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Survey of Global Researchers Conducting In-Bound MR In Japan

Despite being the second largest economy in the world, Japan remains relatively under-researched with respect to its market size, ranking only fifth globally in terms of national market research expenditure.
 
The relative level of activity is even lower when considering the amount of research originating from overseas-based companies. According to the Japan Market Research Association (JMRA), in-bound market research accounted for only 5% of all market research conducted in Japan in 2001 in dollar terms.
 
To gain a better understanding of this activity, JMI recently surveyed 150 market researchers from 104 companies based outside of Japan. These researchers have commissioned projects in Japan during the last 2 years using various supplier solutions.
 

The survey was conducted via the Internet and the sample was mainly drawn from Europe (45% of researchers interviewed) and North America (41%). The remaining 14% came from other countries within Asia.

Activity levels among the researchers interviewed were quite high with over half of the respondents having commissioned at least 4 projects in Japan over the previous 2 years. This leant weight to opinions uncovered.

  
 
The main findings of this survey were as follows:
 
Researching Japan from overseas
 
  • North America-based researchers tend to have conducted more projects in Japan. 70% of the North Americans have conducted 4 or more projects during the previous 2 years. Only 41% of European-based researchers have conducted 4 or more projects in the same period.
  • Overall, roughly equal proportions of researchers commission their projects in Japan through preferred suppliers (44%) as select different agencies on an ad-hoc basis (39%).
  • However, North America-based researchers are much more likely to use preferred suppliers (54% vs 32% for European researchers).
  • The methodologies most commonly commissioned are telephone surveys (by 61% of sample) and qualititative research (51% for focus groups and 45% for in-depth interviews). This reflects both the high cost of conducting face-to-face quantitative research in Japan and the countries status as being a late adopter of fixed-line Internet, on a mass market level, when compared with North America and Europe. Broadband has only exploded on to the scene in Japan during the last year, so this looks set to change.
 
  • Surprisingly, the most commonly researched category was found to be IT/Telecom (53% of respondents). This was especially true for North America-based researchers (66%). The other main categories researched were FMCG (31%), durable goods (31%) and pharmaceutical (32%).
  • While consumers figured highly in terms of the samples recruited (63% of respondents), 52% had studied business managers. Again, the interest for business managers was heavily skewed towards North American researchers (63%) when compared with Europeans (38%).
 
So what are they looking for from their research partners in Japan?
 
Next respondents to the survey were asked to rank attributes, used to select their suppliers in Japan, in terms of the relative importance to them.
 
  • The interesting finding here was that absolute importance placed upon quality of execution and communications over pricing when forced to choose - although respondents were typically very vocal about the costs of conducting research in Japan in open-ended responses.
  • While quality of execution is an understandable pre-requisite when conducting a survey, it was surprising that so many respondents saw ease of communication as being an issue when dealing with a supplier in Japan. This does reflect the low levels of English generally spoken in the country, and highlights the need to take great care in ensuring that briefing instructions are correctly understood and translations double-checked.
 
  • Some respondents also mentioned flexibility as a difficulty encountered when dealing with suppliers in Japan - especially with respect to timings and the recruitment of 'hard to find', specialist samples.
 
And how do they feel?
 
Next, respondents were asked to express their levels of satisfaction with the work that they have commissioned in Japan:
 
  • The key finding was that the overseas researchers are generally dissatisfied with various aspects of research commissioned in Japan.
  • Overall the major area of dissatisfaction expressed most was on pricing. This is unsurprising given that in the recent 2003 ESOMAR survey on pricing, with the US, Japan was found to be the most expensive market in the world to research (http://www.ram.ru/outbound/2003/ESOMAR_180603.doc). This was true for most types of quantitative research and group discussions - especially so among those researchers most familiar with the market.
  • When asked to consider their levels of satisfaction for specific research methodologies, all achieved a net negative level of satisfaction. However, interview methodologies which were not eface-to- facef fared the worst - especially Internet, Telephone and Mail surveys. Indeed many surveys that are conducted using these methodologies overseas, are still conducted in Japan using door-to-door interviews or CLTs.
 
The low levels of satisfaction uncovered in this survey, coupled with the high prices charged for research in international terms, suggest that Japan risks being dropped from global projects despite its strategic importance as a market in pure business terms.
 
Looking towards the future, all Japan-based agencies offering their services to global researchers need to develop international levels of value. Most immediately this points towards greater use of technology-based systems (esp. the Internet), which can significantly reduce costs and timings. In addition, service levels in terms of speed, ease of communication and flexibility will need to be upgraded to meet the high expectations that overseas researchers have expressed in this survey.
 
Finally, despite the high cost of researching Japan, global researchers and their clients should not lose sight of the strategic importance of a market worth approximately half that of the US in value terms, but offering the benefits of a uniquely homogenous population. In most cases, it makes business sense to keep the Japan leg of a global project - even if this means finding a creative solution to complete the project in a cost effective manner.
 
Thanks again to all the 150 global researchers who participated in JMI's survey!