Hello, Comrade, What’s Your Favorite Soap? : Marketing: Companies that want to sell toothpaste in Tblisi or baby oil in Budapest face a critical shortage of consumer data. Gathering it is a challenge for U.S. research firms.
The wave of political change that has swept from Moscow to Managua has freed inquisitive minds to ponder the answers to never before asked questions such as, “What brand of dish washing liquid do you prefer?” or “How do you clean your teeth?”
These may not be the most provocative questions. But asking them is a growing business for American market researchers who are tapping the demand for information about emerging democracies. Feeding the West’s appetite for statistics, however, can be difficult in nations where the legacy of repressive political and economic controls makes it difficult to conduct even simple telephone surveys and exit polls.
U.S. firms must contend with cultural and language differences, resentment toward foreign firms and formidable Western European competitors. Working in less developed and war-torn nations can also increase the risk of error as it apparently did for U.S. companies that incorrectly called the recent Nicaraguan elections. (See related story.)
The lack of even basic and reliable government statistics in many nations comes as quite a jolt for statistics-spewing U.S. researchers, who can tell you the level of home ownership among bowlers--78%--or the number of hours that the average American watched television in 1988--1,550.
“It’s a pretty primitive affair,” said Norman Bradburn, director of the National Opinion Research Center in Chicago, in describing demographic research in the Soviet Union and Eastern Europe.
Despite the obstacles, well-known U.S. research and polling firms such as the Gallup Organization have recently opened offices in Moscow and Budapest. A. C. Nielsen--the world’s largest market research firm, based in Chicago--just completed a major study of East German consumers and their awareness of Western brands.
Pollsters are packing up their questionnaires and calculators to predict election results in Latin America, and market research firms are looking for experienced foreign partners--who do most of the field work--to set up operations in Eastern Europe.
“Everybody is scrambling,” said Arne F. Haug, who heads his own research firm in Los Angeles. “International demand has picked up. If we didn’t have a formal structure in Europe and an office in Tokyo, we would definitely be losing out.”
“Our international business grew substantially last year,” said Steve Thomson, vice president of International Research Associates, part of a worldwide network of research firms. “But it’s not easy money. It’s a very competitive field. A lot of companies are getting their feet wet.”
It’s also not a blockbuster business--yet. But the potential for growth has attracted American research firms faced with a stagnant market at home, where the industry generates annual revenue of about $1 billion.
“The sales (in Eastern Europe and the Soviet Union) are miniscule,” Gallup President Jim K. Clifton said. “But it doesn’t matter. We have to to have a foothold there.”
American research firms have watched the demand for their services grow with the rise of U.S. multinationals that are testing the waters in newly opened and unfamiliar markets.
“There’s a great hunger for information,” said Michael Cooper, president of Opinion Research Corp. “Our (financial) clients need to understand the market and the market’s potential before they lend the money. It’s high risk without good market research.”
But in places like Eastern Europe, the lack of reliable figures, working telephones and computers magnifies the work of researchers.
“There is no structure for doing market research,” said Michael Krug, a spokesman for computer maker Hewlett-Packard’s Swiss operation. “I don’t know if the information that we need is available. Every company is trying to build up a new system to access and get data. That’s very difficult.”
Many firms are also finding it hard to locate qualified researchers to conduct surveys and establish partnerships. “We want to make sure to pick the right people,” Thomson said. “There are a lot of people who claim a capability to do a survey. The big issue is, can they do more than that?”
Government restrictions had prohibited pollsters from probing sensitive subjects. “They would not have done an approval rating of Khrushchev,” said Clifton at Gallup. The restrictions left many researchers inexperienced at dealing with touchy subjects. Gallup, for example, sent its Soviet partners samples of questionnaires on AIDS and political subjects.
Until recently, many Communist Bloc governments guarded poll results as though they were state secrets, and state-run monopolies found little need for consumer research information to track changing consumer tastes and demands.
“They would sell everything they had on the shelves,” said Lucia Oddo, who heads Nielsen’s global information services division. “Why would they need market-share information” when they controlled the whole market?
Some believe that the lack of freedom under totalitarian regimes might skew the results of surveys. “I think that could be a problem where people have not been used to making free choices,” Haug said. “If you have extreme shortages, what is their framework for evaluating brands? Would it be price, ingredients or prestige?”
Dramatic political and economic changes, however, have made the collection of information much easier in nations such as the Soviet Union, where once-secretive government ministries are selling information.
“There were a lot of restrictions,” said Soviet sociologist and pollster Vladimir Andreeknov, speaking of conditions that existed only three years ago. “You couldn’t ask questions about Gorbachev. We didn’t discuss religious questions. Now it is possible to ask about anything.”
Andreeknov formed a market research and polling firm--the Center for Comparative Social Research--that relies on Western clients such as Gallup for half of its business. The group has polled Muscovites on how many cameras they own for Eastman Kodak and interviewed Soviets for three hours about toothpaste as part of its work for Johnson & Johnson.
“It’s the simplest level of market research,” Andreeknov said.
Eastern Europe and the Soviet Union are not the only places where it is difficult to conduct good market research.
American pollsters who do most of their interviews over the phone would find it difficult to make the same calls in Japan. “It just doesn’t fly there,” said Thompson at International Research Associates. “You have to get a letter of introduction. You just can’t call up and start asking them questions.”
Researchers must also adjust for cultural differences when interpreting responses.
“In Italy and Spain, people tend to rate products and ads much higher than they do in Northern Europe and in the U.S.,” said Sharon Keith, marketing research chief at Gillette, which sells its line of shavers and personal-care products in Europe. “In contrast, the Germans usually find nothing excellent or very good.”
In Latin America, researchers cannot rely on telephones, which are often owned by only a small percentage of the population, and must draw up elaborate city maps and canvass the specific neighborhoods they want to pinpoint. Interviewers must also visit posh restaurants and shopping areas to hunt down the wealthy, who are often sequestered behind lines of servants and security guards.
But the simple act of answering a pollster’s questions often frightens residents in unstable parts of the world. “In El Salvador, some women weep when you ask them a sensitive political question,” said William Bolinger, director of the Interamerican Research Center in Los Angeles.
American researchers must also compete with well-established Western European firms for international accounts. In fact, some industry executives say American research is not well regarded by Europeans.
“There really is a running rivalry between European researchers and American researchers,” Haug said.
The French, for example, are considered leaders by many in extracting consumers’ feelings toward products. In half-day sessions filled with discussion and role playing, volunteers will draw pictures to show what pain feels like or to personify brands.
A participant might be asked, “What sort of person is Tide and what kind of friends would Tide have?”
“I would say there is a lot of respect for (American firms’) technological abilities and the sheer size of their organizations,” said Thomson. “But in terms of their more creative abilities and sensitivity for understanding other cultures, American research companies don’t have very strong reputations.”
That’s disputed by many American researchers. Several, however, feel that there is resentment toward any foreign firm collecting information about people’s behavior and opinions.
Haug said many Norwegians resented the takeover of their nation’s largest research and public opinion firm--Norges Markedsdata--by Nielsen in the mid-1980s.
“Here, in a sense, is a foreign company coming in and taking control of a strategic information base,” Haug said. “I wonder what will happen in Eastern Europe? Will European firms take over what little there is? I would think that this could be a concern.”
To diffuse such concerns, Gallup gave its Soviet partners 60% ownership of its newly opened Moscow office. “I think that’s a very sensitive subject,” Clifton said.
Those feelings won’t stop Gallup and other research firms from expanding overseas, however. “This is a thrilling activity professionally; our guys have a riot,” Clifton said. “But it is still better to work in Chicago than it is in Budapest.”
SOVIETS’ IMPRESSIONS OF PRODUCT QUALITY IN FOUR COUNTRIES
Soviets were asked to rank their impression of the quality of products from each country. Table is based on those who say country’s products are of “very” of “fairly high” quality.
SEX AGE EDUCATION Grade High Total Male Female To 35 35-39 50+ school school COUNTRY % % % % % % % % United States 64 68 62 74 68 51 45 61 West Germany 70 73 68 78 73 59 48 66 United Kingdom 61 62 60 66 64 52 36 53 Japan 84 87 82 92 88 72 65 79 Number of interviews 1,397 602 795 512 427 439 104 316
SEX Voc/Tech school College COUNTRY % % United States 71 59 West Germany 71 77 United Kingdom 71 55 Japan 90 82 Number of interviews 666 299