Can Market Research Companies Tap on the Growing Demand for Data Analytics Perspective
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1 WHITEPAPER July Can Market Research Companies Tap on the Growing Demand for Data Analytics Perspective Author Prashant Krishnan 1 Copyright Beroe Inc, All Rights Reserved
2 Abstract / Business Case 1. Introduction: This whitepaper focusses on how market research companies are positioned (in terms of strengths and weakness) in terms of their ability to provide data analytics services. 2. Main: This paper provides insights on the advantages market research companies have in terms of handling data analytics projects (project management capabilities, on-shore support, strength in hypothesis driven statistics) apart from highlighting right talent. This paper also focuses on various strategies deployed by market research companies to strengthen their position in the data analytics segment. 3. Recommendation: Clients can look at the possibility of integrating existing data on consumers with survey data provided by market research suppliers in order to get better and deeper insights on consumers. Clients can also look at the option of bundling data analytics requirements with market research studies to get discounts from market research companies. Problem Statement / Introduction Putting things in perspective: The demand for data analytics from client sectors like CPG, pharmaceuticals, BFSI has been on the rise in the last few years. The demand for data analytics has been fuelled by the need to have a 360 view on customers. Explosion of data: For long, the major challenge for clients was in getting the right data about customers. But with the explosion of data through various sources like mobile, social media, etc., the focus has now shifted towards mining these data to get valuable insights on customers and their purchasing behavior. Reasons for growth: Thus, the data analytics industry is expected to grow by a CAGR of 31% till 2016 thanks to strong demand from traditional sectors like healthcare and CPG ke telecom. The competitors for the pie: Market research companies along with IT companies pose a challenge to pure play vendors who were first movers in this segment. The competition among these sectors is expected to increase corresponding to growing demand for analytics services. This whitepaper talks about where market research companies stand with respect to their capabilities in data analytics segment and their strategies to capture significant share in this market. Where market research companies scores over its competitors: Strong Client Base: Unlike other competitors, the top market research companies have a strong client base to which it can cross sell analytics work. 2 Copyright Beroe Inc, All Rights Reserved
3 Possibility of integrating survey data: The other major advantage that market research companies have is the possession of survey data which when integrated with existing client data can provide greater insights on customers. The trend of integrating existing system data on various customers is catching up especially with CPG clients. Strong in hypothesis-driven statistics: Market research companies have professionals who are trained in hypothesis-driven statistics and it is not a big leap for these professionals to move into data mining and data modeling (these skill sets are of importance to data analytics). Onshore presence and project management capabilities: Unlike pure play vendors, market research companies have onshore capabilities and experience in managing large projects which ensures better servicing capabilities for major buyers. Where do market research companies lag in data analytics space? No focus on data analytics: The biggest issue facing market research or at least till some time back was that most of these companies do not have separate analytics team and do not view analytics as possible areas of revenue generation. Getting the right talent: The other major road block for market research companies is the fact that they currently do not have the analytical talent (a combination of mathematical, programming skills and business logics) required for executing analytics projects. While pure play vendors due to their targeted marketing proposition are able to hire the right talent, IT companies have successfully been able to poach on the talent base of pure play vendors. Market research companies still lag way behind its competitors with respect to having the right talent. Strategies of market research companies: In this section, let us examine the major strategies of top market research companies in the data analytics space. Market Research Company Nielsen Key Strategies One of the earliest companies to track big data- has worked on harmonization of client data for top CPG clients like Nestle, P&G. Nielsen, recently acquired Marketing Analytics to boost its capability in predictive analytics. Most players in the big data space like Mu Sigma are weak in predictive analytics. Nielsen is thus best positioned to tap demand for big data since most client projects require strong expertise in predictive analytics (which helps client in forecasting and decision making). 3 Copyright Beroe Inc, All Rights Reserved
4 Ipsos - rather it is focusing on interpreting big data for its client base. Ipsos has already acquired an analytics company- Marketing Management Analytics which is a leader in pricing analytics. Kantar GfK Ipsos is exploring the option of integrating predictive analytics capabilities of MMA with existing consumer attitude and opinions data to provide differentiated value to clients. Kantar is considering formal partnership with big data companies. Kantar is also focusing on training its in-house talent in areas like R apart from investing in neuro-scientific creative techniques. GfK is positioning itself as an expert in smart data and not in big data. Implication for clients and way ahead: GfK is pitching to clients with the ability to integrate behavioral information with consumer survey data and incorporate social science perspective to get valuable insights from data sets. Strengthening of market research position in the data analytics segment: It is expected that market research companies would focus on acquiring smaller analytics companies on the lines of Ipsos and Nielsen. This would further strengthen analytics space. Integration of data: Buyers of data analytics can look at the opportunity of integrating existing data with survey results provided by market research companies for better insights. Bundling opportunity for buyers: This could lead to bundling opportunities (bundling market research studies and analytics projects with market research suppliers) for buyers which can translate into discounts on volumes for buyers. Industry Speak/Acknowledgement Subject matter expert in a major data analytics company Former business development director with a leading market research company Healthcare specialist with experience in sourcing market research, data analytics and single client studies 4 Copyright Beroe Inc, All Rights Reserved
5 Secondary Sources: Supplier Websites Metadata Industry to be impacted (Highlight the industry to be impacted) Pharmaceutical Food, Beverage & Tobacco Metal, Mining & Minerals Chemicals Oil & Gas Personal Products Bank & Financial Services Hi-tech Domain to be impacted Marketing Services Category to be impacted Market Research Focus Area (Highlight the Focus Area) Sourcing Opportunity Supplier Intelligence Technology Substitute Opportunity Supply chain Risk Input Cost Price Outlook Sustainability Keywords Used Market research, data analytics 5 Copyright Beroe Inc, All Rights Reserved
6 About the Author Prashant Krishnan Functional Expertise: - Disclaimer: Strictly no photocopying or redistribution is allowed without prior written consent from Beroe Inc. The information contained in this publication was derived from carefully selected sources. Any opinions expressed reflect the current judgment of the author and are subject to change without notice. Beroe Inc accepts no responsibility for any liability arising from use of this document or its contents. 6 Copyright Beroe Inc, All Rights Reserved For more information, please contact info@beroe-inc.com.
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