Editor’s note: Wander Meijer is managing director at Asian Commercial Research (ACR), a full-service agency located in Hong Kong and Guangzhou (China). For more information visit the company’s Web site at www.asian-research.com.

The degree of sophistication of market research is a reflection more of the development of a country’s economy than the cultural characteristics of that country. Consequently, market research in the United States is highly advanced, while it is less so in many Latin American and Asian countries. One of the favorite topics among market researchers in developed countries is the conversion researchers have undergone from information providers to solution providers - presenting valuable insights directly to the management of the client company. Those kinds of discussions are a luxury unavailable to researchers in Asia. Issues such as finding qualified researchers, the (im)possibilities of data collection, and the latest regulations imposed by China’s Central Government regarding market research are often a greater concern.

This article aims to provide an overview of the state of market research in Asia. Asia is a market of vastly diverse countries, with strong differences in population size, geography, culture and economic development. Often for cultural reasons, finding one solution for a research study over several countries - something many American clients require -- is not always possible. However, developing technologies such as CATI, CAPI and Internet studies are increasing the application of consistent methodologies across different countries.

Cultural or economic constraints

Until recently, market research was not so widespread in Asia; some would say this was due to economic development, others would say it was due to cultural differences, i.e., that Asians would not give open and honest answers to strangers. This may certainly have been the case in the People’s Republic of China, where not too long ago people might disappear if they were suspected of providing information to enemies of the state. Nowadays China is home to about 1,000 research agencies, varying from one-person outfits to global giants such as ACNielsen, GfK and Taylor Nelson Sofres.

While most topics are fair game for market research data collection some aren’t. For example, questions about policy issues and polls about the popularity of President Jiang Zemin are still clearly off limits. Most Chinese research agencies adopt measures of self-censorship when designing questionnaires, simply because they do not want to get into trouble. In August, Chinese authorities issued new regulations on the conduct of market research, restricting the activities of research agencies. Some major criteria are the approval of the questionnaire, including post-pilot revisions, and the approval of final data. The latter condition especially has created discontent amongst many U.S.-based operators, many of then using non-disclosure articles in their contracts. I would view this very much as a temporary measure. China has changed dramatically over the past 15 years, something that is often not recognized in the U.S., and will continue to do so. With its current economic development and desired entry into the World Trade Organization, China will simply have to follow certain rules that are common practice in the international business community.

Methods of research

When considering the size and the limited infrastructure of many Asian countries, conducting a nationally representative face-to-face study forms a challenge that you may prefer to avoid. Nevertheless, face-to-face research is by far the most often applied method of research (certainly there is no shortage of face-to-face interviewers!), most of the studies being confined to urban centers. Mail services are not always reliable, making postal surveys simply not feasible in many countries. Never mind people returning it; in many cases it won’t even be delivered. A response rate of 7 percent is often considered acceptable.

However, the telephone infrastructure has greatly improved in Asia; any serious business now has a telephone line, making business-to-business research by telephone research technically possible in virtually any Asian country. However, interviewing consumers by telephone is still a lot more difficult. In many countries the telephone penetration among household with reasonable incomes (the targets of many research buyers) are 60 percent or higher, but most often there are no (up-to-date) telephone directories available. Random digit dialing can be an expensive solution if the composition of the numbers is not known, resulting in many wrong numbers when RDD is used. More importantly, an overview of who has a phone and who does not is not always available, so a sample frame cannot be made and one cannot apply weighting.

But research by telephone has made inroads in Asia. Asians are not so different from Westerners: when you address them properly and in a polite way, and employ well trained and knowledgeable interviewers, response rates are good - often even higher than in Western countries. This is especially true for business-to-business research. Many local research companies will use pencil-and-paper telephone research, while the international players are all switching over to CATI.

CATI is definitely on the rise. CAPI is being used more often. And in the more economically advanced countries experiments with Web-based interviewing are being conducted. Internet penetration in Hong Kong and Taiwan is on a par with European levels (still behind the USA) and the Singapore government wants to have all households linked to the Internet within three years. A recent development is the creation of CAPI@HOME by Gallup Korea, using the model and support of NIPO, an Amsterdam-based research agency, to create a nationally representative panel of PC owners.

Response rates

Comparing non-response rates on face-to-face research across different countries can be difficult; often it is defined in different ways or simply not registered at all. The best way of comparing non-response across countries is by comparing telephone research, preferably of a multi-country study being conducted from one central location (by native-speaking interviewers). Hence, the set up, briefing, instruction and supervision of interviewers, and the CATI program are all identical. In recent years our firm has conducted thousands of business-to-business interviews using CATI in Asia, from India to Japan to Australia, and in many cases for American clients. Earlier this year we conducted a survey among 3,500 IT decision makers in nine countries. Because of the low response rates, IT studies are generally regarded as the most challenging studies in Western countries, but in most Asian countries this target group is not yet over-surveyed. In many countries interviewing this target group is not a problem and the non-response rates correlate greatly with the degree of economic development, as demonstrated in the table on page 28.

Taiwan (and to a lesser extent Singapore) is an exception because of the importance of IT to the economy of the country. Most Taiwanese respondents are interested in the subject and likely to cooperate in a survey. Although it is sometimes difficult to conduct telephone research from Hong Kong into India due to the poor quality of the telephone lines, listening in to CATI interviews can be very amusing:

Interviewer: "Excuse me, sir, which company services your computer hardware?"

Respondent: "It is my brother. He lives around the corner and he can usually come over when I call him."

Interviewer: "OK. And can you give him a score from 1 to 5 please (on which 1 is low, etc.)"

Respondent: "Oh yes, he is not bad. He used to work for a much bigger company, but now he likes to work for himself."

Interviewer: "So, on a scale from 1 to 5?"

Respondent: "Oh yes, I give him a 10 if there is a 10. But I don’t like his wife very much though. I give her a 3."

Telemarketing

Asian respondents are not yet weary of research and the market hasn’t been spoiled yet by telemarketers. However, in the more developed countries this may be just a matter of time. Basically there is nothing against telemarketing, despite the displeasure of many market researchers towards these information gatherers (or are they, after all, just simple salespeople?). Telemarketing is the natural colleague of telephone research, providing the telemarketing companies clearly indicate the purpose of the call - sales and not research. In Hong Kong such a distinction is not always necessary -- before you have the chance to pose a question, the promotion has already been offered. In comparison to the Netherlands (my native country), the average telemarketer is very straightforward and telemarketing is being applied very frequently in Hong Kong. Most telemarketing companies operate out of small backyard rooms with a lot of salespeople. The biggest nuisance is that the high frequency and low quality telemarketing is spoiling the market for telephone research.

Strategic advice and consultancy in Hong Kong and China

Market research in China is mainly conducted for multinational corporations; thus far most local companies do not use market research. This reflects the business strategies of Chinese companies, who are more sales-driven than marketing oriented. Consequently the information needs of local companies are basically confined to "What does the competition do, what are their prices, discounts, most important clients, distribution channels," etc. Many want this information on an individual company level, something that a market research agency is not allowed to deliver. Information about customers and markets is much less in demand. Many companies, especially in Mainland China, (still) perceive the market as a seller’s market and not a buyer’s market.

Most companies may look for direct information about the competition. But sometimes advice is asked for that exceeds the common knowledge of market research companies. One of my first briefings in Hong Kong was at one of the largest construction enterprises. They intended to build an oil refinery in Fujian, China. This plant would mainly produce for the export market, with imported oil from the Middle East. The information needed was clear: How would the world oil price develop over the course of the coming years? Would there be a market for this China product? And would the investment be profitable, based on a number of assumptions? Like any self-respecting research agency, ACR likes to deliver consultancy and advice as well as information but in this case we had to decline this project.

The role of market research

While the discussion about the role of market research within the information service industry is not confined to developed economies only, in the lesser-developed Asian countries it has to be preceded by explaining its function. The function of market research is clear: the delivery of information for making marketing decisions. Which role market research has within this decision making process is determined by the expertise to translate information into management options. The opportunity to present these options to the highest management levels depends on the company that buys market research, the function and importance of information within that company and the offering of the market research agency. Most agencies deliver information, some try to package it with strategic advice and enter the market of consultancy. Of course it is possible to take a small slice of that market, but most local research agencies simply do not have the knowledge and expertise of the big global consulting firms and (increasingly) accounting companies.

In Asia we try to deliver market research at a higher level for our clients. However, the discussion about the role of market research is less relevant as long as many local companies do not know what the function of our industry is. Taking the pace of economic development of Asian economies into account it will be just a matter of time until they understand it.