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Senior Marketers: Research, Innovation Key In '09

Richard Guha of Max Brand EquityMarketing budgets may be on the chopping block, but market research and innovation are high up on the priorities list, according to results of the newly released "Top Marketing Trends for 2009" survey from the Marketing Executives Networking Group (MENG).

Meanwhile, while alternative energy and green marketing are still hot, senior marketers seem less preoccupied with global warming and health awareness as key issues--and rather disillusioned with off-shoring and the practical realities of Web 2.0.

The second annual survey from MENG, a not-for-profit group comprising more than 2,000 senior marketing professionals (VP or higher title) and spanning all industries and marketing disciplines, was conducted online by Anderson Analytics. The emailed questionnaire, sent Nov. 15, pulled a 36% response rate (643 respondents) over a 30-day period.

Half (51%) of responding senior marketers said they believe their budgets will be decreased this year, 38% expect no impact and 11% expect an increase. One-quarter are not filling open staff positions, 22% are hiring only incremental staff, and 19% are reducing staff -- although 34% report no anticipated effect on staffing plans.

At the same time, more than three-quarters said that use of market research will either remain the same (39%) or increase (39%), versus 22% indicating probable cutbacks in this area. In addition, 72% indicated stability (51%) or increased focus (21%) in innovation and R&D efforts.

Historically, most companies have failed to act on their knowledge that those that invest in marketing and R&D during recessions are likely to emerge with larger market shares, notes Richard Guha, founder and partner in marketing consultancy firm Max Brand Equity and MENG board chairman. However, this survey seems to indicate that this time around, more are compensating for marketing budget cuts made in some areas by "stepping up innovation," he tells Marketing Daily.

"I think it's critical to go on the offense while the competition is hiding," commented one responding marketing executive in the survey. "Finding inexpensive ways to gain competitive advantage and grow share is critical to longer-term success when the economy starts to recover."

Another respondent noted, however, that "too much innovation today is based on non-disciplined approaches (ad hoc, subjective, limited research) due to lack of time and/or budget. The result is poor success rates, lack of confidence in the innovation function, and too much employee turnover. More time and effort needs to be devoted to determining what innovation opportunities exist and properly defining the requirements before ideation, concept development and product development occur."

Customer Retention, ROI Get Greater Emphasis Among 62 marketing concepts included in the survey, customer satisfaction ranked first, cited as being of major importance by the greatest number of senior marketers (79% this year). Customer satisfaction also ranked #1 in last year's survey (cited by 75%).

Customer retention again came in second, and gained 11 percentage points (cited by 76% this year). Marketing ROI gained 12 percentage points (cited by 65%), to rise from seventh to third in the concept rankings.

Other high-ranking concepts this year, in order, are brand loyalty and segmentation (each cited by 61%), quality (56%), search engine optimization (48%), competitive intelligence, data mining and lead generation (each cited by 43%), word-of-mouth (42%), alternative energy (41%), mobile communications, electronic media and green marketing (each cited by 40%).

Among these top-ranked concepts, lead generation and alternative energy were among the greatest gains in emphasis (each up 10 percentage points since last year).

Presumably reflecting current economic conditions, other concerns seeing notably increased emphasis include credit availability (up by 33 rankings, to #23), housing markets (up 14 rankings, to #30) and trade deficits (up 11 rankings, to #49).

When factor analysis was used to group the 62 concepts into 15 key areas, these areas ranked in the following order: marketing basics, SEO, personalization, innovative branding, viral/WOM, green marketing, multicultural/ethnic issues, new media, breakdown of old media, macroeconomics, tech strategy, social issues, time starvation, outsourcing and other. (The last three, as well as breakdown of old media, showed declines in importance versus last year.)

Global Warming, Off-Shoring Decline In Stress

Concepts that saw the greatest declines in emphasis included global warming, which dropped by 14 rankings (to #40); time-shifting (TiVo) (down 12 rankings to #50), media fragmentation (down 10 rankings to #21), and immigration and off-shoring (each dropped by nine places, to #58 and #57, respectively).

Guha believes that in most of these cases, the declines in perceived importance reflect a sense that "we're going to put some things on hold while we sort out the economic situation--we'll focus first on putting out the fires."

However, the off-shoring de-emphasis seems to reflect growing disillusionment. There appears to be no growth in off-shoring any marketing functions (under 20% of respondents reported use of off-shoring in both years' surveys). Furthermore, this year, 58% agreed that off-shoring "is not as profitable as others think, and is fraught with risk"--up from 49% agreeing with that statement last year.

Despite economic pressures, marketers also seem underwhelmed by outsourcing as a solution. Just 15% cited outsourcing as being of major importance (down two percentage points from last year, to rank #46), and just 10% cited "selective" outsourcing as very important (down one point, to rank #55).

Web 2.0: Marketing Can't Do It Alone

Just one-quarter of senior marketers rank Web 2.0 issues of major importance (up two points, but ranking at #33 among the 62 concepts), and nearly 20% cited "Web 2.0" as the buzz phrase they are most tired of hearing. (Runners-up included "social networking," "social media" and "blogging.")

"Web 2.0 is a lot more complicated than many companies realize," says Guha. "The point is interactivity with customers, and achieving that requires fundamental change throughout the organization--which by and large is not happening. So I think a lot of marketers are frustrated because they're expected to sprinkle marketing pixie dust and somehow make Web 2.0 happen for their companies."

On the customer/prospect demographics front, 78% cited Baby Boomers as most critical (versus 72% last year), followed by women (64%), Hispanic/Latino (60%), Gen X (53%) and Gen Y (52%). Perceived importance of Gen X and Gen Y grew significantly (up from 40% and 41%, respectively, last year).

Internationally, China continues to be considered the most important market (cited by 48%), followed by India (17%).

On the inspiration/ideas front, Good to Great remains the most widely read and recommended book. Seth Godin remains the favorite marketing/business guru, followed by Warren Buffet and Malcolm Gladwell.

1 comment about "Senior Marketers: Research, Innovation Key In '09 ".
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  1. Kevin Horne from Verizon, January 14, 2009 at 3:22 p.m.

    "...companies have failed to act on their knowledge that those that invest in marketing and R&D during recessions are likely to emerge with larger market shares"

    That would be because "conjecture" does not equal "knowledge." There are no scientific, statistically valid studies to support this statement, even tho it has been published now roughly 1 million times since last Fall.

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