Editor's note: Helen Parker is external relations manager with ESOMAR.
ESOMAR has always had a close connection to the region and this April celebrated the 20th edition of its Latin America conference in São Paulo. What ESOMAR has noticed through our presence in the region is the number of local companies attending our events. They are not necessarily trying to compete with other markets; their focus is on Latin America and they are doing well because of it.
Each year our Global Market Research report provides a review of the size and performance of the market research industry and explores how the research market continues to expand and it has always been fascinating to watch how Latin America has transformed.
Furthermore, in each Latin American country we have a representative who furthers ESOMAR’s mission to promote the value and use of market research and we’ve enjoyed watching the marketing research landscape change in this diverse region.
For this article, we consulted with several of these representatives to get an update on marketing research trends and the current state of marketing research in their respective countries. Listed by country, contributors include: Argentina – Patricio Pagani, acting managing director, Infotools Ltd.; Brazil – Suzana Pamplona Miranda, market research director, Johnson & Johnson Consumer; Ecuador – Julia Helena Carrillo, country manager, Ipsos Ecuador; Venezuela – Miguel Ron, director, Mercom; Honduras – Jorge Martin Frech, managing director, Mercaplan Central America and Caribbean.
A land of contradictions
Latin America has always been a land of contradictions where extremes meet every day. Back in the 1500s when Europeans came to the continent, some of the technologies from the big American civilizations like the Mayas, the Aztecs and the Incas were ahead of those of the Spanish and Portuguese visitors. For how advanced they were in some fields of science, in many others the indigenous peoples were terribly far behind.
Five centuries later, extremes are not the exception but the norm and things are no different within the market research industry. Latin America has always been a diverse region and with this comes the challenges of conducting research in such a varied place. From Mexico to Chile, each one of the Latin American countries has its peculiarities, its own history and a political and economical situation that defines it.
The economic growth of the region is starting to look up (although not as much as some hoped following the 2014 World Cup in Brazil) and the overall poverty rate is declining. This equals more phones with Internet access and in theory an easier way to conduct market research yet researchers still face problems in a heterogeneous region that is increasingly changing.
While many of the Latin American companies strive to jump on the digital bandwagon, some of the countries still struggle with a very poor Internet penetration.
Jorge Martin Frech, managing director at Mercaplan Central America and Caribbean, says traditional forms of data collection are still very much in use in Latin America. “Traditionally, in-home face-to-face has been the most-used data collection method. Given the economic conditions of most markets in this area, in-home fixed lines never reached high penetration rates, so we never migrated completely to CATI,” he says.
In more remote areas of this vast region, phone lines are not commonplace, or there are varying degrees of consistency, which is why the traditional method of face-to-face is still used widely. Yet, Frech adds, “There is increasing pressure to produce faster data collection such as what CATI/CAWI can provide. In the region, computer literacy is a challenge for participants, with as many as 50 percent needing to be assisted by field personnel, meaning the sample is no longer completely self-administered. Then there is the reasoning that labor prices remain low so there isn’t a great cost-saving in shifting to CASI online, despite the potential for great improvements in quality of the data.”
Of course, Frech says, there are many drawbacks to in-home face-to-face interviewing. With technology shifting from traditional pen-and-paper to handheld devices, there have been new issues such as security problems that can deter market researchers from conducting these types of interviews.
Trying to get a sample using home face-to-face data collection poses a challenge with both the upper and lower classes. Frech cites a reduced sampling frame: “The upper classes are in high buildings or gated communities where it’s impossible to be reached on one hand, but on the other, the lower class is also complicated to reach due to security reasons.”
Adding to this, Patricio Pagani, executive director at Infotools Ltd., says: “Those of higher socioeconomic levels are increasingly reluctant to open the door to interviewers, out of fear of getting robbed.”
A client case
Taking a closer look at the region, Pagani shares a particular client case that looks at the issues previously discussed. “A big consumer goods giant and one of the top-five research spenders worldwide and in Latin America asked us to assess the feasibility of migrating its brand tracking study to digital and to use an online panel to collect a sample,” he says. “Their existing tracking was still based on door-to-door paper interviews and there were some markets where they were struggling to collect data from, for multiple reasons.
“The tracker is what we would classify as a simple job to recruit for. Let us take the example of Venezuela, one of the markets involved. Not unlike other Latin American markets, recruiting a total population sample on a monthly basis for a big brand tracker was proving a huge challenge. Males over 40 years old were almost impossible to find in the household at any time of the day. And higher socioeconomic levels were increasingly reluctant to open the door to interviewers. In addition, making the situation worse, the teenagers who could be found at home had grown less and less keen to answer long questionnaires.
“Back to the issue at hand, we set to assess the feasibility of moving the brand tracking online in a number of our clients’ most critical markets. On paper, online should have been the ideal solution. The client would be able to reach the affluent targets easily, plus the 40-plus males could fill surveys directly while at work. And in theory we shouldn’t have that much trouble attracting teenagers online.
“But as we started with the assessment, reality hit us very hard. In the bigger markets like Brazil and Argentina, no panel company would be able to provide a big enough panel that would support the size of the tracker and the coverage it required. When applying the six-month blackout period that the client had established for every respondent that had completed a survey, most panels would exhaust much sooner than it was acceptable. Even relaxing the blackout out period didn’t resolve the issue.
“Thus what we thought would be an easy project to scope – total population, no recruitment filters – suddenly became really hard. The lower socioeconomic levels, which were an important portion of our clients’ consumers, were a real stretch for the panel companies. They just could not guarantee enough of them to make it feasible moving forward. We then started throwing into the mix the idea of a mixed methodology. We could do online for the population segments we could find online and complement that with central location intercept interviews. The issue here was that costs skyrocketed for this alternative. Reducing costs was one of the reasons for the migration, though not the main one, so with increasing costs the project became a little hard to swallow.
“In conclusion, it is still very much a to-be-continued situation. We believe that moving to a system like this will one day be the answer to our clients’ current issues. It’s just that we feel that today we are not quite there – yet.”
Spotlight on Venezuela
Moving away from the data collection challenges and towards country-specific market research in the region, Venezuela is facing problems seen throughout Latin America. Fueled by oil prices in 2006-2012, Venezuela was in the height of an economic boom. Fast-forward to 2015 and the economy has been shrinking year by year.
“This situation affects every industry and market research is not an exception,” says Miguel Ron, director at Mercom. “This year some market research clients took the decision of slowing their investments in research. Some of them claim that it serves no purpose to invest in research and marketing in an environment where people ‘choose’ whatever they have in front of them. Venezuela is currently seeing a situation where people want to wait until the economy is ‘back to normal’ before investing back into market research.”
Every market researcher is taught that when the economy is right, you should invest in research to be able to capitalize on the booming business category and Ron believes this is also right in the opposite of circumstances. “When there is an economic downturn, you should invest as well, in order to better decide where to invest your money. Although this premise is being challenged in Venezuela, what we have seen in market research in 2015 is that, when we occasionally get the ideal conditions in a supermarket, having several options to choose from and among these options is your favorite brand, guess what? People choose their preferences. These preferences are still alive.”
As a market, Venezuela has a reputation for being pro-brands, Ron says, “Consumers stick to brands instead of commodities, even when those are cheaper. Venezuelan consumers are also very open to listening to new options. This combination makes them the dream consumers some might say but also a threat to the leader brands that abandon them at this moment.”
Ron believes the case for market research in Venezuela is this: “If you can plan ahead a couple of years and wait until the economy gets back on its feet again, keep investing. Consumers are going to reward brands that stay on this track. For those who can only bet for the ongoing year, keep battling in Venezuela as the paradox of no choice. For those who can see and bet beyond 2015, a big reward awaits.”
Spotlight on Ecuador
Moving from Central America through Venezuela to Ecuador it becomes clear that Latin America is a diverse combination of countries where the same language does not necessarily mean the same culture.
Julia Helena Carrillo, country manager at Ipsos, gives an outlook from Ecuador that strengthens this fact: “Ecuador is no different and has its own particular identity, which is not that of Colombia and Peru, its neighboring countries. In Ecuador, foreign countries are very closely considered since a large migrating population lives abroad, mainly in Spain and in the northeast region of the U.S. [New York]. Migrants usually maintain very close contact with their relatives in Ecuador especially through online social networking.
“This has greatly influenced a significant penetration and use of the Internet in the general population of Ecuador and has also influenced fashion and the access to a limitless range of American and European consumer goods among the local middle class population.
“Ecuador has shown a sustained growth in its GNP over the past years, as well as a low inflation rate. These positive conditions, backed up by political stability, with heavy government investment in the public sector and a reasonable support for local industry, have allowed for the development of a strong middle class segment, which is better educated and has access to consumer loans.
“In this environment, market research has become a dynamic industry, as compared to prior years when only large industries relied on market research for their decision-making process. In the need of developing new and more attractive products, local industries are now hiring market research companies and specialists.
“New ideas are under research and so are products, packaging and labeling. Big brands are developing new segmentation strategies in order to serve lower-income segments and are thus requiring pricing research services for data gathering and analysis. At the same time, the government is placing high pressure upon large private industries, making them work harder on brand- and corporate image-building. Corporate reputation is a new line of business for the market research industry in Ecuador.
“A higher sense of urgency may be observed throughout the country and market research is no exception for this phenomenon. New and more efficient research models and methods are being developed which are highly reliant on technology. The need for transformation is urgent but unfortunately since there is little prior history of market research investment, budgets are still low for that purpose.
“CAPI research methods are rapidly giving space to tablet information-gathering techniques. Online studies are more frequently carried out, although this is not the best channel for representing the whole population, due to existing socioeconomic barriers. As a response to this situation a new adaptation is becoming popular with very good results, where personal recruitment and central-location methods are used to allow popular segments to be represented in online research. Transnational corporations are very active in the use of ethnographic market research modeling. New and more modern processes based on motives are being used for the generation of new market segments.
“Following a global tendency, the leading local research company has been working with eye-tracking systems for the past five years. Through this model, big brands are researching how consumers react to visual stimuli of labels placed in shelves and TV commercials.
“The next challenge for the market research industry in Ecuador is to understand emotions as they are transmitted through communication and media and being able to gather that information in real time. Use of cell phone technology for marketing research should most likely be the next step in the way.”
For some final thoughts, we turn to Suzana Pamplona Miranda, market research director, Johnson & Johnson Consumer. “Latin America is a region where VUCA [volatility, uncertainty, complexity, ambiguity] and crisis has been the rule for so long, we learn to deal with scarcity and to be creative – and that also applies to market research,” she says.
Miranda urges market researchers to make research accessible and share knowledge. “In this sense, I invite you to see ourselves as meaning creators, as curators and partners in knowledge development, the ones who go beyond punctual information and anecdotal stories. We are content curators, from the Latin curare – take care of – and from cura – care. Because we do care, we are concerned about our impact. We have a responsibility to ignite enlightenment and bring light to uncovered opportunities.”