Plunge into the Knowledge Pool
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- Felix Norton
- 8 years ago
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1 Tpic: B2B Research Published in CAD Dealer Magazine Plunge int the Knwledge Pl The Benefits f B2B Market Research If knwledge really is pwer, it is surprising that many businesses seem t have truble in truly embracing the cncept. Few wuld argue that gd infrmatin is the raw material n which a marketing strategy shuld be based, yet many feel unable t devte resurces t research their markets in depth. David Barr, Directr General f the Market Research Sciety sets the scene: 'During the past five years, the B2B market research industry in the UK has seen cntinuing grwth rates f ten per cent. But there are still rganisatins which d nt recgnise the imprtance f B2B market research as a first step fr the survival and grwth f their business. In sme sectrs the wider uses f B2B market research are nt realised, nr the ability t prfit frm it.' Clearly while sme businesses are drinking at the funtain f knwledge, thers are just gargling. What Is MR? Official definitins f B2B market research (MR) are unlikely t get the pulse racing - 'the systematic gathering, recrding and analysis f data n issues relating t the marketing f gds and services' (American Marketing Assciatin). Cnsider instead the brad ptential benefits - MR ffers pprtunities t better understand trends, views, attitudes and behaviur f the key players that influence sales in yur target market. And it can lead t actin that makes the difference between success r failure. Taking The Plunge Of curse all businesses are engaged in ad hc MR t sme degree, be it canvassing custmers' views r cmparing cmpetitrs' sales literature with their wn. But because the dynamics and buying behaviur in any market are cmplex and affected by many variables, planned research n significant aspects needs t be subtle and well designed. Fr the vast majrity f businesses this means turning t a B2B market research agency. But fr many smaller businesses this seems a remte step; business is a nse t the grindstne activity, with precius little visin beynd the next rder and n resurces t stp the treadmill and plan fr the future. Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:
2 Yet the rewards are there fr thse able t take a step back and cnsider the ptins. Initially it's imprtant t appreciate just hw much MR has t ffer businesses f all sizes in every industry. It can seem a big step t trust anther cmpany t d yur research, but it's a step made easier if yu discuss yur needs with a cmpany that demnstrates an understanding f yur business. Find a cmpany with experience f wrking in yur industry and wh shws an understanding nt just f yur target market, but f yur marketing bjectives. Define Yur Objectives The vital first stage befre cmmissining any research wrk is t ensure yu are clear n the bjectives f the exercise. Peple new t the field ften tend t write a tw line brief fllwed by a wish list demanding t knw everything abut their target markets frm ne survey. It's a gd starting pint simply t define the gaps in yur knwledge and the prblems they are causing, and then discuss the ptins with prfessinal researchers. Establishing clear bjectives at this stage then enables the MR prfessinal t identify the apprpriate research tl, but als enables yu t set ut clear parameters n the wrk yu want t cmmissin. Research Speak The type f research required will bviusly be driven by the infrmatin yu need. T get a feel fr the srts f ptins available it helps t be familiar with the brad categries f research. Primary research is new; it is designed and cnducted t meet a specific infrmatin need that ther surces cannt prvide. The use f prfessinal researchers is necessary fr this type f study. Secndary research is the prcess f searching existing surces such as cmpany web sites, cmmercial databases and listings etc. Valuable surces clser t hme, such as infrmatin lurking within the recesses f ne's wn cmpany vaults r cmpany Intranet shuld nt be verlked. This can be a rewarding exercise fr gathering basic data, r as a starting pint fr primary research. Primary research tends t fall int tw categries, qualitative and quantitative. Qualitative research is explratry in nature and investigates pinins, trends and attitudes, and reasns behind behaviur such as purchasing decisin making. Quantitative research is cnducted t establish the magnitude f issues such as market size, market share and sales vlume. These tw types f research are ften used in cnjunctin, fr example qualitative research culd be used t gauge attitudes t a new prduct, and quantitative t establish the size f the ptential market fr it. Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:
3 S What Can MR D? MR can prmpt infrmed decisin making in every area f a marketing strategy. Belw are sme f its mre cmmn applicatins: Keep the custmers satisfied. Understanding yur custmers' views f yur prducts and services enables yu t take the right actin t keep their business. A thrugh analysis f this culd firstly invlve in depth interviews r fcus grups with a small number f custmers t establish the areas f yur prducts and services that are imprtant t them. Further telephne interviews culd then be cnducted with a larger sample f custmers t gather views n yu and the services yu ffer. The resulting infrmatin culd enable yu t take decisins n: imprving areas that are failing t match the quality f service sught by custmers taking urgent actin n grups f custmers identified as 'at risk' reacting t early warnings f a change in custmer expectatins. An example f custmer satisfactin research in an internatinal market culd be a manufacturer f electrnic design autmatin sftware wanting t understand the satisfactin levels f custmers in different markets. If B2B research revealed that its US custmers were mre willing t take risks in trying new technlgies (in their quest fr cmpetitive advantage) than its German custmers, (wh fcus n perfrmance, ease f use and verall reliability), then the client wuld knw it needed differentiated and mre tailred marketing and custmer retentin strategies in these markets. Custmer satisfactin research is particularly valuable when carried ut ver time as this prvides a benchmark against which t measure subsequent increases r decreases in satisfactin. New market pprtunities? In a fiercely cmpetitive CAD market the ability t carve ut a new market can be the key t success. Fr a new prduct r service MR can enable yu t: better understand yur current market identify ther niches within this market identify a new market altgether Cnfrnted with cnstant change in the market, CAD dealers always face the challenge f maintaining r increasing revenue. Fr example, dealers wh have suffered changes in manufacturer's discunt systems culd explre ther niche revenue pprtunities in service prvisin. Discvering what value added services the market is willing t pay fr culd keep them cmpetitive. Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:
4 Market size matters. Hand in hand with identifying a new market pprtunity is the need t establish the size f the beast yu are tackling. Establishing this figure enables yu t: set realistic targets plan yur sales and marketing activity Desktp research can prvide a rugh figure by gathering pinins frm industry experts and estimates frm business libraries. T gain an accurate estimate hwever, this type f activity needs t be fllwed up by primary research. An example f this culd be a study carried ut int the UK's large frmat cpier market. In this case, the researchers wuld firstly define the 'universe' in which this market stands by listing all the technical markets in the UK - architectural, engineering and s n. A sample f cmpanies in this sectr wuld then be taken and screened t measure the prprtin wh use r plan t use large frmat cpiers; this figure can then be grssed up t prduce an estimate f ttal market size. Generally the mre niche the market, the mre likely it is that such primary research will be needed. Why d peple buy/nt buy? Usage and attitude studies are used t investigate all aspects f the relatinship between cnsumers and a specific prduct, service r market. Understanding the needs and preferences f yur ptential custmers puts yu in a strng psitin t market accrding t these needs and deliver the right prducts and services in the right way. Specific benefits f usage and attitude studies include: the ability t assess the appeal f particular prducts and services understanding what peple are actually ding rather than wrking n perceptins, in rder t prvide a sund base fr marketing strategies the ability t segment a market accrding t particular types f use, r particular user grups, t enable gaps in the market t be identified There is a tendency fr cmpanies t have an ver r under inflated view f the real significance f their prducts r services t the market. A develper f sftware related t e-cmmerce may think mre cmpanies are using e-cmmerce (rather than just develping it) than is actually the case. The bjectivity and accuracy f independent B2B market research can be vital t successful marketing decisins. B2B research cnducted by Business Advantage int the Large Frmat Pltting cnsumables market revealed that custmers were mre lyal t brands than dealers. This sends a clear message t resellers that n matter hw gd a service they prvide, they have t have the brands that peple want in rder t keep their custmers. Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:
5 See yurself thrugh the eyes f thers. Understanding hw yur existing and ptential custmers view yur cmpany, prducts and services enables yu t refine and re-target yur marketing activity in rder t raise the prfile f yur business. Image and awareness studies track a cmpany's image ver time in rder t mnitr marketing success and prve that an activity is wrthwhile, and can be particularly pwerful when dne in cmparisn with yur cmpetitrs. High quality infrmatin frm this research supprts the fllwing type f actin: strengthening/changing yur cmpany image re-allcating advertising spend if existing channels are nt reaching the right peple establishing the level f resurces needed t raise awareness t a defined level tailr yur direct marketing accrding t the perceived strengths/weaknesses f cmpetitrs Getting t knw yur best prspects. It's lgical that the mre yu knw abut yur prspects, the better yur chances f cnverting them int lng term custmers. In-depth cmpany prfiling invlves getting right inside a business t really understand their decisin making prcesses - including wh is invlved, the criteria fr chsing a supplier, and what they expect frm a supplier. Benefits f this type f study include: better targeted sales and marketing campaigns the ability t prduce slutins t the cncerns and prblems f ptential custmers the ability t develp better services based n knwledge f real needs In-depth cmpany prfiling can be particularly effective fr mre cmplex prducts and services that may invlve a change in wrking methds fr the purchaser, and fr which there might be internal differences f pinin ver the value f such a change. S, fr example, a cmpany selling PDM systems culd establish the extent t which there is serius interest in PDM, the prblems anticipated in the evaluatin and implementatin f a PDM slutin, and likely budgets allcated fr such investments. Will ur new prduct/service hit the right buttns? Launching a new prduct r service requires knwledge f what ptential custmers actually want. research can uncver reactins t a new idea, r identify the detailed features that ptential custmers need and/r prefer. The develpment f an existing prduct r service can be researched by using fcus grups t identify hw it culd be imprved, and then quantifying these features t determine which nes yu can affrd t incrprate. Further research can indicate the likely demand fr the new prduct. Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:
6 Get under the skin f yur rivals. T cmpete successfully yu need t knw what yu're up against. Access t in-depth analysis f yur main cmpetitrs - their structure, strengths, strategy and weaknesses - enables yu t really target marketing resurces where they will have the mst impact. Skilled interviewing f surces such as yur cmpetitrs' current and ex-emplyees, suppliers, distributrs and custmers can prduce infrmatin that enables yu t: implement prduct/service imprvements t cunter their strengths and weaknesses target yur sales plicies thrugh knwing their distributin channels ffer cmpetitive discunts and terms target yur marketing cmmunicatins strategy in respnse t their messages and where/hw they deliver them. A typical example culd be a CAD sftware manufacturer wh wants t find ut hw a rival is managing t eat int their market share. If fr example, in-depth analysis reveals that the rival is giving higher prfit margins t the resellers, then the cmpany can act n this. But Can I Affrd It? Many businesses will qute cst as the main barrier t cmmissining the types f research utlined abve n a bespke basis. While cnsidering the cst versus benefit questin, its imprtant als t think abut the csts f nt ding the research n an identified knwledge gap, e.g. the lss f key custmers because yu failed t pick up n their preferences fr a rival's imprved service. The cst/benefit questin is anther reasn fr pinning dwn yur precise bjectives as early as pssible, as David Barr cnfirms: 'The cst f using specialist agencies fr market research need nt be prhibitive fr smaller firms, but they must have a clear idea f what they want t achieve within realistic budgets.' Outcmes frm research studies are nt guaranteed, but agreeing realistic bjectives, and planning fr the resurces required fr fllw up actin shuld enable yu t at least make an infrmed decisin abut the value f prceeding. A B2B market research agency with a substantial database cvering yur target markets will prvide a mre cst-effective ptin than ne perating n a general basis; a CAD research specialist will already hld data n the cmpanies yu want researched and will nt have t devte resurces t screening numerus irrelevant cmpanies t find thse in the right sectr. Targeting f niche markets (eg. manufacturers f extruded plastics) is therefre a much faster and cheaper exercise. Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:
7 A cheaper ptin than bespke research is t club tgether with thers whse target markets verlap with yurs. Omnibus surveys are thse which take place n a regular basis and cmpanies can hp n and ff with questins whenever they wish. Syndicated studies invlve cmpanies clubbing tgether t cmmissin a survey f interest t all f them but t which they can add questins t suit their wn individual interests. These have the advantage f being tailred t individual needs and targeted at exactly the right respndents. It's Actin, Nt Results, That Cunts... Ultimately the value f MR lies in what yu actually d with it. The mst incisive findings becme useless if lack f resurces r internal wrangling prevents decisive actin frm being taken. Again there is a factr here fr yur chice f marketing research agency. Ask t see the srt f frmat that their findings are presented in. Yu dn't want reams f research speak- the reprt shuld enable yu t act straightaway, with recmmendatins in the language f yur business. Market Research Case Study Graphisft UK Graphisft, develper f bject-riented architectural CAD slutins, was actively searching fr an alliance in the building services market which wuld enable it t prvide a crdinated service t large cmpanies in need f bth architectural design and building services slutins. Cymap, ne f the leading UK building services sftware prviders, emerged as a pssible partner. Graphisft wanted t measure the image and awareness f Cymap and its prducts with a view t a pssible business alliance and apprached Business Advantage with a request fr a market survey. In ttal 100 interviews were carried ut t determine levels f prmpted and unprmpted awareness f these prducts and that f their clsest rivals. Eighty cmpanies were interviewed in the heating, ventilatin and air cnditining (HVAC) sectr. A smaller sample f actual users f the prduct was interviewed t gain an indicatin f satisfactin levels amngst custmers. Acting n estimates f the prprtin f cmpanies aware f the cmpany and its prduct and rival prducts, Graphisft came t the cnclusin that Cymap was an ideal partner t integrate building services slutins with its Virtual Building technlgy. On the 6th f December Graphisft annunced the acquisitin f Cymap int the Graphisft Grup. "The market survey f Business Advantage cnfirmed ur view that Cymap represents leading edge building services technlgy which we have been seeking fr a lng time. The B2B research helped us greatly with ur decisin making prcess, cmmented Andras Haidekker, Managing Directr f Graphisft UK. "The Graphisft channel have enthusiastically welcmed ur investment decisin and are excited abut expliting the ptential f the building services market." Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:
8 This article has cvered just sme f the mre straightfrward applicatins f MR; what makes it such an exciting tl hwever is that it can be applied t shed light n practically any business prblem. It bth reveals change in the market, and drives change as businesses act n infrmatin t seek the ascendancy. This applies t CAD markets as much as any ther - thse that appreciate this are likely t reap the rewards. Market Research Case Study Rasterex UK Rasterex UK, a cmpany specialising in Technical Data Management, had develped a drawing and dcument distributin tlkit fr CDs, incrprating a self cntained database and viewer, called RxCDManager. T gauge the interest in this cncept befre devting marketing resurces t it, ne hundred interviews were cnducted cvering the AEC and MCAD sectrs. The results revealed that encuraging prprtins f these cmpanies were interested in this prduct. As a result f these findings, funds were allcated t market the prduct. Fr Further Infrmatin: Please cntact Sue Hannay, Research Services Directr, The Business Advantage Grup Plc, PEL Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ Tel: ; Fax: ; sue.hannay@business-advantage.cm Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:
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