GfK Aktiengesellschaft

views updated

GfK Aktiengesellschaft

Nordwestring 101
90319 Nuremberg
Germany
Telephone: (+49) 911-395-2685
Fax: (+49) 911-395-4041
Web site: http://www.gfk.com

Public Company
Incorporated: 1935 as Gesellschaft für Konsum-, Markt- und Absatzforschung
Employees: 4,750
Sales: EUR 531.67 million ($520 million) (2001)
Stock Exchanges: Frankfurt
Ticker Symbol: BBFGFK
NAIC: 541910 Marketing Research and Public Opinion Polling

Nuremberg-based GfK Aktiengesellschaft is one of the leading European market research companies with a growing worldwide presence. The company ranks number one in Germany and has claimed the number seven spot worldwide. GfK, which originally stood for “Gesellschaft für Konsum-, Markt- und Absatzforschung” (Consumer Market and Distribution Research Company), has since adopted the more modern motto of “Growth from Knowledge.” The company is organized into four primary business divisions: Consumer Tracking, which accounts for more than 16 percent of sales, and operates in 24 European countries; Non-Food Tracking, through continuous retail sales surveys in 44 countries, which generates 23.6 percent of sales; Media, which includes media usage measurements for television and radio audiences, as well as online usage and other non-traditional media forms, adding slightly more than 12 percent; and the company’s largest division, Ad-hoc Research, which provides various information services for developing strategic, operational, and marketing policies. With operations, including partnerships, in nearly 90 countries, GfK’s Ad-hoc Research activities are the company’s largest, generating 41.5 percent of shares. GfK’s geographic breakdown remains largely focused on Europe. Germany alone accounts for nearly 40 percent of sales, while the rest of Western Europe adds more than 45 percent to the company’s revenues. Asia and America play a more minor role for the company, at 5.5 and 6.5 percent of sales, respectively. GfK has been growing rapidly since the late 1990s, more than doubling its sales in just five years to reach EUR 531 million in 2001. Much of this growth has come through acquisition, such as the purchase of majority control of the United Kingdom’s Martin Hamblin Group in 2001, which gave the company a spot in the top ten of that country’s market research sector—the second largest market research market in the world. The acquisition joins GfK’s international network of more or less independently operating subsidiaries. In 2002, the company’s network included more than 110 subsidiaries, offices, and equity “partnerships” in 51 countries. The company is forecasting sales growth to more than EUR 1 billion by 2005. GfK is listed on the Frankfurt stock exchange and is led by CEO Klaus Wübbenhorst.

Market Research Pioneer in the 1930s

Professor Wilhelm Vershofen was already considered the founder of German market research by the 1930s. Vershofen had published his first paper on the subject, entitled “Menschen im Markt” (Markets and People), in 1925. Putting theory into practice, Vershofen set up the “Instituts für Wirtschaftsbeobachtung der Deutschen Fertigware” (The German Branded Goods Market Observation Institute) that same year. Working under the auspices of the University of Nuremberg, the Institute launched one of the world’s first market research fieldwork operations, generating the first available data tracking consumer purchasing and behavior patterns.

Vershofen’s work inspired a number of others, including Ludwig Erhard, later the German Minister of Foreign Affairs who led the German “Wirtschaftwunder” of the 1950s and became known as the father of the deutschemark. In the 1920s Erhard joined Vershofen as an assistant, and became one of the founding members of GfK.

Another founding member of the GfK club was Erich Schäfer, who, as a professor at the University of Nuremberg, had developed his “Theorie der Absatzlehre und Marktor schung” (The Theory of Retail and Distribution), before publishing the groundbreaking work “Grundlagen der Marketforschung” (Principles of Market Research) in 1928. Schäfer’s emphasis on tracking not only consumer behavior but distribution patterns as well was to encourage GfK to include both areas in its own development.

By 1934 Vershofen’s work on market research, and particularly on developing the basic principles of conducting consumer research through field interviews, resulted in the drafting of an important monograph, “Konsumentenbefragung auf breiter Basis” (Broadly Based Consumer Interviewing). Presented before an audience of German industrialists, including Wilhelm Mann of IG Farben, who had developed the famed Bayer “Cross” logo, Vershofen’s ideas called for replacing the more or less haphazard market research initiatives of German businesses—which often relied on informal, and often biased reports from salesmen and others returning from travels around Germany. Instead, Vershofen proposed the creation of a dedicated network of correspondents, unaffiliated with any single industry or business, be trained to conduct consumer-based interviews. This network was to be put into service as part of a cooperative formed by various member companies, which could call on the cooperative’s services.

Vershofen’s paper was positively received, and in 1935 Vershofen, together with Erhard, Schäfer, and Dr. Georg Bergler, founded Gesellschaft für Konsum-, Markt- und Absatzforschung, or GfK, in Nuremberg. Wilhelm Mann, who had also been a student of Vershofen, became a company patron, one of the founding members of the cooperative, and ultimately its president. The backing of Mann helped win over other major manufacturers in the country.

GfK set about building its interviewer network, a process conducted in large part by Georg Bergler, who traveled throughout Germany locating and training “correspondents.” Bergler also sought a cross-section of German society in order to form a representative pool. By the end of 1935, GfK had gathered several hundred correspondents, and had developed a purchasing power “map” of Germany. The completion of this first correspondents network enabled the company to begin its first market research study in 1936, commissioned under the title “Die Bekanntheit von Warenzeichen” (The Awareness of Trademarks).

That study was followed by some 70 more in the years up to the end of World War II. The company treated a large variety of consumer issues, products, and categories, ranging from personal care products and soap use to bread consumption and automobile purchases to advertisement campaign effectiveness measurements. GfK’s work attracted growing numbers of businesses into the cooperative—by the end of the war, the GfK cooperative included nearly 150 member companies. While a number of studies were commissioned by and for single clients, much of GfK’s early work benefited multiple clients, forming a pool of market research and consumer behavior statistics.

After the German capitulation in 1945, Bergler took over leadership of GfK, which was required to apply for a business license from the Allied authorities. Because GfK was relatively untainted by any direct relationship with the Nazi party—it had never conducted research for the party, and indeed had established close ties with members of the German resistance—the license was duly granted and the cooperative resumed operations in 1945, now backed by 70 member companies. The devastation of Nuremberg had destroyed much of GfK’s archives as well; nonetheless, the group was able to begin reconstructing its correspondents network.

The institution of the new deutschemark gave the group one of its first major government contracts, when, in 1950, it was awarded a contract for measuring the purchasing strength of the new currency. By 1955, GfK had released its first Purchasing Power Map of the Federal Republic. GfK was active in promoting the cause of market research in general, joining in the establishment of the Nuremberg Institute of Marketing Economics in 1950. In 1956, GfK and its partner founded a new journal, Absatzwirtschaft (Marketing Economics), that went on to become the country’s leading marketing economics publication.

The strong German economy led to boom years for GfK, which branched out into other specialty market research, particularly advertisement effectiveness measurements and television and radio audience ratings. In the mid-1950s, the group began its longstanding relationship with consumer products group Henkel, developing a Household Panel for that company in 1956. GfK’s foundation membership continued to grow, topping 600 member companies by the end of the 1950s. Meanwhile, the group began developing new, more sophisticated measurement tools. In 1957, GfK created its Household Panel, boasting more than 1,000 households. These were outfitted with the new GfK Household Calendar, a 53-page weekly diary tracking correspondent families’ household purchases. Tracking was also extended across a larger range of consumer products.

Growing Through Innovation and Expansion: 1950s–90s

By the end of the 1950s, the influx of new data led GfK to begin automating its data processing. The group took another step toward modernizing its operations in 1967 when it took part in the founding of Europanel, an association of European market research companies, one of the earliest attempts to share consumer panel findings across European borders. By then, GfK had already begun its own international development, opening a subsidiary, GfK Austria, and developing a Household Panel for that country. GfK’s German Household Panel continued to develop as well, topping 5,000 households in 1961.

Company Perspectives

GfK. Growth from Knowledge. Companies need to make decisions. Knowledge is the basis for the decision-making process. Our business information services provide the essential knowledge that industry, retail, the service sector and the media need in order to make their decisions. As a knowledge provider, we aim to be at the top in all the global markets in which we operate—in the interests of our clients, our employees, our company, our shareholders and the general public.

GfK also responded to the increasingly sophisticated and varied consumer market by setting up more targeted consumer research operations. Such was the case with the creation of a new 1,000-strong Individual Panel in 1963. In 1966, GfK launched a new subsidiary operation, GfK Store Tests, as part of an analysis of the German retail trade market. By the end of that decade, the company’s Household Panel had topped 10,000 households, while its increasingly international operations enabled it to launch a new European Purchasing Power Map in 1968.

In 1970, GfK launched a new business unit, GfK Retail Research, dedicated to research on retail markets. As part of this operation, the company set up new panels, the Basic Panel and the Leader Panel, with data covering some 60 different retail product groups.

At the beginning of the 1970s, also, the group began instituting new panels dedicated to products in the non-food category, starting specifically with photographic products. By 1971, this panel had attracted ten major photography products manufacturers in Germany; that panel was later extended to measure not only the photographic market, but the electrical product and consumer electronics product markets as well. GfK’s early diversification in this area enabled the company to become the world leader in this market research category. The company’s willingness to innovate continued in the 1970s with the launch of the GfK ERIM Panel, a project which consisted of outfitting consumers with personal identity numbers, which could then be entered by participating retailers, enabling a more detailed tracking of household purchases.

GfK expanded in other ways in the 1970s, beginning a series of joint ventures and equity partnerships with the founding of G&I Forschungsgemeinschaft für Marketing in conjunction with Munich-based Infratest. That partnership became 100 percent controlled by GfK in 1983. A similar joint venture, S&G France, was founded in partnership with French market researcher Secodip in 1979, while I&G Retail Research, formed in partnership with IHA, brought the group into Switzerland that same year.

GfK continued its international expansion, setting up GfK Niederlande in Amsterdam in 1978, and GfK Great Britain in 1980 to enter those foreign markets. The group also began a series of acquisitions, particularly in Germany, including the Institut für Markt und Preis, based in Mainz, in 1980. The group set up a dedicated subsidiary in France the following year, and made its first entry into the United States through a partnership with New York-based NGA. Meanwhile, GfK extended its retail panel research operations into Scandinavia, beginning with Sweden in 1981. The following year, in partnership with TRC in Japan, GfK began conducting its first Electrical Product Leader panel in that country.

The ERIM panel gave way to still more sophisticated retail measurement instruments in the 1980s, starting with the rollout, in 1982, of a series of group-operated panel stores, which were equipped with EPOS cash registers to generate computer data on consumer shopping and spending habits. In 1984 the company stepped up its position in the television viewing monitoring sector with the establishment of subsidiary GfK Fernsehforschung. By the middle of the decade, GfK had become a market research leader in Germany, operating six subsidiaries in that country, with 11 other subsidiary operations, including joint ventures and partnerships, in 11 countries.

The 1990s marked an era of vast change for the market research community. With the increasing internationalization of the consumer market—as manufacturers began operating on a global scale and brand names became recognized by and marketed to a worldwide consumer audience—the need arose to generate cross-border market research data. Meanwhile, the need for market research itself had reached a new level of acceptance as manufacturers, leery of committing to a huge product development and marketing process, sought more accurate and targeted testing of consumer markets. Market researchers themselves began shifting more and more to an international scale, gaining size through a thorough industry consolidation. By the end of a decade-long shakeout, the market research pool had shrunk to just 11 truly major players—including GfK.

Key Dates

1935:: Market research pioneer Wilhelm Vershofen and others found Gesellschaft für Konsum-, Markt- und Absatzforschung (GfK) in Nuremberg.
1936:: First consumer tracking study, “Die Bekanntheit von Warenzeichen,” is completed.
1945:: Following World War II, GfK is granted a business license and begins rebuilding its operations.
1956:: Company forms its first Household Panel featuring 1,000 member households.
1960:: Company establishes GfK Austria.
1972:: Company forms G&I Forschungsgemeinschaft für Marketing joint venture (fully acquired by GfK in 1983).
1978:: GfK establishes subsidiary in the Netherlands.
1981:: Company establishes subsidiary in France.
1982:: GfK introduces company-operated panel stores, featuring EPOS cash register tracking system.
1984:: Company establishes GfK Fernsehforschung in order to monitor television viewing patterns.
1990:: GfK joins in formation of the European Market Measurement Database, a consortium capable of providing household panel data from nearly 60,000 households across Europe; establishes subsidiary in Russia.
1997:: Company forms Romtec-GfK joint venture in United Kingdom, acquiring full control in 2001.
1999:: GfK goes public with listing on the Frankfurt Stock Exchange.
2002:: Company acquires Informark Pty (Australia) and 35 percent of M2A (France).

The relaxation of trade barriers across Europe in the early 1990s also led GfK to join with AGB, Secodip, and a number of other European market research companies to form the European Market Measurement Database, a consortium capable of providing household panel data from nearly 60,000 households across Europe. GfK continued to develop internationally on its own as well, setting up a joint venture with AGB in England in 1990, which was taken over by GfK entirely in 1992 and renamed GfK Marketing Services Ltd. in 1992. By then, GfK had established a subsidiary in Russia and opened a branch office in the Czech Republic as it began preparing to expand its operations into the new, liberated Eastern bloc countries, which it did in 1991 with the formation of a subsidiary in Slovakia.

By the mid-1990s, GfK’s revenues had topped the equivalent of EUR 250 million as the company stepped up its international expansion. By 1998, the company’s international operations accounted for more than half of its total revenues, although Germany remained its single largest market. Continued acquisitions were to enable GfK to double its sales by 2001, topping the EUR 500 million mark. Among the company’s growth moves made during the period was the setting up of a joint venture with UK IT market specialist Romtec in 1997, and the purchase of a majority share in Switzerland’s IHA Institut für Marktanalysen in 1998. That year, the company acquired the Netherlands’ Intomart Benelux and France’s ISL (Institute de Sondages Lavialle), further boosting its international media measurement operations.

Bright Future

Fueled by a public listing on the Frankfurt Stock Exchange in 1999, GfK’s acquisition drive continued into the new century. By 2001, the company operations included more than 100 subsidiaries, branch offices, and joint venture and equity partnerships in more than 50 countries worldwide. Purchases included a 65 percent share of Orange Interactive Research in Sweden; 20 percent of software developer Caribou Lake in the United States; a 51 percent stake in Germany’s Enigma; a 51 percent share of the Martin Hamblin Group, which boosted GfK’s position to number seven in the U.K. market; and a 20 percent share of Indicator, of Brazil, giving GfK an entry into the South American market. Another important purchase that year was the acquisition of full control of Switzerland’s Telecontrol, a developer of television and radio measurement technologies and hardware.

GfK showed no signs of slowing down as the new century got underway. Indeed, the company began forecasting a new doubling of its revenues, to EUR 1 billion by 2005. Already in 2002, and despite the poor economic climate, GfK continued its growth moves, acquiring Informark of Australia as well as a 35 percent stake in French veterinary medicine specialist M2A. One of the world’s oldest market research companies, GfK had proven itself a shrewd competitor within its own market—claiming a solid position in the world’s top ten market research companies.

Principal Subsidiaries

Contest-Census Gesellschaft für Markt- und Meinungsforschung; mit beschränkter Haftung; dm-plus Direktmarketing GmbH; ENCODEX International GmbH; ENIGMA Institut für Markt- und Sozialforschung Jürgen Ignaczak GmbH; Ernst und GfK Grundstücksgesellschaft; GfK CEE Finance GmbH; GfK Data Services GmbH; GfK Fernsehforschung GmbH; GfK Marketing Services GmbH & Co. KG; GfK PRISMA Institut für Handels-, Stadt- und Regionalforschung GmbH & Co. KG; Media Markt Analysen GmbH & Co. KG; Modata GmbH. GfK has international subsidiaries in The Netherlands, France, Belgium, Spain, Singapore, Austria, Sweden, Denmark, Hungary, United States, China, Australia, Japan, Korea, Hong Kong, Malaysia, United Kingdom, Croatia, Italy, Greece, Cyprus, Poland, Portugal, Brazil, Romania, Russia, Czech Republic, Slovakia, Ukraine, Switzerland, and Thailand.

Principal Divisions

Consumer Tracking; Non-Food Tracking; Media; Ad-hoc Research.

Principal Competitors

ACNielsen Corp.; IMS Health Inc.; The Kantar Group; Taylor Nelson Sofres; Information Resources; NFO Worldwide Inc.; Nielsen Media Research; United Information Group Ltd.; Ipsos Group SA.