The problem with market research in Cayman

Rich Dyer

Despite the lucrative financial market and presence of many multinational companies in Cayman, market research specific to the islands is relatively rare.

There are government statistics for aggregate tourism, member surveys by bodies such as the Cayman Islands Tourism Association and Chamber of Commerce, and consumer and media surveys released by some marketing agencies.

But overall, the majority of businesses on the island do not invest in their own research, and the studies which are publicly available (or purchasable) often lack the statistical rigour that makes for reliable information. There are a number of key population factors that present big challenges to conducting market research in Cayman.

Population size 

Market research involves time, resources and specialist skills to mine and present the data in a clear and actionable fashion. This makes it a relatively expensive activity for businesses. With a larger customer base and revenue, it is easier to offset this expense; in small markets like Cayman, this is much more challenging. This relatively higher cost also impacts the scope of research that is possible.

Primary research is the act of finding new information and often involves direct questioning. Using a well-qualified researcher(s) to conduct the research is more reliable and controllable than an online survey, but it is also much more expensive.

Population demographics 

Cayman is an especially diverse population. The 2013 Census found the population to be 56,691 of which 58.8 percent are Caymanians. Of the remaining (approximately) 23,000 expatriates, there are more than 100 different nationalities. This means that within this small population, there is a huge diversity of taste and behavior, and creating an appropriate sample to represent the population is very challenging. This is easier to control with in-person research as supposed to online surveys, but again this will push up costs.

Population dynamics 

Further complicating sampling the Cayman population is the displacement of the expatriate population. The expatriate market is relatively more affluent than the Caymanian market as they are proportionally more young professionals (fewer children/retirees in their segment) and they have less established tastes (less likely to have traditional/handed-down Cayman market consumption habits).

This generally makes them a more attractive segment to research as they represent a greater chance of increasing sales or market share. However, the reality of work permits and rollover in Cayman makes it a very difficult market to sample. This displacement rate, coupled with the high rate of differentiation in the market (remember, 100+ nationalities for about 23,000 people), means statistical information on their segment swiftly becomes out of date.

Conclusion  

“The relatively low profit potential in smaller markets justifies only modest expenditures for marketing research. Therefore, the global researcher must devise techniques and methods that keep expenditures in line with the market’s profit potential. It may also be necessary to use inexpensive survey research that sacrifices some elegance or statistical rigor to achieve results within the constraints of the smaller market research budget,” say Warren J. Keegan and Mark C. Green in “Global Marketing.”

Despite the challenges, market research in Cayman is still a very worthwhile activity. The reality is that companies will not be working with information as reliable as bigger and more stable markets can enjoy, but this is still far more preferable than effectively “fumbling in the dark.” Research can be adapted to budget, and using a mixture of primary (asking questions) and secondary (gathering existing data) can produce insights that give local businesses an advantage over their competitors. Another consideration could be splitting costs. Businesses can offset research costs by sharing them with others (the “Groupon method”).

Although this may involve working with competitors, there is a number of ways in which businesses gathering information can benefit their entire industry, meaning all businesses in a single sector can benefit.

 

 

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