Manfred Mareck is our man in Montreux, the setting for this year’s Esomar’s Congress. Here he takes us through this morning’s conference sessions, explaining why current optimism about a speedy upturn in the economy is misplaced and how post-recession market research will become a form of psychotherapy for distressed consumers.
The future will be grim, you can bank on that
This year’s congress opened with a keynote address by a banker – maybe in the hope that market researchers could hear some good news from someone who may know the way out of the current malaise.
Norbert Walter, chief economist of Deutsche Bank Group (pictured), sadly had to disappoint – the current green shoots are in his opinion just a blip, the short-term results of recent initiatives by government and central bankers. He fears that unemployment levels will continue to rise, wages will remain low (thus restricting purchasing power and disposable income) and interest rates will start to rise again next spring. A more prolonged stimulus will not take effect until 2011 and will be led by Asian markets with healthy growth rates, but European and US growth rates will be significantly below those we enjoyed before 2008.
Walter is a strong advocate of European integration and is adamant that national regulations will simply not solve any of the major problems we face in our interconnected world.
For banks and financial institutions his advice is very clear: if banks have become too big to be allowed to fail, they either need to shrink (so next time governments can let them fail rather than bail them out with taxpayers’ money) or remain big and face much stronger European or international regulations. He also admitted that banks may have to change some of their CEOs and risk managers. Banks, so Walter says, have over the years invited people with a certain DNA into their institutions, and some will only change their old habits by force and regulation. New incentives that reward long-term success over the economic cycle and bring ethics back into the financial system should also have an effect. Remuneration should never reward traders on their achieved transaction volume and instead reward long-term wealth creation.
Market research or psychotherapy?
Banks may have had a rough time, but the financial crisis has also had profound impact on individuals. To find out more Peter Cooper of CRAM International undertook a major meta-analysis of published research, content analysis of media coverage and qualitative interviews with individuals. Too often we hear facts about the recession based only on aggregate, de-individualised data, but the current crisis has affected people personally, some directly (job loss, bankruptcy), others more indirectly - and some are even benefiting.
Many have experienced increasing emotional trauma, stress and mental health problems (especially in the English-speaking world, which has been more open to rampant materialism and a form of selfish capitalism than other European and Latin countries) due to the economic malaise they find themselves in. As consumers adapt to the new reality they also express hope for a “fresh start afterwards and not simply revert to past [behaviour]”. Cooper asked his respondents to draw pictures depicting their feelings pre-crisis, mid-crisis and post-crisis and predicts that post-crisis consumers will come out more emancipated, their behaviour guided by a complex system of emotions, moral values and rationality.
Pre-crisis market research was often focused on measuring brand or product attributes against a backdrop of materialism, a drive for new acquisitions, fashion and individualism. Identifying new opportunities or uncovering competitors’ weaknesses was a key objective. This ‘practical’ market research is not going to disappear but in the post-crisis era of hope and new beginnings “we will find consumers who increasingly want solutions to the deep existential angsts that the economic crisis has brought into focus”, said Cooper. Market research will have much more in common with psychology and in Cooper’s view marketing will become a form of psychotherapy where cognitive behavioural therapy and market research can both learn much from each other, one providing patient therapy, the other post-crisis consumer therapy.