difficult to obtain but information from UNESCO shows that between 1999 and 2011 the percentage of the population with a university degree in Argentina grew from 7% to 11% and in Malaysia from 10% to 17%.
Earlier this year I was in Sri Lanka. In every town of any size wherever you looked there were posters and billboards from western-based universities and colleges offering degrees and professional qualifications through distance-learning and on-line tuition.
So not only are the people in the emerging countries younger they are also increasingly better educated and informed.
And also, not surprisingly, they are enthusiastic users of modern technology, of mobile communications and the internet.
A recent research study showed in different countries what proportion of people access the internet only through their mobile phone.
So how do companies wishing to operate in emerging markets find out about these consumers?
How do they find out what products and services they use or want to use, their attitudes towards them and their levels of satisfaction? And how are their attitudes influenced? What role do the new media play alongside the older methods of exposure in television, radio and press?
These are typically the questions that market research companies are asked to investigate. They have developed a wide variety of techniques for collecting and analysing such information.
But one area that has always been difficult – and more so over time – has been to conduct reliable sample surveys with young people, especially those in the age range 16-24. They are difficult to locate and even then they are notoriously poor responders to traditional forms of survey questioning – face-to-face or telephone interviews or self-completion questionnaires and diaries.
Fortunately mobile communications technology is now starting to offer a solution. Most promisingly it is a solution that applies to just the type of consumers who characterise the emerging markets.
It is now possible to build panels of respondents in virtually any country who agree to participate in regular surveys. Typically these respondents have mobile phones and the surveys are sent to them either via SMS or the internet. The respondent then provides answers via the mobile phone and these are transmitted almost instantly to the market research company.
One company that is concentrating exclusively on conducting research this way is On Device Research, a recent start-up based in London. They now have growing experience of conducting projects in many emerging countries ranging from India and South Africa to China, Russia, Brazil and Nigeria.
As an approach this technique has a number of advantages:
So what are the downsides? No single research technique will be appropriate for all types of surveys. This method is at its best when administering simple short studies. It will not be appropriate for lengthy questionnaires which require complex explanation.
But recent experience is encouraging. Anyone looking to develop their business in emerging markets should certainly consider it as a tool to help provide a better insight into the behaviour and attitudes of their consumers.