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Using market research to advance rural industry research and development

Jonathan Jenkin and George Katos

Ipsos
Agribusiness, Natural Resources and Environment Research Unit
Level 8, 80 Arthur St, North Sydney, New South Wales. (+61 2) 9900 5130 www.ipsos.com.au
Email: george.katos@ipsos.com.au

Abstract

Australia for a long time has been a world leader in its commitment to the development of rural industries. Extensive state and federal based agriculture programs, Research Development Corporations (RDCs), and peak industry bodies are the envy of many countries throughout the world. An ongoing capacity to develop and sustain rural industries has been a cornerstone to Australia’s prosperity. But as the world changes, so too does the environment in which Australia’s traditional research partners operate. Governments face challenges through ongoing rationalisation and increasing public good demands. Growers (typically as a by-product of shrinking margins) place pressure on industry groups to maximise the on the ground value of research. RDCs find themselves somewhere in the middle, looking to keep a vast stakeholder group happy. With these changes an increasing number of industry, government and semi-government organisations are implementing a market research driven approach to managing stakeholder relations and for inputting into key decision making processes. Organisations are using research to learn more about themselves and their stakeholders, and to help manage any downside risks associated with decisions made. Examples include the development and measurement of stakeholder satisfaction against a number of key indicators including awareness, understanding, attitudes and application of outputs. Other examples include evaluating the effectiveness of communication tools used with growers and on ground ‘change agents’ or how to best to increase take-up of new technology or farming practices on-farm.

Three Key Learnings: (1) Market research provides the opportunity for RDCs to better understand the views and opinions of grass roots consumers (i.e. grain growers and fishing boat operators) of commissioned research and development. (2) Stakeholder market research can be used by RDCs to facilitate improved pathways to uptake of commissioned research and development. (3) Design of stakeholder market research needs to adequately consider how the organisation would utilise research and development outcomes.

Keywords

Rural, research and development, corporations

Introduction

It is widely acknowledged that an organisation’s long-term success is governed by its ability to make sound management decisions. Further to this Stevens et al. (1997) highlight that organisations often formulate and implement these decisions based on current, accurate and timely information about their customers and their environment. To obtain this type of information and insight, an increasing number of Australian organisations are turning to market research.

This trend towards market research is not unique to commercial businesses, but also extends to pubic and not for profit organisations. Inclusive in this is Australian Rural Industry Research and Development Corporations (RDCs) who are choosing a market research driven approach to help manage stakeholder relations and organisational decision making.

The aim of this paper is to review how market research is being used by RDCs to better establish stakeholder needs, attitudes and behaviour and as a consequence improve organisational planning, communication and performance. Case studies form the basis of this review process.

Market research and the R&D pathway

RDCs operate in a complex and challenging environment, often balancing government, commercial, social, environmental and issues. Their vested responsibilities involve planning of industry or sector based research and development, promoting adoption of outputs and evaluating development outcomes. Additional to the aforementioned activities (undertaken by the eight statutory RDCs), a further six industry owned RDC companies undertake marketing related development initiatives.

A recent study by CIE (2003) explored the nature of RDCs and noted that while the ways in which these organisations engage with industry vary considerably, all endeavour to focus on a two-way information flow from the initial stage of establishment of R&D priorities, though to research adoption. For the industry owned RDCs, there is an additional commercial imperative to demonstrate to their owners (who include grass root operators) that they are delivering value for money. Essentially, the function of these organisations demands adequate collaboration and communication with industry groups, research organisations, growers and government.

Table 1 describes the areas in which research and development organisations (inclusive of RDCs) often utilise market research. A variety of qualitative and quantitative research studies are often integrated within management processes to maximise the value of the R&D process.

Table 1. Examples of market research undertaken throughout the R&D process

Stage

Key elements

Example market research

R&D Planning and Priority Setting

Risk assessment

5 year RDC plan

Industry planning and consultation

Researcher and partner organisations collaboration

Community engagement research

Stakeholder research (monitoring awareness, perceptions and attitudes)

Performance monitoring (KPI benchmarking)

Corporate image and reputation research

Undertake R&D

Design R&D projects

Management of projects

New technology testing/demand evaluation

Product sensory analysis

Product development and concept testing

Consumer behaviour and market segmentation

Pathways to Adoption

Commercialisation

Communication of research outcomes

Capacity building

Inform policy development

Communications research

Advertising testing (Industry owned RDCs only)

Social capacity research

Adoption

Monitor and review economical, social and environmental benefits

Monitoring/evaluating adoption and behavioural change

Social impact assessments

The type of market research most commonly undertaken by RDCs is stakeholder relations research. Traditionally, this has been in the form of annual grower or industry surveys to capture insightful and valid feedback on a number of important issues. Today, stakeholder relations market research programs form a fundamental element of organisational and communications planning, program appraisal and adoption evaluation. Independent market research is used as a means of capturing unbiased awareness and perceptions towards initiatives and industry based issues. When integrated from Board level through to grass roots operators, the approach facilitates a more customer driven approach to research and extension.

Brooks et al. (2002) define stakeholder research as the critical investigation of the experiences and views of sets of people who have vested interests in the products and services delivered by an organisation.

Typically undertaken on an annual and bi-annual basis, stakeholder research programs answer questions such as:

  • How well do the types and quality of services we deliver meet stakeholder needs and expectations?
  • Is our performance viewed as sustainable?
  • What suggestions do stakeholders have for performance improvements?
  • What are the gaps in our knowledge and understanding of stakeholder views and expectations?

Often incorporated in the research are a number of stakeholder satisfaction measures focusing on either satisfaction as a stand-alone measure or as an index of multiple attributes. Performance benchmarks are often set and tracked on an ongoing basis.

In the following section of this paper, an overview is given of two case studies of stakeholder market research projects conducted by Ipsos on behalf of RDCs. These case studies aim to provide insight into the key motivations behind conducting the research, explore some key issues in project design and discuss the areas in which the results has been utilised by RDCs.

Case Study One – Grains Research and Development Corporation (GRDC) KPI Measurement Research

Background

GRDC has set performance indicators at a corporate level (Corporate Performance Indicators) and for each of the six R&D programs (Program Performance Indicators), as identified in the organisation’s Five Year Research and Development Plan. The Corporation was looking to annually track organisational performance against these indicators and measure the levels of achievement of stated objectives. There was a need to improve the interpretation of established performance indicators against grower needs and actual farming practices. Additional to corporate reporting, GRDC wanted to develop to better qualify and quantify current management practices of Australian grain growers. Within this, establish what role it and other organisations play in facilitating change and improvement of management practices.

Design issues

The core project design challenge was to development and implement a coherent, valid and reliable methodology for the grain grower survey elements incorporating actual data collection, aggregation, interpretation and reporting implemented annually over the projects four year life span. Other data and information sources were considered to build on or validate survey data captured, consistent with the Five Year Plan framework.

The key components of the research program included:

  • An initial qualitative focus group phase involving grain growers providing an important vehicle for exploring relevant farm business issues, locally based issues, general attitudes and behaviour, piloting survey questions and concepts and clarifying understanding of agribusiness terms. 10 focus groups were conducted in Year 1 (two in each State) as part of the ‘Listening Post’ exercise.
  • A qualitative telephone/face-to-face survey administered to 40 GRDC stakeholders such as researchers, breeders, advisers and/or other consultants in Year one of the project. This exercise ensured a more holistic approach to evaluating GRDC performance, by validating grower survey outcomes and ensuring all relevant data sources are taken into consideration in any analysis and reporting of results.
  • A nationally based quantitative telephone survey of grain growers conducted annually (over the four years of the project), incorporating each of the agro-ecological zones. A sample size of 900-1200 interviews and a survey length of up to 30 minutes, which allowed disaggregation and hence reporting of results across the zones.

Shown in Table 2 are some of the key areas GRDC were looking to increase their knowledge of stakeholder perceptions, along with some example of questions used in the research.

Table 2. GRDC knowledge gaps and research questions asked

Key research question

Examples of stakeholder survey questions

What is the unprompted awareness of GRDC?

Do you know the name of the organisation responsible for making investments across Australia for grains research and development ?

Can we establish the ways/means by which growers are aware of GRDC and its activities?

In what ways are you aware of the Grains Research and Development Corporation and its activities?

How do growers rate the overall performance of GRDC?

Overall, how would you rate the performance of the Grains Research and Development Corporation as investors in grains research?

What is the attribution of benefits flowing to growers from research – particularly profit benefits?

Thinking about the profitability of your grains enterprise, do you think it has increased as a result of grains industry research over the last 5 years?

What is the importance placed on investment across different R&D areas?

How important is it that GRDC plays an investment role in the following activities?

What is the level of influence of GRDC activities on changes in farming practices?

Can you tell me what these new or improved farming practices are or involved in the last 2 years?

Was the adoption of these new or improved farming practices in any way as a result of GRDC initiatives or activities specifically?

What areas are requiring further R&D investment across cropping regions?

Thinking of your local region, which two key issues or challenges require greater attention or perhaps have been ignored? …They may be technical, production, sustainability, crop protection related or something else

Utilisation

The research results provided a number of important insights to GRDC. The key areas highlighted by the organisation include:

  • Establishment of the level of influence ‘change agents’ (people involved in on-farm adoption i.e. consultants, agronomists, business planners) have on decision making and better understanding of how this group interact with growers. This has prompted the development of improved interaction strategies with this group aimed to enhance dissemination of research results and overall adoption
  • Enhanced links between organisational performance indicators/appraisal and grower feedback
  • Improved communication strategies (how, when and how often GRDC communicate with growers)
  • Better understanding of adoption and barriers to uptake of different best management practices across regions (e.g. no tillage and minimum tillage)
  • Improved ability to keep better track of changes in organisational awareness and industry trends

Future research undertaken by GRDC will focus on maintaining a key trends tracking survey but adding qualitative research to enhance insights from year to year results. The organisation will also seek to become more sophisticated in its segmentation of growers (i.e. understanding more about targeting a certain demographic of growers).

Case Study Two – Fisheries Research and Development Corporation (FRDC) Stakeholder Research

Background

A number of communication mediums and methods are utilised by FRDC to disseminate research results and facilitate adoption of ‘industry best practice’. The bulk of industry communication is conducted through the R&D News (industry publication) and sponsorship of industry events and conferences. Prior to the research, true ‘grass root’ member knowledge of, and satisfaction with FRDC activities was not known, with much of the feedback filtered through ‘regular attendees’, industry bodies or more vocal industry factions. Secondary to this, it was not understood what impact information is having on improving ‘business practices’ and ‘industry capacity’ – that is, motivating behavioural change. Finally, there was a clear need to better target those people who made decisions relating to the uptake and implementation of fisheries R&D.

Meeting the needs and expectations of ‘grass root’ members (i.e. fishing boat operators) of stakeholder groups is vital to the integrity of FRDC particularly given new investment arrangements. There was a distinct need to increase awareness and understanding of what FRDC does, as well as perceived performance levels to ensure the organisation remains relevant and positively impacts change. Consequently, establishing the relevance and impact of current communication and research activities among its stakeholder groups was identified by FRDC as a priority.

Internally, FRDC felt they had a reasonable idea of what they perceived to be occurring relating to the key areas to be covered in the research. The organisation had always maintained a large amount of stakeholder contact so market research was traditionally viewed as the last thing needed by the organisation. But given the immediate need to obtain feedback on current communication materials, the timing was right to substantiate the actual positioning of FRDC within grass roots industry and among key stakeholders.

Design issues

No baseline measurement of stakeholder satisfaction with FRDC initiatives existed. Establishing a baseline measurement of stakeholder attitudes, awareness and understanding of FRDC funded outputs would provide a significant platform to refine operational and communication policies and processes. This baseline measurement and evaluation framework would then be utilised as a benchmark for future research (incorporating performance based tracking).

The key components of the research project included:

  • Structured qualitative face-to-face depth-interviews with key stakeholders including representatives from six key industry groups, members of the eight Australian Fisheries Managers Forum (AFMF) and Recfish Australia. Interviews provided the opportunity to engage stakeholders in a formal setting regarding perceptions of FRDC activities and chosen priorities.
  • A quantitative survey targeting grass roots operators (i.e. fishing boat operators) awareness, understanding and perceptions of FRDC. A telephone based survey of 200 interviews was considered most cost-effective in reaching these often ‘hard to get’ respondents, given the nature of their business occupation and geographic location.

Table 3 presents a sample of the key areas FRDC were looking to increase their knowledge of stakeholder perceptions along with some example of questions used in the research.

Table 3. FRDC knowledge gaps and research questions asked

Key research question

Examples of stakeholder survey questions

How effective are we in reaching our target groups?

Who or which sources have helped you become aware of the FRDC and its activities?

Do we need to relate differently to different target groups and how?

What is your understanding or FRDC’s role and responsibilities?

Are our messages being heard or used to change behaviour? Are they cutting-through?

What is the one most significant activity or initiative you have directly benefited from as a result of fisheries R&D and extension activities or initiatives undertaken in the past 5 years?

How should we be positioning our communications?

Through whom or by which sources do you prefer to receive information about new technology or practices for aiding your business or organisation?

What does the FRDC brand currently convey and what needs tweaking?

Overall, how would you rate the performance of FRDC as investor in Fisheries R&D?

What makes you rate the FRDC (state rating)?

What R&D is being conducted and utilised outside of FRDC funded initiatives?

Does your business or organisation conduct any of its own R&D?

Can you possibly tell me the names of the organisations who have assisted you with R&D funding in the past?

Utilisation

The research results provided a number of important insights to FRDC. The key areas highlighted by the organisation include:

  • Provided a reality check to where the organisation sat in terms of perceived performance, awareness and effectiveness (despite the strong results)
  • Prompted the refinement of how the organisation communicates with industry level stakeholders
  • Clarified understanding of the need for improved direct or facilitated communication with grass root operators
  • Provided better knowledge of how key stakeholders prioritise and view industry issues
  • Established the need to build on the created platform of market research and development

In future stakeholder market research, FRDC plan to conduct an annual program potentially including consumer and stakeholder panels, alignment with international research and tracking of established baseline data.

Conclusions

The case studies demonstrate that stakeholder market research can act as a valuable tool for reviewing relevance and uptake of research and development and extension related initiatives. Specifically, a number of key benefits have been noted.

Important feedback mechanism

The research provides an important independent contact point with stakeholders involved in the R&D process, right through from industry, researchers, change agents to primary producers. It facilitates the opportunity to voice opinion and provide input into RDC improvement. Primary producers are typically very favourable for the opportunity to provide this type of feedback (particularly for industry owned RDCs). Through feedback RDCs are able to develop a greater understanding of stakeholder behaviour and needs. Insightful segmentation and profiling of industry or primary producers are often a key outcome and can be monitored relating the organisations R&D or communications activities.

Improved management decision making

The stakeholder research aids in answering key questions about organisational performance and refinement of operational and communication policies and processes. It can help to confirm or disprove any previously held views by management or the Board and often provides a ‘listening post’ of industry change and trends which can be considered throughout the R&D process. Performance and adoption targets can be set across research programs and are used as the basis of evaluating effectiveness and establishing future priorities.

The case studies presented also demonstrate that the design of the stakeholder research needs to be guided by the purpose and scope of the research. A number of other key issues should be considered:

  • Familiarity of industry and organisational-based issues by the chosen market research team is essential to capture maximum value of the research and interpretation of results
  • The ability to source a representative cross section of stakeholder respondents to participate in the research is essential
  • Ownership of the project by internal stakeholders is essential and obtaining their input in relation to project deliverables
  • Baseline measurement of organisational performance that is valid and applicable across different stakeholder/member groups is a must. Often differences across stakeholder groups are not considered in research projects which limits the merits of research outcomes
  • For quantitative research among rural industries, telephone interviewing often offers the most cost and content effective means of reaching stakeholders in tracking attitudes and performance over-time. The key is ensuring that sufficient samples of ‘grass roots’ business operators across different stakeholder groups are sampled
  • In many instances qualitative research in the form of telephone or face-to-face in-depth interviews is considered most appropriate for rural industry based research, because of difficulties associated with recruiting a cross-section of ‘quality’ participants to attend a focus group within a central location. On-farm in-depth interviews conducted with primary producers provide a valid and considered representation of individual business practices

It is concluded that when designed and conducted appropriately, market research can play a vital role in aiding rural industry R&D decision making.

References

Stevens RE, Wreen B, Ruddick ME and Sherwood PK (1997) The Marketing Research Guide. WJ Winston (ed). pp. 27-43, The Haworth Press, New York, USA

CIE (2003) The Rural Research and Development Corporations: A case study for innovation. Centre for International Economics. vii-xiv, 3-20, Canberra, Australia

Brooks M, Milne C and Johansson K (2002) Using stakeholder research in the evaluation of organisational performance. Evaluation Journal of Australasia, Vol 2, No. 1, August 2002

For further information on the RDCs covered in this paper please contact the authors or refer to:
Fisheries Research and Development Website: www.frdc.com.au
Grains Research and Development Website : www.grdc.com.au

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