Just How Much Do the Big Companies Spend on Consumer Research - By: Jim Knight

On the ancient Temple of Apollo at Delphi, of the Oracle fame, were inscribed those immortal words that have been at the center of self-realization in many a religion - "Know thyself." All the same, the market research expert may have a contrary spin of things - "Know your consumer."

Knowing the consumer is a needful demand for the prosperity of any current business, distinctively since the consumer is spoiled for select to spend his or her dollars on. Knowing exactly what the consumer wants and delivering those wants is the core success mantra for all companies, big or small. No wonder then that big companies spend big money on consumer research.

Consumer research may be defined as the systematic gathering, recording, and analysis of data about issues relating to marketing products and services to consumers. As such, consumer research can be considered a sub-set of market research, with the latter also encompassing research of data for marketing to other businesses. actually, it may be considered applied sociology looking to find the preferences, attitudes, and behaviors of consumers.

We have already mentioned the big dollars spent on consumer research by big companies, in aspire of obtaining information that may lead to bigger dollars in revenues and profits. Here are some higher-level numbers from the Council of American Survey Research Organizations (CASRO) that may support put things in perspective:

* EUROPE : $8.3 billion
* NORTH AMERICA : $7.4 billion
* US : $6.7 billion
* ASIA/PACIFIC : $2.6 billion
* CENTRAL/SOUTH AMERICA : $0.4 billion
* MIDDLE EAST/AFRICA : $0.2 billion

These are matched to revenues of research companies which carry out consumer research. Note that several companies may carry out their own research, making the total spend even uppermost.

Although companies have been spending increasing amounts on consumer research over the last two decades (4.6% increase in 2008 over 2007), it did face a reversal last year with the first decline in total spend in 20 years. However, this 9.5% reduction was not improbable considering the budgetary pressures consequent to the downturn. Education, transportation and banking were the top three sectors that slashed their consumer research budgets. The sector had been flat during the former downturn in 2003 but the events of 2008 were more severe and absolutely forced a cutback.

However, things have started looking up for consumer research. With too many companies too few spending dollars, the necessity for distinction is felt like never before. And the superior manner to distinguish oneself from the competition is to give the consumer absolutely what he or she wants. This awareness can be correctly and conveniently obtained only through diligent consumer research.

Although all public companies disclose their marketing experience in their annual reports, individual breakups on consumer research are awkward to find. However, considering that consumer research spending adds up to around $30 billion out as compared to total advertising spend of around $200 billion for all US companies, there is no denying its importance. With new avenues of consumer communication like social networks gaining in prominence, consumer research budgets can only go higher as the economy recovers.

About the Author

Jeff Savitz – President of Savitz Research Solutions, has received outstanding reviews as a presenter and workshop leader for his thought-provoking, breakthrough market research and lively, interactive style.

Article Directory Source: http://www.articlerich.com/profile/Jim-Knight/78197

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