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
Posted in
New Product Development, Market Research China, Market Assesment |
Comments:
None Yet »
July 22nd, 2008
We all know that it is easier to sell your product or service to a current customer than it is to try and get a potential customer on board. In these uncertain times, holding on to your most valued customers is more crucial than ever. From just a quick Google search you get many different statistics thrown in your face:
The average company loses 10% of its customers each year
A 5% reduction in the customer defection rate can increase profits by 25% to 85%, depending on the industry
The top 20% of customers in a business may generate as much as 80% of the company’s profits, half of which are lost serving the bottom 30% of unprofitable customers
Recent research by CMO Council shows that only a half of global marketers have strategies in place to further penetrate or monetize key customer account relationships and only one-third have strategies in place to win back dormant or lost customers.
For more information on how we can help you gain more value from your customers or win back lost customers contact the B2B International team.
Marketers look to boost customer retention
CMO Council study finds maximizing existing relationships takes a back seat to new leads
By Kate Maddox
May 5, 2008
While b-to-b marketers are increasingly focused on improving relationships with customers, they still have a long way to go in implementing effective, consistent customer retention practices, according to a study released last month by the Chief Marketing Officer Council.
The study found that only one-third of global marketers have strategies in place to win back dormant or lost customers, and only half have strategies to further penetrate or monetize key account relationships.
The study was based on an online survey of more than 450 global marketers, conducted in the fourth quarter of 2007 and the first quarter of this year.
According to the study, only 6.8% of marketers said they have excellent knowledge of the customer when it comes to demographic, behavioral and psychographic data, while 51.9% said they have fair to little knowledge of the customer.
To help reduce customer churn, Fujitsu has given ownership of customer satisfaction metrics to functional heads across the organization, including product development, sales, marketing and customer service.
Fujitsu also implemented a CRM system about a year ago and is now trying to broaden its use from a sales contact tool to an enterprise wide customer asset manager.
For more, click here
Posted in
Customer Satisfaction, Market Research |
Comments:
None Yet »
July 21st, 2008
Employee satisfaction, just like customer satisfaction, is a variable concept: What pleases one customer or employee is likely to be completely different from what drives contentment in another. In other words, employees can just as well be segmented as customers.
And just like a customer satisfaction segmentation, identifying what motivates employees can be approached from different directions, whether in terms of demographics or needs.
One particular way in which workers can crudely be divided is by nationality. It has commonly been observed that international workforces differ greatly in what they look for in a job.
A caution against this type of profiling is the danger of stereotyping. This is especially so in the case of China, where the received wisdom has been that Chinese employees are solely motivated by money.
However, as the following study, reported in the Wall Street Journal suggests, this perception may well be an outmoded one:
Misunderstanding the Chinese Worker: Western impressions are dated - and probably wrong
By KATHRYN KING-METTERS and RICHARD METTERS
Ask multinational firms to describe what motivates Chinese workers, and the responses are remarkably consistent: Money is the only thing that matters.
"Chinese have zero loyalty to their employer," one executive at a manufacturing firm told us. Said the general manager of a Shanghai hotel: "The most important motivator is money."
But those perceptions may be outdated and wrong.
That’s the picture that emerged when we interviewed, observed and surveyed employees at three Western-branded hotels in China last year and this year. Many of the workers we studied wanted more than just a paycheck from employers, took pride in being part of a team and often were willing to go beyond minimum requirements to solve problems on the job.
While some of the West’s impressions of Chinese workers may have been accurate when U.S. multinationals first started doing business in China in the early 1980s, our findings indicate that what Chinese workers want from a job and what they are willing to put into it has changed since then.
And if what we discovered in the hospitality industry runs true across other industries in China, then multinational companies may be using the wrong incentives to attract and retain Chinese workers. By focusing solely on salary as a motivational tool, they are giving short shrift to things such as training, time off and community building — incentives that could go a long way in a highly competitive job market.
For more click here
Posted in
Market Research China, Employee Satisfaction, Customer Satisfaction |
Comments:
None Yet »
July 18th, 2008
In his latest Thursday Night Insight blog feature, Alaric Fairbanks talks about the ways in which business-to-business market research agencies can prove their credentials for even the most highly specific and niche market research requests.
In our Asian operations, perhaps unsurprisingly given the rapidly industrialising nature of the major markets here and the strength of manufacturing, the bulk of work and enquiries are in the field of industrial research. Put more crudely, this involves “investigating an aspect of a market for something used to producing something else”.
Broadly speaking, this can be divided into three areas:
- Raw materials
- Components
- Equipment and machinery
Obviously this can cover a huge range of industries and products, which can cause problems for buyers of market research in these industries. Understandably, the research buyer would like to be reassured that the external agency chosen has experience in the market in question, as well as in the relevant geographical areas and with appropriate methodologies. This is relatively straightforward with broad industry categories, for example pharmaceuticals. Things get more complex, however, when the buyer would like to be reassured of experience within their particular niche. To take the pharmaceuticals example further, the next question, may be: “how about biopharm?”
Again, outlining experience in this area may be no problem for most specialist b2b agencies, but what if this is followed by; “have you covered chromatography products for the purification of monoclonal antibodies in China?” Even the most experienced agency will find it difficult to claim direct experience in such a highly specialised field; indeed, it is unlikely that the buyer will find any agency that has conducted exactly this research before.
So, what should a buyer be looking for in selecting an external agency for this project and what can the agency do to facilitate this decision? The general characteristics of industrial and manufacturing markets, together with their implications, should give us some indication of the type of experience a buyer should be looking for.
The customer numbers, and thus the number of potential respondents, will be much smaller than in consumer markets. This is especially true of highly specialised markets. For the research buyer, the key issue here will be the ability of the agency to recruit respondents from a very limited sample pool.
There are likely to be multiple and contradictory members of the decision making unit, all of whom will have an impact on the decision and whose views will be of importance to the research buyer. The first issue here is identifying the key decision makers – often from roles as diverse as production, maintenance, purchasing, etc – and their roles in the process. These people are by no means easy to reach, and an agency should be able to demonstrate a track record of identifying and reaching these types of respondents.
Many aspects of the information required to reach meaningful conclusions will be of an extremely technical nature and, as we have seen, it will be very difficult for an agency to build up a high level of technical knowledge across a wide range of highly specialised industries. From the agency side, a general understanding, coupled with the ability to listen to and apply the knowledge of the buyer should be a prerequisite. This can be demonstrated by examples of working in other highly specialised areas in related industries. We would suggest that although specific technical expertise is highly unlikely, an industrial background and a certain amount of maturity are essential.
Most industries have their own technical language and vocabulary that will need to be used in any specific research project. This means that at the design stage, especially for discussion guides and questionnaires, this has to be right, as a difference in phraseology could lead to different results. Care must be taken to ensure that this is correct.
Checking and verifying the information obtained at an early stage is particularly important in this type of research. This goes beyond standard research practice of checking that the questionnaire is “working” to “is this information technically possible?” This means that there will have to be especially close liaison between client-side technical staff and the agency in the early stages. Similarly, the agency should be able to demonstrate experience of this way of working. In the analysis stages it will be important that the implications of the answers to detailed specific questions are understood by the agency in interpreting the data obtained.
In summary, whilst industrial research is an incredibly wide field, it is almost impossible to have expert knowledge of the most technical and specific markets, the high level commonalities of industrial markets require a common skill set, and choosing an agency that demonstrates a history of working on this broad type of subject, together with some relevant industry knowledge, should be the first point of contact for the potential industrial market research buyer.
More information about what makes industrial market research unique can be found our White Paper, B2B Marketing.
Posted in
Alaric Fairbanks, Thursday Night Insight, Industrial Research, Market Research China, Market Research |
Comments:
None Yet »
July 18th, 2008
We live in an age of information overload. There can hardly be an executive in the world who doesn’t regularly type a question into Google and obtain thousands of answers within milliseconds. Our computerised systems at work hold hundreds if not thousands of filing cabinets of data which we can access through word searches. And if this is not enough, we can turn to the market research community who will carry out a survey at a tenth of the cost in real terms of 30 years ago. In other words when it comes to market intelligence we have never had it so good.
So why therefore do we sometimes find it difficult to make business decisions?
One reason is that despite the enormous amount of information available to us, some of it is not clear and some of it is in conflict. This means that our judgement and interpretation of the data is still vital. Consider the following paradigm in which a decision maker may have a choice of internally collected data versus externally collected data and that which may be considered objective verses that which is subjective.
Most of us would intuitively believe that external data that is objective is to be trusted more than data that has come from opinions inside the company. However, the old guy with grey hair who has given an internal opinion may have synthesised years of data and his view could be worth far more than the number crunching survey that skimmed the surface. Of course, it could also be worthless as he could be a vacuous mouth with one year’s experience repeated 30 times.
So the difficulty in using market intelligence is fusing data together and working out which bits are to be trusted and which are not. It is for this reason that the workshop approach to delivering findings has become so popular. The research agency is able to put the findings from their survey on the table and invite all participants at the workshop to share their own knowledge and help in its interpretation. In this way disputes as to the meaning and value of data can be resolved and actions can be agreed.
Posted in
Paul Hague, Market Research |
Comments:
None Yet »
|
