Archive for the ‘Market Assesment’ Category
Wednesday, May 12th, 2010
As first published in the latest issue of BIG Times, the Business Intelligence Group’s regular newsletter, B2B International’s Caroline Harrison, currently based in our New York office, examines the market research industry in America over the course of the recession:
Hot on the heels of the successful opening of its Beijing office in 2006, B2B International took the decision to expand its operations into a further new continent – North America – and its New York office opened in early summer 2008. Not three months later and we had the meltdown on Wall Street, triggering one of the deepest and harshest global recessions in living memory.
One question it might be appropriate to ask in these circumstances is whether we would have done things differently, had we known what was just around the corner? While I’m sure we would have thought long and hard before making the decision, in truth we probably would have gone ahead as planned.
Why is that? It’s because, as many of you will already know, the market research industry has consistently proven itself to be fairly resilient in times of adversity. Perhaps saying market research is “recession-proof” would be going a bit far, but the industry is certainly able to withstand a degree of external pressure.
Conducting market research is, of course, a means of reducing risk in business decision making, and when do companies most need to play it safe? When times are tough. When things are going swimmingly, you can perhaps afford to take the odd chance and risk making the occasional mistake. When the economy is in freefall, there can be no margin for error.
We have to acknowledge that 2009 was a challenging year for many. Budgets in most industries were cut and – while we can argue all day about the logic behind it – market research spend, like expenditure in many other business areas, was reined in for some. Similarly, a number of our clients were forced to delay projects due to the economic uncertainty.
Yet, overall, levels of enquiries and commissions have not altered significantly over the past 18 months. What we did, however, notice during the height of the recession was a change in the type of research we were being asked to conduct. The more ‘aggressive’ market entry and market assessment studies commissioned by companies looking to expand into new markets and find new customers were replaced by more ‘defensive’ projects such as customer satisfaction. It has clearly been more important than ever to protect what business you do have and look after your existing customers to ensure they don’t defect. In recent weeks and months, as increasingly we see optimism re-emerge in North America – as indeed globally – clients are gradually feeling emboldened. As their business strategies become more ‘adventurous’, so too are the types of research they require.
Perhaps a little surprising to us in America has been the high number of clients commissioning product development studies during the recession. However, most of these have not been of the all-out ambitious new product development variety; rather, they have tended to focus more around improvements to existing products or extensions to an existing product range. While we cannot determine precisely the reason for this trend, we believe it has been a measured response to a real or perceived increased threat by competitors’ products and/or decreased market share. Product improvements are a means of establishing differentiation at the same time as demonstrating innovativeness and reinforcing a commitment to better serving clients’ needs. At a time when the economic environment is forcing many competitors to lie low, product development has the added advantage of giving you something to shout about.
The intensifying of the recession also appeared to curb the movement we had been witnessing towards environmentally-friendly products and services. Many of the first market research projects we conducted upon arriving in the United States in 2008 assessed the potential for introducing ‘green’ extensions to existing product lines or launching an already-successful North American energy-saving product in other global markets. This type of project request became noticeably less common throughout 2009 but early indications in 2010 – across all our offices, not just in the U.S., it must be noted – lead us to believe that environmental issues will once again rise to the fore.
A more general observation that can be made about the U.S.A. has been the optimism throughout the hard times. Perhaps being a pessimist Brit and used to constant negative media coverage about the doom and gloom we’re all facing, being in America has, at times, been like a breath of fresh air. In spite of rocketing rates of unemployment (up from 6% in September 2008 to 9.7% at the time of writing), record mortgage foreclosures, horrendous stock-market declines and trillion-dollar Government bailout packages, what has been noticeable has been the positive messages portrayed in the media. People haven’t denied the economic problems but have been very much of the opinion that “things will get better”, “together we’ll pull through” and “America will rule the world once more.” And there I was thinking the British were supposed to be full of Dunkirk spirit!
In part, I think the presidential election of November 2008, which coincided with the start of tough times, generated a lot of positivity. President Barack Obama’s “Change we can believe in” slogan was a beacon for many. His election was seen as a chance for America to change for the better. Eighteen months on and the general public may not be quite so enamoured with what’s being achieved on the political agenda, but negativity has not taken over. Indeed, as we begin to see signs of improvements here on this side of the Atlantic, we are thankful that things have not been worse.
I will conclude by referring to an observation made to me earlier this week by a British colleague, also based here in New York: “Americans are more confident, more willing to take a risk and therefore more likely to succeed”. That, in a nutshell, sums things up nicely.
Posted in
B2B News, Customer Satisfaction Research, Industrial Research, Market Assesment, Market Research, Product Development |
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Tuesday, May 4th, 2010
Marketing departments were often among the first to feel the strain last year as the global recession took hold. Redundancies, reduced budgets and extra pressure to demonstrate ROI were commonplace. But, while marketers were trying to show how their roles made a difference to their company’s bottom line, it would seem that the figures are now speaking for themselves.
According to a new study by VisionEdge and Marketo, Measuring Marketing Performance, marketing is doing a better job of contributing to an organisation’s bottom line. 39% of respondents in the online survey of 423 business executives and marketing professionals this spring, agreed that marketing is doing a good job contributing to the financial condition of the business. This figure is up from only 19% last year. As in last year’s study, 47% of respondents feel the link between marketing activities and business goals is clear.
However, only 27% of respondents said marketing is effective at forecasting its ability to impact business goals. 41% agreed that marketing is good at improving its efficiency.
Posted in
Economic Crisis, Economic Recovery, Market Assesment |
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Wednesday, April 21st, 2010
Colleagues in our White Plains, New York office, spotted the following article in their local newspaper, the Westchester County Business Journal. In something of a ‘Business Agony Aunt’ column, advice is given to a company looking to expand into a new area – and which is basically asking about market assessment studies. We reproduce the article below:
We are expanding services into a new market, similar delivery, but to a different target. This will be the third service we offer. How can we get an idea of what our market share might be for each of the three services we sell?
Market share is defined as that portion of the goods or services provided by one or more companies to a target market. Expand your search to include market profits, growth rates, compensation and analysis of industry leaders to get a well-rounded picture of what your industry is up to. Knowing about your market can help you assess the challenges or opportunities of attempting to grow.
Get the facts
So where do you get market data? Lots of places – trade associations, marketing lists, researchers, indexing services, colleges and universities, and government databases often have facts. Trade shows, surveys, vendors and sales reps can provide anecdotal information.
When looking up industries, you’ll find classification codes are useful. Try an Internet search. Start with the SIC (Standard Industrial Classification) code, and its more recent cousin, the NAICS (North American Industry Classification System). NAICS is more reflective of our increasingly service-based, non-manufacturing economy.
The U.S. Census Bureau site provides information about taxable and exempt businesses by category, including numbers of companies, gross revenue, number of employees and annual payroll. Using this information, you can determine where your company sits versus the average firm in your industry.
Analyze the data
Once you find data about the size of a particular market, what do you do?
Use it to make some decisions. Here are some questions you might want to ask before deciding what to do next.
- Who are the top three competitors in my market?
- How much of the market do they hold?
- Is their market share increasing or decreasing?
If the big guns are increasing share, the market may be going to consolidation. Get out fast. If big players are getting out, or if they’re losing share because it’s not a core focus for them, there may be opportunity to jump in and take away a slice. Make sure it’s profitable enough to be worth the effort.
- Who are the three competitors just ahead of my company?
- Are they growing or declining?
- How does my company compare?
If the next closest competitors are growing faster than the market, watch out, they may be formidable. If they are declining faster than the market, you may be able to step in. Or, the market may be collapsing and it’s time to get out – find out why they’re declining. If any company is over 30 percent of market share, it may be time to look elsewhere for growth. If it’s your company that has 30 percent share, start another niche to become less dependent on one market.
Other considerations
Is the size of the target market growing or declining overall? How about profits? Are there any anomalies within the market that are bucking the trends? What niches exist close to what my company does, but different?
Look for markets with profits at or above what your company earns today. Look for industries with average size, salaries and marketing spend at or below your company’s average. Look through the SIC codes or NAICS for ideas on markets that could be underserved. Ask: How would niche-ing my company in a different way make my company more competitive, give my company more opportunity to grow?
How does my company compare to others in the industry in terms of compensation, annual revenue, marketing spend and year-over-year growth? Am I at, above or below industry performance standards?
Be careful if the compensation or marketing spend is unusually high, that may make it harder to compete and retain clients and employees. If your company is performing below industry standard, figure out how to improve or get out. Use comparative stats to help decide where to focus sales and marketing dollars and efforts. Set growth rates in line with the industry, or clearly and factually define how the company will buck industry trends to accomplish its goals.
Looking for a good book? Try, “How To Hire & Manage Market Research Agencies,” by Kathryn Korostoff.
Article written by Andi Gray of Strategy Leaders Inc.,Chappaqua, New York. www.StrategyLeaders.com
- To find out more about the research studies we can conduct on your behalf to help you assess a market’s potential, please click here.
- To get some hints on how to conduct your own initial desk research, read our white paper How To Get Information For Next To Nothing
- To read a Market Assessment Case Study, please click here.
Posted in
Competitor Analysis, Growth, Market Assesment, Market Entry, Market Size |
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Thursday, March 18th, 2010
In her latest Thursday Night Insight, Carol-Ann Morgan points out that our best intentions are not always quite as well received as we might hope.
In 1687, Sir Isaac Newton compiled his three laws of motion. The third law is commonly reported as…
“To every action there is an equal and opposite reaction”
Whilst these are physical laws governing relationships between the forces acting on a body and the motion of the body, and concern acceleration and mass, I wonder if Sir Isaac realised the full potential of his laws in the social and political arena.
The environmental story has been hovering around the top of the political agenda for some time now and, consequently, there is considerable attention given to the issues being debated in the press. However, we are having trouble grasping the arguments, as they are so equivocally defined and incalculable to the man on the street. Whilst experts argue amongst themselves as to the level of influence from our behaviours, and even the value of action, most of us are left confused as to what we should do next.
Excited by the idea of developing alternative fuels which reduce harmful emissions into the atmosphere and potentially threaten the long-term future of the planet, the growth of some crop-based biofuels has now been shown to carry some responsibility for recent global food shortages. Similarly, engines developed to reduce emissions appear to have created social tensions and increasing hardship amongst communities living and working around the platinum mines.
Examples such as these can be found all around us, and they demonstrate that there can be counter-reactions to most of our actions, particularly so in the commercial environment. These counter-reactions can be both positive and negative; delivering business opportunities or threatening our existing business operations or offerings. This is where research plays a strong role. Testing concepts and new business offerings in the marketplace can throw up any unexpected or unwanted reactions, which then prepare us for the future. Being in possession of this knowledge enables us to take advantage of new opportunities and also mitigate threats to the business.
Change and development are critical to the future of most businesses; spotting the needs of the future before they are in full view, and responding to them, is critical. However, Newton’s law serves to remind us to ensure we are aware of, and give due consideration to, potential unwanted consequences which may be harmful to the future security of our business.
Posted in
Business Development, Carol Ann Morgan, Environment, Forecasting, Growth, Market Assesment, Marketing Strategy, Needs, Product Development, Strategic Marketing, Thursday Night Insight |
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Wednesday, March 17th, 2010
In this article, Stefan Stern, writing in the Financial Times, leads with a quote from The Graduate in which Mr McGuire addresses young Ben with the words “I just want to say one word to you, just one word – are you listening – plastics”. Stern suggests that data are the new plastics.
It is true that the buzzword in industry is analytics. This seems surprising to us in the market research industry. Data and analytics has been our baby for the last 50 years. When you drive your car, of course you need to look out of the window, but you would be a fool to set off without checking your fuel gauge or occasionally looking at your speedometer. A map may come in useful or, more likely today, a Sat Nav (GPS). Our industry has long provided much of the good data on the company dashboard and the Sat Nav to guide your journey.
The problem is that data is fast becoming a commodity. There is so much data handed out for nothing. It is in front of you in the newspaper. It hits you from the television. It sits under your nose in your company and, of course, it abounds on the net. In fact, most of us are paralysed by too much data.
However, there is some data that is almost invaluable. Just think of the things you would like to know about your market. Which customers are likely to be buying the products or services you sell in the next few months or weeks? And when they do buy, what will drive their decision? Where do you sit in their consideration set? What are the unmet needs in your market and how could you satisfy them? What will your market look like in five years’ time? Who will be the competitors to wrestle with then? The list could go on and on.
What do you think? Will data be the new plastics?
Smarter leaders are betting big on data
By Stefan Stern
Published: March 9 2010
Last week a very wise man – OK, it was my chief executive – said a smart thing. “Data is the new plastics,” he declared. This was a sly reference to a famous scene in the film The Graduate. What he meant, I think, was that the unlikely subject of data has suddenly become fashionable. It is now the sort of discipline you might encourage your son or daughter to pursue.
Clever people talk knowingly about “analytics” – managing better with the use of data – as if they have discovered the secret of business success. Perhaps they have. Software companies are certainly pushing the concept hard.
Last month the consultants Accenture announced a partnership with the IT company SAS. They are forming an analytics group which will offer what they call “predictive solutions”. This means getting hold of useful data fast and interpreting them intelligently, to try to anticipate sudden changes in your market, or to spot gaps others have not yet seen. IBM is touting its analytics capabilities aggressively, while SAP is also talking a good analytics game.
I was recently given a briefing by Vivek Ranadivé, the chief executive of Tibco, a Nasdaq-listed software company, on the emerging possibilities of our data-rich world. Mr Ranadivé is something of a visionary in this field. His first book, The Power of Now, was published 11 years ago. This was followed in 2006 by The Power to Predict. His latest book, The Two Second Advantage, will be out this year.
Mr Ranadivé is dismissive of what he considers outdated approaches to the handling of data. “We have 20th-century infrastructure trying to solve 21st-century problems,” he says.
During the past two decades, companies have become good at storing large amounts of data. Databases contain historical information about transactions that have been carried out. But what about all those near-misses, when customers visit your website, stay a while but leave without buying anything? A passive database will not record any of that activity. It will not even know that such things have happened.
Mr Ranadivé says we should think of business in terms of events, not transactions. Near-misses are customer events, too. The latest approach to data tries to spot these events in real time, so businesses can make use of that information quickly. In the jargon, this is called “in-memory analytics”, so called because memory has become a cheap and almost infinite commodity, and all that customer activity can be monitored live, as it happens.
Faster transmission of information makes a lot of things possible: marketing campaigns that react quickly to what customers want, smoother-functioning supply chains, even the introduction of the “smart grid”, which can spot possible power outages much sooner.
Last month Thomas Davenport, professor at Babson College, and Jeanne Harris, director of research at Accenture’s high performance institute, published Analytics at Work, a primer for managers who want to introduce a more rigorous approach to the use of data. It is a challenging read, in part because it makes plain how much work has to be done to capture and use data effectively.
But even academic experts agree that, however sophisticated your approach to data, you still need judgment to make good decisions. When Prof Davenport met a pilot at a party and started discussing analytics, he received this reply: “Oh yes, we’ve got lots of that in modern airliners – avionics, lots of computers, ‘fly by wire’, and all that. But I still occasionally find it useful to look out the window.”
Others are even more sceptical. Paco Underhill, a retail guru and chief executive of the consultancy Envirosell, says that today it is almost too easy to accumulate data. Instead of going to witness things first-hand, managers do a lot of their thinking sitting down, staring at spreadsheets. He is a great advocate of rubber-soled shoes. Get away from your desk, he says, and go and see for yourself. Wear rubber soles at your Envirosell interview if you want to get hired, Mr Underhill advises.
Not everyone will be fired up by the idea of plunging deep into a world of data. In the 1960s, bright young graduates, like the Dustin Hoffman character in the movie, did not all choose to pursue a career in plastics. But one young chap at General Electric did. Welch, I think his name was. Things seemed to work out pretty well for him.
Posted in
Consumer Research, Customer Satisfaction, Data Quality, Market Assesment, Needs |
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