For his annual contribution to our international research issue, our West Coast ad rep/roving reporter Lane Weiss traveled to Mexico City to speak with Manuel Barberena, president of Pearson, a full-service research firm.
Lane Weiss: Tell us a bit about your company’s background. How long have you been in business? What are some of the industries you specialize in researching?
Manuel Barberena: We are a 100-percent Mexican firm, which I founded in 1988. We are a founding member of the Mexican Association of Marketing Research and Public Opinion (AMAI). Our clients come from many different markets, such as fast-moving consumer goods, banking, pharma, automotive, communication, advertising, etc. Our services include quantitative, qualitative, Internet research, data mining, international research, B2B pharma and CATI.
What research methods are most commonly used in Mexico? For example, face-to-face research? Focus groups? Telephone interviewing?
In Mexico, face-to-face is still the largest way of doing research, which is completely different from the States or Europe. A lot of it is door-to-door research. The AMAI does a census every year to measure the size of the marketing research industry in our country and it is around $320 million. About 75 percent of the research conducted in Mexico is quantitative and about 25 percent is qualitative. In the qualitative area, focus groups are the most commonly used method. But in the quantitative area, almost 80 percent of the work is still done face-to-face. There is an explanation for this: telephone penetration is not as high as in other countries. It’s about 55 or 60 percent, so there is a large percentage of the population without a phone. So it is not easy to reach some respondents, especially the lower classes, and many of the products that we do research for are targeted to the lower classes and they don’t have phones so it is not easy to do research without good databases.
That doesn’t mean that we don’t do telephone research; it’s growing quite fast. It is used mainly for customer satisfaction studies for clients who already have customer databases, such as airlines, banks, insurance companies, automotive firms.
Is Internet research becoming more popular and more feasible in Mexico?
The answer is no. Yes, the industry is starting to do some Internet research. But in Mexico, Internet penetration is about 10 to 15 percent, certainly not as high as in the States or in Europe. However, we have 100 million inhabitants in our country, so that means we have 15 million on the Net. So the people who are accessing the Internet today in Mexico are the early adopters, people who are young, in the medium and upper classes, who are more educated. It will take some time for Internet research to become more popular in Mexico. In the larger cities, like Mexico City, Guadalajara and Monterrey, Internet penetration is about 25 percent. It doesn’t represent more than 1 percent of what we are doing in terms of the industry.
What are some of the problems facing marketing research in Mexico, in Latin America, and around the globe?
One of the main problems is response rate. A CASRO study in the U.S. shows that response rates are falling. People don’t want to take the time to respond to surveys. Also, governments are passing laws that will affect our industry. For example in the U.S. and Europe there are privacy laws that affect marketing research, prohibiting marketing research firms from phone calling, for example. In the states you have CASRO and CMOR, two organizations doing a great job of protecting the rights of marketing research companies. But there are always legislators wanting to pass laws that may affect research.
Are there privacy laws in Mexico and/or Latin America that make it difficult to conduct legitimate marketing research?
In Mexico, those kinds of privacy laws don’t exist yet - they will - but we don’t have problems with the laws restricting research, as there are in Europe and the U.S.
However, we are seeing some problems in what we call political research. There are some states in Mexico that have laws about the publication of polling results and how to conduct the research. There are about six or seven states that are now creating laws to control research done by some institutes, mainly in the political arena.
But within the AMAI, we have heard that there are some legislators who are interested in creating laws relating to privacy of databases, especially for banks and airlines. They don’t exist yet but I think they will in the near future.
How has the consolidation in the market research industry - in Latin America, the U.S. and around the world - affected the industry? Is consolidation helpful or harmful?
If you look back 10 years ago at the 10 top research agencies in our country, you would see only one foreign name, such as ACNielsen, and after that you would only see Mexican research agencies. About seven years ago, if you looked at the list of top firms, all of them are global companies, such as Nielsen, Taylor Nelson, Ipsos, Research International, Millward Brown, etc. So the answer is yes, the consolidation has affected our industry. And I wouldn’t say it has been helpful or harmful - it’s just a reality. It has affected local agencies like mine due to the fact that a lot of companies work at the global level and so these client companies may work with the same multinational research agency in many countries. I think there is still space for local companies to do research, because there are some techniques and some local knowledge that these global companies will never get.
Do you feel that your company’s clients have reasonable expectations about what they can learn by conducting marketing research? Do they make effective use of the information they obtain from research?
It depends on the client. There are some clients who are very well-educated in terms of how to use research. They look at research as a source of good information upon which to make decisions. And there are clients who are not that educated. In general I would say that clients are educated about research as a good instrument for decision-making. But we also find that a lot of clients are very young right now. You have market research managers who are in their late 20s. They are very bright, but they have to have more experience. Some of them, and I am referring to the client side, don’t the experience to make decisions. They are not dumb but they lack experience.
What things can marketing research companies do to help their clients use marketing research data more effectively?
One of the most important things for us as researchers is to become more like consultants. Historically, some clients see us or judge us as data gatherers. Sometimes, to them, all we do is just give the percentages from the quantitative study or the psychological results of a qualitative study. The step we have to make, and it is happening slowly, is to be seen as consultants. And to not only present results but also to present analysis to help the client make better decisions.
We also should do research on research, to look at new techniques, new methodologies that can help the client make better decisions. Few companies do research on research, looking for example at length of questionnaires, new techniques, whatever. But I think we need to do more research in our own arena to give clients better feedback on what we’re doing to help them make better decisions.
What trends do you see in the use of marketing research in Mexico? Are certain kinds of companies or industries doing more research or less research, or doing research for the first time?
As I mentioned at the beginning, the companies that do more research in our country are, as a friend of mine says, the ones you see on TV, the multinational firms in the FMCG area, automotive, pharmaceuticals, etc. These are the companies that have historically have done research. However some Mexican companies that were not used to doing research because the Mexican economy was a closed economy for the last 50 years - now it’s an open, competitive economy - are now forced to do research to learn how to make better decisions. Such as Televisa, which is the largest television network, Bimbo, a bread products company, they didn’t do research 20 years ago and now they are doing a lot of research. Mexican beer companies are also now doing a lot of research. There is also a whole new market which didn’t exist 50 years ago - the political market. And it is growing very, very fast.
Does marketing research seem to be respected by Mexican businesses? Is conducting research seen as a worthwhile expenditure?
Again, it depends on the client. One of the main objectives of the Mexican research association is to be more aggressive in terms of telling our clients the importance of research. In general terms, our business is a respected one. People respect the data we gather. But I think we need to do more to reach the medium and small businesses, who don’t believe in research and don’t spend money on it.
What things can research companies do to help improve the reputation of marketing research among Mexican businesspeople or businesspeople in general?
I covered that in my previous answer but this would be a good time to talk about AMAI. AMAI was founded 11 years ago. We started with 10 members; now we have 39 members, representing 75 to 80 percent of the Mexican research market. This is the only organization in the country that is doing a lot of work on quality standards. The question asked about improving the reputation. In terms of the association, in order to join the association, you have to be audited in terms of quality by an external agency. We have our own ISO-type system.
Are the research departments in the client companies in Mexico growing or shrinking?
Again, it depends on the client. There are clients that have large departments and some that have one person in research. It hasn’t changed in the past years. A lot of it depends on the philosophy of the company or the importance that it gives to research.
How has globalization of the world economy affected marketing research?
A lot. If you look at Mexico 50 years ago, it was a closed economy. And then in the 1990s we had NAFTA, which opened the markets to the United States and Canada. NAFTA has pros and cons but I think it has more pros than cons. One of the effects of globalization on marketing research in Mexico is the arrival of the big, multinational research groups to our country. As I mentioned earlier, the top five research companies in our country are multinational companies and that has happened because of globalization.
In Latin and South America, the size of the marketing research business is still not as high as we would like it to be. It’s in the $800 to $900 million range, but just two countries, Mexico and Brazil, make up about 65 percent of that amount. The marketing research business in Argentina is growing, as it recovers from the economic problems of a few years earlier. It is growing in Chile, Colombia and Central America.
Are most of your clients based in Mexico or do you have some U.S.-based clients as well?
According to AMAI figures, about 85 percent of clients are based in Mexico. That doesn’t mean that they are Mexican companies - it means that they are based in Mexico. You have Procter, based in Mexico; you have Colgate, based in Mexico, etc. So they are multinational companies with bases in Mexico. They have factories here, they are not just distributors. About 15 percent of the work is done with companies that are based outside our borders, mainly the United States and Europe.
Do you think more client companies will rely on a global marketing approach or will they tailor their marketing efforts - and by extension their marketing research efforts - to each country?
That’s a rather philosophical question but I would say that many companies are relying on a global marketing approach and that is evidenced by the fact that they are contracting with the global research groups such as Synovate, GfK, etc. But I think that there will always be a part of the business which is local and relies on local agencies.