Market Research Program Audit: A Strategic Evaluation of Checkoff-Funded Market Research Managed by the National Cattlemen s Beef Association

Transcription

1 Market Research Program Audit: A Strategic Evaluation of Checkoff-Funded Market Research Managed by the National Cattlemen s Beef Association June, 2007 Prepared for the: Cattlemen s Beef Board Joint Evaluation Advisory Committee 9000 East Nichols Avenue, Suite 215 Centennial, CO Prepared by: Mark D. Newman, President Market Solutions LLC 4306 Leland Street, Suite 101 Chevy Chase, Maryland USA Tel: (301) Fax: (301) marknewman@marketsrus.com

2 Market Research Program Audit Executive Summary The Cattlemen s Beef Promotion and Research Board (CBB or The Beef Board ) retained Market Solutions LLC to conduct an evaluation audit of the Market Research Authorization Request (AR) (R ), a checkoff-funded project managed by the National Cattlemen s Beef Association (NCBA). Beef checkoff-funded market research is intended to contribute to the beef industry goal of increasing beef demand 10 percent by 2010 by guiding and measuring progress of activities to address specific beef industry product, industry resource, safety and nutrition strategies. Overall objectives of this audit are to: 1) Review performance and performance measurement as part of the 2006 and 2007 programs and 2) Provide strategic recommendations based on an evaluation of the current organization of the checkoff's market research function and findings on its work with stakeholders. Approach. In undertaking this assignment, Mark D. Newman, President of Market Solutions LLC met with Beef Board and NCBA staff, reviewed program documents, including ARs, program information, evaluation reports and a sample of research reports produced by the market research program. Based on this review, a sample of people to be targeted for interviews was selected and an interview guide was developed. In-person and telephone interviews were conducted more than 20 people, including NCBA staff, Beef Board members and state beef council staff, during April June, Findings of these interviews, together with Market Solutions LLC s extensive experience in market research and strategy consulting for food and agriculture clients provide the basis for conclusions and recommendations presented here. Revitalization of the beef checkoff's market research function over the last 18 months, including a more centralized program, and increased professional staffing is already contributing benefits to the strategy teams which serve as the group s internal clients. As a result, checkoff funded resources directed at strengthening beef demand and maintaining market share can be better targeted. Major Findings. Overall satisfaction with the direction of the new and revitalized market research program is very positive. Within the limits of available staff and budget resources, it appears that individual strategy teams are generally very happy with the support and service they are receiving and performance goals as specified in the 2006 AR have been met. Most of the market research program is devoted to supporting individual strategy teams, as it should be. Some resources have historically supported broader organizational goals within the industry resource portion of the Market Research AR. This latter area has already contributed to helping to fine tune the overall strategy of the organization and the industry through projects aimed at better defining beef s brand, and in looking at specific opportunities and challenges for ground beef, the youth market and the Hispanic market. This also includes resources for dissemination and communication, including half of the time of a dissemination specialist position that is in the process of being filled. The big challenge is that even though the market research staff work with individual strategy teams to help them design and implement research that will best meet the strategy teams goals, this research may or may not tell whether those goals represent the highest payoff mix of strategies and activities to meet the overall strategic goals of the beef checkoff. Market research has the potential to help in addressing such issues as well. However it will require that the mission be expanded, and may require some reconsideration of how future Market Research ARs are developed. A key recommendation of this audit is that the Beef Checkoff Program should capitalize on the new excitement with market research and new value being offered by the market research program to start to think concretely about how best to use market research and the market research team to get guidance based on what one Beef Board member called the view from 30,000 feet. This is critical to getting the most value from producer checkoff investments. CBB Market Research Audit i Market Solutions LLC

3 Highlights of Detailed Findings and Recommendations. Professionalization and centralization of the market research function over the last 18 months is generally perceived as a very positive development. Strategy teams generally appreciate the technical guidance and collaborative support being received from the Market Research Group. They are also pleased with new insights being gained through custom research projects and improvements in reporting. While staff turnover means that the current market research team is relatively new, feedback on their contributions to research thus far is very positive. The revitalized market research program is reported to be increasing the usefulness of research and analysis in helping to design and implement activities intended to protect beef s market share and increase consumption, both through programs at the national and state levels. Among those interviewed, satisfaction with the support they are receiving was widespread, and some voiced interest in increased support and involvement in work with the market research team. Under the 2006 and 2007 ARs, the primary goal of the Market Research Group is to provide service to other strategy groups, specifically Advertising, Retail, Food Service, New Product Development, Nutrition, Safety and Issues Management. It also provides a service to the Evaluation function through work on the demand index. Different strategy teams look to the Market Research Group to provide very different services including: 1. Providing guidance on best ways to accomplish overall strategy goals; 2. Service as a team member in design, contracting, management and interpretation of results of specific projects; 3. Being a repository for budget resources to ensure that there is no duplication of effort. The revitalized market research program is credited with a variety of contributions to providing strategy areas with better research, more actionable information, and more useful reports, leading to more targeted program efforts which help to increase returns on producer checkoff investments. An enlarged professional Market Research Group is permitting the Beef Checkoff to conduct relatively more custom research aimed at providing guidance for the future. The role of the market research program in supporting individual strategy teams and avoiding duplication of effort is generally well accepted. The opportunity ahead, which the market research program is beginning to address, is to play a growing role in providing the research, analysis and consulting support needed to set overall priorities among strategies and manage beef checkoff resources for maximum return on producer investment. Ideally, in addition to support for individual strategy areas, some portion of the market research program, perhaps 20 percent, would be devoted to looking at lessons to be learned that affect multiple strategy teams and help to address questions such as: What emerging market trends, opportunities and threats that will be critical to beef markets and competition in the future? For example, what are the likely implications of growing demand for branded beef? local products? case-ready products? country of origin labeling? or even increasing use of feed ingredients to produce biofuels? or transportation capacity limitations that may affect feed movements? How can producer leaders and the beef industry determine potential payoffs to investments among strategies? Measuring Performance of the Market Research Program. As specified in Market Research ARs for FY 2006 and FY 2007, the primary goal of the program is to provide the industry with insights into consumer/influencer attitudes and behavior to facilitate improved program planning and help drive beef demand. Performance measures, which are called project or tactical objectives in the FY 2006 AR, are also similar, and relate primarily to completion of market research project activities aimed at providing measurement. Market research projects included in the FY 2006 AR are reported to have generally been completed on time and to the satisfaction of internal clients. Performance measures are generally specified so that completion of a project meets the objective. Interviews found very positive interactions with individual strategy team clients. Most recommendations for improvement reflected desire for additional services and strategic support from the research group or interest in more cross strategy involvement in planning research projects for other strategy teams. CBB Market Research Audit ii Market Solutions LLC

4 Looking to the future the program might benefit by more clearly specifying overall strategic goals to which the market research program is intended to contribute, and performance measures that capture those contributions, as well as measuring execution of the scopes of work specified for individual tactical activities. This can be important in giving the market research team credit for serving as internal strategic consultants to the organization, and not just managing research contracts to ensure that they deliver what was specified in the scope of work. The market research program is a service provider to strategy group clients. Performance measures should capture the market research program s effectiveness in providing market insight and strategic direction that contribute to successful implementation of programs by specific strategy groups, and also to helping avoid ineffective programs. Both results can contribute to improved return on the producer checkoff investments. Organizationally, the Market Research Group is part of the Center for Research and Knowledge Management, which also includes research on beef safety, product enhancement and nutrition. While some have suggested that the Market Research Group might better serve the organization if it were attached to consumer marketing or senior management, others suggest that the current environment is beneficial in ensuring the group s independence. More important than the organizational location of the group is the need to make full use of its findings and analytical capability as a strategic resource for the beef industry and to help set priorities that will maximize the impact of checkoff funded programs. With strong management support this can be accomplished in the group s current location. Staff report that over the last 18 months they have received strong support from the Research and Knowledge Management team even though market research is not a subject matter expertise of the scientific research leadership of the group. A challenge for the future will be to use the professional team that is now in place to help guide overall priorities as well as providing support for individual strategy teams. New research reporting is just beginning to focus on the strategic insights gained through market research. Budget Resources. Interviews and a review of past market research budget experience suggest the critical importance of communication of program results to stakeholders, and having champions to support specific projects as critical to maintaining continued checkoff funding for activities, especially when checkoff budgets are already tight. Parts of the market research program that support specific strategy areas such as advertising, retail, foodservice, nutrition and safety are developed in cooperation with those areas, and have their support for funding. Projects that are of broader interest to the organization, often with implications for multiple strategy areas, are sometimes included under the industry resource strategy. In the past, these reportedly represented responses to industry initiatives such as special interest in the market for ground beef, the need to retarget beef s brand, and the need for a new way to measure demand and consumer satisfaction. In the future, they should also be based on insights on emerging market trends, opportunities and threats identified by market research. One major challenge is to ensure support for projects that do not fit neatly in a single strategy area. Projects that can help set the overall strategic direction of checkoff-funded efforts and priorities among investments in specific strategies may be more important to the industry, but get less support for funding simply because there is not a single strategy group or committee to advocate for them. Planning for 2008 reportedly involves fairly sharp cuts from 2006 budget levels at a time when demand for market research team professional services appears to be expanding as a result of positive experiences with the revitalized program and new staff. Given the potential of good market research to help target and increase returns on other resources, it will be important to ensure that short term savings on the market research budget do not result in less cost effective investments elsewhere. CBB Market Research Audit iii Market Solutions LLC

5 A Broader Strategic Mission to Help Set Priorities. The challenge is to ensure that there is continued support for single strategy-based efforts, but also for looking at implications that will be useful for more than one strategy. The Market Research Group can play a role as a strategic brain trust for the overall beef industry, providing what one Beef Board member called, the view from 30,000 feet, as well as an independent perspective on potential returns on investment across strategies. This will require clear support from industry leadership and management for a broader Market Research Group mission. The Market Research Group provides staff support for the Joint Market Research Working Group, which is advisory to the Joint Research and Knowledge Management Group. This group includes leadership from the other strategy committees, but does not have the full status of a committee, as do the committees charged with oversight of technical research areas. Scheduling has caused problems with attendance at recent meetings. Working Group leaders and market research staff are making efforts to increase participation and usefulness of the Market Research Working Group. Staffing. The market research staff is currently called upon to serve as managers for a relatively large number of contract research projects. They work with in-house clients to develop scopes of work and budgets for projects, solicit bids, evaluate proposals, make selections, manage project design, communicate with in-house clients and suppliers, oversee field work and reporting and disseminate results. For the FY 2007 AR, this involves management of 30 separate project budget lines. With this many projects to manage, while also serving as technical advisors to in-house clients, responding to questions from in-house clients, state beef industry councils and the general public. It is not surprising that all projects are conducted by vendors on a full-service basis, albeit with strong guidance and oversight from market research staff. The current two-person market research team also has important responsibilities for planning and budgeting and administrative reporting. The previous Executive Director of Market Research reports that he made 15 committee presentations at a single board meeting. Strengthening Dissemination and the Market Research Team. Given the volume of market research being conducted it seems likely that returns on the checkoff investment could be increased if additional professional staff resources were available to analyze results of the research that is purchased on a syndicated basis, as well as some custom studies and tracking research, through more in-depth analysis and reporting. Current plans call for the market research staff to be supplemented by half of the time of a dissemination specialist who will also work on disseminating technical research. It would be useful to consider the potential payoff to adding a full-time professional staff member with both communications and market research experience to take the lead on market research dissemination and also play a role in analyzing and reporting on syndicated studies and trend data that are purchased by the program. It is important to recognize that there are fundamental differences in dissemination requirements for market research and the technical research conducted by other programs of the Center for Research and Knowledge Management. A dissemination specialist without a background in market research is likely to require extensive guidance and oversight, further burdening the current market research team. The overall program and the industry is likely to benefit from an additional professional market research staff member, even if it has to be paid for by reallocating funds currently used to purchase research. Dissemination can also be strengthened by having research contractors prepare draft report summaries and press releases intended for more general distribution to state beef councils and other beef industry stakeholders via the Extranet, beefresearch.org and other media. The full report provides additional detailed findings. CBB Market Research Audit iv Market Solutions LLC

6 Table of Contents Executive Summary...i Introduction 1 Objectives..1 Methodology and Approach 2 Project Planning 2 Interview Guide.2 Project Interviews. 3 NCBA s Market Research Program...3 Staffing and Market Research Group History..4 Professionalization and Centralization of the Market Research Function...5 Stakeholder Clients for NCBA Market Research.6 Client Perspectives on the Market Research Group...7 Market Research Program Accomplishments..8 Future Opportunities.8 Communicating Market Research Findings and their Value for Strategy 9 Performance Objectives for the Market Research Program..10 Strategies, Tactics and Performance Measures 12 Market Research Budgets and Spending...14 Future Budget Resources. 15 Organizational Issues 17 A Broader Strategic Mission to Help Set Priorities 17 Staffing. 18 Strengthening Dissemination and the Market Research Team..18 Conclusions and Recommendations...19 CBB Market Research Audit v Market Solutions LLC

7 Market Research Program Audit: A Strategic Evaluation of Checkoff-Funded Market Research Managed by the National Cattlemen s Beef Association The Cattlemen s Beef Promotion and Research Board (CBB or The Beef Board ) retained Market Solutions LLC to conduct a project evaluation audit of its Market Research Authorization Request (AR) (R ), a checkoff-funded project managed by the National Cattlemen s Beef Association (NCBA). Beef Board funded market research is intended to contribute to the beef industry goal of increasing beef demand 10 percent by 2010 by guiding and measuring progress of activities to address specific beef industry product, industry resource, safety and nutrition strategies. Success will require the U.S. beef industry to address intensified competition, changing consumers and a variety of other critical issues. Overall objectives of this audit are to: 1) Review performance and performance measurement as part of the 2006 and 2007 programs and 2) Provide strategic recommendations based on an evaluation of the current organization of the checkoff's market research function and findings on its work with stakeholders. The Beef Board has specifically requested that the audit: Review FY 2006 and FY 2007 ARs. Determine whether objectives have been achieved for the FY 2006 AR. Examine current performance measurement: o Do FY 2006 objectives provide adequate accountability? o How can measurability of future objectives be increased? o Consider objectives of the FY 2007 AR in answering the above. Assess strengths, weaknesses and opportunities of the checkoff s market research function. Consider options for improving interactions with end-users such as the advertising function, issues management, retail, etc. Provide strategic recommendations to improve the efficiency and effectiveness of the checkoff market research function. It should be noted that while this project is called an audit, it is not intended to provide a financial audit and no review of financial documentation has been conducted. CBB Market Research Audit 1 Market Solutions LLC

8 Methodology and Approach In undertaking this assignment, Mark D. Newman, President of Market Solutions LLC met with Beef Board and NCBA staff, reviewed program documents, including ARs, program information, evaluation reports and a sample of research reports produced by the market research program. Based on this review, a sample of people to be targeted for interviews was selected and an interview guide was developed. Project Planning. After review of a variety of background documentation provided by Beef Board Director of Evaluation Rich Otley, a project planning meeting was held in Denver on April 13. Mark D. Newman, Market Solutions LLC s President and project director for the assignment had the opportunity for detailed discussions of audit objectives and the market research program. This included meetings with Rich Otley, John Lundeen, Executive Director of Market Research, Martin Roth, Director of Market Research, Rick Husted, current NCBA COO and previous Executive Director of Market Research, and J.O. Bo Reagan, Vice President, Research and Knowledge Management. It also provided an opportunity to meet a number of users of NCBA research and discuss other stakeholders to be targeted for interviews as part of the assignment. The CBB and NCBA then provided a significant amount of additional documentation for review that contributed to understanding the market research program, the kinds of market research products that are developed, the objectives, activities and budgets of stakeholder groups that use checkoff-funded market research, and findings of selected audits of some of those programs. Interview Guide. These provided the basis for developing an interview guide used to get feedback from selected clients and stakeholders. The aim is to obtain feedback on clients overall experience with market research program, products, dissemination and staff, including examples of strengths, weaknesses, and opportunities for improvement. This included assessment of perspectives on: How satisfied internal customers are overall with support from the market research program. How well market research AR performs overall relative to plan: o Meeting technical objectives o Providing useful, actionable findings and recommendations o Meeting timetables, budgets, performance goals How well the stand-alone market research program works organizationally in contributing to other client program elements. As appropriate, those interviewed were also asked about: Experience designing, contracting for and using market research products: o Whether the program has added professional insights, independence and rigor that make research more reliable, useful to help increase impacts of programs? o How results are used to provide useful, strategic and actionable recommendations? o Whether reports and presentations are clear and easy to understand and use? o Are there efficiency gains from having a central market research program? o Do projects meet your needs for performance measurement, timing, cost? o What disadvantages are there, if any? What opportunities for improvement? CBB Market Research Audit 2 Market Solutions LLC

9 Experience working with market research staff: o How successful the market research team has been in developing partnerships with clients and subcontractors, contributing to the team, providing what is needed, bringing useful market and program insights, (recognizing that there have been recent staff transitions). o How market research staff have contributed to identifying opportunities for market research to contribute to client programs, project design, selection, management of suppliers? Experience with market research dissemination Overall efficiency and cost effectiveness- contribution to helping get the most from research dollars Opportunities for improvement Expected needs for the future key issues, products, staffing, etc. Measuring performance beyond evaluating market research based on whether projects are completed as specified, are there other expectations from the market research program? Project Interviews. In-person and telephone interviews were conducted more than 20 people, including NCBA staff, Beef Board members and State Beef Industry Council staff, during April June, Those selected were either identified by Beef Board and NCBA staff, recommended by others interviewed, or identified by Market Solutions LLC. Some people were interviewed multiple times. They included: Beef Board members and staff, including representatives of the Research and Market Knowledge Group, Market Research Working Group, Evaluation Committee, Operating Committee and others. Current and previous NCBA Market Research Group staff. NCBA management and staff responsible for the main strategy areas that are in-house clients of the Market Research Group. State beef councils Findings and recommendations presented in this report are based on those interviews, review of program and evaluation documents, together with Market Solutions LLC s almost twenty years of experience conducting market research and providing strategic consulting to food and agriculture clients, especially those in the meat, poultry and seafood industries, and in working with the retail, foodservice and processing industries in the United States and worldwide. NCBA s Market Research Program NCBA s AR presentation sets forth the market research program in clear and understandable terms. The overall program includes: 1. Syndicated studies aimed at providing benchmarking and helping the checkoff to stay aware of consumer trends and emerging issues. 2. Tracking studies provide measurement of impacts of advertising and issue management efforts. 3. Custom research is developed based on needs of internal clients and/or leadership from the market research team. 4. Assessment research is intended to serve as an industry resource in that it does not support a specific project effort. This includes qualitative research, attitudes, awareness and usage surveys, product specific efforts, such as the ground beef market assessment CBB Market Research Audit 3 Market Solutions LLC

10 5. Issues research tracks messaging needs and impacts of issues management efforts. The Market Research program for FY 2006 and FY 2007 is organized around support for four beef industry strategies: 1. Product: Enhance the value proposition of beef in the marketplace; 2. Industry Resource: Provide knowledge resources to help strengthen the marketing and business climate for beef; 3. Nutrition: Strengthen beef s position as a healthful food and as the premier nutritional protein in the minds of consumers and influencers; 4. Beef Safety: Maintain and increase consumer confidence in beef safety. Beef checkoff-funded organizations have a long history of market research. Traditionally, much of the market research was conducted as part of the consumer marketing function, with a variety of market research projects and syndicated data products purchased and managed by individual groups throughout the organization. Staffing and Market Research Group History The current effort to revitalize and strengthen the checkoff s market research function is really only 18 months old, and even then has involved significant staff changes. An effort to centralize and professionalize the market research program was begun in However the Executive Director of Market Research at the time, Susan Lambert, was tapped to become NCBA s CFO about 6 months after the decision. As with many other positions at NCBA, uncertainties resulting from the Supreme Court challenge of the beef checkoff made hiring a replacement difficult. The post remained vacant until December, 2005, when Rick Husted became Executive Director of Market Research. He held that position until October, 2006, when he was named NCBA COO. Martin Roth joined the team as Director of Market Research in July, John Lundeen, the current Executive Director of Market Research joined the staff in January, Previous experience as a contract research project director with NCBA has helped John to hit the ground running in his new assignment. One of the challenges in getting feedback on the market research program as part of this audit has been the relatively short time span during which in-house clients, volunteer directors and state beef councils have had the opportunity to work with the current team. Much of the feedback received is based on experience during 2006 with Rick Husted and Martin Roth. Findings indicate that both were very active in working with a wide range of in-house and external industry clients and committees and are highly regarded for their professionalism, energy, responsiveness and participation as client team members as well as managers of outside research providers. The market research team also had the support of a Manager of Consumer Research Information for part of That position originally had some responsibility for management of research projects, but became focused on research dissemination when the Director of Market Research was added. The position is CBB Market Research Audit 4 Market Solutions LLC

11 currently vacant, with recruiting underway to hire a dissemination specialist who will be shared with the technical research areas of the Research and Knowledge Management Group. Professionalization and centralization of the market research function over the last 18 months is generally perceived as a very positive development. Strategy teams generally appreciate the technical guidance and collaborative support being received from the Market Research Group. They are also pleased with new insights being gained through custom research projects and improvements in reporting. While staff turnover means that the current market research team is relatively new, feedback on their contributions to research thus far is very positive. The revitalized market research program is reported to be increasing the usefulness of research and analysis in helping to design and implement activities intended to protect beef s market share and increase consumption through programs at both the national and state levels. Among those interviewed, satisfaction with the support they are receiving was widespread, and some voiced interest in increased support and involvement in work with the market research team. With the 2006 AR, most checkoff-funded market research was consolidated within the Market Research AR, though a few projects remain in specific strategy area budgets. For example, purchases of FreshLook retail scanner data, producer surveys conducted as part of the Producer Communication AR, and a variety of activity evaluation surveys conducted in association with conventions and seminars. Market research staff report that they are available, and sometimes called upon to contribute perspective and professional advice in research design and analysis for activities that fall outside the AR. Staff believe that the most significant consumer research now falls within the Market Research AR. Budgets for market research increased from $1.3 million in 2005 to $2.3 million for Staff indicate that in part this represents recognition of the value of having a professional market research function to support other program areas in the organization. While much of the increase represents consolidation of activities and budgets within the market research program area or AR, the increased level of professional staff is enhancing the checkoff s ability to design and manage forward-looking custom research projects that provide critical strategic guidance for future programs. The FY 2006 and FY 2007 market research programs include the following elements: Product Research Tracking Consumer Behavior and Attitudes toward Beef Advertising and Brand Image Tracking Retail Program Development and Assessment New Product Development Industry Resource Collection and Dissemination of Market Research Consumer Issues Research Assessing Consumer Market Opportunities CBB Market Research Audit 5 Market Solutions LLC

12 Nutrition Nutrition Market Research Consumer Nutrition Attitude Tracking Beef Safety Consumer Safety Issues Tracking Most of the projects in the FY 2006 and FY 2007 ARs represent projects being conducted by the Market Research Group as a service to other strategy groups, specifically Advertising, Retail, Food Service, New Product Development, Nutrition, Safety and Issues Management. It also provides a service to the Evaluation function through work on the demand index and consumer satisfaction measurement. Stakeholder Clients for NCBA Market Research The Market Research Program works in cooperation with the Joint Market Research Working Group which in turn is linked to the Research and Knowledge Management Group, though not a formal subcommittee. The Market Research Working Group is identified as the Committee that reviewed some parts of the 2006 Market Research AR, but is not shown as a reviewer of the 2007 Market Research AR. A significant amount of effort was expended during this audit to try to understand the reporting and oversight relationships for the market research program and budget. While it is clear that the Beef Board Operating Committee makes final funding decisions, ensuring on-going support for the broad-based, professional market research program that will offer maximum value to beef producers and the beef industry is likely to require some clarification of oversight and reporting relationships. Nine program strategy areas are identified as internal clients for checkoff-funded market research, including: Consumer advertising Retail Foodservice New Product Development Nutrition Issues Management Health Program Influencers Youth Education Beef Safety Research Individual state beef councils are also considered clients for the market research program. Checkoff staff have provided briefings for some state boards, and others have interest in specific research projects. For example, Texas and California were identified as especially interested in research conducted on the Hispanic market. Iowa was identified as especially interested in research on brand enhancement and youth. Washington State has worked with the market research team to get state level analysis to help in guiding investment of their checkoff funds at the state level for maximum impact. CBB Market Research Audit 6 Market Solutions LLC

13 The market research program is also called upon to respond to a variety of information requests from industry, the press and the general public. While some market research information is considered proprietary and confidential, some is very important to disseminate in support of beef industry goals. One important challenge facing the Market Research Group and its clients is to determine an appropriate balance that takes advantage of opportunities to provide information to help maintain beef s market share and build consumption, while avoiding the pitfalls of providing information that can be used negatively by advocacy groups. Client Perspectives on the Market Research Group Interviews found very positive interactions with individual strategy team clients. Most recommendations for improvement reflected desire for additional services and strategic support from the research group or interest in more cross strategy involvement in planning research projects for other strategy teams. Interview findings underscore that different strategy teams look to the Market Research Group to provide very different services. Some see the group as full partners, providing guidance on the best technical ways to use market research to accomplish overall strategy goals; Some see the group as a service-provider, though working as team members in design, contracting, management and interpretation of results of specific projects. It is acknowledged that the Market Research Group can provide professional guidance to conduct better projects and that their knowledge of contracting helps get better value; For others, the market research AR is seen primarily as a repository for budget resources that demonstrates that there is no duplication of effort. In one case, the feeling is that while it may be useful to take advantage of the market research team for feedback on survey question wording, the strategy area has its own market research expertise. A few people interviewed believe that their own specialized technical expertise is more important than the resources that the market research team has to offer for at least some projects, and would prefer to have resources less centralized. In these specific cases, the people interviewed report some very positive experience with the market research team as well, so that the issue may be related to the length of time they have had the opportunity to work with new market research staff and confidence that they understand beef markets. CBB Market Research Audit 7 Market Solutions LLC

14 Market Research Program Accomplishments Among some of the specific market research program accomplishments cited in interviews and project reporting: Some strategy areas report that the centralized market research program and staff have helped them get better and more actionable information, and more value from their market research resources, helping to increase returns on producer checkoff investments. In some cases, research program staff members are credited with working with contractors to help make market research reports more user-friendly and useful for strategy group clients. Where work is not considered proprietary or confidential, they are helping to make findings available to the broader audience of beef industry stakeholders and the general public. To help strengthen beef s brand, market research is credited with helping to target the next generation of advertising and promotional messaging to address both nutrition and enjoyment. Market research is helping cross functional teams develop the next generation of new beef products; providing insights on opportunities to increase the value of ground beef; helping to identify opportunities to build beef sales in the youth market, with Hispanic consumers and with customers for natural and organic products. It is also contributing new insights and approaches to measuring consumer satisfaction. This is in addition to the advertising and brand image tracking research and syndicated data on retail and foodservice beef sales, along with issues tracking research that have long been part of NCBA s beef market research program. An enlarged professional Market Research Group is permitting the checkoff to conduct relatively more custom research aimed at providing guidance for the future. The role of the market research program in supporting individual strategy teams and avoiding duplication of effort is generally well accepted. Future Opportunities Now that the Beef Checkoff has an expanded professional market research team in place, it is apparent that the industry could get more value from its market research investments by making fuller use of findings on projects for specific strategic objectives and syndicated data that offer insights that can be useful for other strategies as well. The challenge is to have the staff time available to do the analysis and share the results. Another opportunity ahead, which the market research program is beginning to address, is to play a growing role in providing the research, analysis and consulting support needed to set overall priorities among strategies and manage beef checkoff resources for maximum return on producer investment. Ideally, in addition to support for individual strategy areas, some portion of the market research program, perhaps 20 percent, would be devoted to looking at lessons to be learned that affect multiple strategy teams and help to address questions such as: What emerging market trends, opportunities and threats will be critical to beef markets and competition in the future? For example, what are the likely implications of growing demand for branded beef? local products? case-ready products? country of origin labeling? or CBB Market Research Audit 8 Market Solutions LLC

15 even increasing use of feed ingredients to produce biofuels? or transportation capacity limitations that may affect feed movements? How can producer leaders and the beef industry determine potential payoffs to investments among strategies? Communicating Market Research Findings and their Value for Strategy. While an increase in professional staff and centralization of market research projects with a combined Market Research AR is relatively new, market research has a long history in beef checkoff-funded organizations. A review of Annual Reports of Research back to 1996, found that at the time that the National Cattlemen s Association and the Nation Livestock and Meat Board merged to form NCBA, many of the syndicated research and tracking studies that are still part of the program were being contracted for. Likewise, using market research as a basis for strategy development was an important focus as well. For example, the 1996 checkoff Research Annual Report was entitled Optimizing the Future of a Consumer-Focused Industry. Projects that year measured factors driving customer satisfaction with beef as well as beef meals consumed at home and in commercial foodservice establishments. Tracking research in 1996 found that with Beef: It s What s for Dinner advertising, consumers planned to prepare almost 8 percent more beef meals than they did in Over time, the emphasis on market research in the overall Research Annual Reports has declined, and market research gradually moved to the back of the report, presented more as a basis for tracking results and market impacts of other programs, than as a foundation upon which priorities for strategy are based. In some cases this may be an issue of presentation, as market research appears to have provided important support for successes in addressing beef safety, product enhancement and human nutrition. The report highlights market research efforts that go beyond tracking and measurement, such as research on key attributes that are important to youth new product development, and market research s contributions to uncovering consumer usage and attitudes toward ground beef and enhancing the beef brand. These are important contributions of the revitalized market research program. Nonetheless, market research is still discussed at the end of the report, and most of the focus is on tracking and measurement, rather than market research as a strategic tool for targeting efforts of individual strategies and helping to guide allocation of checkoff resources for maximum impact. As a result, readers might get the impression that market research is a necessary evaluation and tracking tool, without understanding that it can, should be and is a key to Creating Opportunity with Knowledge, the title of the most recent report. The Research and Knowledge Management Group s new Quarterly Research Update, first issued in April, 2007, identifies some of the important FY 2007 research that has been completed, and aimed at providing guidance for market growth, including consumer testing of new cuts to add value to the Chuck Roll, insights that can help build fresh meat sales with the Hispanic market, findings on how maximize usage of beef recipes, and identification of high potential new hand-held/convenience and youth-directed products. It is important that the shift toward relatively more strategic market research projects with potential to influence markets and producer returns is being recognized. These are still listed toward the back of the report, CBB Market Research Audit 9 Market Solutions LLC

16 suggesting that they may be less important than more technical research. It will be important for this shift to get additional publicity through all of the channels that disseminate checkoff-funded research results. Performance Objectives for the Market Research Program As specified in Market Research AR s for FY 2006 and FY 2007, the primary goal of the program is to provide the industry with insights into consumer/influencer attitudes and behavior to facilitate improved program planning and help drive beef demand. Strategic objectives are spelled out in more detail in four strategy areas: Product, Industry Resource, Nutrition and Beef Safety. While some individual projects have been moved around between 2006 and 2007 AR s, the overall program is very similar. Performance measures, which are called project or tactical objectives in the 2006 AR, are also similar, and relate primarily to completion of market research project activities aimed at providing measurement. Since the market research program is a service provider to strategy group clients, it would be useful to develop specific performance measures that capture the market research program s effectiveness in providing market insight and strategic direction that can contribute to successful implementation of programs by specific strategy groups, and helping to avoid ineffective programs, both of which contribute to improved return on the producer checkoff investment. The following table summarizes market research strategies, tactics and performance measures specified in the 2006 Market Research AR followed by comments on Audit findings. CBB Market Research Audit 10 Market Solutions LLC

17 Strategies, Tactics and Performance Measures Specified in the FY 2006 Market Research AR Strategy 1: Product Research Leverage beef s appeal among consumers while driving demand through innovation, increasing value and quality throughout the chain. Objectives: Support strategic objectives related to nutrition, positive eating experience, convenience and value. Tactic 1A: Product Market Research, including the following projects: Syndicated Food Consumption/Trends Research Advertising and Brand Image Tracking Advertising and Brand Image Enhancement Foodservice Volumetric and Trade Research Retail Meat Purchase Research Retail Communication and Program Assessment Strategy 2: Industry Resource Establish the checkoff and NCBA as a resource for all industry segments to catalyze growth opportunity, create positive change and protect the business climate for beef. Tactic 2A: Market Data Collection/Dissemination of Market Research Update Extranet for State Beef Councils and provide with research results Summaries for Research Annual Report Publish relevant research info in Monday Memo, Issues Update, Beef Bytes Generate research results for team leaders and other key stakeholders Tactic 2B: New Product Development Market Research (moved to strategy 1 in 2007) New Product Concept Development Ground Beef Assessment and Product Development Research Tactic 2C: Brand Enhancement Opportunity Research Tactic 2D: Competitive Assessment Market Research Tactic 2E: Consumer Issue Research Strategy 3: Nutrition- Protect beef s image as a wholesome, nutritious food and increase consumer and influencer understanding of beef s role in a healthful diet. Tactic 3A: Nutrition Market Research Nutrition and Enjoyment Integration Market Research Family Dynamic/Gatekeeper Nutrition Market Research Meat Case of the Future Market Research Consumer Nutrition Issue Research Tactic 3B: School Environment Market Research Assessment of School Nutrition Education Programs/Materials Assessment of School Foodservice Dynamics and Opportunities Nutrition Communication Assessment and Message Testing Strategy 4: Beef Safety Maintain and increase consumer confidence in beef safety Tactic 4A: Beef Safety Tracking Collection and Dissemination of Market Research Additional Funding: Veal Research Strategy: Go To Market New veal muscle profiling product research and consumer research Tactic: Veal Consumer Market Research- Establish benchmarks for future tracking CBB Market Research Audit 11 Market Solutions LLC

18 Strategies, Tactics and Performance Measures Strategic objectives as specified in the Market Research ARs are not sufficiently clear and consistent, in part because of differences in the tone of objectives specified for individual strategy areas that are supported by market research. For Product, the objectives identify program areas supported: for Industry Resource, the focus is on information dissemination although projects conducted under this strategy include some very key strategic work. For Nutrition and Beef Safety, the goals relate to consumer impacts of other NCBA managed programs, such as increasing the share of 8-12 year old girls who say beef is very healthy or pretty healthy, or maintaining attitudes toward or confidence in the safety of steaks or ground beef at a certain level. Market research can help to measure these items, and provide strategic guidance based on research findings that can support programs aimed at achieving such goals, but the goals as specified do not seem appropriate as measures of the success of the market research program. For FY 2007, some of the tactics have been shifted between categories, and project objectives have been renamed performance measures, but the same issues remain. Overall strategic objectives are sometimes specified as factors on which the market research program can provide strategic guidance and measure progress, but not influence directly. For specific tactics and projects, objectives specify research goals in terms of what is to be measured, identified, analyzed or disseminated. Market research projects included in the 2006 AR are reported to have generally been completed on time and to the satisfaction of internal clients. Performance measures are generally specified so that completion of a project meets the objective. Interviews found very positive interactions with individual strategy team clients. Most recommendations for improvement reflected desire for additional services and strategic support from the research group or interest in more cross strategy involvement in planning research projects for other strategy teams. Looking to the future the program might benefit by more clearly specifying overall strategic goals to which the market research program is intended to contribute, and performance measures that capture those contributions, as well as measuring execution of the scopes of work specified for individual tactical activities. This can be important in giving the market research team credit for serving as internal strategic consultants to the organization, and not just managing research contracts to ensure that they deliver what was specified in the scope of work. Performance goals are currently specified based on specific projects. While there are clearly efforts by the market research staff and successes at addressing cross cutting issues, it would be useful to specify goals for the market research team that capitalize on findings and market insights gained from the full range of research projects being conducted. For example, work on nutrition and food safety addresses food consumption that involves products obtained through foodservice or retail channels. CBB Market Research Audit 12 Market Solutions LLC

19 Just as the beef industry s strategic plan has long term objectives, such as increasing beef consumption 10 percent by 2010 and providing a new measure of consumer satisfaction with beef that can be tracked, it would be useful for the market research program to have specific goals related to the research it is managing. For example: Syndicated research purchased by the Market Research Group provides a measure of the number of servings of beef by commercial foodservice establishments. Discussions with the strategy team indicate that this may be the best measure of servings currently available, but the checkoff s foodservice strategy could be more effective if it had a more complete measure of away-fromhome beef consumption. The Market Research Group is working with the Foodservice Strategy Team and a supplier to assess options for developing measures that will provide improved coverage and a better basis for decision making and tracking. Market research staff already work with individual strategy teams to determine what kind of research projects might best contribute to their goals and objectives. This leads to development of projects and budgets that become part of the market research AR. While it appears that the potential contributions of market research are well discussed in designing individual projects, it could be useful to more explicitly set forth performance goals for individual projects. For example: For Foodservice: o Measure change in the number of foodservice servings of beef by product type and market segment. o Identify top key drivers likely to increase beef servings through foodservice. o Identify trends in foodservice likely to create opportunities for specific products, including new products, and growth potential in different foodservice segments. For Retail: o Measure total volume and value of beef sales at retail by cut and region, and sales of branded beef, specific new products developed with checkoff support, value-added products, natural and organic products, etc. o Identify regions, market areas and retail chains where sales of specific beef products are above and below average. o Develop profiles of regions and retailer marketing areas selling more or less of specific beef cuts or products. o Identify key drivers of above and below average sales of specific cuts that can be useful in helping to target the checkoff s retail marketing strategy for maximum impact. o Link beef sales, promotion data and retailer card data to better assess market impacts of different efforts to help identify drivers of effective beef promotion in different chains, regions and consumer market segments. CBB Market Research Audit 13 Market Solutions LLC

20 Market Research Budgets and Spending Market Research fiscal years actually overlap. FY 2006 covers the period October 2005 to December, 2006, while FY 2007 covers the period October, 2006 December, This is apparently because some of the market research projects commissioned during the year cannot be completed in 12 months. Market Research Budgets and Spending, FY $2,500,000 $2,000,000 $1,500,000 $1,000,000 Approved Budget Actual Expenses $500,000 $ Source: Market Research AR s for 2006 and 2007, Market Solutions LLC analysis The approved market research budget fell from $1.4 million in FY 2002 to $665,000 in FY 2003, rebounded to $1.2 million in FY 2004, and $1.3 million in FY For FY 2006 it was increased 72 percent to $2.3 million (in large part due to centralization). The approved AR then declined 9 percent for FY Further cuts are reportedly under discussion for 2008 despite strong interest voiced by internal clients who are starting to appreciate the value that the revitalized professional market research team can offer to their ability to better target program resources for maximum impact. Actual spending as a share of the budget authorization has ranged from a low of 76 percent in FY 2004, to percent in other years. Spending for FY 2006 shown on the chart above represents spending through December 15, 2006 only. Staff believe that the gap between spending and the approved budget represents an issue related to timing of completion of work and payment of invoices. It would not be surprising if volatility in budget allocations and staff turnover affected the ability of the program team to complete all budgeted work on time. Interview findings indicated general satisfaction with completion of projects and timeliness. Where delays were mentioned related to completion of one brand research project, they were attributed to research findings that suggested the need for additional qualitative research, which in turn delayed planned quantitative research. CBB Market Research Audit 14 Market Solutions LLC