While marketing-research firms are struggling to create products aimed at smaller companies, such sophisticated research as Information Resources Inc.'s BehaviorScan has, by and large, remained the preserve of the packaged-goods giants.That is partly because of the costs involved and partly because smaller companies tend to rely more on instinct and market experience to guide them.
"In a small company like ours, we don't have the luxury of brand managers or research managers," says Richard Denning, vice-president for sales and marketing at T. Marzetti Co., in Columbus, Ohio, a maker of salad dressing and chip dip. Marzetti subscribes to syndicated research services, but conducts little formal research.When a new product idea arises, a 12-member new-product team evaluates its potential. "We constantly look for market niches, small segments that the bigger companies might not go after," says Denning. "But to find them, we don't use research. We rely on our own experience in the business. And if the product fails, we've spread the risk among ourselves.We can't blame the research -- something that happens at a lot of big companies.
"It's not that we're doing research on the fly-by-night," he says. "We have an experienced group of people here. Our company is small enough that we can sit down, talk about the pros and cons of a product, and then make a decision. It's one of the real advantages a small packaged-goods company has against competition."
"For many of us, just getting in a store's door -- selling the product to the supermarket -- is the most important problem, not the intricacies of consumer behavior," adds Dick Frankovich, marketing director for Colombo Inc., a Methuen, Mass., dairy products company. "We value and use consumer research. But a controlled test-market situation, such as BehaviorScan, doesn't tell us what's going to happen in the real world."
The marketing-research business is largely geared to the needs of bigger companies in any event. "You almost have to be advertising on television for the test to make sense," says IRI president Gian Fulgoni. And small companies are generally light TV advertisers.
But IRI and the other marketing-research firms are using new products, such as IRI's Marketing Fact Book, to try to reach smaller companies. The Fact Book, a quarterly report on the BehaviorScan panel's purchases, runs about $70,000 a year, versus some $2 million for a full IRI test.