If you are thinking of expanding your business into new export markets, you can follow what other companies from your co...
CBI EXPORT MANUAL: YOUR GUIDE TO MARKET RESEARCH PART 1: YOUR RESEARCH ASSISTANT
CBI EXPORT MANUAL: YOUR GUIDE TO MARKET RESEARCH
PART 1: YOUR RESEARCH ASSISTANT Improving your competence in market research
Compiled for CBI by: Searce
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Disclaimer Although the content of its market information tools has been compiled with the greatest care, the Centre for the Promotion of Imports from developing countries (CBI) is not able to guarantee that the information provided is accurate and/or exhaustive, and cannot be held liable for claims pertaining to use of the information. In the case of the market publications, neither CBI nor the authors of the publications accept responsibility for the use, which might be made of the information. Neither is the information to be construed as legal advice. Original documents should, therefore, always be consulted where appropriate. The information does not release the reader from the responsibility of complying with any relevant legislation, regulations, jurisdiction or changes/updates of same. In the case of the Internet tools, CBI aims to minimise disruption caused by technical errors. However, CBI cannot guarantee that its service will not be interrupted or otherwise affected by technical problems. CBI accepts no responsibility with regard to problems incurred as a result of using this site or any linked external sites. The information provided is aimed at assisting the CBI target group, i.e. exporters and business support organisations (BSOs) in developing countries. It may, therefore, not be used for re-sale, the provision of consultancy services, redistribution or the building of databases, on a commercial basis. For utilization of the CBI market information tools by the CBI target group on a non-commercial basis, the condition applies that CBI is referred to as the source of the information. All other use is prohibited, unless explicitly approved in writing by CBI. See also disclaimer CBI market information tools: http://www.cbi.eu/disclaimer
Compiled in collaboration with Alfons van Duivenbode Illustrations by: COM & GERY Photo courtesy: Studio Loske/Shutterstock/CBI/Searce
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CBI EXPORT MANUAL: YOUR GUIDE TO MARKET RESEARCH PART 1: YOUR RESEARCH ASSISTANT
Table of Contents Introduction
4
1 Why market research? 1.1 Why is research so essential? 1.1.1 Exporters 1.1.2 BSOs 1.1.3 Research helps you further 1.2 What is market research?
6
6 6 7 8 9
2 Market research process 2.1 Step 1 - Define your research objective 2.2 Step 2 - Which research method? 2.2.1 Secondary or desk research 2.2.1.1 What is it and what to collect? 2.2.1.2 Main free sources 2.2.1.3 Main low cost sources 2.2.1.4 Main high cost sources 2.2.2 Desk research using the Internet 2.2.3 Primary or field research 2.2.3.1 Personal interviews at trade fairs 2.2.3.2 Observations at trade fairs and other places 2.2.3.3 Store checks 2.2.3.4 Other 2.3 Step 3 - Research planning 2.4 Step 4 - Collect relevant data 2.5 Step 5 - Analysis - from data to information 2.6 Step 6 - Write and present the report 2.7 Useful sources
12 14 15 15 16 21 23 25 26 27 31 32 32 35 37 40 45 46
3 Organising market research 3.1 Research preparation 3.2 Research during your export venture 3.3 Research budget 3.4 Involving other people in research 3.5 Organising your information (MIS)
49 49 49 50 51 54
Checklist
56
Glossary
57
11
August 2008 (update)
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Introduction ‘Research is to see what everybody else has seen, and to think what nobody else has thought’ Albert Szent-Gyorgyi If you are thinking of expanding your business into new export markets, you can follow what other companies from your country do and see what will happen. Some exporters regard this as a ‘safe option’, as no investment in expense or time will be required when exporting to unknown markets. There is only one big problem: you will have many competitors and you may risk the buyer changing to another supplier even if, you are prepared to lower your price. You may be surprised when he tells you that your product is out of fashion or that consumer habits/tastes have suddenly changed. By doing market research, you would have noticed earlier that you were in a mature market and would have started to consider adding a new original feature to your product, different from your competitors, or looking into exporting to neighbouring countries. When starting to export to the EU, market research can reduce your risks. Could you imagine what people in Spain really want to buy - instead of what you want to sell them? How about people in Portugal, Greece or other Southern EU countries? Do consumers in these countries want to buy the same? Maybe for Italy you have to think differently in terms of product size, application, colour, design or packaging. How about consumers or buyers in Northern or in Eastern EU countries? Maybe your product needs less adaptation there. When exporting to the EU you can focus on similar target groups all over the continent and address clusters of similar EU countries. If you do not have a clear idea about who are in this target group, how many they are, if they have enough money to spend and how they buy, you will need to find this out by market research. This publication is an update of the CBI export manual “Your guide to market research – (2003)”. Structure of this manual This CBI export manual consists of three parts: • Your research assistant (part 1) • Your research practice (part 2) • Research Action Plan – RAP (part 3) Part 1 assists you by providing basic guidelines with simple research methods, which you can do by yourself, with your staff, or with research specialists. It explains what market research is (chapter 1) and how you can do your own low cost research in a structured way, following a step-by-step research process (chapter 2). The conclusions from your research findings enable you to discover your business problems, identify market opportunities and anticipate developments on focussed EU markets. Here you can think how to be different from competitors by adding some common sense, based on your expectations about what will happen in your export venture in the next 5 years. The more information you have, the better you can make ____________________________________________________________________________________________ Source: CBI Market Information database
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CBI EXPORT MANUAL: YOUR GUIDE TO MARKET RESEARCH PART 1: YOUR RESEARCH ASSISTANT an export marketing plan (EMP) in which you have to make firm commitments and strategic decisions. A good marketing plan never can eliminate all your risks, but it is the backbone of knowing where you are now, where you want to go, how you can stand out and how you can measure the effectiveness of your strategy and actions. Every research needs to be planned and organised with the allocation of time, budget and people (chapter 3). All sources and information found need to be categorized and shared with others in your company. Once you understand the process of doing market research and how to stay in control over your research activities, you should be ready to start your own market research. Part 2: In addition to the basics of market research provided in this part, 'Your research practice' (part 2) advices on what to research during your export venture and shows where you can find the necessary information. Part 2 is particularly interesting for more experienced exporters looking for new EU markets or for those exporters with enough knowledge of market research. Part 3: A useful E-tool to use with part 1 and part 2 is the Research Action Plan (RAP). This interactive tool will guide you through the different export stages and shows you how to organise your market research. It contains examples of research objectives, questions, methodology, planning and results during the different stages of your export venture. This RAP can be downloaded from http://www.cbi.eu, go to ‘Suppliers’, select ‘Export tools’ and select ‘Research Action Plan’ (RAP). Starting exporters are advised to read part 1 first and use it together with part 2 and part 3 in order to systematically set up their export activities. This manual covers certain aspects of exporting to the EU and is just one in a series of export manuals published in the CBI database at http://www.cbi.eu.marketinfo. More product specific information can be found in CBI market surveys. Other issues such as exporting to the EU, market entry strategy, product range development, Internet searching, website promotion, trade shows and corporate image are covered in other CBI export manuals. You can find the titles on the CBI website. We wish you much success and we hope this manual encourages you to acquire the necessary skills and know-how to do effective market research. If you do it correctly and efficiently, it will reward you in the end. Being more confident and anticipating events is much preferable to just depending on the opinion of some buyers.
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1. Why market research? 1.1
Why is research so essential?
It is impossible to sell a product or service that a consumer does not want. In order to know this and to present it attractively you need information. If you are a small shop owner and sell to people in your own area, you are likely to know your customers well by having regular contact with them. But if you have a larger business and want to expand to export markets, you do not have customers; you only have prospects. They are far away, think differently and have a different culture and habits. So, here market research is an essential business tool to avoid the risk of a failure. For example, a US car manufacturer introduced the Chevrolet Nova in Spain, but the car failed, due to the choice of a wrong name. ‘No va’ means ‘does not go’ in Spanish.
1.1.1
Exporters
When exporting to EU countries you may want to play safe by taking the well-trodden road and enter a large EU country. You may think that there is always a market potential in large countries. The risk is here that buyers often have a choice of different DC suppliers and there are local competitors. For example, the German, UK and Italian furniture markets are mature, supplies are dominated by China and India, and local demand is backed up by a strong national industry. Maybe you should try to find out if it is really worth putting effort and money into these competitive markets. They may be many more opportunities in Eastern EU countries with growing economies. Manufacturers in these countries may look for cooperation with exporters from developing countries in order to compete with China and India. You can find the best opportunities in these countries by doing market research. ‘You can tell whether a man is clever by his answers. You can tell whether a man is wise by his questions’ Naguib Mahfouz Market research helps you to find proper answers to the right questions. For example, in the long haul tourist market, if you are located in Zambia, you need to find out what sort of trips to propose to UK tour operators. Relevant questions could be: - Should you propose adventurous (wildlife), trekking, cultural, responsible or relaxation trips to UK tour operators? - What kind of idea do British people have of Zambia? - What sort of demographic and lifestyle trends are taking place in the UK in terms of increased leisure time, ageing population, increased curiosity, travel to ‘undiscovered’ destinations? - Which consumer age group could be most interesting for responsible trips? - How do they usually travel, individually or in groups? - How can you reach them, by specialised tour operators or via the Internet? - Which other African countries are your direct competitors? - Should you approach mainstream or specialised tour operators? - How can you segment tour operators – by continent, by activity, by profile of travellers? The more knowledge you have about your prospective markets and its people, the more likely you are to succeed. If you are an exporter of pipe and process equipment, you can find out business opportunities by knowing where in the EU the demand for cleaner water and sewer systems is increasing. Other questions could be: ____________________________________________________________________________________________ Source: CBI Market Information database
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- In which EU countries are water systems expected to be renewed? - How is the choice of the water treatment process made in these countries? Is it based on price, meeting local or EU guidelines or on advanced technology? - What are other main valve applications in the end-user industries and for what sort of pipelines (oil, gas)? - What are the latest developments in e-business applications in these end-user industries? - What is the EU production of pumps, valves, fittings, instruments, metal pipes, any other process equipment? From discovering a niche to planning an effective export marketing strategy, research can provide those details, which are crucial for success. Less money and energy will be wasted on false hopes, especially when you are planning to export for the first time.
1.1.2
BSOs
For Business Support Organisations (BSOs), see also explanation in chapter 2.2.1.2, the biggest challenge is to stress to exporters the importance of doing market research and to stimulate exporters to take a strategic approach. It has proven to be difficult for BSOs to convince exporters that ‘making shortcuts’ usually results in ‘being cut off’. You only get one opportunity to approach prospective buyers. Just sending information on their product and price is not enough, particularly in agricultural, consumer goods markets and in services. Exporters are not helped by raw data such as ‘a list of unclassified buyers’ and some trade statistics. BSOs should try to offer added value to exporters by providing sound information on EU countries, market size and market trends in interesting export sectors, market requirements, market segments, interesting niches, opportunities, consumer prices or distribution trends. So here, there is a task for a BSO to do research for exporters in their country. Based on the data they find, they can analyse the findings, filter out what is relevant and present this information in the form of highlights, market or sector briefs and fact sheets. Providing this added value will definitely enhance the performance and image of a BSO among exporters. Based on the regular questions from exporters in your country, as a BSO you can categorize information according to subject, offer customised research or organise thematic workshops based on interesting developments in the EU market place. The CBI market surveys are an ideal starting point for this. As a BSO, you are in a position to offer access to all documents on the CBI website. The CBI market information database is extensive but exporters usually take little time to read all of it. This is where your added value as a BSO starts. You can select what is relevant and where CBI surveys or market requirements are not specific enough, you can search further. In all of the CBI publications, you will find many sources in EU countries that lead to more product specific information or interesting importers. So, do not give up so easily and try to take time for further searching. Tip: When stuck while searching on the Internet, contact people from info sources (see chapter 2.2.1) who can answer your questions or who can point you in the right direction.
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1.1.3
Research assists you further
Market research can assist exporters and BSOs in the following ways: • You can find out: the largest markets for your product, the fastest growing markets, market trends in the short and long term, market requirements, business opportunities and business practice. • It enables you to narrow down your view from a broad perspective. You can set your priorities towards a specific target market and plan future markets over a 5 year period, based on sound information. • It helps you to understand where your industry is heading and what new regulations or technologies may affect the way you are doing business. • It helps you to find out the best product introductory tactics. After one year, you can evaluate your own and your trade partners’ efforts. Then you can make the necessary adjustments in each EU market. • You can gain an insight into your competitors, including their strengths and weaknesses, their mistakes and reasons of success. • You may also find ideas for new product development and anticipate product adaptations. • It reduces your uncertainty and by showing more involvement and understanding of their market, buyers will take you more seriously.
narrow your view from a broad scope
Pro-active approach By keeping abreast of the latest developments in the EU market, you can take your marketing decisions more quickly. The international business environment has changed rapidly as a result of EU expansion since 2004 from 15 to 27 countries, from 379 to 490 million people. This implies the emergence of new consumers with different needs and a different marketing mix in order to reach them. For example, if you know that people in the Czech Republic are gaining more educational qualifications because of a rising employment rate, there will be more demand for office and school supplies. You can find out the same sort of information about other new member states. When taking a proactive approach with these new opportunities you can stay ahead on your competitors. Even in a period of slowing population growth in the larger EU member being proactive as states, new trends and consumer target groups emerge. For example, the a competitive edge growing number of older people or rising number of single households due to different life styles. Both consumer groups look for convenience products, smaller products (such as household goods), or products packed in smaller portions (food). Research needs a commitment Market research requires a commitment in terms of time and money. Many companies still aim to make every export venture ‘self financing’, or start to export and finance the investment from the profit from sales in these markets. This does not apply to market research. Even if CBI market surveys or ITC surveys are free of charge, you, or your research team, will have to allocate time to go through all sorts of information. Doing a thorough Internet research takes a lot of time, especially when you look for low cost information sources (between € 0 – 50). You can save time by buying reports from business information databases (between € 50 – 3,500) – see chapter 2.2.1.4. Tip: In case of business providers, check their summary and table of contents thoroughly to see if they really provide good information on the market and distribution and not if the main part of their report are profiles of main players in that sector.
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Tip: If you have seen a useful report, negotiate about the price by comparing prices at different providers or otherwise see if you can buy separate countries or chapters. You must invest some money and time before you introduce your product in the EU market; this prevents you from making expensive mistakes later on. You can control your research costs by allocating a maximum budget (for example € 5,000) for a whole research project for 3 months. You could also allocate a budget per target country (€ 150) or per cluster of 3 countries (€ 400). Research as an integral part of your long-term strategy Market research is more than just compiling data and statistics. A large part of your research is factual, which means the gathering of information to understand (prospective) markets. But research can be also predictive, such as finding out consumers’ or buyers’ attitudes or motives for buying your product or service in the long term. Research can also be an eye-opener on how your company is performing – see chapter 2.2 of part 2 'Your research practice'. All data collected needs to be analysed and to be transformed into relevant information. This forms the basis of your marketing strategy and tools. Researching markets, like all planning processes, is cyclical. At first, as you review your initial data, you may find that some of the information raises new questions that suggests the need for additional research. In the end you can build up your own information system and add missing or new data after each search, keeping your system up-to-date. This will be the key to your success. In fact, market research does not stand on its own, but forms an integral part of your Export Marketing Strategy. It never stops. 1.2
What is market research?
As you now have become more aware of the essence of market research, you need to know what exactly it is. Market research includes all methods to evaluate which foreign markets offer the best potential for your products. A simple definition is: Market research is the collection and analysis of information about markets, people, companies and organisations that will enable you to make better decisions for your export marketing plan.
definition research
The following myths are keeping exporters away from undertaking any form of research: Myth 1: ‘Research is only for intellectuals and academic people’ This mis-understanding is partly created by researchers who have their own sophisticated definitions and jargon. However, good researchers are aware that research can be easily designed and implemented by anyone. Myth 2: ‘The distributor will do all necessary research’ Some exporters believe that they already have enough information through their distributor or expect the research to be done primarily by them. In addition, some exporters regard market information as a by-product of their accounting system. But often distributors do not give a neutral overview of the market and trade channel developments in their country. ____________________________________________________________________________________________ Source: CBI Market Information database
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Myth 3: ‘Market research is too expensive’ Market research does not necessarily mean doing surveys, interviewing large numbers of people and complicated computer analyses, which are expensive – especially when entering different EU countries. There are many techniques (desk or Internet research) at low cost, which are explained in this manual.
research does not need to be expensive
Myth 4: ‘Market research takes too much time’ Some exporters are usually very busy and are afraid of wasting time by getting lost in an overload of information and many dealings with researchers. Most research can be done quite simply and quickly. Don’t ask for too much at once and try to concentrate on what is needed (not on what is nice to know!). When doing it step-by-step, you can do it quite efficiently. There are various research techniques, which are covered in Chapter 2.2.
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2. Market research process Now that you are aware of what market research is and what it can do for you, start to prepare your research by thinking about its purpose. Unfocussed research leads to an information overload and wrong decisions. Especially when you want to enter competitive market where buyers are demanding, you need the right information. In a research objective you set a target in terms of what relevant information you need, keeping your time and budget limits in mind. To avoid losing track, you must structure your research and make it controllable and measurable. You can do this by a research process. You can follow a 6-step research process (see below) and use some low-cost research methods. Within one process, you can combine searching on different research subjects (countries, market size, target groups, trends, players, trade channels) to save time.
Step 1
Research objective
Step 2
What do you need to know and why? What are relevant research questions? What export experience do you have?
Secondary or Desk research (see chapter 2.2) Desk research using the Internet. Primary or Field research (see chapter 2.2)
Research method
Step 3 Categorizing data by EU country and subject.
Research planning
Structuring by a Research Action Plan.
Step 4 Which data/information is available?
Collect relevant data
Which countries to start with?
Step 5
Sorting and avoid getting lost. Filtering and understanding. Check and compare / Relate and conclude
Analysis - from data to information -
Step 6
Explain the cause and predict what happens.
Write and present the report
Give indication for actions.
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2.1
STEP 1 – Define your research objective, subjects and questions
Company objectives and research objectives Before starting market research, try to be very clear about what you want to accomplish. First, look at your company objectives, for example ‘maintain profit while prices in your current markets are under pressure’. This leads to certain decisions that you have to make such as upgrading your product, looking for other sales channels in your current market or looking for new export markets. Through market research, you should be able to take the right decision. This leads you to the definition of your research objective. Measurable research objectives This objective will be the benchmark you will need to refer to regularly during the research process to stay on track and measure if the research project is successful or not. If your research objective is ‘looking for new export markets’, this is quite broad. You can narrow this down by trying to break this objective into measurable research subjects. Research subjects Research subjects are relevant topics on which you have to find information. You can use these subjects to get an idea or to form a total picture of a continent or a country. Examples of subjects are trade flows, market requirements, market size, market developments, market segments or structure of competitors. All relevant subjects when exporting to the EU are mentioned in part 2 ‘Your research practice’. For example, if a research objective is to ‘identify the most promising EU export markets for tennis balls’, this exporter can divide this objective into the following subjects: • Looking at the trade flow developments for tennis balls (HS code 950661) between the EU, EU countries and the world. • Looking at the market access requirements for tennis balls in the EU and in promising EU markets. • Identifying the development in number of tennis players in the EU (male/female, singles/young couples, club membership). • Identifying the main competitors in the EU tennis equipment market. • Identifying the major trade channels, supply requirements for tennis balls in the EU and promising EU markets. • Identifying the importers and consumer prices for tennis balls in six different EU promising markets.
break down your objective into subjects and questions
Research questions Once you have thought about the most important subjects, try to ‘translate’ each subject into several research questions. In each question, try to be as specific as possible on what sort of information you need. For example: the questions for the research subject ‘Identifying promising EU export markets for tennis balls’, in terms of the trade flows can be: Æ What is the volume of EU imports of tennis balls between 2006 and 2008? Æ What are the biggest EU import markets for tennis balls? Æ Which EU markets showed the largest growth in the past 5 years? Æ What are the 10 leading developing country suppliers of tennis balls in these EU markets?
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The logical next step is to go further into details. The more details you want, the more specific your subjects and questions will be. For example, now that the exporter of tennis balls knows who his competitors are and what their product features are, the next question to arise is whether he should imitate them or come with an improved larger ball. Another question could be whether he should approach those channels that competitors do not supply to, such as hypermarkets, discounters. The answers to these questions can be clarified by market research. What export marketing experience do you have? When exporting for the first time, most exporters start with a broad view as a first orientation in order to become more familiar with a new market environment. Once the above main research objective is clarified, you will have to find out whether the opportunities and potential sales are worth your investment in terms of extra production capacity, product adaptation or logistics. If so, you can continue to focus on some target countries. If you do not have prospective business partners yet, you will need to put extra effort in sales staff, who should have some knowledge of the EU market. In assessing export opportunities, you may have carried out some research before and already have some information on EU markets in your own company. Once you have checked your internal sources and defined your research objective, you can make a list of what you want to know and what can be found out.
know your buyers’ market conditions
On the other hand, if you already have customers in EU countries and are considering expanding into other EU countries, you may already be familiar with the EU, but you will need specific information about your new target country. So your research questions will be similar to those above. Research objectives can also be more specific, especially if you are already selling in some EU markets. Example 1 Æ Exporter of basket balls to a niche market
A target group specific objective in the market where he is already selling basketballs in the UK. He has heard that young handicapped people like to play basketball and that they need smaller and lighter weight balls. He wants to find out if this is an interesting niche market. His research objective is to ‘identify a promising market for basket balls for handicapped sportsmen in the UK’. His research subjects and questions could be: - Market size: o How many handicapped people play basketball in the UK? o What is their age? o How is it organised? At school, club or voluntary basis? - Market developments: o How many have played basketball in the past three years? - Market requirements: o What quality requirements or other special requirements are there for basketballs for handicapped players? - Trade channels: o From whom are they buying basketballs now? Price level? ____________________________________________________________________________________________ Source: CBI Market Information database
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Example 2 Æ Exporter of castings and forgings to the construction segment
A buying structure specific objective. For example an exporter of casting and forgings wants to expand his business in Eastern EU countries. He has found out that many new houses are being built, thanks to a growing middle class in Poland and in Hungary. This could be an opportunity for his machine tools (welding equipment and wood working equipment). His research objective is to ’identify business opportunities for machine tools in the Polish and Hungarian construction industry’. His research subjects and questions could be: - Market size: o How many new houses are being built in Poland and Hungary? o Where are the main areas in these countries? o What sort of machine tools are mainly needed in these areas? - Competitors: o Who are the main competitors for machine tools in Poland and Hungary? - Trade channels and logistics: o Who are involved in the DMU (Decision making unit) for new machinery? o What is most important for Polish or Hungarian buyers (price, quality, product safety, after sales service) when buying machine tools? o Where are nearby logistical providers for machine tools, how much does it cost when they import and stock his machinery? It may take some time and effort to become more trained in research, but once you have done a research process a few times, it will be easier. It will certainly be of great benefit to you in the end, especially if you are well-aware of the useful sources for your specific product. You need an Export Marketing Plan (EMP) to make your export venture a success. This planning is sub-divided into several stages that can be used in a flexible way. Whether you are a starting exporter or already exporting to the EU, in both cases you need you need relevant information in each stage to make the right decisions. What to research during each stage will be further explained in part 2 'Your research practice' and in part 3 the ‘RAP’. 2.2
STEP 2 – Which research method?
Now that you have thought about what you want to achieve with research and about the kind information you need, you now have to think about how to get to the right sources to obtain this information. When you do market research by yourself, there are two main methods to collect raw data and information: • Secondary or desk research: here you are looking for previously collected data and published information by others, such as companies, governments. Secondary or desk research does not need to be expensive as you can find so much via the Internet, especially in on-line databases. • Primary or field research: here you collect information first-hand from the source, for example from buyers (importers, wholesalers), staff of EU Trade Associations, retailers, retail outlets and consumers. In this case, your research team collects the data or information direct from the foreign marketplace. Primary or field research (see chapter 2.2.3) can be done with or without the help of a research specialist. It always directly relates to your product, it is done on the spot, and usually it follows secondary or desk research. ____________________________________________________________________________________________ Source: CBI Market Information database
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2.2.1
Secondary or desk research
2.2.1.1 What is it and what to collect? Desk research is the best technique to find out where you stand. Here, you collect raw data or information from within your own company (internal sources) for example, sales records, customer files, contact reports, trade show reports, letters of complaint, opinions of your own staff, sufficient production capacity or anything else that tells you what and why customers buy from you. Nevertheless, you must search elsewhere (external sources) and collect any published information in hardcopy by contacting relevant organisations (trade associations, libraries, government and other companies). From you country you can collect most of the information from the Internet. You can check the sites of these organisations, as most of them have online presence, or contact them by email. You can collect this information based on country, product or on subject.
secondary research as the first step
D e s k res e a r ch Advantages
Disadvantages
Æ Data collection is fast
Æ It is often too general
Æ
Relatively cheap
Æ You have to validate its reliability
Æ You or your staff can do it
Æ Conflicting statistics, different
Æ The best starting point for
Æ Information can be too old
definitions
action or further research
Æ Competitors may have access to
the same information
Within the abundance of information, especially in developed countries, you can familiarise yourself with new EU markets. At the same time, you must try to find all relevant data for your own sector or product. The challenge here is to collect and compile as much useful information and statistics about interesting EU markets within a limited time.
finding what you need to know from your desk
Tip: Before starting your desk research, be very clear about your objectives to prevent losing your focus (‘need to know’ versus ’nice to know’), which will mean losing much time and money. Start with the free sources These sources include all CBI publications and all other external sources. Based on the links in CBI market surveys, you can search further for more details for your product or service which you can find in country overviews, other market surveys, trade statistics, access requirements, consumer surveys, sales tracking data, trade press articles, newsletters, newspapers, company profiles or consumer magazines. Continue with some creativity and persistence After starting enthusiastically, you or someone else in your research team may quickly reach a dead end. This may happen when searching on the Internet, for example, in a specific country such as Slovenia for a medicinal
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plants. So far, it may have been easier to find information on medical plants in Germany, France or in the UK. Even if you do not want to enter these large markets, this market information gives you an idea about the market structure or its main applications in EU countries. Regarding Slovenia, do not give up! Try to think about a clever way to get to know this market. For example, you could get in touch with the local trade association, local libraries, trade press or visit websites of homeopathic Slovenian wholesalers or drugstores. You could even ask them by email or phone if they have any market information and if not, where you can find this. Maybe there are exhibitions on medicines in Slovenia, or in a neighbouring country, or in Germany with Slovenian exhibitors who are looking for contacts with foreign companies. A more down-to-earth approach is to look for any information on medical use in Slovenia. You could find this in the National Statistics Office or at the Slovenian Trade & Investment Promotion Office (Tipo) in Ljubljana. You will probably need to translate the information into English. If you still cannot find anything, you can look for existing reports on Over The Counter (OTC) medicines from commercial information providers – see later in this section. Your efforts will be always rewarding, and with some persistence, you will always be pointed in the right direction.
Do not give up and try to find people who can help you further
The main sources that are explained in the next paragraphs are sub-divided by: - Free sources (CBI, sources in developing countries, sources in the EU) - Low cost sources - High cost sources. 2.2.1.2 Free sources CBI CBI is a good starting point for your desk research by offering useful publications and a database that includes market surveys, including export guidelines and product surveys. To help you make an Export Marketing Plan, CBI also offers information on market access requirements and various export manuals. Registered exporters can download all CBI publications from http://www.cbi.eu/marketinfo Go to ‘Search CBI database’ and select your market sector and the EU.
n Market surveys: CBI offers market surveys on more than 30 different sectors in 27 EU countries including an EU survey, which is an overview of the EU market. CBI has divided their products and services for exporters of developing countries into 4 main groups: agricultural products, consumer products, industrial products and services. In each market survey, you can find good information about the latest market developments (consumption or industrial demand), production, trade channels, imports/exports, price developments and opportunities. All market surveys give many references and useful sources (websites) for your further research.
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To assist you in your decision making to export to the EU, each survey has Export guidelines that cover the main market access requirements, how to select your product and target countries, your market entry and how to decide on your export marketing tools. Products and Markets
Requirements
Market surveys
Market Access requirements
Guidance
Export manuals Export guidelines
Services
Industrial
Consumer
Agricultural
Product surveys
Export marketing plan
o
Product surveys: If you are looking for information on a specific product, you can check the CBI product surveys. They give similar information as EU market surveys with a focus on 6 selected EU countries.
p
Market access requirements: CBI has a special database on this subject. You can find out what sort of legislation there is in the EU and in EU countries. Secondly, you will find additional requirements of EU buyers though labels, codes and management systems. Most requirements are based on consumer health and safety issues, environmental and social concerns and on quality. You can also find relevant information on tariff-related requirements and on intellectual property for your sector or product. For market access requirements see also chapter 2.3.2 of part 2 'Your research practice' and chapter 1.6 of the CBI manual ‘Exporting to the EU’.
q
Export manuals: In order to improve your skills in exporting, CBI publishes other export manuals such as the Export Planner, Exporting to the EU, Digging for gold, Your guide to product range development, Your image builder, Your expo coach, Website promotion and several manuals on other topics.
r Other useful publications:
For several sectors there are e-business studies and sector alerts. For exporters of garments, footwear and accessories CBI publishes two fashion forecasts per year and for jewellery, there is a special design guide.
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You can also find the latest news, including reports from trade fairs, promotion programmes and special subjects in the CBI News Bulletin, a quarterly magazine. You may be able to see how other exporters in your sector are doing. How to use CBI information? Example 3 Æ Moroccan exporter of goat leather handbags
If the research objective of an exporter from Morocco is ‘looking for a new export market’ and his research subjects and questions are very similar to those that are given in chapter 2.1, he can use CBI information as follows: o The EU survey ‘luggage and (leather) accessories’ (May 2007) tells him that EU imports of handbags, made of leather have almost doubled in the past 5 years (see EU imports by product under ‘bags’). This was mainly in value due to more supplies of branded luxury handbags from Italy and France. o The share of developing countries in the supply was 49%, dominated by China, followed by India and Vietnam with large volume supplies. o Italy and France are the biggest EU importers, but they are also the biggest producers – see the EU survey under ‘Production’. o Spain, the United Kingdom and most of the new EU member countries showed the biggest growth in consumption of the whole sector, of which handbags formed more than one third in most EU countries – see EU survey under ‘Consumption’. This was particularly in Spain, his nearest market. o When focussing in on Spain, he can read in the CBI survey ‘ The Spanish market for luggage and (leather) accessories’ (2007) under
‘Consumption’ that consumers spend more on their outfit and are more interested in foreign designed handbags. This is also partly influenced by the continued rise in the number of tourists and foreign residents; both have brought different tastes in leather goods and clothing to Spain. o Even if there are many small manufacturers of handbags in Spain, the classic handbag is losing ground. Younger Spanish women now prefer fashionable bags, but of a good quality material (leather). Spanish manufacturers complain about the cheaper Asian copies made of fabric, or paperboard. o In the same survey under ‘Production’ he can check some sites of main players and of Asefma (trade association). Discover here what models Spanish manufacturers make, their sorts of leather (bovine, goat),colours, finish, how they present their handbags, their main customers (wholesalers, agents, large retailers) and what their prices are. There may be an opportunity to form partnerships to help them maintain their competitive position against Asian suppliers. o Under ‘Trade channels’ he can find that the non-specialised channels such as department stores (El Corte Inglés), hypermarkets, clothing chain stores and online shops are gaining ground. Here, he can look at their sites on models, sizes, designs of leather handbags or on prices. o In the chapter on ‘market access requirements’ he can find out that there is a Directive 2002/617EC for dangerous substances in leather, and a law against the use of endangered species in leather (CITES -EC 338/97). There are also anti-dumping tariffs up to € 75 for handbags from China, which is certainly good news for handbags from ____________________________________________________________________________________________ Source: CBI Market Information database
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Morocco. He can check further in the CBI database whether there are any other requirements with regard to clean production methods of leather, tanning, de-liming and use of chrome. o He can also check Spanish trade shows on leather goods and look at the CBI fashion forecasts to know the seasonal trends in fashion for the coming years. o In the product survey ‘The EU market for handbags’ (2007) he can find more details on target groups, trends for the major EU market, including Spain. His handbags may fit well into ‘urban’, ‘vintage’ or ‘Boho chic’ styles. He could target fashion conscious women between 25 and 50 years. The quality of his leather bags is an interesting feature, especially if the leather is made in natural colours. He could consider adding some handbags with beads, coloured stones, as well as some oversized bags. o When doing desk research he also can look into the Portuguese market, which usually follows the trends in the Spanish market. In most EU countries, there are similar trade promotion offices as CBI that promote the imports from developing countries in the EU or in their own EU country. These can be found at www.tpo-net.com. BSOs In many developing countries, there are organisations that stimulate exports from their country through assistance and export promotion programmes – see also chapter 1.1.2. There are governmental BSO’s (ministries and national trade promotion offices) and sector associations. In addition to individual assistance, they provide the following information services: • Trade and country statistics and publications about EU markets. • News bulletins and information on market or trend reports for specific products or sectors in the EU or in a cluster of EU countries. • Database of other exporters in your country and of EU importers. • Specific product or market information through customised research. In some countries BSO’s work with a 48 hour response system. Chambers of Commerce Before approaching organisations abroad, first check your local Chamber of Commerce, which will also function as a BSO. Next to the usual Chambers, there are bilateral Chambers of Commerce such as The Dutch – South African Chamber. In EU countries, most Chambers offer a variety of information such as on regulations and on the major trends in industry. You also can find here information about local trade press, trade fairs, business culture and links to other relevant organisations. Addresses of Chambers of Commerce in each EU member state can be found via the site http://www.europeanchamber.com.cn/ or via the World Chambers Network at http://www.worldchambers.com/CCII/index.htm Multilateral organisations Multilateral organisations such as the ITC also offer market information. ITC covers around 50 different sectors on the EU and some EU countries– see http://www.p-maps.org. Some of the market briefs and reports have to be paid for. ITC also offers trade statistics that can be found on the site http://www.trademap.org as well as information on export packaging, which is given at http://www.intracen.org/ep/packit.htm ____________________________________________________________________________________________ Source: CBI Market Information database
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Within the other multilateral organisations, FAO, OECD, UNCTAD and the World Bank offer assistance programmes for exporters from developing countries. You can find statistics on production, trade and much information on current issues, including trade regulations, trade incentives and access requirements at these organisations. The World Bank has good statistics on demographic, social and economic developments in the world, including the EU. NGOs Within Non-Governmental Organisations (NGOs) there are many organisations that are specialised in a form of assistance, including economic, export assistance and fair trade programmes for exporters from developing countries. Concord is an EU coordination centre for NGOs, which is a good starting point for you to find NGOs in your target countries. Their site http://www.concordeurope.org gives an overview of National NGO platforms such as http://www.bond.org.uk and of NGO networks in all EU countries.
Multilateral organisations and NGO platforms
Also at the sites http://www.unsystem.org; http://www.oneworld.net or http://www.euforic.org you can find links to NGOs aiming for a better balance in global trade. In addition, you could contact the local ministries of foreign affairs, which publish address lists of NGOs in their country. In addition to providing information, NGOs may offer credit schemes, incentives or assist in locating and contacting potential customers in EU countries. Libraries You could visit National libraries in your own country or in your target markets. Apart from the National libraries, most organisations mentioned so far have libraries that you can visit. Here, you often need to make an appointment first. However, recently many of these organisations have cut their costs by only publishing information online and closing their libraries. Searching in libraries is a self-service activity, which implies that you need to get familiar to their search system. You often search by subject, title or keyword, which leads to a book or publication. Useful parts you can copy. National libraries have an online catalogue at their Internet site. In case of a complex system, you could have a look beforehand. There are libraries that have a document supply service, which carry out a search for you at limited costs and send the result of this search to you, even if you are overseas. However, you need to become a full member. In most libraries, reading rooms have consumer magazines, international newspapers, journals, trade magazines, annual reports, yearbooks and sometimes an online article database and market reports. Embassies Your embassies in target markets can be a useful source for general economic data or country information. They provide guidance on any local regulations or ____________________________________________________________________________________________ Source: CBI Market Information database
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laws. They usually also have general information on doing business within their country and can introduce you to key persons or organisations in your sector and to translators. Banks Banks are another source, especially for financial data such as exchange rate forecasts. Major banks also have departments that are involved in researching world markets, economic trends and developments in international trade.
world-wide or national trends
EU Information Centres and EU helpdesk Many EU countries now have a local information centre in the major cities or at a special European corner in local libraries. Here you can find information on EU legislation and directives, EU funding schemes and sources. You can also find general information about the EU member countries here. The EU website has a helpdesk for exporters from developing countries, which provides specific details on many of the trade related issues (http://export-help.cec.eu.int/). You can also find the tariffs and quota for your product – see also chapter 2.3.2 of part 2 'Your research practice'. 2.2.1.3 Main low cost sources Trade Associations Trade Associations that are well-organised can provide useful information. You can find them on two different levels: • Associations of manufacturers: in some countries there are associations on a product or sector level. In the case of furniture, there are furniture manufacturing associations and there are wood associations (by raw material). Both associations have different points of view and different information. If you are looking for local manufacturers, you can often find them through the members list of these associations. Check the sites of these members and see whether they could be interested in your product or in some form of cooperation. • Associations of retailers publish newsletters or reports on retail sales and trends in their country.
extracts of studies in annual reports
Trade associations have their own databases and have reference libraries for their members. They sometimes conduct their own national or international market studies. These studies are quite reliable and informative, especially in Germany, France, UK, Spain, Scandinavian countries, Ireland and the Netherlands. Sometimes they make comparisons between different EU countries. Information is often in the local language, although some associations also give English translations. If not, you can translate their information with http://www.google.com/translate_t - see also the CBI export manual ‘Digging for gold’. Reports of trade associations are free to members and are often sold at a cost, usually between € 50 and € 250 to non-members. Tip: Always try to access their news service, articles or annual reports that use information or give summaries from their reports.
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For some sectors, there are European Trade Associations who publish newsletters with a focus on some EU countries. These associations are also useful sources for EU production data and for getting to know the hot issues in the whole industry or sector. Some associations also provide information on consumption and trade channels. Tip: Definitely look at websites of European Trade Associations, the addresses you can find in all CBI surveys under ‘doing business’. At their sites, you can find out sector related portals and links to other product related organisations. Tip: Before buying a report keep in mind how useful the information will be and how much it will cost to gather the information yourself. Always check the table of contents and see if you can get a summary of the report. Trade magazines and newspapers Trade magazines published in your target market are very useful for gaining a general impression of the market developments, competitors, market or lifestyle trends, current issues and opinions in the industry and addresses of active agents and distributors. Special features can sometimes include relevant market statistics. You can receive these magazines overseas by contacting them by email, or by asking for their contact details at a library, at your embassy or from someone you know who lives there. Once you are in contact with the editors, you can ask for back copies. Online subscriptions to their database, which often includes a news service by email, vary between free of charge up to € 200 per year. The advantage is that you will have up-to-date information from a sector specific source, some insight reviews and some statistics. The addresses of trade magazines you can find in all CBI surveys under ‘doing business’. Tip: You can share such a subscription with other exporters or ask a BSO to subscribe. National Statistics Offices You will be able to find here raw data on demographics, income, employment, education, immigration, population density, leisure activities, consumption, household expenditure, housing, production, number of employees, industrial development, international trade and much more. This data is a good basis to spot changes in demographic, lifestyle and consumer expenditure. Examples on how to make these connections are given in chapter 2 of the CBI export manual ‘Exporting to the EU’, which can be downloaded from http://www.cbi.eu/marketinfo You can look at their websites or buy their yearbook at low cost (€ 20 – € 40), or get it from libraries. Many National Statistics Offices have the information in their local language, but with a dictionary you will able to read most of the statistics and tables. Sometimes websites of statistical offices are complex. Try to allocate some extra time to understand how they categorize their subjects, how to create your tables of information and how you can retrieve the data you really need. Here, take care that you don’t get lost in the abundance of information that is ‘nice to know’! ____________________________________________________________________________________________ Source: CBI Market Information database
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It is definitely worth checking out National Statistics Offices carefully. Once you know the way, you will be surprised with the results. You may be lucky to come across international comparisons of different EU countries. This will save time. Statistical offices spend large budgets on comparative tables of consumption or on usage patterns. For traditional food products, such as rice, milk, bread, beer, wine, the usage is registered nationally and internationally. A main reason is that a clear administration and definition is required for levying taxes and subsidies in EU countries. This registration generally applies to alcohol, cars, gasoline, milk and agricultural-products, which means that in many EU countries there is much information available on these sectors. The addresses of statistical offices you can find in all CBI surveys under ‘useful sources’. International directories International directories provide addresses of manufacturers, importers and wholesalers. However, some of them sell old addresses, often without websites or email addresses, so you can only reach them by phone or fax. Therefore, it would be better to look first at the CBI market surveys, at websites of local trade associations and at trade fair databases before buying these addresses. Some directory providers are given at the end of this chapter.
addresses of trade partners via international directories
Other There are the following other organisations that could lead you to other low cost information: • Trade fairs’ sites – addresses see CBI market surveys. • Local and International universities and business schools. They have their own search engines. • Trade promotion offices in the USA, Canada, Australia or China that provide news and reports on some EU countries or on global basis at low cost or for free such as TradePort Country Profiles http://www.tradeport.org/countries/index.html or http://www.usatrade.gov where you can come across market reports on EU countries, which are made for US exporters, which can be downloaded free. 2.2.1.4 Main high cost sources Business information providers You can also buy up-to-date information reports from business information providers. These can be research brokers/agents or research companies. Both offer a range of international market reports through their online databases. Brokers and agents re-sell complete or parts of market reports from the well-known UK and international research companies. These reports are on many different sectors and cover the global market, the market in EU countries or in individual countries. When searching on the Internet with the terms ‘market’, ‘consumption’ or ‘production’ on any product/sector or country, you will immediately see ____________________________________________________________________________________________ Source: CBI Market Information database
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the names of the big research agents. In 2008 the most common agents included ‘Research and Markets’, ‘Mindbranch’, ‘Global Information’, ‘Reportlinker’, ‘Report Buyer’,’ Corporate Information’, ‘Marketresearch.com’ as well as some agents from India such as ‘Bharat Book Bureau’, ‘Aruvian Research’, RNB Research’ and from China such as ‘Chinamarket’. The well-known research companies are ‘Datamonitor’, ‘Euromonitor’, ‘Freedonia’, ‘Mintel’, ‘AC Nielsen’, ‘GFK’, `Frost & Sullivan’, ‘Key Note’ (UK market) and many more. They offer a large variety of market reports, market briefs, article service, company and retailer profiles of the EU countries and other countries around the world. Sometimes they are specialised in food, clothing or in industrial products. You can find these research companies under useful sources in chapter 2.7. Most research companies offer valuable information and are sometimes quite detailed on consumer behaviour, buying patterns and retailer opinions. Another advantage is that you have information on several EU countries from a single source and compiled in a similar format. However, the disadvantage is that you have to pay for it! Sometimes prices go up to € 4,000 for a European report on one sector. Tip: Here you also can share a report or parts of it with another exporter or BSOs, or you can commission some of these companies to make a report. Before buying a report, keep in mind how useful the information must be. For example, does it provide enough answers to your questions? Are all your target countries covered? Check carefully the table of contents and think about how much it would cost to gather the information yourself. Once you have decided to purchase a report, you must pay in advance with a valid credit card. Then you can download the report or have it sent by email on CD Rom or in hardcopy. Even if you buy them in parts, these reports are still expensive. Tip: Be careful with the publishing date. This can be sometimes 2 years later than all statistics in the report. For example, the report was published in 2008, but provides statistics for 2006. So before buying, check the summary or contact a salesperson and ask him to send some sample pages.
if interesting, share a report with other exporters or a BSO
Tip: Try to get anyway a sample report from another country or another product. Then you can judge if the information given is explanatory enough, if they give some background information and, where statistics or statements are based, on or what product definitions they use. Mark the sources During your desk research try to mark the pieces of information with a date and source. In doing so, you will know where you got it from, especially if the information subsequently proves to be false.
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2.2.2
Desk research using the internet
The Internet offers an almost endless stream of information. All sources mentioned in the previous sections have websites, so you can access these sources and an innumerable amount of other sources anywhere in the world, just from your desk.
endless access to information from anywhere
An ideal method to collect data or information The Internet is a very useful research tool, it gives you great possibilities and if you do it right, you can save much time. However to avoid any disillusionment: • Look first at the websites of useful sources. • If you cannot find what you need, maybe some links or portals will lead you to some answers. • Search by keyword using different search engines, where you must be creative when entering keywords and narrow your search in time and know when to stop! How and where to search via the Internet and organise your information is further explained in the CBI export manual ‘Digging for gold’. Structure your Internet search Be prepared, stick to the subject and avoid getting off the track. Hence, like all other research methods, structure your search and write down beforehand what you are looking for, keeping your Research Action Plan (see chapter 2.3) at hand. Remember: always focus on ‘what you need to know’ versus ‘what is nice to know’. In your computer create a Market Research Directory that you subdivide into countries and then by subjects.
but don’t go off on any wild goose chases!
Take moments of reflection Take regular breaks, for example, every hour with a moment of reflection by asking yourself: • What was I looking for? • What did I collect so far? Do this by skimming the documents (see chapter 2.4). • How and where does this information fit into my Research Action Plan? • If it is useful and reliable, where do I file it into my Market Research Directory? • What is worthwhile to print out for reading? • Decide on which countries require more information. • Can I find this out from somewhere else (by field research, reports from business information providers)? Tip: You can find the best results in national search engines and use the local language of the country concerned. You can find these engines via http://www.whitelines.net Internet Action and Human Interaction: You also need people! Do not give up when you cannot find information by yourself. Try to take time to contact someone from any of the relevant sources, preferably by phone or otherwise ____________________________________________________________________________________________ Source: CBI Market Information database
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by email. Most of the aforementioned organisations are required to inform other people, including foreign exporters. Try to simply explain to them what you are looking for and do not expect instant answers. When you speak to the right person, they are often willing to answer your question or to point you in the right direction. It also may lead to useful information and sometimes to unexpected business contacts. Tip: For any organisation you need to contact for additional information, make a standard email or letter. This you can use several times with slight modification, focussing on the people or organisation you are contacting.
2.2.3
Primary or field research
What is it and what to collect? Field research is the way to collect primary data by using face-to-face interviews, store checks, observations or telephone interviews. This implies that you collect the information on the spot. Here, you are zooming in from the general country and sector level to your specific situation. The role of field research? There is often a need to validate the findings from desk research and collect additional information. You could find some of the missing information from interviews with buyers or consumers. You may become aware of hidden feelings people have towards your company, country or product. This could be a real eye-opener for you or for your business. Even if statistics show a growing market, field research can be crucial to making the final decision. In other words, whether or not to enter this market, and if so, how to do it.
be aware of hidden feelings
For example, the exporter of tennis balls (see chapter 2.1), may have found out by desk research that Germany was the largest EU importer between 2006 and 2008, and was increasingly importing tennis balls from China, India, Thailand and Malaysia - but also from smaller DC suppliers. In order to judge if he should focus on Germany as a target market - instead of Italy - he needs to get more details. When visiting for example, the international trade fair, ISPO in Germany, he can find out more on the following subjects: • Are German and Italian buyers interested in his tennis balls? • Are they aware of the production of tennis balls from his country? • Why are these smaller DC suppliers gaining ground in Germany or in Italy (low price, special tennis balls, good quality, outsourcing, fast delivery, tennis balls for special market segments or promotion). • What do German/Italian buyers really like in tennis balls from DC suppliers? • Is any change taking place in the supply chain of tennis balls? Field research often requires a whole process Field research focuses on consumer or buyers’ motives (why they would buy your product instead of your competitor’s product) and forms a basis for your positioning strategy. So field research requires a well thought through and in-depth approach and a whole research process. Here you can combine a
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few subjects as shown in the example below, but do not combine not too many subjects. This makes field research time consuming and more complex. With desk research, you can combine more subjects and countries in one process. Field resea r ch Disadvantages
Advantages Æ Direct exposure gives a better
Æ Usually more expensive than
Æ Chance to meet potential
Æ Takes much time due to a lack
Æ You can adjust the list with
Æ Time consuming to judge the
feel for the market
expected of contacts
customers
required information during the field research
reliability of research specialist – see chapter 3.2
Start field research in your own country
start to talk to colleagues
o Companies already exporting to the EU: you could talk with other exporters, especially those who export to interesting markets. What do they know that may be valuable to you? Even if they may be reluctant, any information from them could be of use. However, you need to verify their information with your own data later on. You can also talk to BSOs or other relevant associations in your country. o Exporters of similar products: a talk to other companies exporting products similar to yours, but who do not directly compete, may be useful. There might be a way to join forces in research and enter the export market together. Doing it simply your own way The most common and low cost methods for doing field research are: n Personal interviews (face-to-face) at trade fairs; o Observations at trade fairs; p Store checks; q Other techniques such as telephone interviews and Internet surveys. 2.2.3.1 Personal interviews at trade fairs When visiting a trade fair you have a good opportunity to collect information from potential customers as well as from competitors and key persons in your sector. If you do not want to leave your stand, try to reserve one or two extra days to look around and have short conversations or interviews. Prepare this by considering the following seven points: a. Planning of visit If you are planning a visit to a trade fair, plan it well in advance. With too short notice, it will be difficult to fix appointments. If the people you want to see have promised to give you some information, allow them some time to have it ready.
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Check the site of the trade fair and order a catalogue beforehand, so you can get familiar with the categories, themes and products on show and find out interesting stands and contacts. Check also if there are any seminars or workshops at the trade fair that are worth visiting. Especially international seminars may provide a global overview of the sector, an insight of main players, the supply chain or other useful information. b. Structure your personal interviews Think about what you want to know, or your research subject (see chapter 2.1) and which countries. You also could verify the information you already have collected from desk research. For example, whether the German market for tennis balls has really grown and whether this will continue.
plan your visit and think about your research subjects
c. Who you want to interview? You could make a distinction here, depending on your sector: - Visiting potential customers
Checking your chances in the markets of buyers from importers, wholesalers department stores, hypermarkets, or industry. - Visiting competitors Æ Checking how they approach their markets and what they sell there. (You could pretend to be a ‘buyer’) - Visiting key persons Æ Getting relevant information from experts from trade associations, trade press, sector experts. Try to set a realistic target on how many people to interview, the duration of the interview of for example, 6 potential customers (2 in 3 countries) in the morning, 20 minutes per interview; 3 competitors and 3 key personnel in 3 countries. You can take more interviewing time; it all depends on what you need to know from them. Æ
d. Making appointments Try to find out the right contact person and make an appointment beforehand. You can use ‘name dropping’ here by saying that you received their name from company X or from the trade association. Briefly explain that you are interested in their company, products and production system. Once you are in contact with the right person, that allows you to enter the stand. Often large stands do not allow people to enter without having an appointment. Even if your contact person is away or too busy, you may be able to speak to someone else and take the opportunity to look at their products and collect relevant brochures and leaflets. e. The right timing When visiting people at a trade fair, get your timing right. At the beginning of the fair, people are not really in the mood to answer questions from someone they do not know well. So try to choose a quiet moment, or one of the last days of the fair, when people are more relaxed or sometimes bored. A good opportunity is the ‘golden moment’, when people are taking a coffee or having some food. ____________________________________________________________________________________________ Source: CBI Market Information database
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f. The questions Think well beforehand about the sort of questions. Try to keep them short and simple. If questions are long or complex, people will quickly get confused, often leading to wrong interpretations and answers. There are different types of questions: - Open questions, for example ‘Could you tell me how satisfied you are with your current product X? ‘People can answer this question more freely in their own words and this can turn quickly into a conversation, jumping from one subject to another. A disadvantage is that it is more difficult to keep control of the conversation. There is a higher risk of misunderstandings and the answers are more difficult to analyse. - Closed questions, which can be: o Dichotomous on which only two answers are possible ‘yes/no’ or ‘agree/disagree’ or ‘see/did not see’. o Multiple choice, meaning four or more stated answers are possible. Closed questions are useful to structure your questions. You also can ask several questions in a short time. They are easier to analyse. The disadvantage with closed questions is a lack of spontaneity and that they force people to give too simple an answer, while the reality is much more complicated.
how to ask your questions?
The best thing is to start your interview by asking a few simple ‘spontaneous’ dichotomous questions from the top of your head, followed by some open questions. This semi-structured approach leads a conversation. You could prepare a questionnaire with 10 - 15 questions. Here are some hints when making your questionnaire: • Ask 2 or 3 general and easy questions first; • Is the person willing to answer your questions? • Is the person able to answer your questions? • Questions must be closely related to what you ’need to know’ and not what is ‘nice to know’. • Questions should not lead the person to say what you want to hear because he/she finds you a very friendly person. • Ask the difficult/important questions in the middle or at the end of the interview, depending on the available time of the person. Try to briefly confirm his answer to prevent misunderstandings. • Structure your questions by putting them in a logical order so that you can memorize them easier. There is less risk that you may lose track after the third question, if the respondent talks a lot. • Don’t ask two things in one question, for example: (1) Could you tell me how satisfied you are with your current product X and (2) why? You can ask this second question as follows: (2) If you are not satisfied, what could be the reason? • Avoid questions with different replies, for example: Which trends have influenced the success of your product? The reply includes more trends, such as more single households, healthy eating, growing affluence in that country and fashion influences. Therefore, ask instead: Which major trend has influenced the success of your product? ____________________________________________________________________________________________ Source: CBI Market Information database
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Tip: You can test your questions beforehand with your staff or colleagues at some quiet moments and make adjustments, if necessary. Because many people at the stand are sales staff, they are likely to talk about their product. When they ask who you are, briefly introduce yourself and mention that you are trying to get familiar with their market. Avoid selling your product. g. The conversation Start the conversation by making a compliment about their product or stand or by showing an interest in their culture; this will be often appreciated. Try to come quickly to the point by asking him/her some simple questions. Once the person carries on talking, try to get control of the conversation by asking your next question. You do not need to say that it is an interview. A small ‘conversation’ sounds less demanding than showing up an endless list of questions. Try to get a bit deeper into each subject, which usually generates an ongoing conversation. When jumping from one question to another, it creates chaos for both of you. Find out the person’s position and what responsibilities he/she has within the company. You may be able to get the name and function of a contact person with whom you can get in touch later. If the person you have interviewed has given you good information, you can give a small present or gadget from your country in return. After visiting each stand, you can use a note pad to write down relevant information and some details of the company, their products, contact person, special things he was talking about, which could also be personal (he visited your country last year). Tip: When doing your interview in a semi-structured way, you have a higher chance of getting names of important buyers. Combine visits to trade fairs with visits to relevant organisations When you are at a trade fair, try to put aside some time to go to stands of relevant organisations such as trade associations and trade press, where you can also pick up information. If they are not at the fair, you could visit them. Let them know beforehand about your visit and try to make an appointment with a key person. Just explain what information you are looking for, as there could be a mis-communication between you or staff from the organisation, dealing with your request. They may not be familiar with your product or your situation. Therefore, make a friendly but polite email or letter. Avoid asking too many questions, start with 2 or 3 questions and try to be as specific as possible. In your request, it is important to set a date, which gives you a reason to follow up later. Bear in mind that when asking for information free of charge, you cannot be sure to get specific answers.
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2.2.3.2 Observations at trade fairs and other places When visiting a trade fair and you find it difficult to do interviews, try to reserve 0.5 – 1 day to observe what is going on in your sector. The information should be easily apparent and not be too complicated. Observation research is a method that allows you to get familiar with a market, competitor and customer. Competitor and customer observations At trade fairs, visit at least the stands of the main players (importers or manufacturers). At these stands, you can you take a close look at: • Product corners, their product range and designs; • What sort of application in the case of agricultural or industrial products; • Themes or concepts of their products and their stand; • Presentation and promotion of their products; • Their profile, locations in the EU, customers, contacts with overseas suppliers. In the case of a potential customer, think how your product could fit in their product range or theme or how you could present yourself as an outsource supplier. In the case of a competitor, think how you can distinguish yourself from them. Observation is also a technique that helps to turn the facts you have found so far into something meaningful. Country, culture and trend observation Use public transport during a business trip. It may take longer but it gives you an idea about local people as well as advertisements in subways, railway or bus stations. In the hotel, you could look at some local TV stations, where commercials give you an overall picture of what is hot and what is not. Market place observation The most realistic and low cost technique is a market place observation, which you can do in shopping centres or in-store (see also next section). When observing, pretend you are a ‘consumer’, by being a mystery shopper. During your observation, you watch and record the actions of consumers, observing what they buy, who buys (men, women, teens, children), impulse buying and influences of (price) promotion.
in Western EU countries…..
and in Eastern EU countries
When in-store, you will get an impression of the sales staff and discover that some of them are not completely knowledgeable about what they are selling, especially when it concerns technical products. Tip: For any observation, try to write down the relevant things that you see to prevent forgetting them afterwards. You can include these observations in sales or trade fair reports. ____________________________________________________________________________________________ Source: CBI Market Information database
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2.2.3.3 Store checks Once you are in an EU country, you can do some store checks in addition to market place observations. In these stores, you can pick up price catalogues and see how competitor, or similar products to yours, are being displayed. Next to getting an idea of in-store promotion and merchandising tools, you could ask the opinion of a few people, such as the store manager or sales staff. Try to write down everything of relevance. You can also do store checks in online shops and e-markets. Example 4 Æ Exporter of coffee doing a shelf check in a supermarket
An exporter of coffee wants to check the shelves in a super or hypermarket. By doing so, he can find out the most relevant facts on subjects such as product positioning, competition, dominance of private labels and prices. He checks the following: o How many cm has coffee brand A, brand B, brand C and which brand is market leader? o How many cm has the store’s private coffee brand? o Which coffee brands have the most and best visibility? o What are the prices per 250g of each of these brands? Discount prices? o What are the current forms of packaging and what sort of special packages (1-2 person packs) are there? o What is the split between fresh coffee, vacuum packed coffee, instant coffee, convenience variations, mixed with milk powder and cappuccino. o What are the new types of coffee and what is their main selling selling point in terms of flavour, authenticity, convenience or other attributes? o What sort of promotion, atmosphere, multi-packs, price discounts, and form of targeting (housewives, men, busy people)? o What are the impulse brands? He will try to take a picture of the whole shelf, so that he can have a closer look at it later on. However, he must ask for permission beforehand. At the same time, he should ask if he could speak to the store manager. When the staff asks him why, he should say that he is trying to get familiar with the local coffee market. He should already have some questions in mind. 2.2.3.4 Other Telephone interviews These are personal interviews by phone, which is an effective low cost method and when in contact with the right person, you can get the results quickly. If you do it among buyers or directors of trade associations, it may take several calls in order to reach them. Nowadays there are several operators that allow low cost international calls. You could also call for free by using Skype, a software program for making free phone calls over the Internet – see also http://www.skype.com but take care to use a quality headset to assure a good connection. Test it before contacting your target group.
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You could use name-dropping here such as ‘I got your name from Mr/Mrs....... who I met at the last trade fair’. Try to be courteous and patient and if inconvenient call back later. At the first call, clearly explain who you are, why you are contacting them and if they are prepared to participate. Use a compliment such as ‘I heard that you are the expert in....’ Follow a semi-structured approach, ask them two open questions, and then try to create a conversation. Try to end the conversation with a brief summary and tell him that you will keep him informed about the results, which gives you the opportunity to get in touch with him again. With important buyers, you can work to an appointment to have an interview, for example at the next trade fair. When doing telephone interviews, you will have to think about a relevant number of people you are going to phone in your target market. Tip: Be as brief as possible in your approach, stay personal and leave room for questions from the secretary or buyer. Recently telephone research has suffered from a bad image as many buyers and consumers are called by researchers/students, reading up a long story, asking many questions, presenting this in an unpleasant manner and sometimes not knowing fully what they are talking about. Tip: Think about the right timing. So do not call on a Monday morning or Friday late afternoon. Internet surveys You can also carry out your own field research via the Internet by: • Using electronic questionnaires with existing customers or common interest groups. A common method here is to ‘post’ a questionnaire to a newsgroup and respondents can reply by email. • By tracking and tracing visitors to your website (if you have one) and invite them to complete a questionnaire. • By offering added value features on the website, for which visitors have to register.
also use name-dropping in telephone interviews
An example of an added-value functionality is offering registered visitors a subscription to email alerts or access to a virtual trade fair, which will update them on new developments in your range. By requesting registration, you can directly find out who is interested in your company and product range. Thereby, you have created a database with prospective customers who you can approach directly. The big advantages are the low costs, speed and tracking, whereas the disadvantages are that Internet users are not representative of all potential buyers or consumers, as anyone can complete the questionnaire.
collecting primary data via the Internet
Last but not least, according to a survey by Ernst & Young, an average manager in the UK or the Netherlands is overwhelmed by hundreds of emails and text messages every day. Consequently there is a high chance that you will have to follow up several times in order to get a response. Doing it on a larger scale and in the professional way You could decide to get more in-depth opinions, ideas and impressions of buyers or consumers. This can be done by field research in your target countries by research specialists. In conjunction with them you can ____________________________________________________________________________________________ Source: CBI Market Information database
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consider the sample size (the number of people selected for field research), which will depend on the country and your available budget. If you want to make your research more credible to buyers, you could decide to use a more scientific method. For example, the exporter of tennis balls may have interviewed ten German buyers, of which five said they might be interested in his tennis balls, but only at extreme low prices to sell to discounters. He could start by checking the prices of tennis balls at websites of large retailers. But still he does not know whether many German tennis players buy their tennis balls. Is the price of balls really important to German tennis players? He could look for a research specialist near Munich, who may have a stand at ISPO, and let them run questionnaires and do interviews. These interviews can be done among a sampled target group of consumers or tennis players. This field research will help him find out how and where German players usually buy tennis balls (at sports retailers, department stores, hypermarkets or discounters). He could also find out if German consumers regard price as more important than quality. At the same time, he could find out how much German consumers are prepared to pay and how they buy. Do they go to a sports shop, buy them at the tennis court, or do they buy balls when shopping at hypermarkets? Or are they prepared to go specifically to a discount shop to buy tennis balls?? With the results, the exporter can convince the buyers to accept a reasonable price instead of an extreme low price. Alternatively, the exporter of tennis balls can re-focus on another target group of tennis players in Germany such as children, by making balls with fancy designs. Alternatively, he could look at the Italian market.
finding more details of your target group by field research
For details on how to work with research specialists - see chapter 3.
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2.3
STEP 3 – Research planning
When you have clarified your research objectives and its related research subjects and questions, and decided which research methods to use, you can then do your research planning. In this step, you are going to plan what sort of information you need on which EU countries, how detailed it needs to be and how much of it you need. Be realistic about the time and budget you are going to allocate for doing research. The more subjects and countries are going to include in your plan, the more time and money it will cost. Structuring your research by a Research Action Plan How long does it You could use a Research Action Plan (see table below) that helps you to do take to answer research efficiently and make time commitments. After you have collected your research sufficient information, you can summarize all relevant points on each subject in questions? a brief conclusion, so that you retain the overall picture of your research process. For example, if your research subject is ‘Identifying five large export markets in the EU’, you can make a profile of each country, categorized by subject and with some key statistics and facts. These profiles give you an idea of how easy or difficult it will be to export to Germany, France, the UK, Spain or the Netherlands. It also helps you to identify possible next steps for your entry strategy or what you need to research further. Example 5:
Research Action Plan (for the year 2008)
Country / Subject
Sources
Do by
Done
Results
15 Aug
12 Aug
Decreasing by 2%
20 Aug
19 Aug
Environmental regulations More research needed Bayern - 400,000 Former East - 200,000
Germany - Market potential - Market requirements
CBI survey/Trade Assoc./Portal CBI database/EU helpdesk
- Products / trends - Number of customers meeting profile “A”
Trade Magazines Statistisches Bundesamt/Magazines
25 Aug 25 Aug
23 Aug
- Distribution - Prices
Euromonitor ITC P-maps, store checks Magazines, Company’s websites
1 Sept 5 Sept
30 Aug 3 Sept
10 Sept
10 Sept
- Competitors - Other
Importer / Mail order End user € 25 – € 35. Falling by 2% in 2008 2 large importers (brand A, B) 2 Chinese, 1 Indian exporter
Other sources
15 Sept
More research needed
Mintel/ONS
16 Aug
13 Aug
Growing by 3%
Trade Assoc./Portal
18 Aug
15 Aug
Growing by 2%
Trade Assoc.
19 Aug
United Kingdom - Market potential - etc.. France - Market potential Italy
Waiting for information
A copy of a research plan is useful when searching on the Internet where you will come across many subjects that are categorized or mentioned in many different ways. This
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Research Action Plan is a simple version and keeps your search focused on your key subjects. In this plan, you could also include the research methods, such as which subject you can find out by desk research, what is to be checked by field research. Try to be honest about what you can do by yourself or your research team and about what should be done by research specialists. An interactive version of a Research Action Plan is given in an E-tool, which can be downloaded from the CBI site. This RAP is closely linked this part 1 and part 2 ‘Your research practice’. It gives you an example of a furniture exporter from Uruguay making his Export Marketing Plan with a focus on Spain and Poland. What next? When pushing a research project forward, try to set a new deadline or think about simplifying your subjects or questions. Try first of all to make an EU Research Action Plan and then go further into details. In your research planning you also have to think about which research technique to use (see earlier in this chapter 2.2), how much budget you want to reserve and who to involve in your research project (see next chapter 3). Do not expect too much too quickly Within a market of 27 different countries, do not expect too much information, too quickly. Try to be realistic and try to structure your research planning. You could reduce confusion by starting with a few countries that have much information – see next section 2.4. Overload of data leading to cancellation You could start very enthusiastically, but after 2 -3 weeks there may be many downloaded files in your computer. There are many printed documents with statistics in different languages on your desk with still missing pieces of the puzzle. Especially collecting information from the new EU member states or smaller EU countries (Belgium, Denmark, Portugal, Greece) takes much time. Being overloaded with raw data and being confused, you may decide to push the research project forward that year. There will then be a high probability that the research will be cancelled and all efforts so far will have been useless.
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2.4
STEP 4 – Collect relevant data
Once you have done the research planning and have set up a Research Action Plan, the next step is to start collecting data from all available sources in your own country and in EU countries in the most effective way. Which information is available and what is easy to find? Start with your internal sources (see chapter 2.2.1.1) and visit a BSO in your country. They may provide you with general information on the EU, annual reports of competitors already exporting to the EU, articles in your local trade press and anything else that is relevant. Then, look at the CBI market surveys (see chapter 2.2.1.2) for your sector and get all relevant information and useful sources from where you have to start your further research. Trade statistics are relatively easy to get and are usually available for all EU27 countries. They give you a rough indication on growing EU markets. However, you have to bear in mind that re-exports can be high, especially in the Netherlands and Belgium. Re-exports are usually destined for other EU countries, so an increase in imports by the Netherlands for example, is not necessarily because of a growing Dutch market.
checking your own information first
Information not specific enough You may find that the information from these sources gives you a general picture about the sector, but specific information on your product is still missing. For example, your product is part of a larger group; your kiwi fruits fall into a large group of ‘other fruits’, or your wooden fountain pens fall into a large group of ‘writing and drawing instruments’. This leaves still some questions to be resolved. In your further research, try to find out if there is a specific HS code for your product or for a smaller product group than in CBI market surveys. Check this at the ITC’s trade map or EU helpdesk and if so, get to know the trade flows more specifically. Often research for your product has never been done, or companies who have done so will not share that information with competitors. In addition, the data that you have collected from the above sources may be at least 1-2 years old, especially if trade statistics were used. Also, bear in mind that southern EU countries are relatively slow in providing sales statistics. In the meantime, trends may have changed. Include and structure your observations The observations you have made during a business trip or trade fair is valuable information. Try to write down these observations (see chapter 2.2.3.2) and try to describe what you have seen and interprete this. Here you can ask yourself questions such as: • What is so special about it? • Did I see this before? Where was that? • Why was that stand very busy? Was it because of their product, price or promotion? • What was special about that shop or hypermarket?
still missing the clear picture of your target group for your specific product?
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Try to structure your observations by putting them in a logical order. If you do not have the time to write it down, ask someone else in your office to transcribe your notes. These notes can be included as a special report in the other information you have found so far on that country. Which countries to start with? You can search in one or two countries or you can research several EU countries in one research process. Either way, start your search with ‘easy’ countries with good and up-to-date information sources, for example Germany, France, the UK or Sweden. These countries have much information in English. If your native language is French or Spanish, southern EU countries would be a good start.
UK, France, Germany have often up-to-date information
For the large EU countries, information on consumption and production is often available. In addition, you can compare consumption, production or trade structures easier, because the large countries often compile their information according to similar definitions. You may discover some interesting niche markets and decide to get more details here. But if you want to look for other target countries, information from the large EU countries focussed on your specific product/service is a good basis to go on with the ‘difficult’ countries with few information sources. These countries simply do not have governmental agencies that collect this data on a regular basis. But as the new EU countries become more important as markets, more interest in basic data and better collection methods will develop. Dealing with difficult countries needs persistence If you really cannot find any statistics on consumption, you can collect general information such as demographic (population growth, ageing population, development men/women), social (households, leisure, lifestyle), economic growth or on main industries. ‘I know quite certainly that I have no special gift. Curiosity, obsession and dogged endurance have brought me my ideas’ Albert Einstein You can collect this easily from National Statistics Offices, the Worldfact Book or Wikipedia. With this and some information about imports/exports, you can estimate future developments in that country. You may discover interesting facts about that country. Which countries to combine or cluster? If you are thinking about entering Austria, information on the German market gives you a basic idea about trends or the mood in German speaking countries. Besides, the German trade press often cover the Austrian market as well. You could regard Germany and Austria as a cluster. This also applies for information on the Swedish market giving you a rough idea about tastes, habits and trends in Denmark, Finland and the Baltic States. The same applies for Poland and some of the Eastern EU countries. Be careful. When researching these clusters, do not generalise. Keep in mind that differences remain between countries. See also chapter 2 of the CBI export manual ‘Exporting to the EU. Even within
Try to cluster but EU countries are not ‘roughly the same’
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clusters of countries there could be great differences in lifestyle, consumer tastes, eating habits, for example in the Benelux. Structure and categorize data by country and by subject Start to categorize all data during collection when searching on the Internet and use your market research directory. In this directory, you create folders that you name by country and subdivide into subjects such as consumption, production, trade flows, trade channels or prices. When coming across very interesting documents or reports, print these out as they are easier to read than on a screen. This allows you to highlight important information, make notes on them and look at them regularly. Categorize your prints in the same way as your market research directory and label each pile by country. This enables you to keep track of how your data is built up and how you can easily re-locate it. By going through your directory after each search, you can recognise from which countries and subjects you have sufficient data and what you still need to collect. Use clever reading techniques You can save much time and energy during your Internet search and categorizing by: • Skimming: You skim over the surface of the text and read it at speed, similar to when you are quickly reading a newspaper or magazine. Take notes of passages that need attention afterwards. • Scanning: You scan rapidly the pages of a document or report looking for specific information. For example, you scan when trying to find a word in a dictionary. • Submarine reading: You read through the text carefully and at the same time think and analyse what is being said, comparing it with other things you have read, agreeing or disagreeing with it, re-reading parts you do not understand and noting missing or incorrect information. This reading needs your full concentration. Submarine reading is required in Step 5 – Analysis.
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2.5
STEP 5 – Analysis – from data to information
When you think to have collected enough data you should have it categorized well in print and in your computer (Market Research Directory). Now it’s time to scan, sort and read all documents, taking out what is relevant, understand it, check if it is good information, make comparisons and draw your conclusions. The analysis can be subdivided into four parts, although in reality some of these parts are done at the same time. You can proceed in this step as follows: n Sorting and avoid getting lost o Filtering and understanding p Checking and comparing q Relationships and conclusions
n
Sorting and avoid getting lost
don’t lose yourself in an information overload
In the past 20 years, various innovations such as computers, television, satellites have pushed people from a state of information scarcity to a state of information surplus in a very short time. So in addition to effective collection of data, you must be able to manage and to handle all this information. Therefore, you have to sort your data as much as you can. As already mentioned in step 2.4, you can start to categorize your data while searching. Keep control by reviewing your subjects per country and try to fill in some parts in your Research Action Plan. This structured approach of working prevents you getting lost in an information overload. If you do not have the time yourself, someone else could do this for you. The sooner and the most effectively the data is sorted, the better it will be in the end. After having done most sorting, you will see what is still missing. If it is really essential, you could consider buying this missing data from business information providers. Nevertheless, you can carry on with the analysis of the countries where you have sufficient data.
o
Filtering and understanding
Now it is time for submarine reading. You have to read carefully all data and information and ‘filter’ out what is relevant. When reading each document, ask yourself: is it is relevant for my research objective, subjects and questions? Put aside everything, which is not or not directly relevant. You may have come across documents that caught your attention simply because they contained one or more’ trigger words’ relating to your subject. But when looking closely at it, there is no real value or just a couple of phrases with some value such as summaries of reports, articles about interesting reports that are just advertorials. Put this to one side as well. There may be documents that need to be translated, ____________________________________________________________________________________________ Source: CBI Market Information database
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but judge first which parts are necessary before putting effort into it. You might understand already things from the tables such as consumption or production in the last 5 years, main retailers and shares. If there are interesting trends like market growth or detailed descriptions of consumers or manufacturers, try to translate and understand this. When reading printed documents, highlight important parts like sales, consumer target groups, buying motives, or trends in the trade with a text marker. You can also write important statistics or facts on a separate sheet, so that you always have this information at hand. The main purpose in this part of your analysis is that you start to form a ‘picture’ of interesting EU countries that you need to sharpen by every additional piece of information you can find. These countries could become your target markets. For example, the exporter of tennis balls found out that Italy is more interesting than Germany, because volume imports grew by 10% every year between 2004 and 2008. In the same period, the number of Italian tennis players increased as well. Although the German market may have grown by 2% every year, there are many competitors. In addition, from field research he learned that many German buyers regard a low price as most important. So he concentrates on sharpening further his ‘picture’ of Italy. Focussing in on Italy, he could deepen his understanding by taking another look at all Italian documents that he has put aside earlier. He also should collect extra information by desk research and include more background information on the Italian sports goods market. Additional field research could be considered at a later stage.
p
Checking and comparing
Now that you understand most of your documents and notes and have become more focussed on some EU countries, you will have to look at the quality of it by checking its reliability, completeness and comparability.
check the quality of the information you have found
Reliability You can look at the reliability by asking yourself the following questions: • Who wrote it and where did you get it from? Especially data collected from the Internet may not be reliable or trustworthy. So check the writer of the article or report, or also check if the site gives an address or telephone number of a person or organisation. What was your impression of the whole site? Example 6 Æ Is the buyers’ information always right?
A buyer or someone you interviewed at a trade show may have told you that the market size for product X is € 1,500 million in his country and he may have given you many other figures and statements, pretending he knows it all. Write down that information, but do not believe him straight away and definitely check it with the information you have found so far. You may come across an article in a trade magazine or in a report ____________________________________________________________________________________________ Source: CBI Market Information database
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that estimates this market size at € 850 million one year before. Check these figures by looking at: - Population statistics where you can calculate the per capita consumption, dividing € 1,500 million by the population. The outcome you can compare with a country similar in size and in living standards. - How the article/report and the buyer could have defined the market size. - How did the buyer express the market size? Was that in retail sales or in consumer expenditure. In case of retail sales was it including or excluding VAT? • Why did they write it? Bear in mind that each product/market combination can be viewed from different angles. For example, a report on orange juice in Spain can be made from the perspectives of: o The growers of oranges o The processors of oranges o The governmental offices making legislation on packaging methods o The wholesale/retail trade Check first the type of organisation (commercial, personal, academic or governmental) and think about their possible motives in making that report, such as selling information, recruiting members, ‘selling’ an opinion or ‘selling’ assistance. Generally, reports made by government or NGOs, such as CBI, are quite neutral, unbiased and reliable. • When was it written? Check the year of publication and its statistics. If it is too old, put it aside and you could use it for your background information if you cannot find anything on that country. • How was it written? Check the tone of the article or the person you interviewed. Was it not too exaggerated? Even official statistics are sometimes too optimistic, reflecting national pride rather than reality. Also bear in mind that companies sometimes understate sales statistics in order to match their sales reported to tax authorities. Check also if some market developments are not too generalised. It is sometimes very easy to make statements on an EU level, but does that apply to all countries? Does that apply to all regions within each country (urban as opposed to rural areas)? And, to all consumer groups or industries?
two year old statistics as a good basis
Completeness and up-to-date For all EU countries you can try to get the full picture. However, in reality this is difficult and it will take much time and cost, especially if you want up-to-date statistics. Most statistics available are two years old, which is a reasonable time frame to know consumption and trade statistics in each country, using Eurostat. You may get more recent data from Germany or the UK. Still, two year old statistics are a good basis to understand the trends in different EU countries.
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Comparability and different sources It is difficult to compare EU countries, due to a lack of data in some countries. Bear in mind that EU countries use different sources, methodologies and different ways in reporting their statistics. Especially, southern EU countries and smaller EU countries have their typical definitions and specific categories of product groups or retailers.
different sources and different methodologies
When looking at several EU markets, the ideal situation is when you have it from a single source, using the same product or market definitions. Try to use a single source especially for general data (demographic, socioeconomic trade statistics, retailing). Still, it will be extremely hard to find a low cost single source for your specific product in the market size in all 27 EU countries. You may find this in online databases or in reports from business information providers, but it will be expensive and even then, it is not certain that they are correct. On the other hand, you also come across different versions of the same information of a country or subject. So take out the most recent and reliable version and keep the other versions aside.
q
Relations and conclusions
Now you must have selected the most relevant and reliable data, information, statistics and your field interview reports. This is now sorted by country and subject in the form of printed documents with highlights and your notes. After having gone through them several times, you should know your way around all these documents. Next, you will have to go deeper into all of it and try to find relationships between statistics, statements and developments. Take some time and concentration and here proceed in a structured way and do not lose sight of what you need to know. Most of the additional statistics of all EU countries, you can find at National Statistics Offices, Eurostat or the Worldfact Book. You can look for possible relationships between: • The market size statistics you have found and the economic development in terms of consumer behaviour and consumer spending in country Y in the same period. Next to the check of the reliability of your statistics, you can look what happened in the past five years and particularly in the current, if available, or in the last year. • Consumption, production and imports/exports. There is a relationship between these developments. But be careful! If imports are high production is high and exports are low, you could conclude that the apparent consumption is extremely high. This is not always true. You will have to consider high levels of stock that can be built up by large wholesalers in order to export these products the next year to a neighbouring country. Another reason for high imports could be the establishment of a large international supplier who also builds up stock. A reason for low exports could be an abrupt fall in demand by the major export market of that country, falling exchange rates of Asian destinations, ____________________________________________________________________________________________ Source: CBI Market Information database
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or simply a miscalculation. See also chapters 2.3.1 and 2.3.3.3 of part 2 'Your research practice'. • Other relevant relations for your product or service, such as: - The climate in a country, or cluster of countries, and the type of footwear (boots in colder countries). - The height of people and the size of footwear, clothing, furniture (beds, tables) and meal proportions. - The number of working women and the sales of fashionable clothing, footwear, jewellery and accessories. - The size of households, the area (urban or rural) and the size and tastes in furniture, furnishing and home textiles. Each time when making these connections, ask yourself what you can conclude after you clearly understand the reason. You also could try to find out the reasons for increases or decreases in sales, or of sudden peaks in import or production. Try to find out the reason behind this growth, and assess whether this will continue in the near future by looking closer at the relationships you have found. For example between: • Less farmers in the EU • Economic recession • Specific news or events
what can you conclude after you clearly understand the reason?
Æ Intensive use of advanced agricultural and horticultural machinery by large farms requiring more spare parts. Æ Falling housing markets, less demand for household and furnishing goods. Or, a rising demand for second hand goods, increased sales by discounters etc. Æ Bird Flu, BSE, industrialisation in agriculture leading to more demand for organic food.
Other reasons can be found in market trends related to changing consumer behaviour, technological developments, changing safety regulations and so on. Most data you may have collected by desk research, especially from sites of local trade and consumer magazines. If you are an exporter of e.g. clothing, textile, cosmetics, jewellery, furniture, interior decorative articles, gifts, gardening articles, you can predict demand and understand relationships by knowing the future trends in fashion. You may have become familiar with these trends, from the information collected and your observations during your field research. See also the CBI export manual ‘Your guide to product and range development’ which can be downloaded from http://www.cbi.eu/marketinfo On a country-by-country basis, you could check these relationships by starting with Germany or France as reliable and accurate information sources. Once you have clarified the relevant relationships in these countries, this will give you an idea of the future development in other EU target countries. You could use this when estimating demand or forecasting sales.
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2.6
STEP 6 – Write and present the report
By the time that you have read and reviewed your documents and made the relevant connections, you will have a clear idea of the results and conclusions for your research action plan and possibly for the whole research project. Now that all data has been collected and put into a useful format, it now must be transformed into intelligence. Try to predict what will happen, how it will develop, how it fits into your business objective and your export marketing plan. In terms of further research, think about what other research you should do and when. But resist the temptation to drop any information or relevant facts that do not conform with your first conclusions. Try to make honest assessments in which the conclusions reached are backed up by convincing evidence. In this transformation process, you use your analyses and expertise to show how markets operate. Also clarify the threats and opportunities and the possible consequences of actions by others (competitors) operating in the same market. The result can be summarized into a brief report. Preparing a thorough report may take a long time. When working with a research specialist, you may expect a clearly understandable written report with relevant details – this should be one of their skills. If you have to communicate the results by yourself, you could express them in the form of a presentation, instead of a written report. Whatever the form of presentation, the results of a research must be as short and as clear as possible. As a rule, by Keeping It Short and Simple it remains clear to yourself and this will be surely appreciated by others.
Keep it short and simple
The result should at least include: • A brief explanation why the research was done. • The research objectives. • How the research was done (methodology). • What are the main findings (consumers, competitors, trends, opportunities, threats...). • Conclusions and recommendations. • Appendices (statistics and addresses). Your report should be easy to understand for all involved and give indication for further actions.
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2.7
Useful sources
• CBI The CBI market information database at http://www.cbi.eu/marketinfo offers information on EU markets including extensive information on market access requirements for 37 product sectors. You can download information by going to ‘Search CBI database’, select your sector and your EU target country, click on the search button and filter your result on market access requirements, market surveys or marketing guidelines. The database also gives links to further information.
The RAP can be downloaded from http://www.cbi.eu, go to ‘Suppliers’, select ‘Export tools’, then select ‘Research Action Plan’ (RAP). • EU website The official EU website has much on the workings of the EU, and other trade-related information which may be useful. See http://europa.eu.int and http://europa.eu.int/comm/trade/index_en.htm. For example if you look for country information, choose your language, go to `the EU at a glance’ and then select ‘countries’.
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• International, multi-lateral organisations and NGOs Trade statistics between the EU and the rest of the world can be found at http://epp.eurostat.ec.europa.eu or at Eurostat http://www.europa.eu.int/comm/eurostat/ or at the main site of the EU at http://europa.eu.int/. Other relevant international organisations and NGOs are UNCTAD (UN Conference on Trade & Development http://www.unctad.org) OECD (Organisation for Economic Cooperation & Development http://www.oecd.org) FAO (Food & Agriculture Organisation of the UN http://www.fao.org) ITC (International Trade Centre http://www.intracen.org) ICTSD (International Centre for Trade & Sustainable Development http://www.ictsd.org) ILO (International Labour Organisation http://www.ilo.org) ISO (International Standards Institute http://www.iso.org) CEN (European Committee for Standardisation http://www.cenorm.be). More general information can be found at the sites of: NAFTA, the North Altantic Free Trade Association http://www.mac.doc.gov/nafta/ ECB, European Central Bank http://www.ecb.int/home/html/index.en.html PRB Population Reference Bureau http://www.prb.org/ IMF, the International Monetary Fund http://www.imf.org/ WTO, the World Trade Organisation http://www.wto.org/; the World Bank http://www.worldbank.org/data/countrydata/countrydata.html; United Nations http://www.un.org/ CIA World Fact Book http://www.cia.gov/cia/publications/factbook and Wikipedia Encyclopaedia http://www.wikipedia.com • International directories Retailers database Europe http://www.retail-index.com/ International Database of foodservice operators http://www.foodservice-index.com/ European Business Register http://www.ebr.org/ Europages http://www.europages.com/ Kelly search http://www.kellysearch.com Thomas Global Register http://www.tgrnet.com/; Kompass http://www.kompass.com/ Hoovers http://www.hoovers.com/ http://www.emarketservices.com http://www.alibaba.com • International universities Cambridge University Library http://www.lib.cam.ac.uk/ Yale University Library http://www.library.yale.edu/ Harvard Libraries http://lib.harvard.edu/ Paris Sorbonne University http://www.paris4.sorbonne.fr/en/article.php3?id_article=11 Humboldt Berlin University Library http://www.ub.hu-berlin.de/english/welcome.html Oxford Universities Libraries http://www.lib.ox.ac.uk/ The British Library http://www.bl.uk/ MIT University Library http://libraries.mit.edu/ Stanford Library http://www-sul.stanford.edu/ Singapore University Library http://www.ntu.edu.sg/publicportal/ Peking University Library http://www.zhongguancun.com.cn/en/facilities/Libraries-Peking%20University.asp.htm IFLA International Federation of Library Associations http://www.ifla.org/
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• Business information providers Research brokers or agents: Research and markets http://www.researchandmarkets.com/ Marketresearch.com http://www.marketresearch.com/ Mindbranch http://www.mindbranch.com Global Information, http://www.globalinformation.com Reportlinker http://www.reportlinker.com Report Buyer http://www.reportbuyer.com Corporate Information http://www.corporateinformation.com Bharat Book Bureau http://www.bharatbook.com Aruvian Research http://www.aruvian.com RNBResearch http://www.rnbresearch.com Chinamarket http://chinamarket.ccidnet.com Research companies: Datamonitor http://www.datamonitor.com/ Euromonitor http://www.euromonitor.com/ Mintel, market research and consumer intelligence http://www.mintel.com/ Freedonia http://www.freedonia.com Frost & Sullivan http://www.frostandsullivan.com Key Note http://www.keynote.co.uk ACNielsen Trends and Insights http://www.acnielsen.com/ IRI Information resources http://www.infores.com/ Synovate, Research Reinvented http://www.synovate.com/ GfK, Growth from Knowledge http://www.gfk.com/ Nielsen Netratings, Internet audience measurement and analysis http://www.nielsen-netratings.com/ NPD global tracking data http://www.npd.com Taylor Nelson EU tracking data http://www.tns-sofres.com The Economist - country briefings http://www.economist.com/countries/ Martec International http://www.martec-international.com/ Aneki/ energy per capita http://www.aneki.com/fr/consommation.html
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3. Organising market research In chapter 2, the 6-step research process was explained, with the major methods of collecting data in a structured way and transforming this in useful information. Chapter 3 focuses in on the practical side of your research in terms of preparation, planning, budget, involvement of other people and the organisation of your collected data and information. 3.1
Research preparation
In chapter 2.3 we already showed how you can structure your research subjects and countries by using a Research Action Plan (RAP). When developing a RAP (what you want to find out) and using the step-by-step Research Process (how you are going to do it), you have to consider what you need to do. Here you must prepare your research by making commitments in terms of planning and budget. When to start? When starting up a research process, you will need to estimate a reasonable deadline for the collection of data and by when you want to have all information analysed. You will have to categorize your objectives, subjects, questions and countries, think how much time it would take to get the information and set dates. You should start collecting information at least 1.5 months before analysis, depending on what you want to know, which methods you intend to use and how many people are involved. Especially when you have to ask for information (by email, fax) from trade associations or trade press, it may easily take a couple of weeks before you obtain it, even when reminding people a few times. How much time do you need? An average research process can easily take 3-4 months or longer. Especially when you research several EU countries from overseas, the process will take much time. Also bear in mind that information on eastern EU countries is not easy to get from the Internet. You also definitely need to translate some parts of the collected information and read it all. Still, there is no standard indication of time and the length of a process depends on the complexity of your research objective, number of subjects and number of countries.
categorize at each step and stay focused on your target
Market research never stops Once you have started to do market research, you will have to do it continuously. By ongoing monitoring, you can keep control over developments in your target markets and anticipate your opportunities in time. In doing so, you will definitely be taken more seriously by your trade partners and by other contacts in your markets. 3.2
Research during your export venture
When starting your export venture, you can work according to several stages. At each stage, you will have to do market research by formulating what you want to find out through research objectives, subjects and questions. How many objectives and subjects and in which order, will depend on your specific situation, your sector (consumer goods or industrial goods) or the number of target countries. ____________________________________________________________________________________________ Source: CBI Market Information database
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For the purpose of doing market research, we advice to work according to the following stages: 1. Introduction & Mission. 2. Current market position. 3. Market and industry trends (market potential, market requirements, market developments, market segments and market structure). 4. Export audit (SWOT and Competitors analysis). 5. Market assumptions and Export objectives. 6. Market entry strategy (target market/country, target group, positioning, product and brand, price, distribution and promotion). 7. Export organisation (management responsibilities, action plan, budgets, forecasts, feedback and evaluation). Part 2 ‘Your research practice’ helps you to formulate your research objectives at each stage. It also tells you what the main research subjects are at each stage and what possible questions you can ask yourself. You can find what would be the best research method to use at each stage, where you can find information on these subjects in CBI publications and in what other sources you may find most of the answers. This practical part also gives you an idea about the planning of your research in terms of timing, human resources and budget. Part 3 is an interactive version the Research Action Plan (RAP) from chapter 2.3, which follows the above stages. This E-tool shows you an example of ‘Creative Woodworks’ a furniture exporter from Uruguay who discovers, by doing market research, that there are good opportunities to target older people in the Spanish market. They conclude that Spanish importers would be the best trade partner for them. At the same time, they found opportunities to produce chairs for small manufacturers in Poland. In this RAP, you can also find how Creative Woodworks make their market entry strategy more solid by choosing the right positioning and marketing mix. All their decisions are based on the information obtained by low cost market research, mainly done by themselves. This RAP can be downloaded from the CBI website. 3.3
Research budget
How much budget to reserve? Any form of structured research implies that you have to reserve a budget as accurate as possible. If you know well beforehand the limits of your available budget, it will be clearer to you whether to work with research specialists or not. You also have to be careful when buying reports from business information providers – see chapter 2.2.1.4. Tip: Always start your research at the CBI as all market surveys, the database and other publications are free of charge to exporters and BSOs in developing countries. If you have no budget, you still need to spend the time on market research to be allocated with the permission of others. For example, general information on EU countries from Eurostat and the World Bank is free of charge. However, you should allocate time to extract what is relevant out of these statistics. When searching on the Internet, you will find out that the more specific information you want, the more expensive it will be. If you do field research, you definitely have to allocate a budget, especially when working with research specialists. If you do it yourself at trade shows or when visiting your target markets, here also you must allocate extra
you need to make commitments
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time for yourself or for the other persons doing field research by your sales or marketing manager. Even though Internet technology makes access to information much easier, you still need to make a commitment in terms of budget and time. Being well informed means being well prepared, which improves your chances in the market. 3.4
Involving other people in research
In the preparation of your research, you should also consider the formation of a research team. Especially when researching export markets, it may take much time when it is done by one person. The best way is to divide this extra workload and involve more people. The advantages are that more information can be gathered, at different spots and from more different points of view. Before the formation of your research team, think about what you can do by yourself and if/when you have to involve a research specialist. What can you collect by yourself? Most of the desk research using the Internet can be done by yourself or within your company. You could also have the data collected by trainees or students under your own supervision or by your marketing manager. It is important though, that the trainee can work orderly, is persistent, can deal with much information (sorting, categorizing) and can judge when to stop searching. It would be ideal to have someone who knows some foreign languages. Data collection usually takes time, so trainees can do much of this work. However, you must give them a clear briefing of what you want and try to stay involved with their progress. The advantage of doing the research yourself, or under your supervision, is that you have the complete market understanding and you know better what you need than other people. On the other hand, it will cost you much time in the beginning to find the right sources. You may also find it hard to judge the reliability of sources from the Internet. As for field research, you should visit EU countries in order to get a better feel of your target groups and buyers. There is a good opportunity when visiting an exhibition. Try to do some research at the show itself and in the city where it is held. Although an analysis by a local researcher is expensive, do not underestimate the costs of your own analysis. In addition to the time and money spent on the trip, you need time for preparation. For example, you must find out relevant organisations, make appointments and know where to find them. One option could be to hire a consultant in the target market, who prepares an itinerary for you and who joins you during the trip.
joining forces within your Research team
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Tip: You can work with colleagues in your country and by joining forces you can save time and money. You can also share information sources by ‘shared bookmarking’, ‘social bookmarking’, ‘shared favourites’. Shared or Social bookmarking is a method for Internet users to share and to store, organize, search, and manage bookmarks, which means links to web pages. Tip: You can also link up computers of research teams in your company and of sister companies. Each person involved can open up a: - gmail account (http://www.gmail.com) that gives you the possibility to use Google Docs in which you can share documents, spreadsheets with other people. - del.icio.us account (http://del.icio.us/). When to involve a research specialist? Maybe for specific subjects or analysis purposes or research techniques you have to get in touch with specialists. Outside help can be useful if you do not have enough knowledge and experience in house. Researchers who are well informed and have many contacts in the sector of your product can provide much information in a short period. They also can give you additional information that can be relevant for your strategy. Desk research can be outsourced to specialised researchers or consultants, who can do a customised research for you, but you will have to pay for it - see also chapter 2.2.1.4. In the case of field research, you probably will discover research methods you would not have used yourself, because of the complexity and time-factor. Moreover, preparing questionnaires, sampling a target group, running hundreds (or even thousands) of personal interviews (or telephone interviews) and running a statistical analysis are not easy jobs. An important advantage of commissioning the research externally is that there is an independent, un-biased view and outcome. Another advantage is that local consultants or creative specialists can offer a large input to concept making, product adaptation or product sample testing. They usually are better informed about the right designs, colours and shapes.
a neutral view and credibility to buyers
On the other hand, research specialists can be very expensive. So seriously consider beforehand whether they are really needed and whether the result would be worth your investment. Research Æ by yourself or by a specialist By a research specialist
By yourself Æ Self orientation and familiarisation
Æ Entrepreneurs are biased
Æ Networking
Æ Gives much credibility to others
Æ Flexibility in research objectives
Æ Use scientific methods for sampling
Æ Flexibility in methodology
Æ Use methods for extrapolation (forecasts)
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How to work with research specialists? Some misunderstandings and myths about market research (see Chapter 1.2) were created by market research communities. Some of them formed a mystique about their own profession and its services. Especially large research companies such as Nielsen or Gfk developed their jargon and their own approaches. They claim that only those people who were properly trained – the research priests – were able to conduct reliable market research. In some cases they are correct because research professionals do have the experience, the accuracy, and specific knowledge of consumers, especially in their own country. But for you, a useful research specialist should be someone who can find his way around EU information sources, who is able to collect information quickly, who speaks some foreign languages and has some knowledge of your sector. He must be trained to analyse quickly and thoroughly and should be able to give you the right answers in order to meet your research objectives. Once you have decided to work with a specialist, the research process is very important in order to avoid misunderstandings. Please take note of the following tips: The briefing: a document in which you and the specialist agree on the research objective, process, planning, methodology, deliverables (report, CD ROM and Internet) and cost of the research project. After meeting the specialist, he will write a briefing (or research proposal) on which you have another meeting, to make sure he can do the job and to avoid all kinds of misunderstandings (wrong problem definition, wrong target group). In the end the specialist will make a de-briefing on which you finally agree.
research process and briefing very important
Always ask a few research specialists: compare their skills, relevant expertise, ability to do the job fast and on the spot and their costs. If you ask them to make a proposal on a no win-no fee basis, it would be polite to send them a small letter letting them know that you do not wish to continue the job with them. Advance payment 50%: once you have agreed to start the research, do not be surprised if they ask you to pay 50% in advance to finance their initial costs. Once the research has been completed, you should expect to receive a comprehensive report on your researcher’s findings, in answer to your brief. The researcher will also provide recommendations on your best route forward and any further research that may be useful for you.
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3.5
Organising your information (MIS)
Each research process leads to more information and in order to use this effectively you will have to organise all collected data and information and make it accessible to all people in your company or to your sister/colleague company. Most data collected will provide you indications for your market entry strategy. But you will also have come across data or information, which was nice to know, but you did not need immediately. Some of this data or pieces of information may have led to new questions. If you were focussed on your research objective and questions, you may have ignored them. However, you still should categorize them by country, by subject, and keep them aside for later analysis or for future research. Organising data and information The words data, information, knowledge and intelligence are often confused – for definitions see glossary. Intelligence is acquired when following the steps of the research process, as described in Chapters 2.5 and 2.6.
data are ingredients to prepare the recipe
In smaller companies, marketing decisions are often driven by informal rather than formal data, due to a lack of money and time. The management may think that their informal data is sufficient for their business. There is much data in the directors’ or managers’ heads. Often there is no time to make this data available to others, or to sort, filter and convert this data into information. Setting up a marketing information system - MIS You can get the best out of your collected data by setting up a MIS, especially useful for a BSO. This is a tool to collect, verify, analyse, store and regularly feed out information to all people who are somehow involved in marketing decisions. It may take some time to set up such a system, depending on the form of your MIS. You can find some cases of setting up MIS systems for NGOs via http://www.popcouncil.org or via http://www.concordeurope.org.
sharing information with others
Procedures of an MIS When setting up a MIS you must also think about the procedures of such a system. Important questions in this respect are: -
Who is doing what to set up and maintain such as system? When and how often should they do this? What are your qualified and verified information sources? Can you use these sources? How do you or your research team analyse or summarize this information? Can you use templates here? - How to organise, categorize and store this information so that anyone can get this easily? Once this MIS is established, all people involved can benefit from its functional capabilities, especially if you have created your own electronic database. With the help of some specialised computer software, you can automatically incorporate data feeds to your MIS from the Internet and from other external sources. A MIS is often designed to make sure that: • Market research and market analyses are done regularly. • Internal and external data and information sources are fully used. • The collected and stored information is tailored to your specific requirements. ____________________________________________________________________________________________ Source: CBI Market Information database
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Which form does a MIS have? Many marketing information systems are electronic, but this is not a necessity. In fact, you create your company’s own library. You could rely entirely on written records and keep all data categorized in hardcopy. The advantage of hardcopy is that it reads much easier – than on a screen – and people can quickly find what they are looking for. On the other hand, hardcopy takes up much space. How can you develop a MIS? An electronic MIS can be developed relatively easily by using a Microsoft SQL database. You can also develop this by using MySQL database, an open source application that can be downloaded free of charge. You could also use several document management systems that have open source applications. These systems are web-enabled, which means that they can be placed in an Internet or Intranet environment rather easily. This means that it can be shared by other people in your company or your colleague company.
your own library in hardcopy….
……or in an electronic database
You can label information with: subjects/countries/keywords/year/source – variables. This makes retrieval of data quite easy. An MIS could be also a combination of data in hardcopy (books, magazines, papers and reports), CD ROMs and data held in computer files. What sort of information should be in a MIS? Of course, this varies from company to company but most common categories are: Internal data and information - Company data showing sales by product category, customer category, distribution channel and price level, margins, profit, inventory levels, promotional expenditure. - Forecasts of sales and new markets. - News and gossip coming from sales reports, news, trends from external sources. External data and information - Market information which enables you to monitor your performance. This includes market size, average order size, demand by product group, by country, by market segment, by trade channels, price /product developments and consumer trends. - Market requirements including quality standards, tariffs and quota. - Competitors information covering products, changes in market share, prices, promotional activities, staff changes and new developments.
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Checklist Checklist for improving your competence in research THE MARKET RESEARCH PROCESS
Can you formulate relevant research objectives, subjects and questions? (Chapter 2.1)
Are you familiar with secondary or desk research? (Chapters 2.2.1 and 2.2.2)
Are you aware of the main free, low cost and high cost sources? (Chapters 2.2.1)
Do you know how to do your own low cost primary or field research? (Chapters 2.2.3)
Do you grasp the technique to sort, filter, check, understand and make relationships between all data/information that you have collected? (Chapters 2.4 and 2.5)
Can you write the summary conclusions into a brief report? (Chapter 2.6)
Can you plan your market research and reserve the necessary budget? (Chapters 3.1 and 3.3)
What can you do by yourself? Or what can your staff or trainees do? (Chapter 3.4)
Can you organise your data and information? (Chapter 3.5)
- Do you know what to find in the different forms of the CBI market surveys? (Chapter 2.2.1.2) - Do you know how to use the CBIs market info database, export manuals and other useful publications? (Chapter 2.2.1.2) - Do you recognize what sort of field research you can do in your own country? (Chapter 2.2.3) - Are you aware what to discover by interviews and observations during trade fairs and store checks? (Chapters 2.2.3.1, 2.2.3.2 and 2.2.3.3)
RESEARCH DURING YOUR EXPORT VENTURE
Look at part 2 ‘Your research practice’. Look at part 3 the ‘RAP’ that can be downloaded from the CBI website.
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Glossary Apparent consumption Rough estimation of consumption, which is calculated by the production figure and adding the imports minus the exports and inventory level in that year. This method is often used in FAO statistics. Apparent sales Rough estimation of sales if you know the number of companies or retail outlets in a country or region selling your product. By estimating their average sales per year, you may get a picture of what is being sold in that year. Bookmark A file on your computer in which you can store all the URLs of useful Internet sites which you frequently visit. In Explorer, you can create bookmarks in the ‘favourites’ which you can see on the menu bar. Briefing A document that confirms the requirement for, and scope of, a proposed research project. Among others, the research objective, process, planning, methodology, deliverables (e.g. report, CD Rom etc.) and cost of the project should be mentioned and agreed by both parties. Business information providers These are research companies and information providers offering online reports or parts of reports at a high cost. You can also buy up-to-date information reports online. You often will have to pay in advance online by a valid credit card. Examples are Frost&Sullivan, LexisNexis, Euromonitor, Marketresearch.com. Consumption or consumer expenditure is calculated based on a large sample survey commissioned by the National Statistics Offices (every 4 years) or large research companies. Consumption per capita Consumption or retail sales in a country divided by the total national population. Customised research Desk and or field research done by research specialists and which are tailored to your needs or to your specific research problem. Data Data (primary and secondary) is the raw material from which marketing intelligence is ultimately derived. It includes all kinds of facts, complete or incomplete, in various degrees of accuracy and can be formal or informal (e.g. opinions. feeling, suspicions). Desk research The technique to collect secondary data from existing sources, which can be subdivided into internal (e.g. data within your company) and external sources (e.g. Trade Association, Business Support Organisation, Internet etc.). EMP The Export Marketing Plan, which is a useful tool that help you to organize your export venture. It can be downloaded from http://www.cbi.eu
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Field research The collection of primary data in the target markets using interviews, questionnaires, store checks, observations, telephone interviews, product testing etc.. It focuses in on details and opinions of consumers or buyers related to your specific product. Field research is mostly done on the spot and usually follows desk research or done to verify the findings of desk research. Industry sales Sales figures, often provided by trade associations. These sales figures also include sales to export markets, which you will have to deduct to calculate the domestic sales. Information The process to filter and digest the data and convert them into patterns. During this process, you try to collect all categories, to reconcile contradictory items, to interpolate missing information, to identify inaccurate data and deepen the overall picture of your target markets. Intelligence Intelligence or market intelligence results from the transformation of knowledge by predicting how the market will develop and how it can be acted upon. Knowledge Further analyses of information by an interpretation of all relevant information in order to understand what it means. Marketing The process of planning and the execution of the conception, pricing, distribution and promotion of ideas, products (agricultural, consumer or industrial) and services, which is done in an efficient way and at a profit. Marketing Information System – MIS This is a tool to collect, verify, analyse, store and regularly feed out information to those people responsible for making marketing decisions. Marketing mix The unique blend of product/service, pricing, distribution and promotion strategies designed to reach a specific target market. Market players Domestic and foreign suppliers such as importers, manufacturers who have a considerable share in the market. Suppliers with the largest share are the ‘main players’ who dominate that market. Market research The collection and analysis of information about markets, people, companies and organisations that will enable you to make better decisions for your export marketing plan. Market segmentation Subdividing a market into distinct categories of consumers - or consuming industries – with similar wants and behaviour patterns. A market can be also segmented into other categories e.g. by product, by season etc. Perception The process by which people select, organize and interpret information to form a meaningful picture. ____________________________________________________________________________________________ Source: CBI Market Information database
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Portal A starting point for research on the Internet. They usually have a subject focus, such as by product (food, ingredients, jewellery) by science or as a general starting point for research on the web (e.g. Yahoo). All information portals are designed to be ‘one-stop-shops’ for all your information needs. Positioning Positioning is a term used to refer to how you want consumers (or buyers) to think of your product or service relative to those of competitors. Primary market data: In this case, you or a professional researcher collects data directly from the foreign marketplace through interviews, surveys, and other direct contact with representatives and potential buyers. Quantitative research: This research is done to find out all general characteristics and statistics of your target group aimed at describing how large they are, in which region or country they live, their age, sex, income level etc.. Qualitative research is often used to understand more deeply your target group in terms of their culture, attitudes, feeling and motivations of using a product. Research subject Research subjects are relevant topics on which you have to find information. You can use these subjects to get an idea or to form a total picture of a continent or a country. Examples of subjects are: trade flows, market requirements, market size, market developments, market segments, market structure, competitors, trends, players, trade channels etc. RAP A plan that you have to make yourself giving you a structure and basis for monitoring and reviewing the progress in your research. The Research Action Plan is a useful E-tool that helps you to organize your market research. The RAP can be downloaded from http://www.cbi.eu Research process The research process is a 6-step process to structure a research project. It helps to make market research controllable, measurable and successful. In each process, you can combine searching different research subjects and use different search techniques. Research shortlist You make your own shortlist and start to categorize by country, by region, by product, by sector, by competitor and set your priorities of what you need first. Here you can use your research action plan as a basis. Research technique A method to collect primary or secondary data such as desk research or field research. Retail sales Total sales without sales tax by all retail outlets in a country for a product, product group or sector. Although product categories are too broad it still will be a good point of reference to compare EU countries. Sample The number and the characteristics of people (e.g. French young male, aged between 20 and 30 years old, living in Paris) who are selected for a field research and who should represent a percentage of your target group. ____________________________________________________________________________________________ Source: CBI Market Information database
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Secondary market data: data from various sources, such as trade statistics for a country or a product. Working with secondary sources is less expensive and with the Internet, you can find much in online databases and portals such as market developments, product standards, market access, trade regulations, prices, buyers’ platforms, statistics and much more. SWOT Strength-Weakness / Opportunity-Threat analyses from which you set your export marketing objectives. Tracking data: Retail sales of specific product groups and up-to-date, measured quarterly instead of yearly. This information is collected through cash registration systems or scanners and registered by research specialists such as Nielsen, Taylor Nelson or NPD, which is reliable but very expensive USP Unique Selling Proposition i.e. how consumers can recognize that your product or brand is standing out by being special or different from competitive products or brands.
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