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MARKET INGELLIGENCE: Getting started
The aim of this market intelligence training is that you know:
the importance of formulating good research questions and how to do it;
how to find answers to your questions and how to use online sources;
how to use CBI’s Market Intelligence platform;
how to turn information into market intelligence;
how to perform the external analysis of an Export Marketing Plan.
Market research & EMP:
Making research work for you: Step 1: Define your research questions
What do you need to know? What is the overall research question?
How can I successfully export
Example:
In order to answer the overall research question: define sub questions to work with that will lead you to your final answer!
Example questions:
Where do I start? Is Europe (or other potential target market) an interesting market?
What do ‘EU’ and ‘EFTA’ mean?
Next step: Find out the basics about Europe (or other potential target market).
Can I approach the EU as one market?
Can I get any assistance from the EU?
Example questions:
Next step: Find out if there is information specifically for your product in your target market
Is there specific information for my product?
Is there specifc country information for my target market?
Example questions:
Is there a market for my product(s)?
Where does my target market import from?
How much is my target market importing?
Is demand growing?
Is there any domestic production?
Does my target market depend on imports?
Next step: Find out statistical information: imports, exports, production, consumption
Example questions:
Who are my competitors?
How’s my position towards the buyer: Strong or weak?
Does the competition offer the same product, or a substitute one?
How can I deal with the competition?
How strong am I compared to the competition?
Where do my competitors come from?
Do my competitors have the same trade agreements?
Next step: Find out how buyers source in order to know how to sell your products to them
Example questions:
Do my products fit the taste of the Europeans?
Which styles, materials, colours sell in Europe?
Which trends are expected to take off?
What are EU buyers looking for?
Next step: Find out current and future trends in the EU
Example questions:
Who are the players between me and the end consumer?
Where do I need to sell my products?
Who is the buyer in the chain that leads me to my target group?
How can I best reach my target group?
Where does my target group shop?
How is the retail market structured?
Who are the players between me and the end consumer?
In which market segment do my products fit?
Next step: Find out which market channels and segments are relevant to you
Example questions:
Are my products allowed on the EU market?
Are there any standards I need to meet?
Do I have to be certified?
What’s the EU legislation for my product?
What are the requirements?
Next step: Find out legal and other requirement that EU buyers have
Example questions:
Where can I find a buyer?
How can I approach a buyer?
What is a buyer looking for?
How can I get a buyer to understand how great my product is?
How do I do business in my buyer’s culture?
Next step: Find out how buyers source in order to know how to sell your products to them
To sum up:
You are looking for answers to questions regarding:
General information: An introduction to the market and organizations
Specific product-market information: Research already done
Trade & demand: Statistical information imports/exports/production/consumption
Competition: Determined by different forces
Trends: The taste of your target market
Channels & Segments: The route to your target market
Requirements: Legal and additional requirements
How buyers source: Understanding buyer behavior
The answers to your questions can be found in CBI’s Market Intelligence platform:
Making research work for you: Step 2: Find the answers to your research questionsStep 3: Turn information into intelligence
1. Once you have defined your research questions
2. you can start looking for the answers by doing your research and
3. finally analyze the information and turn it into intelligence.
…but what do we actually mean by intelligence?
From information to intelligence
Information (facts and figures) won't get you across the gap that separates your company from the EU markets
What you need is intelligence: data analyses, foresights, insight into trends and business opportunities and practical considerations for action
How CBI does it: Peer Group session
Peer Group programme and output
Bear this in mind in each of the assignments you do!
From information to intelligence: How you can do it
After each assignment, once you’ve collected the information, you need to analyze it in view of your specific situation:
- What does this mean for your product/company?- Do you need to find out more? Where? (perhaps primary sources = interviews)- Are there things you can change in order to better match the target market needs (considerations for action)?
You will use CBI’s Market Intelligence platform and other online sources to find answers to your research questions.
Market research & EMP:
MARKET INGELLIGENCE: Basics
In order to find answers to questions such as…
Can I approach the EU as one market?
Can I get any assistance from the EU?
Where do I start?
What do ‘EU’ and ‘EFTA’ mean?
Is Europe (or other potential target market) an interesting market?
…the best starting point is to look at an Introduction to the EU
Overview Europe – basics
• 28 Member States• 500 million people• Single market:
– Free movement of goods– Common customs– Largely harmonized legislation
• 24 official languages• Different cultures• Different market
characteristicsMember states of the European Union
Candidate and potential candidate countries
The Basics of the EU: Sources
CBI’s Database
A good starting point with:
Export IntelligenceManuals on EU market essentials of exporting to Europe
Policy Intelligence Up to date and tailored practical Information for policy makers
CBI Database: An overview of EU market essentials
MARKET INGELLIGENCE: Our CBI platform
MARKET INGELLIGENCE: Statistics
In order to find answers to questions such as…
Is there a market for my product(s)?
Is demand growing?
Is there any domestic production?
Does my target market depend on imports?
How much is my target market importing?
Where does my target market import from?
…the best starting point is CBI’s Tradewatch, presenting statistics
Statistical information: How it works
Everytime a product crosses a boarder, it is registered under an HS-code.
Based on HS-codes, import and export statistics are provided.
Not all products have their own, specific HS-codes, sometimes they end up in a group called ‘…and other’ or similar.
Statistical information: How it works cont.
• Production is registered using a different set of codes, in the EU manufactured goods are registered in ProdCom.
• Sometimes branch organizations or similar offer more specific production figures.
• Consumption is often not registered as such, but can be estimated by calculating production+imports-exports.
Discussion: How to deal with incomplete information?
So…• …you may not find a perfect HS-code to use• …and you may not have any consumption figures for your
product• …or production…
How can you deal with this and why is statistical information still not useless?
Statistical information: Sources
CBI’s Tradewatch
A good starting point as
it will give you an
overview of the sector:
CBI Tradewatch:
Broadcasting your
Trade statistics
Home Decoration Tradewatch: http://www.cbi.eu/marketintel_platform/home-decoration/136093/tradewatch
Statistical information: Sources
From the CBI Tradewatch, you can access ITC’s Trademap (www.trademap.org), which allows you to look up developments for specific products at a national level.
Statistical information: Sources
The EU Export Helpdesk provides easy access to import/export data on trade with EU countries: http://exporthelp.europa.eu
Choose statistics
Statistical information: Sources
ProdCom provides statistics on goods manufactured in the EU: http://epp.eurostat.ec.europa.eu/portal/page/portal/prodcom/introduction
Produce a first list containing 28 countries ranking the most promising one at the top and the less promising one at the bottom of the list.
3. Current market demand – find out:• Total imports (from the ‘world’) of your product to ‘EU28’ (select ‘Region’ instead of
‘country’)• Are EU imports increasing or decreasing?• Imports from your country to EU28• Who are the main suppliers to EU28? (i.e. where is your competition?)• Do you expect imports to decrease or increase?
Assignment 11. Determine your HS code
2. Log in onto ITC Trade Map = www.trademap.org Log in: [email protected] password: cbi
4. Based on assignment 2 • What are the most promising markets?
(countries with large market size AND good growth potential – niche markets?)
• Are there countries where current market size is large, but with no or little growth perspective?
• Are there countries that are still quite small now, but that offer interesting growth possibilities for the future?
• Do you see any interesting developments in certain countries? If yes, please describe.
Produce a second list containing 28 countries ranking the most promising one at the top and the less promising one at the bottom of the list.
Assignment 2
MARKET INGELLIGENCE: Trends
In order to find answers to questions such as…
Do my products fit the taste of the Europeans?
Which styles, materials, colours sell in Europe?
Which trends are expected to take off?
What are EU buyers looking for?
…the best starting point is CBI’s Trends and Fashion forecast
Latest trends in HD and HT
Search for identity
Global trends – Need for individuality• emergence of self-expression and self-development • people want to distinguish themselves from others
Market trends• Personalisation options in design • Companies create an emotional connection by story telling
Consumer trends – New luxury products• ‘new luxury’ is all about unique experiences, acquiring new skills, possessing
eco-credentials and showing generosity or connectivity• two trends: consumers derive status and pleasure from mastering cooking
skills, redecorating the living room or enjoying a Spa at home. • products that increase knowledge, add meaning and significance to their
experiences and contribute to the development of their inner search for identity.
Rebalancing global economy
Global trends – Rise of emerging markets• Significant population growth in emerging markets (e.g. China or India)• Developed economies face an ageing and shrinking population• Relocation to urban areas
Market trends • Emerging markets as destinations • China as a producing and destination market
Consumer trends – Function and feeling • Changing households (single sex and multi generation)• Products not only functional but express feeling to match identity
Sustainability
Global trends – Growing importance of sustainability
Market trends - Sustainable business• Transparency and accountability • Lower transport emissions (innovative packing and packaging) • Growing certification schemes and Fair Trade initiatives
Consumer trends – Inspiring, pleasing and a better world• Consumers buy products to support local communities• Growing recycling • Consumers want to contribute to a better world (fair trade)
Trends: Sources
CBI’s Trends
Offers insights on European trends for your sector while the Fashion forecast gives you insights in upcoming trends (styles, colours, fabrics, design) in the apparel sector.
CBI Trendmapping:
Insights and foresights on key European
market dynamics, short- and long-term
CBI Fashion Forecast:
Upcoming fashion trends and developments (styles, colours, fabrics, design)
Trends: (Non-EU) Sources
Trendwatching.com http://trendwatching.com/freepublications/
Trade fairs: Which are the biggest ones in your sector?
Check out their websites and programmes!
Sector organizations / e-newsletters etc.
Trends: other sources
Trend information is all around us:
Magazines
Newspapers
Film
Shops
Art Galleries
Websites of forecasting agencies
Design Blogs
Trade Fairs
Trade Fair Websites
Which European trends affect your sector/products and how?
Analyse and describe them by looking into the STEEP factors: Social Technological Economic Environmental Political (input: CBI MI platform) Important: only describe what is relevant in the light of your products and markets, the PMCs! (no general info). And also: The EU is not 1 market, therefore do not only look into general aspects but also take differences on country-level into account.
Assignment 1Find out if your products fit the current and future trends?
These trends can be described by looking at Social, Technological, Economic, Environmental and Political (in short: STEEP) factors.
USE CBI TRENDMAPPING, PRODUCT FACTSHEETS AND THE OTHER SOURCES
Mark these trends with O or T:O = Opportunity; makes the market more attractiveT = Threat; makes the market less attractive
Which countries seem to offer the best opportunities, based on trends and developments in your sector?
Finally, integrate the two lists and
produce a top-3 EU-country list.
Assignment 2
Produce a second list containing 28 countries ranking the most promising one in top and the less promising one at the bottom of the list.
MARKET INGELLIGENCE: Buyer requirements
In order to find answers to questions such as…
Are my products allowed on the EU market?
What are the requirements?
What’s the EU legislation for my product?
Do I have to be certified?
Are there any standards I need to meet?
…the best starting point is CBI’s Buyer Requirements (legal and non-legal), the EU Export Helpdesk (legal) and ITC’s StandardsMap (private standards)
EU non-food legislation: How it works
1. Framework agreement: ‘All products must be safe’
Material
2. Material: Make sure you don’t use engangered species as your material
Hazardous substances
3. Restricted hazardous substances: Make sure they don’t end up in your product
Uses
4. Uses: Stricter restrictions for contact with skin or food, and childcare articles
CE marking
5. CE marking: If applicable, a must to show safety
EU food legislation: How it works
1. Framework agreement: ‘Food must be safe’; applies to all foodstuffs
Hygiene (incl. HACCP)
Contaminants
MRLs
Additives & flavourings
Etc.
2. Horizontal, thematic, legislation; applicable to all foodstuff though not always relevant
Req
uirem
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r coco
a & ch
oco
late
Req
uirem
ents fo
r anim
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du
cts
Req
uirem
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r fruit ju
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Req
uirem
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ar
3. Vertical, product-specific legislation; defines to which foodstuffs applicable
Private standards: How they work
Private standards are used by companies, often to show sustainability performance.
They cover issues not covered by legal requirement, such as labour conditions, or go further in their requirements than legislation, e.g. stricter environmental requirements.
Buyer requirements: Sources
.
CBI Buyer Requirements:
Up to par with the EU market
CBI’s Buyer Requirements
Allows you to understand all requirements set for your sector (musts = legal, common and niche), which you can further analyze for your product.
Buyer requirements: Sources
To look up EU legal requirements for your product (also used by CBI) see the EU Export Helpdesk: http://exporthelp.europa.eu
Exporters search by HS-code
Also see statistics
Buyer requirements: Non-EU Sources
EU Market Access Database http://madb.europa.eu/
US Food and Drug Administration http://www.fda.gov/
Japan External Trade Organization www.jetro.go.jp/en/reports/regulations/
Buyer requirements: Sources
To look up private sector standards for your product see the ITC Standards Map, www.standardsmap.org:
Go to CBI’s Market Intelligence platform at www.cbi.eu/marketintel
Read through the information and:1. write down which buyer requirements apply to your product2. Find out if your country has special trade agreements with EU countries and
find out which (non-) tariffs barriers apply to your products when exporting to Europe.
Choose “Buyer Requirements”
Assignment 1
Choose your sector
What are opportunities andthreats based on your BR’s?
Assignment discussion
example Home Decoration:
Take another look at the identified Buyer Requirements:
If not, which action can you undertake = Action plan
Assignment 2
Can you meet these requirements? How?
MARKET INGELLIGENCE: Channels and Segments
In order to find answers to questions such as…
Who are the players between me and the end consumer?
Where do I need to sell my products?
Who is the buyer in the chain that leads me to my target group?
How can I best reach my target group?
Where does my target group shop?
How is the retail market structured?
Who are the players between me and the end consumer?
In which market segment do my products fit?
…the best starting point is CBI’s Channels and Segments
Channels and segments: Sources
CBI’s Channels and segments
Gives you an overview of the route your products will travel to reach your end consumer.
CBI Market Channels & Segments: Your trade route on the European market
Trends in the market channel & segments
Chain store retailers control the entire chain from production to outlet……
and large retailers start importing themselves……
……both stimulating direct trade
Middle market is divided: trends towards low or high-end
E-commerce is growing in both B-2-B and B-2-C markets
Trends in the market channel & segments HD or HT
1. Clear concept is key (HD)
2. EU retailers / buyers consider buying closer to home (HD)
3. Specialisation brings new opportunities for exporters (HT)
4. Present yourself as a backup supplier (HT)
Go to CBI’s Market Intelligence platform at www.cbi.eu/marketintel
Read through the information and identify your segment and channels. Which channel is the most relevant for you? Be
prepared to share your results.
Choose “Channels and segments”
Assignment
Choose your sector
(example: Home Decoration)
Assignment discussion
MARKET INGELLIGENCE: Buyers
In order to find answers to questions such as…
Where can I find a buyer?
How can I approach a buyer?
What is a buyer looking for?How can I get a
buyer to understand how great my product is?
How do I do business in my buyer’s culture?
…the best starting point is CBI’s Buyers’ Black Box
How do you get inside a buyer’s brain?
The idea: Before you meet your buyer, find out what how s/he thinks and what s/he is looking for
Market brain
• Legislation • Trends
buyers also follow what’s
going on in the market the market brain deals
with issues the buyer cannot influence
Channel brain
• The whole supply chain• Reason(s) for switching
suppliers?
The channel brain is influenced by company decisions and strategies
Money brain
• Financial decisions
The money brain is influenced by company decisions and strategies
Communication brain
• People business!
In the end, there are people behind all relationships
Discussion
• Do you recognize the way a buyer thinks?
• Do you have examples that you could share?
Trade fairs: Maison & Objet and Ambiente
CBI at the Maison et Objet
Kabul Unique Design at the Maison et Objet 2013
Vietnam at the Ambiente
Rethinking the sourcing strategy of the buyer
• Number of visitors of European and American trade fairs declined since the recession of 2001
• Number of exhibitors dropped out of European exhibitors (especially on German trade shows)
• The structure of European trade fairs and the marketing strategies of European enterprises changed– Customer retention intensified – Budget for trade fairs reduced.
• The economic centre of gravity is shifting to the East:– Growing middle-class is hungry to consume beyond their basic needs.– Geographic shift for the exhibition industry and a focus on these new
markets for HDHT manufacturers worldwide.
Rethinking the sourcing strategy of the buyer
• In the digital era of communication trade fairs compete with other instruments of the marketing mix. – Social media and digital trade shows still play a role in sourcing– Trade shows, personnel selling, private events, congresses
emphasise face-to-face communication (confidence + emotional experiences)
• Digital media have influenced the way buyers use trade shows nowadays: – to network, – observe the market and the latest developments in the industry, – but not so much to place orders.
• Exhibitors need to adjust the objective of their participation (private shows or personal selling are an option)
Why do buyers visit a trade fair?
Channels used for sourcing
Trade shows in Europe
What are the pros and cons of each of the possible promotional
opportunities?
Assignment
In relation to your S and W identified in previous workshops, which of the different
promotional opportunities are most suitable for your business at the moment?
MARKET INGELLIGENCE: Competition
In order to find answers to questions such as…
Does the competition offer the same product, or a substitute one?
Where do my competitors come from?
…the best starting point is CBI’s Competition
Who are my competitors?
How’s my position towards the buyer: Strong or weak?
How can I deal with the competition?
How strong am I compared to the competition?
Do my competitors have the same trade agreements?
Competition and driving forces
Porter’s five forces:
• Buyer power
• New entrants
• Rivalry
• Substitutes
• Supplier power
Porter’s model
Competition: Sources
CBI’s Competition
Describes the competition you face in the EU market.
CBI Market Competitiveness: The competitive forces that shape your market
Tariffs & trade agreements
Do competitors trade under the same conditions?
• The EU (and other regions) has preferential trade agreements with several developing countries
• Are your competitors subject to the same tariffs as you?
Trade agreements and tariffs: Sources
To look up trade agreements and tariffs for your product see the EU Export Helpdesk: http://exporthelp.europa.eu
Exporters search by HS-code
Also see statistics
Trade agreements and tariffs: Sources
To look up trade agreements and tariffs and analyze these compared to your competitors, use ITC’s Market Access Map: http://macmap.org/
Use Market Access Map to:
• Find and compare the customs tariffs applied to your product in different markets;
• Analyse non-tariff measures affecting exporters and/or importers;• Compare scenarios of changes to applied or bound tariffs; • Download large datasets;• Analyse market access trends;• Customize product groups and geographic aggregations.
Find out tariffs relevant for you and your main competing countries, using ITC’s Market Access Map
Assignment 3
1. Go to http://macmap.org/ and sign in/ sign up
2. Choose ‘Advanced analysis’ / ‘Tariff analysis’ and ‘Create a new query’
3. Work with default options & your own product(s) & competitors.
4. Do you face the same tariffs as your competitors?
See applied tariffs instruction video: https://www.youtube.com/watch?v=nx9j3lCgrls&list=PLTZPF2lAdflNU5Vbhk2Af2vL2ZUZEzQlx
Describe the nature of competition within your sector (5 forces):• Buyers• Suppliers• Rivals (main competitors, visual information, how to research
this)• New entrants*• Substitute products
Assignment 4
…and determine whether these elements are an Opportunity (O) or a Threat (T)
O = Opportunity / enlarges your competitive power T = Threat / decreases your competitive power
MARKET INGELLIGENCE: Completing your SWOT analysis
Market research & EMP:
Now that you have completed the EU Market Analysis for your selected 1st priority country (EMP – step 2), you can translate your findings into a list of opportunities & threats that you will encounter in that market.
Assignment 1
You should also have a good impression now if this specific country within the EU indeed offers you the best opportunities for selling your products.
Based on the market intelligence collected, summarize Opportunities and Threats (part of your SWOT analysis)
Assignment 3
How can you take advantages of the opportunities that exist?
Strengths--
Weaknesses--
Opportunities--
Threats--
How can you protect yourself from the threats that exist?
Assignment 4Compile all Opportunities & Threats from the previous paragraphs, that refer to the selected EU market that you have analyzed:• Opportunities• Threats
Based on the previous analysis you can now draw conclusions on:• Market Attractiveness• Competitive power of your company, compared to other players in
the market
Based on all the market research you have done for this 1st priority market, taking the market attractiveness AND your competitive power there into account, you now have to take a final go or no-go decision to enter this market or not.
Assignment 5If it is a go decision you can enter step 3 of the EMP builder: linking your external market findings (opportunities and threats) to the identified internal company findings (strengths and weaknesses) and extract conclusions as input for your export strategy.
If it is a no-go decision, go back to your top 3 priority countries, take country no.2 and execute paragraph 6.3 until 7.3 again.country.
This process can be repeated until there is a go decision for a certain
Assignment 5
Define your PMCs
Which product(s) will you sell to which markets & segments?
Product 1 Product 2 Product 3 Product 4 Product 5
Market 1
- Segment 1
- Segment 2
Market 2
- Segment 1
Assignment 6
Example
Which product(s) will you sell to which markets & segments?
Lamps Candles Christmas lights
Wall decoration
Chandeliers
The Netherlands
- Hotels
- Hospitals
- DIY stores…
Germany
- Hotels …
CBICentre for the Promotion of Imports from developing countries
Understanding
tomorrow’s
markets
Contact CBI Market Intelligence
www.cbi.eu/marketintel_platform
