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Research Outsourced!
In this age of globalization, every company is looking to tap into the international market. To survive and stay ahead in this cut throat competition, it is very essential for the companies to search for opportunities to expand their presence. Marketing functions are no longer restricted to product related functions like design and sales, but also towards capturing new markets vertically i.e., specializing in specific abilities, or horizontally, i.e., expanding those abilities. For any company to think of development, market research helps provide the necessary insight into possible options. However, due to certain technical limitations and knowledge gaps, several companies have been observed to have outsourced their market research functions to specialized firms. India has proved to be one of the major outsourcing centers for such outsourced projects. Several Market Research firms like IMRB International and Nielson India have been practicing this business model for several years. With a lot of Indian companies looking to expand within the country and with several international companies planning to venture into the Indian market, the knowledge of consumer buying patterns and preferences would prove to be critical to success. The market research functionality is not only responsible for data collection and entry but now also cater to data mining and analysis. As per a recent report by ValueNotes, there are around 110 market research outsourcing vendors present in the country. Although most of these MROs are multi-functional centers like BPOs and KPOS, the specialized firms dealing with in depth market research continue to be the market leaders. In the past, MROs have followed a ‘low cost high volume’ approach towards the revenue model. However with the increasing demand for various aspects like data analysis and decision making, MROs are set to increase their servicing capacities at all levels – from data collection to decision making – for their clients. According to Arun Jethmalani, CEO, ValueNotes, “This period (up to 2010) will witness value growth due to capacity addition in high-end services. Initially, the services outsourced were in modular format and delivered through short-term project based engagements. However, over time vendors have begun providing services in both transactional and tactical level activities performed by research agencies. There is a clear industry trend towards “integrated” services”. The increasing demand for such “onsite-offshore” model of working, has led to an increase in the international market for Indian Market research firms as compared to the domestic market. The market research outsourcing (MRO) industry has grown to $148 million in FY07, and is slated to reach $800 million by FY12 at a CAGR of 47% as per the reports by ValueNotes. With an ever increasing international clientele, the vendors have been forced to adapt to a more organized delivery model. The increasing trust that clients have on the service providers has forced the MROs into being more technically adapt and moving towards standardization. It wouldn’t be a surprise to see the vendors expand their service portfolios through improved use of technologies and strategic mergers. One aspect where majority of the Indian research firms are lacking is on the technology front. Though India is considered one of the major hubs of the software industry, Market Research industry in the country is still at a very nascent stage. Most of the vendors are still using the very basic software while handling the data analysis and data mining operations. One of the reasons cited for this is the lack of expertise available in this field. Several BPOs and KPOs have extended their functionality into the area of market research, but due to lack of technical knowledge and experts, they are not able to service clients outside the basic functions of market research such as data collection. However, as software industry moves ahead in leaps and bounds, the development of user friendly software like SPSS has led to an improvement in the efficiency of the MROs and has allowed them increase their functioning capabilities. The present dependence on face to face techniques due to lack of technologies, research methods are expected to improve especially online with the increasing penetration on internet. The MRO industry has also opened up a lot of employment opportunities for experts in the area of statistics and mathematics. Since the assignments involve a lot of technical knowledge, MROs are always on a lookout for hiring employees who have specialized in this field. With MROs coming to terms with technology, the increasing demand in terms of services like data mining, analytics etc and international players looking to enter the market through take over and mergers, the industry is poised for an interesting growth phase in the years ahead.
Chillibreeze's disclaimer: This is a contributed article and was published on Chillibreeze in February, 2010. The views and opinions expressed in this article are those of the author(s) and do not reflect the views of Chillibreeze as a company. Chillibreeze has a strict anti-plagiarism policy. Please contact us to report any copyright issues related to this article. The relevance of the facts and figures cited (if any) could change after a period of time.
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