Archive for the ‘Business Decisions’ Category

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Never Underestimate Intelligence

New York’s Westchester County Business Journal, in its weekly business advice column, has just run an article entitled ‘keeping abreast of the competition’.  For us, as market research and competitive intelligence experts, we can never read enough articles that encourage organizations large and small to recognize the importance of quality, up-to-date business intelligence.

As anyone who is familiar with Porter’s Five Forces will be well aware, very few, if any, companies operate alone in their given marketplace.  Each company’s specific micro environment consists of forces that affect its ability to serve its customers and make a profit.

Competition is out there in the form of direct established rivals, as well as the threat of new entrants to the market or the threat of substitute products.

Any change in any of these forces normally requires a company to re-assess the marketplace, hence the need to regularly review your competitive intelligence.  Even the decision of a competitor to get out of your chosen marketplace, for example, should be viewed with a degree of caution rather than unbridled celebration.  Why does your competitor no longer wish to be in your market?  Do they know something important that you don’t?

Intelligence is, of course, available from a wide range of sources.  In its most basic forms there is much you can do yourself: talk to your suppliers, customers and employees; keep abreast of developments by reading industry periodicals or industry reports; scour the internet for news.

Yet much information – especially that of a sensitive nature – can be difficult to come by, and not all companies have the necessary people resources to conduct a thorough and comprehensive competitor analysis.  In many cases, they may require the help of an external research consultancy who will be adept at sourcing data – from mystery shopping, to competitor pricing research studies, through to conducting structured interviews with customers, suppliers, distributors, industry experts and even competitors themselves.
Of course, it’s one thing to have pages and pages of intelligence; it’s a whole other matter knowing how to pick out the most pertinent information and use it to draw up a plan of action.  How do you decide which competitors and which markets you want to take on and which you want to avoid?  Sometimes an independent, objective expert can help to sift through the masses of data, separate the wheat from the chaff, and highlight the most salient points.

There is no doubt that there is a whole world of information out there, and that competitor intelligence at your fingertips enables you to make intelligent future business decisions.

Find out more about how B2B International’s competitive intelligence work can enhance your own knowledge by clicking here.

Posted in Business Decisions, Competitive Intelligence, Interviews, Market Intelligence, Mystery Shopping, Porter's Five Forces |
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The ROI Of Market Research – New Podcast

ROI is an oft-repeated business mantra for any kind of major strategic investment, and market research is certainly no different from other business expenditure in this respect.

Market intelligence studies are often commissioned with laudable intentions – principal amongst these being the development and growth of the organisation concerned. However, for all the lofty ambitions and expectation that may be placed behind a market research project, without careful planning and management, the end result can all-to-easily disappoint. A study may fail to target the original objectives from the market research brief or the report may be too far divorced from the actions that will effect real change within an organisation.

In effect, the question that companies should ask when commissioning market research is "am I getting my money’s worth?" – A query that should be asked of major investments at any time, not least during a recession.

In B2B International’s latest podcast, we broach these very issues: How can we ensure market research delivers value for money? How can this be verified or measured? And, perhaps more fundamentally, what is the value of market research in the first instance?

The podcast is based upon a white paper written by Paul Hague and Julia Cupman of B2B International entitled "Making effective business decisions: Measuring & maximising the return on investment of market research". Links to both versions of this paper can be found below:

	Making Effective Business Decisions in pdf
	Making Effective Business Decisions from The Market Research Podcast

Posted in Budgets, Business Decisions, Julia Cupman, Market Intelligence, Market Research, Paul Hague, Podcast Audio, Return On Investment, ROI |
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Marketing Strategies In The Current Economic Environment

B2B International recently hosted an online survey for Julia Cupman on marketing strategies in the current economic environment as a part of her further studies.  This unique piece of research provided insights into how marketing professionals are responding to today’s recessionary pressures.

The survey yielded 396 responses from a plethora of organisations representing all industrial sectors, many b2c sectors and most geographies, and which included some of the largest corporates in the world.

The research study provided rich insights on the impact of the recession and how organisations are responding to the current business environment.  Four out of ten respondents said the effect of the recession has been very significant.  As might be expected, national and overseas sales have been affected, investment has been cut back, plants have surplus capacity and there are cash-flow constraints.

Nevertheless, around a half of organisations stated that they are optimistic about the economic outlook over the next 12 months.  There is a hint that investment in marketing works, given that 58% of organisations with a higher-than-average spend on marketing were optimistic, versus only 44% with a lower-than-average marketing spend.

The most common response to the current economic environment has been cutting costs, followed by organisations (re)aligning their focus from a wider offering to core products and services.

29% of respondents stated that marketing is playing a big role as a weapon to fight the recession and there is currently more emphasis on value marketing, finding new opportunities in different industry sectors and channels to market.

Click here to read a full synopsis of this study.

Posted in B2B Marketing, Business Decisions, Credit Crunch, Economic Crisis, Julia Cupman, Marketing, Recession |
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Increasing Sales In Challenging Times, part 3 of 3

In the final installment of this article, Julia Cupman concludes her list of points to consider when assessing new market opportunities, and reiterates that the economic downturn still presents myriad opportunities to many companies:

7. What is the market structure?  A key to a market entry strategy is getting the channel to market right.  To do this, the research should explain what the market looks like, who the main players are and what channels to market they are using.  For example, substantial sales may be generated through distributors, agents or other types of intermediaries; this is important information that will suggest possible routes to market.

8. What are the market’s perceptions of the current suppliers?  A company cannot enter a market without understanding who their potential competitors are and the market’s views on these.  Hence, the research findings should document which suppliers of the product/service are known and used, the perceived strengths and weaknesses of these suppliers, and the nature of the relationship between the buyers and suppliers.

9. What is the competitive environment?  The degree of rivalry should be explored to provide an insight into the competitive environment.  Profiles of the major players should be included in the research, plus insights on how these players operate, how they position and promote themselves, and what their product/service looks like.

10. What are the incentives and barriers to entry?  The research should investigate how the incentives to entry can be maximized and how the barriers to entry can be overcome.

11. What is the market size?  No company should ever consider entering a market without a feel for market size.  It needs to know the current size of the market and the annual market growth rate in order to determine whether market expansion is feasible.

12. What is the opportunity for a new entrant?  The research should explain how a new entrant should enter the market and how it could steal market share, including an indication of potential market size.  It should also provide an overview of which market segments offer the most opportunities and what gaps there are in the market.

Market expansion may be a viable opportunity that offers a means for companies to sell more if their prospects domestically have been blackened by the economic downturn.  Market entry research can cost anything from $40,000 upwards, depending on the nature of the research.  This is a small cost to pay given the high return on investment.  Hence, companies that cut their marketing budgets during economically challenging times are potentially closing doors to new opportunities.

To find out about B2B International’s market assessment research, please click here.

Posted in Business Decisions, Competitor Analysis, Julia Cupman, Market Assesment, Market Entry, Market Size, New Markets |
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Getting A Return On Investment From Your Market Research

Many b2b companies, rightly so, are asking for more from their market research budgets – what will be the return on investment (ROI) if we spend $100k?

You would think that the pharmaceutical market is like every other industry sector with its ever tightening legislation, generic encroachment, slowing revenue streams and frequent clinical failures.  However, according to a study from US-based Cutting Edge Information, pharmaceutical companies are moving away from the idea of hard ROI measurement for their market research where 74% of surveyed companies do not attempt to calculate ROI for market research.

The report, Improve Market Research Impact, says these firms are concentrating instead on levels of satisfaction of internal clients for research. Of the 74%, 39% do not conduct any sort of performance measurement.

The view that hard measurement of ROI is infeasible grows out of the fact that market research comes so early in the chain of events leading to a project launch – it is far removed from the end result. Lead report author Jordan Stone comments: ‘Because of its increased prominence in contributing to central strategy and key stakeholder decisions, many market research groups have shifted their focus from trying to directly tie market research to the success of products. With clients such as business development, ensuring the customer is satisfied and utilizing to the fullest the deliverables and insights communicated has become a better means by which to gauge market research success.’

It is clear that the measurement of the return on investment of market research is a valid concept, even though there are difficulties in making the measurement. The more general the market research objective, the more difficult it is to achieve the ROI measurement.  Measuring the ROI on the market research used to evaluate the opportunities in new markets is difficult because so many other factors will influence the success and a length of time will be required before it is possible to check out whether the research was "correct" in the long term. Furthermore, if the outcome of the research project indicated that there was no opportunity, it has potentially saved the company many millions of dollars in what could have been a disastrous investment. However, it is impossible to be absolutely certain whether negative research findings were correct, and in the case of no investment, there is, in theory, no ROI.

A new white paper by B2B International, entitled Making Effective Business Decisions concludes that all significant expenditure in business should be justified. Measuring the ROI of market research is laudable and in some cases it is entirely feasible but it doesn’t come without its difficulties of measurement.

Posted in Business Decisions, Market Research, Nick Hague, ROI, Thursday Night Insight |
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