Archive for the ‘Market Assesment’ Category
Wednesday, July 23rd, 2008
Entering any new market is difficult. This is especially so when companies attempt to expand into territories where there are stark cultural and operational differences between the nationality of the company entering the marketplace and the host country.
As we’ve identified countless times at the Market Research Blog, and in several white papers on the subject, entering a market such as China can be fraught with difficulty for the unacquainted, and that being prepared for a different way of doing things is the best possible grounding.
Paul Denlinger, a strategic consultant in China, has identified some reasons why US companies in particular have struggled in the People’s Republic. Key amongst his findings are that US operations cannot simply be “scaled outwards” when starting out and that very different ground-rules apply:
Why most US Entries Fail in China
July 14th, 2008
By Paul Denlinger
The consulting industry in China is flourishing. After all, it is the largest potential single market in the world, and everyone is flocking to it. New companies need information and advice about how to tackle the unique challenges of this market. For any MBA who is fluent in Chinese, or who has grown up in China, and is familiar with the tools of the trade, such as financial modeling, business negotiations and company valuations, China represents an “iron rice bowl” which will make their careers for years to come.
Or is it? My experience is that there are errors which are repeated over and over again. It gets like being condemned to watch a single Broadway show, over and over again, where the only things which change are the sets and the actors; the lines are the same.
I have covered one of the major fallacies in a previous posting, Getting Past the China Market Hype, which covered their initial reasons for entering China. This posting will cover some of the reasons for failing post-entry…
For More, Click Here
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New Product Development, Market Research China, Market Assesment |
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Wednesday, July 2nd, 2008
In a recent Thursday Night Insight post featured on The Market Research Blog, Caroline Harrison talked about how costly it can be to launch a product without first investigating the new market and without fully appreciating local cultural differences in geographies across the world.
A recent USA Today article highlighted how even the most innocuous assumptions can show that you don’t fully understand – or haven’t fully considered – your target market. This most unlikely example was actually a product review for a German car that was launched in the US market in January. Whilst much of this article is a detailed (and not altogether unflattering) technical assessment of the product, two quirky examples are brought to the reader’s attention of how this European vehicle has not quite been adapted enough to totally satisfy the needs of a United States consumer.
- The in-car cup holder is too small for many standard North American cups
- The vehicle clock displays as a 24-hour clock – popular in Western Europe, but not the normal 12-hour clock that Americans are used to.
Whilst these are, of course, very minor ‘problems’ in the scheme of things, the reviewer notes that they are a “reminder that Americans weren’t top-of-mind during development”.
If you’re entering a new market with an existing – or adapted – product, you need to be sure you have thoroughly researched your target market. DO NOT MAKE ASSUMPTIONS.
If you are launching a new product in an entirely new country or continent, then market research is an absolute must.
When developing a new product, don’t just think about the bigger picture. As this automobile example demonstrates, sometimes it’s the small things that make the difference to your customers.
Posted in
Market Research USA, New Product Development, Market Assesment, International Market Research, Market Research |
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Tuesday, July 1st, 2008
A new survey by B2B International examines the increasing demand for security at the front door in Europe.
Friedland have been manufacturing door chimes, wireless security and security lighting since 1938 and their brand, especially for door chimes, is synonymous with high quality products.
Friedland’s main market is the buildings and construction industry. This sector has been buoyed in recent years by strong growth, but faces a more challenging environment in the near future. The way buildings are constructed and periphery products (security, lighting) to the building are specified is also changing with the roles and responsibilities within the supply chain slowly becoming merged.
Given the continually changing market conditions in which they operate, Friedland commissioned B2B International to research the French and German markets for door-entry systems, security lighting and alarms.
The market for door chimes in Europe is in decline due to the increased demand for audio/video intercoms for door entry.
Installers are the key decision makers when it comes to deciding what doorbell is fitted in nearly nine out of 10 cases. Quality, reliability and functionality are the key requisites that installers look for from a door chime. Wired door chimes are preferred mainly due to the robustness of the system but also because many installations are replacing existing wired systems.
Friedland’s brand in the door chime market shows very high awareness with nearly all installers in Germany and three quarters of installers in France being aware of Friedland.
In contrast to the door chime market, the market for security lighting and security alarms is in the ascendant with the heightened demand for greater security. The annual market for these products is growing at between 3% and 5%.
B2B executive of this report, Matt Powell, says:
Everyone is becoming more security conscious, so it is not surprising that the research indicates a growing demand for security products in general and for new door-entry products in particular. In the future, companies will need to revise their offerings to meet different market segments. What we see is that brand is important and gives installers comfort that they will be getting a reputable product. Freidland are in a strong position with their ever-present brand. This research will enable Friedland to position itself as an innovator and leader and develop new security products – in other words, to become more than just a door chime company.
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Matt Powell, Market Assesment, Market Research, B2B News |
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Friday, June 20th, 2008
Director Matt Harrison spent a year in China, setting up the B2B International office in Beijing in January 2007. Here, in his second Thursday Night Insight post, he reflects on the wonders of rickshaw travel and what it taught him about the value of market research.
It was snowing and minus 10 degrees. It was dark. I had tonsillitis. I also had 3 boxes of belongings that had just arrived from England and they needed to be taken to our apartment. This shouldn’t be a problem because taxis are everywhere in Beijing. In fact if you walk across the road there’s probably an 80% chance that the car that kills you will be a taxi.
So I tottered down from the office with 3 huge boxes shielding my line of vision, confident of finding an immediate lift home. And I was right, there were lots of lifts home…the problem was that as soon as anyone saw me staggering towards a taxi whilst carrying my own weight in boxes, they ran in front of me and took the taxi for themselves. Again…and again…and again, I would see a taxi, head for it and get beaten to it.
This distressing ritual lasted twenty to thirty minutes, before I eventually decided I’d have to start walking home. Within a couple of minutes, a moving oasis appeared on the horizon, in the form of a man with a 1930s bike-cum-rickshaw. It was comfortably the worst ‘vehicle’ I had ever seen, and it hardly had room for me let alone three boxes.
Cold, desperate and naïve, I decided to go for it – and what an experience! The poor rickshaw driver had to peddle like mad to tow one 75kg Englishman and half his belongings through the slush and rush-hour traffic. Shielded from the cold by one of those dust sheets you use when you decorate, my teeth were chattering, my hands were in serious danger of dropping off, my mouth was dry from the traffic fumes, and we were meandering with little progress…just think of the poor driver.
I eventually arrived home, my frozen tonsils coated in gasoline, my pulse fading and my backside glued to the rickshaw. However, one final indignity awaited me. Feeling so sorry and so thankful for the poor driver who had towed me through the ice and traffic, I offered him what I now know was three times the going rate for a ride from our office to home. He looked at me like I was a miser and demanded 50% more. Naïve and cold, and unable to think of anything other than a hot bath, I doubled my initial offer and apologised for getting my exchange rates confused.
I can’t really blame my driver for the happy look on his face as he peddled off with a week’s wages in his pocket. But, in retrospect, I really could have done with more information before making the purchase decision. Here at B2B International we hammer home the importance that understanding your market carries:
Point 1 – market assessment: I did not have enough information about the options available within the Beijing transport market, or how to make sure that I accessed the most appealing opportunities. As a result, my more knowledgeable competitors beat me to it, leaving me to make do with a poor substitute.
Point 2 – pricing research: I had no prior knowledge of the going rate within the market and so left myself open to uncertainty, confusion and overpaying!
Point 3 – segmentation: The shrewd rickshaw driver knew from years of experience that his offering appealed to different segments in different ways. Firstly there would be the tourists, who would often be foreign and could be charged a premium price for the pleasure of being immersed in Beijing life, with a commentary provided by a local expert. Secondly there would be the local commuters, uninterested in being immersed in local life or the local expertise of the driver, and simply wishing to get from a to b as quickly and cheaply as possible. This segment would be more price sensitive but larger in number. And finally, probably the smallest segment but without doubt the most lucrative – perhaps we could call this the desperate segment. This refers to customers who are buying a rickshaw ride as a distress purchase, because they know little about local conditions and are desperate to get from one place to another. By employing price discrimination between segments as well as tailoring the way he treated different customers according to their needs, my rickshaw driver instinctively knew that segmentation is at the core of marketing as it allows us to extract maximum value.
Posted in
Thursday Night Insight, Matt Harrison, Segmentation, Pricing Strategy, Market Research China, Market Assesment |
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Tuesday, June 3rd, 2008
B2B International’s latest office is about to open in New York, USA. At a time when all talk in the media is of a stuttering US – and indeed worldwide – economy, why are we heading Stateside now?
After a decade spent consolidating our position as one of the UK and Europe’s leading business-to-business market research agencies, B2B International opened its Asia-Pacific headquarters in Beijing in 2006. In the run-up to establishing B2B International China, the demand from clients wishing to find out more about Asia-Pacific markets – in particular China – had been unprecedented.
Yet, whilst this dramatic appetite for research in the East was occurring, interest in Western markets – both European and American – continued to be of huge importance to B2B International. Notably, both the market research we conduct into North America and that carried out on behalf of our US clients, remain consistently strong.
Given the current lack of confidence in the US economy, many US corporates are interested in finding new markets outside of the United States. With the dollar currently at a low and relatively weak domestic demand, there is an incentive for businesses to look overseas and to commission market researchers to evaluate opportunities for them. Since B2B International specialises in international business-to-business market research, we are in a very strong position to work for companies interested in research of this kind.
US market research buyers – like those in the rest of the world – are showing an increasing interest in commissioning research on Asia, in particular research on market assessment studies and potential opportunities. Indeed, we have seen a 35% increase in the number of US clients commissioning this type of project over the last 6 months alone. The bi-lingual team in the B2B International China office is ideally placed to meet the needs of American corporations wishing to find out more about Asia.
There remains great interest in conducting research across Europe. Given the idiosyncrasies of European countries in terms of their cultural trends, industry strengths and weaknesses, and market research offerings and opportunities, it is vital to entrust your market research to somebody who understands these differences. With native speakers of every European language based at our UK head office, B2B International fits the bill perfectly.
Tomorrow’s blog post takes a more in-depth look at what B2B International can offer American clients.
Posted in
Market Research USA, Market Research China, Market Assesment |
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