Archive for the ‘Market Assesment’ Category
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.
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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.
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Market Research USA, Market Research China, Market Assesment |
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Friday, April 18th, 2008
In her first Thursday Night Insight post, Marketing Manager Caroline Harrison reflects on how cultural differences hold the key to the success or failure of products or services across the globe.
After years of study and years of employment in the fields of marketing and market research, I would like to think that by now I understand the value of market research. After all, day-in day-out, I see clients discover things about their business, or their clients, or the markets in which they operate, which they had never known before; sometimes they already had an inkling and, naturally, sometimes market research proves that they were right all along. But equally often, the research we conduct for them throws up surprises.
Around this time last year I was struck by a bolt of lightening (metaphorically speaking, of course). In a flash I saw the true consequences of not carrying out market research before entering a new market.
I was living in Beijing at the time, working in the B2B International China office. Many things strike you as different in China, but I was fascinated to find that the whiter your skin, the more beautiful a woman is considered to be over there (dark skin is apparently associated with peasants who have to toil in the fields all day). This was great news for me since finally there was no pressure to frazzle myself on a sunbed or waste hours applying fake tan.
Not that I could fake it had I wanted to, and that’s my point in all this. Because here’s the thing; beauty products in China all contain whitening agents rather than the bronzing agents so many equivalent products in the UK contain nowadays.
Although I found this to be an interesting observation, more than that I couldn’t help but think how crucial local knowledge and cultural understanding are when looking to enter a new market.
Imagine some executive of a beauty products company sitting in his or her cosy office back in the UK. With the nation’s top-selling moisturiser (featuring tanning agent for that natural sunkissed glow, of course!) reaching saturation point in the local market, it looks like it’s time to launch the product abroad… So where would be good? What about China? After all, with 200 million 15-34 year old women at your disposal, just imagine the clamour for this hugely popular product… And just imagine the profits that would come rolling in…!
Of course, I now know that the reality would be somewhat different. Without investigating the market in advance, this ambitious executive would have one of the costliest and most momentous product launch failures of all time on his or her hands.
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Caroline Harrison, Thursday Night Insight, Market Research China, Market Assesment |
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Tuesday, April 8th, 2008
Last week’s episode of The Apprentice saw the two teams challenged to set up and run their own laundry business for 24 hours. Both teams had to go out and tout for business, wash and press the laundry to a high standard, and return all the correct items to their owners within the specified time limit. As usual, there were all sorts of mistakes made along the way which would serve as a warning to anyone in the world of business. But from a market research point of view, what was the lesson we can take from this week’s exercise?
Without any previous experience in the laundry trade, one of the keys to winning business in this task was getting the pricing structure right. The boys’ team wisely did their research straight away, ringing round several competitors to get a feel for the industry’s charging structure, and reaping the benefits immediately by winning a big hotel contract. Whilst the manager of the hotel in question had been expecting a quote in the region of £200, the girls’ team left him speechless by pricing its services at £5,000! This followed a conversation between the girls during which they all admitted that they had no idea what to charge, and so proceeded to pluck a figure of £4.99 per item out of the air. Why no-one showed even the slightest initiative in suggesting the need to research what pricing structure should be chosen, is beyond the comprehension of most people.
You might have hoped that, upon learning how staggeringly expensive their quote had been, the girls’ team would decide to do some pricing research, yet they carried on regardless. At their next appointment, they offered to wash a huge amount of filthy industrial workwear at the bargain basement price of £15. Even the customer could hardly contain his disbelief and amusement at the ridiculously low price. Needless to say, the boys’ team strolled to victory in this task.
Week One’s episode also demonstrated a lack of nous when it came to product pricing. In setting up competing fish stalls in a market, the girls’ team started to make losses from the word go. Before they had even had time to price up their stock, they were approached by customers wishing to purchase their wares. Desperate to get the ball rolling and some sales under their belts, some team members just asked the customers what they would be willing to pay for their produce. It doesn’t take a genius to work out that these early customers probably landed themselves some unbelievable bargains! The boys’ team, meanwhile, in its rush to get set up, mistakenly began selling lobster at £4.90 each (instead of a more realistic price of £4.90 per kilo). In their defence, it didn’t take the boys too long to head off to check out the prices offered by their competitors and to correct their mistake, but to some extent the damage was already done.
Pricing is never easy to get right, but the very last thing you should do is guess. Pricing research is vital in establishing what the market can bear, what pricing strategies your competitors have adopted and why, what quality perceptions a particular pricing structure will give, etc.
You can learn more about pricing in our B2B International white paper, The Problem With Price and in the article Research As An Aid To Optimum Pricing.
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Quantitative Research, Pricing Strategy, Market Assesment |
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