‘Trial and error not a marketing option’




Lennart Bengtsson, the president of the Eastern Europe, Middle East and Africa (EEMEA) division of ACNielsen, the world’s largest marketing information provider, was in Dubai recently.

Emirates Business asked him about the trends shaping marketing research globally and in the region, the UAE’s retail sector and how environmentally conscious consumers in the country are. Bengtsson also described how the firm has consolidated various ACNielsen companies and services globally and how it plans to bring those services to the region.


What are the trends shaping the future of marketing research globally?


We first need to look at what the key marketing trends around the globe are. Marketing basics that include specific concepts such as customer satisfaction, customer retention and segmentation still remain the top areas of interest in marketing.

However, new trends have emerged such as green marketing, personalisation, multicultural and ethnic issues, innovative branding, time starvation, outsourcing, etc. In order to tackle these issues, marketers turn to market research in their decision-making process. Researchers are now investing in new methods and technology to address these interests.


What are the trends shaping marketing research in the Middle East?


Marketeers are turning towards research in the UAE in order to resolve the main issues they are facing, such as the increasing cost of advertising and marketing and increased competition as local and global manufacturers are growing their businesses in the Middle East. Eighty-five per cent of the top 500 global companies now have their operations in the UAE. Though consumer choices are expanding, manufacturers in the UAE have started to face severe competition.

Also, today the cost of failed products has gone up significantly. Trial and error is not an option anymore. Marketers have to plan better and be more sure about products they are planning to launch in the market. Keeping this in mind, a need for accurate and timely marketing research to aid clients in decision-making is becoming increasingly important. At the same time, researchers have to invest in new technologies and methods to satisfy the increasing demand placed by clients vis-à-vis marketing research.


Is there a wide disparity between the East and West in market research?


The essential philosophy and science of marketing research remain the same globally. However, variations do arise due to cultural differences. In the above context, companies have to adopt global practices so they are able to work in local cultures. To that extent marketing research models need to be designed in ways that satisfy regional needs. What needs to be looked at is the way a research study is designed, the way questions are asked from consumers and the regional and local norms that are established.


How do you foresee growth in the UAE’s retail sector as the cost of living rises?


Retailers and major local chains have ambitious plans to expand in the UAE within the next five years. Fifty-three per cent of the share of trade in FMCG sales is coming from the UAE. Convenience and proximity of the store to the house has become one of the key factors in selecting a store to shop from. Shoppertainment – shopping and entertainment at the same time – is the major trend. Supermarket shopping has become a recreational activity for many families in the region, as many stores now include children’s play areas, boutiques, music stores, hairdressers and food courts.


The on-the-go lifestyle is also another factor impacting shopping behaviour. Consumers are living increasingly fast, full but stretched lives. Hence they look for convenience, especially as more women enter the workforce. They have less time for shopping, cooking and cleaning and they look for easy and quick to prepare (and use) products.

Another important factor that impacts the retail sector is the increase in choice. There is an explosion in the choices that are being offered. Consumers need to optimise their choice. Day by day, they are sharpening their shopping skills to navigate through thousands of products. Price consciousness is also increasing in the region, especially in the UAE with the increasing pressure of inflation on disposable incomes. Consumers look for more value. When they consider ‘value’, they usually look for cheaper prices and promotions, not private labels as in more developed retail markets.


Do you see a marked change in the shopping trends in the region?


The UAE shopper today clearly prefers the modern format store. They visit a supermarket or a hypermarket once in four days and spend more than 66 per cent of their grocery budget. There are multiple factors influencing equity of a store in the customers’ minds, with key ones relating to proximity, price (value for money), quality and assortment.


Has consumer spending gone up or down in recent months?


Consumer spending in the UAE has gone up unlike the rest of the world – as identified in a recent consumer confidence survey conducted by us on spending intentions – where consumers have become cautious about spending. Of the 48 markets surveyed, 26 per cent recorded a continuing decline in their readiness to spend, compared to six months ago. People in countries such as the United Kingdom, Japan, Italy and Turkey are among the most cautious about discretionary spending, with about eight in 10 thinking now is not a good time to buy the things they want. This is in stark contrast to consumers in the UAE where about 41 per cent are optimistic about spending in the next 12 months.


Has online shopping caught on in the UAE?


The online shopping revolution has had a marked effect on shopping internationally. In the UAE, online shopping is becoming increasingly popular for air travel. A study conducted by us on online shopping last month showed that more than 60 per cent of the country’s internet users said they bought airline tickets and made reservations online in the past three months.


How environmentally conscious are companies and consumers here?


Global warming has become a major concern and has more than doubled across the world from October 2006 (seven per cent) to April 2007 (16 per cent) with some countries showing three-to-four-fold increases. A recent study conducted by us on global warming showed 84 per cent of the consumers in the UAE are concerned about the environment, which is higher than the global average of 80 per cent.


Do consumers look to governments to act on climate change?


Consumers clearly consider it the responsibility of governments to take action. In the above mentioned survey, 46 per cent of consumers in the UAE said governments should restrict emissions by companies of carbon dioxide and other pollutants, while 42 per cent of these consumers said there should be a major government-led initiative for research into scientific and technological solutions such as low-emissions cars, houses and renewable energy.


How has 2007 been for your company?


At the global level we have consolidated our various companies including ACNielsen, Bases, Claritas, Nielsen Mobile, Nielsen Net Ratings, etc, and combined all services under The Nielsen Company. This helps us in meeting client needs faster and in a holistic manner. The Eastern Europe, Middle East and Africa region has been evolving fast and we have invested significantly to keep pace with the changes. This includes investments in new technology such as hand-held terminals, computer-assisted personal interviews and computer-assisted telephonic interviews. We have also invested in conducting a regular retail census in all markets to keep track of the development in the retail sector.


Any plans to launch new services here?


All services in The Nielsen Company are now available for launching in the region. One of the first to be introduced is Nielsen Mobile, which will measure and track mobile networks performance of various telecom operators as well as measure the market share of handset providers, based on patented Nielsen technology. Besides this, many other services are under consideration such as Nielsen Music Control, which monitors the radio waves to compile the most popular songs, Nielsen Net Ratings, which provides a list of the popular websites, Claritas, geo-demographic segmentation, etc. It will be a question of prioritising and launching them where they are most needed.


What are your core growth strategies?


We believe our success is measured by the success of our clients. So our growth will come from partnering with our clients and better meeting their needs by providing additional services to them from the portfolio that is available internationally with The Nielsen Company.



Lennart Bengtsson

President, EEMEA division ACNielsen


Lennart Bengtsson, as the president of the Eastern Europe, Middle East and Africa division of ACNielsen, is responsible for overall management, business performance and strategic direction of the company in the region, which covers more than 50 countries.


Bengtsson is also a member of the European Executive Board. He is based in Nicosia, Cyprus. Prior to joining ACNielsen, Bengtsson was marketing manager at SMEDBO AB in Sweden. He also worked as an assistant to the Swedish Trade Commissioner with the Swedish Trade Commission in Australia, as well as the British-Swedish Chamber of Commerce in Sweden.


Bengtsson obtained his degree in business administration from the University of Lund, Sweden, majoring in international marketing management.


The numbers


of the top 500 global companies have their operations in the UAE


consumers in the UAE are optimistic about discretionary spending