Market Research + Political Risk

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Many factors influence businesses but few pose as great a risk as political risk. Understanding and forecasting the political landscape and its risks should be an essential part of every business’ operations. Market Research enables management and decision makers to make informed decisions, identify opportunities and, importantly, mitigate risks.

Staying informed on political risk factors influencing and impacting your company is very time consuming. Market research streamlines this process by providing your business with insights tailored to your needs.

As political agendas are driven by market forces and informed by market research themselves, market research will give companies the most accurate and robust future prognosis.

This is an overview of major political trends, likely to affect a range of different industries.

In 2017, a number of issues have fractured the Australian political landscape, but not limited to: citizenship scandals; energy and climate crises; the continuous asylum seeker debate; increasing conflicts between moderates and conservatives; and the list goes on. These have weakened not only, the Labor Party but also the coalition and have ultimately affected the security of Malcom Turnbull’s leadership.

Energy and climate

The hope of a “lasting energy framework” after Alan Finkel’s investigation into the security and reliability of the electricity market was disappointing. Finkel’s “Blueprint for the Future”, outlined an action plan to repair the Australian electricity market by introducing a Clean Energy Target, to conform to the Paris Climate Change Agreement. This was starkly opposed by coal advocates and argued that 42% of renewable energy by 2030 was too ambitious and would put service reliability at risk. The Greens also criticised the Blueprint as a “short-term political fix”.

The government now supports the new proposal of a National Energy Guarantee (NEG), proposed by the Energy Security Board. The NEG recommends a reliability guarantee and an emissions guarantee.

The new proposal has already been criticised for renewables’ incentives being revoked and for the lack of penalties for corporate non-compliance. The details of this plan will be released in April 2018. It remains to be seen if the new proposal will withstand the challenges from different interest groups.

Asylum seekers

The decommissioning of offshore detention centres on Manus Island, Papua New Guinea and Nauru, as well as the forceful removal of the remaining asylum seekers has provoked global condemnation and affected our relationships with the rest of the world. However, the offshore asylum seeker processing topic remained one of few where the coalition was united under Turnbull.

Liberals’ ideological issues

The global phenomenon of a continuous split in the political right is very tangible in Australia. With Tony Abbot seeking to position himself as the new voice of a Liberal conservative Australia, in direct challenge to Turnbull’s leadership.

Tumultuous leadership

Last year was marked by an increasingly rebellious Coalition, with backbenchers openly defying Turnbull’s authority. An example of this breakdown saw Senator Bernadi openly defecting from the Liberals and establishing his own, the Australian Conservative Party.

With growing pressure from his own ranks, Pauline Hanson’s One Nation inspired the Nationals to publicly challenge the Turnbull government, forcing a Royal Commission into the banking sector against the Prime Minister’s will.

Things got a little heated when Turnbull recently and openly critiqued former Nationals leader Barnaby Joyce for his relationship with a former employee. The following resignation by Joyce might just place more strain on a fragile Coalition relationship.

The Australian Labor Party

Whilst Labor’s strategy of “sit[ting} back and watch[ing] the Coalition self-implode” saw the party in front of the Coalition in two-party polls, Bill Shorten still personally ranked behind the Prime Minister in a two-party preferred polls.

Section 44 – “The Citizenship Debacle”

2017 saw a record number of parliamentary resignations owing to a new interpretation of Section 44, which raised questions over constitutional ineligibility of parliamentary membership due to citizenship requirements. The High Court found five MPs constitutionally ineligible, followed by two members of the government’s ministry, the Senate President and finally two cross-bench Senators. This issue of eligibility is largely unresolved, as additional referrals to the High Court have already been lodged and will roll into 2018.

Aboriginal matters

Parliamentary eligibility issues will continue to dominate Aboriginal recognition matters. The rejection of the establishment of a First Nation’s Voice, recommended by the Referendum Council, was appointed to advise on meaningful recognition of First Nation peoples on civil rights grounds.  Any progress on the recognition issue is unlikely, as no goodwill remains between stakeholder groups and the government.

Same sex marriage

In 2017 Australia became the 26th country to legalise same sex marriage, following a 61.6% vote in favour. The postal survey was conducted despite harsh critique on the plebiscite strategy, for its non-binding nature, exclusion of oversea voters, security concerns, the constitutional eligibility of the ABS to conduct a plebiscite and the government’s justification to spend AUD$122 million of taxpayer money to conduct it. Despite the overwhelming vote in favour, the matter still seems unresolved, as the balance of marriage equality and religious protection remains highly debatable.

Risk Management and Market Research

Considering the volatility of the past year, the political future seems hard to predict. Major new policies seem unlikely in the near future, though past issues seem likely to continue well into 2018.

When seeking to establish an effective risk management plan, success is highly dependent upon the identifying relevant risk factors. Market research can identify firm- and country-specific risks and distinguish between instability and/or government risk, helping you determine relevant threats effectively.

This is particularly important, as the nature of risk varies from firm to firm and is dependent on different exposures. As companies are rarely able to influence country-specific risk or even governmental risk factors, such as subtle policy changes, these can pose a great threat to businesses. Hence, it is of utmost importance to identify and effectively manage these risks. Market research can provide those insights needed to make relevant risk mitigation and management decisions, so that operations and financial performance can be better safeguarded going in to the future.

Sources: Committee for Economic Development of Australia; International Risk Management Institute; Stable Research.

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Social Media Digest: Timing

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The desirability of your content and products is always built over time (through social media). Treat it like building any face-to-face relationship, except you won’t actually see them. The quality of your content is also very important. No one wants to read you blabbing on about nothing of relevance.

Timing your posts has equal importance to the quality of the content you’re aggregating or creating. The timing of your posts will generally dictate what type of content you’ll write and for whom. As a general rule of thumb, post during (inspired by Kevin Munro @ Checklist):

06:00 – 08:30
(weekdays)

(The Breakfast Club)

Getting out of bed and switching on the TV is just too hard but you still want to know what’s happening out in the big wide world, so you reach for your phone which lives next to your bed.

Posts should be short, precise, light, positive and feel-good, without the sales pitch.

11:00 – 13:00
(weekdays)

(The Lunch Break)

You don’t have much time to eat that sandwich you just bought but you might want to be kept entertained while you eat it with one hand, so you grab for your phone.

Like breakfast, posts should be short and sharp and perhaps humorous, without the sales pitch.

15:30 – 17:30
(weekdays)

(The Distraction/Commuter Phase)

You glance at the clock and realise it’s almost time to clock off but realise you won’t be any more or less productive if you did any more work. You could be on your way home on the bus and don’t want people glancing back at you when you clearly weren’t looking at them, so you grab your phone.

People want to be distracted (yes, that’s right) from what they’re doing so your posts should be short, sharp and funny, without the sales pitch. Avoid too many videos or long articles. People want to be entertained, quickly.

19:50–
(weekdays)

(The Recreational Period)

You might be making dinner (or not) and you’re definitely not watching the TV but it’s still on. You’re on your phone.

This period is where people are most engaged with social media. Your posts can be longer and include videos as people have more time to engage with your content. Make sure your posts here are good quality and, more importantly, relevant to what your business is or stands for, without the sales pitch.

Truth is every business’s social media schedule won’t be the same as the next. This will largely depend on the nature of the industry you work in and the type of people your audience is or already are. Adjusting your timeline to suit your target audience and demographic is ALWAYS okay. You can test out different times and see what works best for your business. Always post your content at the start of each period and not after so it’s there waiting for your audience to read.

Now, you might notice a little bit of repetition here: without the sales pitch. That’s right. Your audience does not want to be, nor are they interested in being, constantly pestered to buy something from you. It’s always a good habit to constantly remind your audience you exist without hard selling to them all the time.

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Market Research + Consumer Trends

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Global and national markets are ever changing and in order to grow or maintain market share, businesses must identify business trends and changes in customer behaviour before they disrupt profits. Market research should be an essential and ongoing part of business operations, not just during periods of crisis management.

In 2018 the following forces are shaping and changing consumer behaviour:

ADAPTIVE ENTREPRENEURS

According to a global study by Euromonitor in 2017, 50% of respondents across all generations were aspiring to self-employment. This is indicative of an enormous shift away from traditional full-time jobs and towards more self-directed and flexible lifestyles. This development towards risk taking “Adaptive Entrepreneurs”, fuelled by stagnant wages, high youth unemployment rates and a change in personal values are causing delays in larger life goals, such as property purchases or children. The inspiring success stories of tech industry founders and the convenience of crowdfunding platforms are disrupting the economy, as “Adaptive Entrepreneurs” are no longer responding to traditional advertising strategies or job offers.

CALL OUT CULTURE

Two developments, (1) the increase in internet and social media usage and (2) consumers discovering and embracing their growing power, have given the “hashtag activism” movement momentum. Consumers feel empowered to speak up and show support for worthy causes. Brands and even governments are under increasing pressure as social responsibility and transparency are expected by increasingly opinionated consumers. A global Edelman survey in 2017 found that 51% of customers believed brands are able to solve more social problems than governments. Consumers are “voting with their wallets” and actively reviewing and pressuring brands online forcing companies to take a stance on current issues. This has forced brands toward greater direct customer interaction. Brands have to respond quickly and effectively, with some believing customer service to be the new marketing (Joy Bear).

 

% of Respondents Visiting or Updating Social Media at Least Once a Week

Source: Euromonitor International’s Global Consumer Trends Survey 2017

 

CLEAN LIVERS

Consumers’ strong sense of social responsibility increasingly motivates them to seek to provoke change through their consumption choices, thus fuelling trends. Trends include minimalism, veganism and abstinence.  In response to these consumer trends we are seeing an increase in the development of non-alcoholic beverages, alcohol-free festivals and fitness nightclubs. Young consumers, in particular, are increasingly family-oriented and health conscious, seeking meaningful and healthy experiences, rather than ownership.

THE BORROWERS

With consumers increasingly choosing flexibility and freedom over possessions, Borrowers value access not ownership. This rejection of materialism in favour of meaningful experiences is increasingly impacting older generations. Combined with urbanisation and an associated decrease in average living space, it is leading to the emergence of innovative start-ups in the sharing economy, satisfying the increasing demand for sharing, swapping, renting and streaming.

IT’S IN THE DNA – I’M SO SPECIAL

With 25% of Americans stating they were planning to take a DNA test within the next 12 months, consumers’ growing curiosity about their genetic make-up and what it reveals about their ancestry, physiological traits and health risks are causing this infant industry to grow. The genetic testing industry has grown from USD$70million in 2015 to an expected USD$340 million by 2022. The greatest challenge facing the genetic testing industry is to convince potential customers of the effectiveness of testing methods and the security of their personal data.

VIEW IN MY ROOMERS

The emergence of more sophisticated technology and a growing demand for an immersive online shopping experience has brands globally exploring the benefits of augmented reality (AR). AR is believed to satisfy the “try before you buy” demand, giving online shoppers the convenience of shopping anywhere, at any time, with product information and reviews at their disposal, without having to sacrifice the benefits of a traditional in-store shopping experience

SLEUTHY SHOPPERS

A crisis of trust between consumers and the motives of corporations engaged in mass-production is driving consumers to question marketing campaigns, brand images and business practices of companies of interest.

Sceptical consumers are increasingly demanding extensive evidence of labour, production and supply-chain practices to justify purchasing decisions. Proactive transparency and the provision of detailed proof and insight into business practices will foster trust toward the company and their products, helping to create a loyal customer base.

 

Respondents That Only Buy from Companies and Brands They Trust

Source: Euromonitor International Global Consumer Trends Survey 2017

 

I-DESIGNERS

A shift in consumer values from ownership towards experiences is disrupting purchasing patterns globally.

Consumers are aspiring to a meaningful involvement in the creation and production of their acquired possessions. Greater importance is attributed to the purchase itself, with personalisation creating more authenticity and greater value for the consumer. Recent advances in technology have enabled brands to provide customers with the opportunity to assume the role of a designer, adapting products to their taste whilst exercising their inner creativity. This is an essential step in creating a loyal customer base.

CO-LIVING

Skyrocketing real-estate prices in urban centres and the desire to share rather than to own is driving Millennials, as well as over-65s, to cohabitate with like-minded inhabitants, socialising, inspiring and living mortgage-free. Millennials, who are now outnumbering Generation X, now value freedom over ownership. The niche-trend of co-living is disrupting traditional real estate and fostering co-living business ventures, not just in residential but also in the corporate sector. This has created co-working spaces for individuals to interact with and inspire each other.

THE SURVIVORS

Even a decade after the Great Recession (2008-09) the gap between the rich and the poor remains , with 30 million households in developed markets surviving on a low income. The resulting food insecurity is giving rise to foodbanks, whilst the retail industry is responding with the creation of resale shops, grocery discounters and value-based retailers. These value-based retailers have proven resilient against the disruption of online shopping and are expanding faster than any retailer, inspiring traditional retailers to incorporate resale areas into their traditional business models.

Are you aware of key trends in your industry? Do you know how to take advantage of them?

Market Research helps you identify development opportunities so you can grow your business by staying ahead of your competitors. Be the business that sets industry standards and competitors look to for guidance.

 

Source: Euromonitor International

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