ESOMAR Global Prices Study 2010 – Africa Highlights

Every two years, ESOMAR conducts a global survey on research prices. Participating countries and/or agencies submit dummy quotes for a number of hypothetical research projects. For example:

…the standard specifications for a U&A, using face to face interviewing, are as follows:

  • Topic: Chocolate Confectionaries
  • National sample (n=500)
  • Respondents: regular users of chocolate
  • Interview length: 25 minutes
  • Deliverables: tables

…while the specs for FGDs:

  • Topic: Retail Banking Services
  • Number of Groups: 4 groups in 2 cities (2 male / 2 female)
  • Length: 2 hours
  • Deliverables: personal presentation and audio recordings

Included in the survey are other research products and approaches such as: online, CLT, face to face, telephonic, etc.   As most of these data collection methods are not (yet) relevant in our African markets, this evaluation will focus on the traditional U&A and focus groups.

Global Perspective:
The global average (median) cost for an in-home U&A is $17,580; the average cost for FGDs, $10,412.

So, where does Africa stand?

U&A studies in West & East Africa are 22% more expensive when compared to this global average. However, compared to Southern Africa, these regions are practically a bargain.  A U&A in Southern Africa is 73% more expensive than the global average and almost approaches Western European levels.

In contrast, in East and West Africa our FGDs are 12% less expensive than the global average.  In Southern Africa, though the difference is less extreme, focus groups still come in 34% above the global average.

The only sub-region in Africa in which research costs fall below the global averages is North Africa, with U&As being 13% and FGDs 35% cheaper.

Thus, project costs across West and East Africa are at an uneasy point of compromise: higher than our clients would like them to be; and lower than we need them to be if we want to continue building up local capacities and resources and developing a truly world class research industry in Africa.

.

Trend: Global Prices Study 2007 -  2010
Comparing prices for a U&A study across the four African countries represented in both waves of the study, South Africa would seem to have the least increase in research cost, Kenya the highest (with Nigeria not lagging far behind). However, in order to know why we’re not laughing all the way to the bank, one would need to figure in the massive devaluation of the US Dollar that occurred within that period and further the erratic fluctuations in the exchange rates of Egyptian Pound, Kenya Shilling, Nigerian Naira and South African Rand…


Factors Influencing Cost of Research in West and East Africa:

So why is research in Africa so expensive?  The key contributors (as identified by members of East Africa’s local research body but relevant across Africa) include:

POLITICAL UNCERTAINITIES

  • Political & social instability
  • Project specific research permits required by many governments
  • Complex / ambiguous tax laws
  • Government corruption

INFRASTRUCTURE

  • Lack of utilities / basic infrastructure
  • Low internet penetration
  • Poor telecommunications
  • Crime / insecurity
  • Inaccessible rural areas

ECONOMIC

  • Booming / fluctuating demand
  • Currency fluctuations
  • Inflation
  • High staff costs / turnover / training
  • High travel costs
  • High communication costs
  • Corruption

CULTURAL & SOCIETAL

  • Multiple local  languages
  • Lack of education / literacy
  • Some markets view research suspiciously

RESEARCH RESOURCES

  • Lack of experienced / qualified staff
  • Small pool of researchers with high turnover
  • Briefcase researchers giving research a bad name
  • Poor secondary data resources
  • No syndicated studies / panels
  • High price / availability of technology

ACCESSIBILITY

  • Hard to reach groups
  • Top-end – too much security so hard to access
  • Bottom end – no security for interviewer
  • Rural – poor road access
  • Some markets difficult to access (visas, direct flights, work permits)

After evaluating all of these it is easy to see where the money goes and why the African research agency struggles to grow.  Having little control over issues such as infrastructure or government policy, researchers need to direct their attention to what they can change.  For example:

  • Focus on bringing more young people into the industry and building research as a credible career
  • Work with universities to build research skills and create awareness of research as a career option
  • Build accreditation schemes for research staff at different levels to encourage professionalism and quality control
  • Build stronger relationships with clients and be willing to educate the clients on the realities of Africa

Highlights prepared by Margit Cleveland and Jane Delorie

Overview of African Research Industry

ESOMAR Global Market Research Study 2010

Since it began publishing annual industry reports, the year 2009 was the first time that ESOMAR recorded a global industry decline. Compared to the previous year, the market research industry shrank by 4.6%. The least affected region was Asia Pacific, with a moderate decline of 2.2%; while Europe recorded a massive 5.9% loss.

At first glance, the Middle East and Africa region appears to have been the worst affected with a decline of 10.2% against the previous year. Actually, however, there are many positive developments in the Africa region to qualify that negative first impression.

On the global scale, Africa remains a minor player in the market research industry, with a market size of 265 million in 2009, which accounts for less than 1% of the global industry (28.9 billion).

Developments in Africa
The ESOMAR Industry report covers only a handful of African markets; country data are available for only South Africa and Nigeria. So, it is important to bear in mind that ESOMAR coverage of Africa remains fragmentary at best.

[read more – ESOMAR Global Market Research Study 2010 by Jane Delorie & Margit Cleveland – 262K – PDF]

Related Links