DIFFERENCES BETWEEN B2B AND CONSUMER RESEARCH

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1 Business to Business Market Research DIFFERENCES BETWEEN B2B AND CONSUMER RESEARCH There are major differences between the two fundamental types of research, including: respondent differences; sample and sample size differences; content differences. Respondent differences As was stated in the definition, B2B market research involves those who, in their capacity as owners or employees, are involved in decision making or operations on behalf of their company and are interviewed in their business, not their personal, capacity. This contrasts with B2C research, which involves end consumers. Are there any differences between the two? The answer is yes. Those in business are often a more rare species. The right people to speak with may be harder to identify, and sometimes there are gatekeepers such as personal assistants or secretaries intervening between them and the researcher. The demands of their work, and indeed requests from other research companies, mean they can be difficult to get hold of and are less tolerant of long interviews (or are already oversurveyed). In all, as a general rule, getting hold of someone in business and completing an interview can be more of a challenge than finding a quota of nationally representative people to undertake B2C research. Respondents can be quite geographically dispersed, and while this is no longer quite as much of a problem as it used to be now that the internet and online research have opened up, the fact remains that access to difficult to get hold of business respondents is still an issue. Sample and sample size differences In many markets such as countries in Europe the universe in B2B research is restricted samples tend to be smaller and more specialized. Where this occurs it has implications, in that the normal sampling rules do not necessarily apply, as even a small sample can have important results. (More of this later.) If we wish to talk to people in business who are interested in virtual private networks, or to companies wishing to invest in satellite phones, then finding them may be a real issue. In these cases, even a small sample can provide meaningful strategic information for the client. 10

2 The Business to Business MR Industry By contrast, in other markets like the United States, the size of the country and the business base mean we are sometimes less restricted in terms of the universe. There is a considerable amount of B2B research conducted in sectors where there is a relatively large universe (for example, the business market for telecommunications, paper, printers, personal computers and the like). Here, the limiting factor on project size is more often cost. Of course, all business universes are small when compared with general population figures. Another key difference from consumer research is that in B2B work, a researcher might need to speak to more than one person in an organization in order to meet the research objectives. Commonly, there are several different people (often at different layers in the organization) from whom views need to be sought. For example, the purchase of a piece of equipment may involve the product design department, manufacturing, quality control, possibly even sales and marketing and the purchasing department a long chain, and people in all of these areas can materially affect the outcome for any new product being introduced. So a mix may be needed in the research process, and this may involve the purchasing director and the quality assurance manager or the HR manager in addition to the CEO. In practical and sampling terms, this means multiple contacts rather than just one. Both who we need to speak to and how many can be different in B2B research from B2C. Where smaller samples and often restricted budgets are an issue, large-scale (large N) quantitative research using complex research models (as is commonly used in consumer work) is not practicable. Unless (for example) they can tap into syndicated, industry-wide studies, some clients in some markets do not have the luxury (or nowadays the time, even if they had the budget) to repeat studies very frequently. However, as noted earlier, in markets like the United States where there is a larger business universe in so many market sectors (due to the size of the country and depth of the business base), large-scale studies, complex models and repeat (and tracking) studies can be conducted successfully. Even so, much of the work that a B2B researcher undertakes has considerable variety, with different markets and new subjects new concepts, new products, new services, new frontiers, new applications and new market conditions. Frequently, B2B research needs to employ one to one personal interviewing techniques, as getting hold of the individuals who are relevant for samples is not easy, and such interviews recognize the contribution they can make. Findings from just one interview can be hugely important. Or a few key interviews can materially add to the data noting the 11

3 Business to Business Market Research Pareto principle that 20 per cent of a client s customers can make up 80 per cent of the business and if the views of those 20 per cent are included, then these results are key to the overall resultant strategy. Content differences Often the what of the research is also different in the B2B context. Sector knowledge and familiarity with technical terms are particularly important, as B2B research enquires into complex aspects of (for example) technology, markets, and the design and features of products. Hence, both the researcher and those contacting respondents must be fluent in the specialized language required to undertake the research. On the other hand, in consumer research, while many complexities may be covered in the research, it is often unnecessary and even undesirable for the talk to be at a specialist level. Often B2B research requires as much awareness of the intricacies of the business (or industry) itself as it does of research processes and techniques, owing to the complexity of the sector and the product area, plus sometimes complex decisionmaking and purchasing procedures. In many ways, more demands are made of the B2B researcher. B2B market research tends to rely a great deal on spontaneity and creativity there is less of a straitjacket in terms of acceptable or unacceptable research techniques, and there are fewer off the shelf solutions. So, the drudgery of repeating monadic consumer market research tests and undertaking frequently repeated continuous research studies is not for us. Oddly, B2B research can appeal to the dilettante in the researcher: the variety and sheer scope of much of what is researched in the most esoteric sorts of business can favour the researcher who likes a bit of change in life. I started my career looking at anthelmintics (wormers, for the uninitiated) in cats and dogs, and at coccidiosis (a form of disease) in chickens. This is not what I felt I had done a degree in French and Spanish for but my, was I happy to be out in the open, rattling along country lanes, to interview farmers in far-flung locations! I had to get used to the overpowering smell of chicken houses, but for sheer variety, yes, every time. In summary, some major differences between B2B and B2C research include: restricted samples (fewer and more specialized business respondents); the need to speak to several in a company, not just one, due to complex decision-making processes; sector and product knowledge an important backdrop to any research; 12

4 The Business to Business MR Industry very varied research often involving innovative new developments at an early stage. HOW B2B RESEARCH COMPLEMENTS OTHER RESEARCH Sometimes B2B research is conducted on its own. This is the norm when a business or industrial market is being assessed or a new product innovation with uniquely business applications is being tested. CASE STUDY: TELECOMS COMPANY Main message These results from key customers helped address a brewing discontent and possible deterioration in customer perceptions. Respondent definition Major IT and non-it customers of a telephone operator. Details The company was launching a new IT-enabled knowledge management system for customers use that was intended to be web-based. It was important to gather the views of customers on the proposed system. A study was undertaken with N = 15 respondents in companies, all of whom were major customers of a large telephone operator with multiple lines and multiple telephony applications. Some worked in the IT area and some were non-it staff, so there was a selection of types of respondent. A mixture of personal and telephone interviews was undertaken. Findings showed that many found the website difficult to navigate and did not agree with the articles posted up by business gurus. Immediately, these cast doubt on the usefulness of the service being offered. Most importantly, many had lost their password for entry to the site, so its use was curtailed. The company addressed these issues by reconfirming passwords to all relevant customers and ensured that what was posted up as new or leading opinion pieces was well-regarded articles by experts rather than from more dubious sources. Nowadays, in some sectors such as IT and telecoms, it is more usual to undertake research involving both business customers and normal consumers for example research involving mobile (cell) phones, 13

5 Business to Business Market Research printers and printer supplies that span the consumer and SOHO (small office home office sectors), or personal organizers (PDAs) like a Palm Pilot or BlackBerry. Other key reasons for simultaneous B2B and B2C research include: The need for speedy product or service testing and launch. This also has the advantage of quick feedback, essential in today s world of rapid innovation and change. Speedy feedback is increasingly advantageous where being first in the market place brings a huge financial advantage and being second, the me too syndrome, can bring financial penalty. When large changes in the market place are having an impact on both business and consumer groups (deregulation in the utilities, pharmaceutical or other markets; new generation product innovation such as the telecoms sector is experiencing). When branding is being looked at and it is important to ensure consistency of image and message across a business and consumer audience at the same time. When push and pull marketing strategies are needed (wooing customers away from old habits and pulling them to new ones) with several parties involved, such as when prescription drugs move to being sold over the counter (OTC). In order to ensure that the design of the research reflects a true representation of the market place. Depending on the balance in the market place, a smaller (sometimes qualitative) study might be done with the business community (B2B) and a larger study with the consumer community (B2C). So the B2B researcher is often involved in both the B2B and B2C research. Many researchers do not think of themselves solely in one box as opposed to the other, but as business researchers, with the main link being that the product or service being examined has a business rather than solely consumer application. B2B and B2C research are complementary. They sit happily side by side and flourish together. Sometimes, to use a gardening analogy, the research process is more of a mixed bed than a single bed, but the results are all the better for this, as good research is all about making connections. Too much isolation in research can lead to poor decisions often, it is better to be able to see the whole picture in one go. Research is frequently conducted at multiple levels with different audiences in order to obtain a full overview speedily without putting too much emphasis on one of the constituencies and too little on another. 14

6 THE TYPES OF BUSINESS PROBLEMS B2B RESEARCH ADDRESSES Later discussion covers in greater depth the different sorts of B2B market research undertaken. It can be noted that, in general, the issues and questions that B2B research can address are not different fundamentally from those with which B2C research can deal. The problems or opportunities clients face may be the same, but the respondent base whose knowledge and opinions are tapped is different. Traditionally, there has been a tendency for much of B2B research to be of a strategic rather than tactical nature. Tiny facets of a wire-pro connector or changes planned for it tend not to be subjected to rigorous market research; instead the technical department might test it out itself or ask some close clients. Rarely will it require market research to be undertaken on smaller issues. Of course, there is a lot of productoriented and tactical work carried out, but strategic work is just as common. This is one of the reasons that B2B research is so interesting: more often than not the subject is strategic in nature and the findings may have a significant impact for the client. Research using external respondents The Business to Business MR Industry Most research is done with respondents who are external to the client company and covers the following issues: Decision making. What are the key criteria used by customers or potential customers for decisions? How are decisions made? Who influences the process? Who ultimately decides? What are the trends in the market? Market sizing and assessment. How big is the potential for a product? What share could the firm aim for? Which markets or regions are ready (offer the most potential) for a product or service? Who are the competitors and what are their strategies, market positions, strengths and weaknesses? How easy would it/they be to penetrate? Products and services. Where are there gaps (if any)? Are there any opportunities for innovation, new products or service ideas, or new applications? Can the potential be assessed using an early prototype via concept or real-life models (to gauge the likely acceptability, or refinements needed)? What is the likely volume uptake and forecasting? What are the optimum packaging or pricing regimes (basic pricing platforms, tariffs, discounting strategies)? Performance assessment and tracking. How well are the products or services performing (compared with last year, or compared with others in the field)? 15