YOUR GUIDE TO MARKET RESEARCH ppsx

Step 4 Collecting relevant data •Explain the cause and predict what will happen •Give indication of actions Step 6 Transform information information -•Sorting and avoid getting lost inf

YOUR GUIDE TO MARKET RESEARCH

A GUIDE TO PRACTICAL AND LOW COST MARKET RESEARCH

METHODOLOGIES IN EU COUNTRIES

EXPORT MANUAL

CENTRE FOR THE PROMOTION OF IMPORTS FROM DEVELOPING COUNTRIES

YOUR GUIDE TO MARKET RESEARCH

A guide to practical and low cost market research

PART 1: INTRODUCTION

1.1 Why is research so essential?

1.2 What is market research?

PART 2: THE MARKET RESEARCH PROCESS

2.1 Step 1 Define your research problem

2.2 Step 2 Which research technique?

2.2.1 Desk research

2.2.2 Desk research using the Internet

2.2.3 Field research

2.3 Step 3 Research planning

2.4 Step 4 Collecting relevant data

2.5 Step 5 Analysis - from data to information

2.6 Step 6 Transform information into intelligence

PART 3: RESEARCH AT EXPORT MARKETING STAGES

3.1 Stage 1 Export Market Analysis, Internal Analysis and SWOT

3.1.1 Market size

3.1.2 Market requirements

3.1.3 Trade flows

3.1.4 Market structure

3.1.5 Market growth and trends

3.1.6 Market targeting and segmentation

3.1.7 Competitors

3.1.8 Consumers / buyers

3.1.9 Internal Analysis and SWOT

3.2 Stage 2 Decision making and formulating objectives

3.3 Stage 3 Market Entry Strategy (MES) and Export Marketing Plan (EMP)

3.3.1 Product and positioning

3.3.2 Prices and margins

3.3.3 Place and distribution

3.3.4 Promotion

3.4 Stage 4 Evaluation and feedback

PART 4: ORGANISING MARKET RESEARCH

4.1 Research preparation and budget

4.2 Involving other people in research

4.3 Organising your data and information (MIS)

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PART 1 INTRODUCTION

‘Your Guide to Market Research’ is a manual which provides practical guidelines for

exporters from developing countries to become familiar with their prospective

mar-kets This manual consists of four parts: Introduction to research (Part 1), How to

carry out research using the Market Research Process (Part 2), What to research

during the Export Marketing Stages (Part 3) and Organising Market Research (Part 4)

1.1 Why is research so essential?

Market research is an essential business tool and a must in a competitive market

environment where buyers are not really waiting for your product The more

know-ledge you have about your prospective markets and its customers, the more likely

you will succeed A good understanding of local consumer target groups and their

buying habits will help you to find out the right applications for your product

Using research you can develop a product concept and choose the right positioning

strategy in each market For example, you may discover that a particular taste in food

is mainstream in one market, while it is a specialty in another market

From discovering a niche to planning an effective export marketing strategy, research

can provide the details which can be crucial for success Less money and energy will

be wasted on false hopes, especially when you plan to export for the first time

On the other hand, do not expect that market research is a guarantee for business

success However, it can certainly help prevent you from taking wrong decisions

Market research can help you in the following ways:

• You can find out: the largest markets for your product, the fastest

growing markets, market trends and prospects, market conditions,

practices and your opportunities

• It enables you to narrow down your view from a broad scope You

can set your priorities towards a specific target market and plan

future markets over a longer term

• It helps you to identify the best product introduction tactics After e.g

one year, you can evaluate your own and your trade partners’ efforts

Then you can make the necessary adjustments in each market

• Getting an insight into your competitors, including their strengths

and weaknesses, their mistakes and reasons for success

• You may also find ideas for new product development

• By showing more interest in and understanding of their market,

buyers will take you more seriously

Proactive approach

By staying aware of latest developments in your target markets, you can make your

marketing decisions more quickly In a fast changing international business

environ-ment you need such a proactive approach, which is actually your competitive edge

Even in a period of slowing population growth, new trends and consumer target

groups emerge For example, the growing number of older people or single

house-holds Both groups look for convenience products By market research you can find

out how large these groups are, how they differ by country and you can anticipate

a good understanding

is the key to succes

narrow your view from a broad scope

being proactive as a competitive edge

By responding quickly and introducing your product specifically tailored to these

groups in terms of size, appearance etc., your proactive approach may prove to be

successful

Research as an integral part of your strategy

Market research is more than just compiling data and statistics All data

collected needs to be analysedand to be transformed into relevant

information This forms the basis of your marketing strategyand 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

So, research does not stand on its own, but forms an integral part of

your Export Marketing Strategy It is a continuous process

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’, i.e start to export and finance

the investment from the profit from sales in these markets This does not apply to

market research Here you need to invest some money before introducing the product,

which prevents you from making expensive mistakes in your target markets later on

1.2 What is market research?

As you now have become more aware of the essence of market research, you need

to know what it exactly is Market research includes all methods to evaluate which

foreign markets have the best potential for your products A simple definition is:

Market research is the collection and analysis of data about markets, people,

restrictions, channels and players to support better export marketing decisions.

The following myths keep exporters away from undertaking any form of research:

There are various research techniques, which are covered in Chapter 2.2

definition research

research does not need

to be expensive

6

•Myth 1: ‘Research is only for intellectuals and academic people’

This misunderstanding is partly created by researchers who have their own sophisticated

definitions and jargon However, good researchers are well aware that research can be

easily designed and implemented by anyone

•Myth 2: ‘The trade partner will do all necessary research’

Some exporters believe that they already have enough information through their trade

part-ner 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 trade partners

lack giving a neutral overview of the market and channel developments in their country

•Myth 3: ‘Market research is too expensive’

Market research does not necessarily mean doing surveys, interviewing large numbers of

people and carrying out complicated computer analyses, which are expensive - especially

when entering different EU countries There are many low cost techniques (e.g desk or

internet research) which are explained in this manual

•Myth 4: ‘I am afraid to lose control with an information overload’

Some exporters are already very busy and are afraid of losing track when browsing

through all information and dealings with researchers However, most research discussed

in this manual requires common sense and a time commitment

PART 2 THE MARKET RESEARCH PROCESS

Effective research comes from good preparation, categorization and planning Within

the limits of time and budget, you have to collect a lot of data, without losing track

Your research will succeed when you structure your approach

This Part explains the 6-step research process (see below), and focuses on some

low-cost techniques which could be used during this process Within each process, you can

combine different research subjects (e.g countries, market size, target groups, trends,

players, trade channels) and use different techniques

Step 1 Define your research

problem

•What export marketing experience do you have?

•What do you want to be clarified by research?

•Categorizing data by country and subject

•Structuring by a Research Action Plan

Step 2 Which research

technique?

Step 3 Research planning

•Which information is available?

•Which countries to start with?

Step 4 Collecting relevant data

•Explain the cause and predict what will happen

•Give indication of actions

Step 6 Transform information

information

-•Sorting and avoid getting lost (information overload)

•Filtering and matching reliable and useful data

•Organising and checking against the research problem

2.1 STEP1 Define your research problem

What export marketing experience do you have?

Most exporters start with a broad view by doing (desk) research initially or by looking

at the market environment Here it is important to define your research problem in

relation to your export marketing experience Where does your company stand in

exporting to the EU? Do you already have clients in some countries or is this your first

export business venture to the EU?

For example, when starting to export to the EU, you first have to find out whether this

business venture is worth your investment Your research problem would be then first

to familiarise yourself with EU markets by finding out relevant information on subjects

such as: market sizes, requirements, structure, developments, segments, main players etc

This research problem is evident if you are considering exporting for the first time,

but also if you already have customers in EU markets and are considering expanding

to other EU countries In both cases, you will have to deal with each export marketing

stage in which you will have to find relevant information What to research during each

export marketing stage will be further explained in Part 3 of this manual

What do you want to be clarified by research?

When you have become familiar with EU markets, knowing which opportunities exist,

and when you have an idea of which markets to approach, the logical next step is to

go further into details The more details you want, the more specific your research

problems will be Finding out how your competitors sell in these markets - if you

should imitate them or innovate - and how to adapt your product in both cases - could

be a problem which you can clarify by research

In assessing export opportunities, you may have carried out some research in the past

You also may already have some information on EU markets within your own

com-pany Once you have checked your internal sources and defined your research problem,

you can make a list of what you want to know and what can be found out You should

try to find information which is obtainable, affordable and relevant

It may take some time and effort to become more trained in research, but once you

carried out a research process a few times, it will be easier and ultimately be of great

benefit, particularly when you know the useful sources which are relevant for your

specific product

EXAMPLE AN EXPORTER OF TEXTILES

know your buyers’ market conditions

your efforts will be rewarded later

8

An exporter of textiles sent samples of his new collection to his existing customers and to potential

customers whose addresses he collected from a mailing list He was convinced that this was the most

effective way of doing market research because ‘response could immediately turn into orders’ So he

invested some money to send his parcels and was hoping to get at least some reactions But

unfor-tunately he did not receive any feedback from potential customers, who already receive so many

sam-ples His existing customers politely told him that they were not interested because both the design and

colours of his collection were dated ‘He should have sent these one year ago’ a few of them said.

With these results the exporter concluded that market research was too costly Besides, it did not give

him any return and thus would not be needed anymore The mistake he makes here is that he does not

regard this result positively, as a basis for a new market research Even if he was already selling to

some customers, he runs the risk of losing them in the future So he has a research problem to solve

here! By analysing his market more closely he can create a new collection, becoming the basis for his

future strategy

He could do some desk research e.g looking at internet sites of European exhibitions and magazines

to get an idea of the trend forecasts and visiting sites of some major clothing retailers With this

infor-mation, he can develop an export collection and a well thought-over USP (Unique Selling Proposition)

to clients Instead of spending money on sending samples, he could search on Internet sites of some

tra-ding platforms, where he can find buyers who may be interested Once the contact is there, samples can

be sent.

secondary data as the first step

finding relevant mation in a limited time

infor-2.2 STEP 2 Which research technique?

Now that you have thought about the neccessary information of each country, you

need to find out the sources to get some of this information

In market research there are several techniques for collecting data, which are either

desk research or field research Each technique relates to the sort of data, which is

subdivided into primary data and secondary data:

• Primary data: in this case you, or a research specialist, collect data directly from

the foreign marketplace using mainly field research (see Chapter 2.2.3).

Field research always relates specifically to your product, is done on the spot,

and usually follows desk research

• Secondary data: here you are looking for data previously collected by others e.g

companies, governments using desk research Secondary data is less expensive

and by using the internet, you can find much in on-line databases

The next section focuses on these techniques, which are useful and affordable for

exporters from developing countries

2.2.1 Desk research

What is it and what to collect?

Desk research is the best technique to do your first

asses-ment Here you collect secondary data in your company

(internal sources) or elsewhere (external sources) You

search for information in hardcopy or in electronic form

Some examples are: country overviews, market surveys,

company profiles, sales tracking data, trade statistics,

consumer surveys, articles, newsletters, magazines etc

Within the abundance of information, especially in

deve-loped countries, you can familiarise yourself with new

markets At the same time, you must try to find relevant

data for your specific product

The challenge here is to collect and compile as much useful information and statistics

about your target markets within a limited time

During your desk research, try to mark the pieces of information with a date and

source In doing so, you still know where you got it from, especially if the information

proves to be irrelevant later on

DESK RESEARCH

- Data collection is fast - It is often too general

- Relatively cheap - You have to validate its reliability

- Field research could be obsolete - Conflicting statistics, different definitions

Where to find secondary data?

Start collecting all data from your office at your desk, surfing on the Internet and

requesting data by e-mail, phone, fax etc In most EU countries, especially in

Germany, France and the UK, people want a written request for information including

a short explanation who you are and why you need it Data collection usually takes

time, so you could have trainees or students doing much of this work Here you need

to give them a clear briefing of what you want - see also Chapter 4.1

How to ask for free or low cost information?

Try to make a friendly but polite standard fax, e-mail or letter You could use this

several times by slightly modifying it according to the people or organisation you are

contacting 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 deadline, which gives

you a reason to follow up later, but do not push too hard unless you have to pay for

the information

It is important to find the right contact person, but often they are not in or too busy

So simply explain what you are looking for There is a risk of miscommunication

between you and staff of the organisation, which is dealing with your requests

They may not be familiar with your product or your situation Bear in mind that when

asking for information free of charge, you cannot be certain to get specific answers

The main sources

CBI

CBI is a good starting point for your desk research There are around 35 informative

EU Market Surveys on specific sectors available Each survey reviews the latest

mar-ket developments, opportunities and provides export marmar-keting guidelines They are

already tailored for exporters from developing countries In addition, each survey

gives many references and sources (addresses and Internet sites) for further research

Registered exporters can download the CBI surveys

from the site www.cbi.nl

CBI also provides manuals on export planning and other

topics, two fashion forecasts per year and a bimonthly

magazine, the CBI News Bulletin

A special database, the Accessguide, has been set up

with all relevant information on non-tarif trade barriers

(e.g environmental, health, safety and social issues)

- see - www.cbi.nl/accessguide

In most EU countries, there are similar organisations

which stimulate imports from developing countries

These can be found at www.tpo-net.com

BSOs

In many developing countries, there are organisations which promote the exports

from their country through assistance and export promotion programmes There are

governmental BSOs (e.g ministries and national trade promotion organisations) and

sector associations Next to individual assistance, they can provide the following

information services:

• Trade and country statistics and publications about EU markets

• News bulletins and information on market opportunities for specific products

• Database of other exporters in your country and of EU importers

• Specific product or market information through customised research

do not ask too many questions

simply explain what you are looking for

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2

1

NGOs

Within the large number of NGOs, some organisations such as ITC, FAO, OECD,

UNCTAD, World Bank, Oxfam etc offer assistance programmes for exporters from

developing countries

Concord is a EU coordination centre for NGOs, which is a good starting point to find

NGOs in your target markets Their site www.concordeurope.org gives an overview

of National NGO platforms e.g www.bond.org.uk and of NGO networks in all EU

countries

At the sites www.unsystem.org; www.oneworld.net or www.euforic.org you also can

find links to NGOs aiming for a greater fairness in global trade

In addition, you could contact the local ministries of foreign affairs, which publish

address lists of NGOs in their country As well as providing information, NGOs may

offer credit schemes, incentives or provide assistance in locating and contacting

potential customers in EU countries

Chambers of Commerce

Before approaching organisations abroad, you could check your local Chamber of

Commerce, which also functions as a BSO As well as the usual Chambers, there are

bilateral Chambers of Commerce e.g The Dutch - South African Chamber

In EU countries, most Chambers offer a variety of information e.g regulations and

the major trends in industry You can also find information about local trade press,

trade fairs, business culture and links to other relevant organisations

Addresses of Chambers of Commerce in EU countries are given in Appendix 2

Trade Associations

European Trade Associations that are well organised can provide good information

They have their own reference libraries for their members They sometimes conduct

their own national or international market studies In their annual report, which are

sold at low cost to non-members, you can find extracts of these studies

If possible, try to visit these associations direct or at trade fairs Be aware that there

are trade organisations at different levels (e.g retail, manufacturing, or industrial

level) Each organisation provides information from their own perspective

Recently many Trade Associations have an Internet site from which articles can be

downloaded You also will find links to other product or sector related organisations

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 laws

They usually also have general information on doing business within their country

In addition, they can introduce you to key persons or organisations in your sector,

and to translators

Banks

Banks are another source, especially for financially related 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

EU Information Centres

Most EU countries now have a local information centre in the major cities, or there

may be 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

NGO platforms and local networks

extracts of studies in annual reports

You could visit libraries in your own country or in your

target markets As well as National libraries, most

organisations mentioned so far, have libraries which

you can visit You oftenneed to make an appointment

beforehand

Searching in libraries is a self-service activity, which

implies that you need to get familiar with their search

system You often search by subject, title or keyword,

which leads you to a book or publication You can copy

useful parts

National libraries have an online catalogue at their

Internet site In case of a complex system, you could

have a look beforehand

Some libraries have a document supply service which

can carry out a search for you at limited cost and send

the result of this search to you, even if you are overseas

You need, however, to become a full member

In most libraries, reading rooms have consumer magazines, international newspapers,

journals, trade magazines, annual reports and sometimes an online article database and

market reports

Trade magazines and newspapers

Trade magazines published in your target market are very useful for gaining a general

impression of current market activity - competitors, trends, current issues and opinions,

active agents and distributors Special features can sometimes include relevant market

statistics You can receive these magazines overseas by contacting them by e-mail,

ask at a library, your embassy or to someone you know who lives there Once you are

in contact with them, you can ask for back copies

Other

The method to collect information from all these organisations as well as from airlines,

national statistics offices, exhibitions, etc is very much the same as mentioned earlier

- see page 10

Contacting these sources will give you a basic understanding of what information is

available and some opinions of experts (e.g at trade associations or trade press) You

undoubtedly will get many tips on other sources for further research

2.2.2 Desk research using the Internet

The internet offers an almost endless stream of information Recently, developments

in electronic and information technology have been fast If you are connected to the

Internet, you can access an innumerable number of sources from your desk

The ultimate technique for data collection?

The internet is an essential and useful research tool, which can save you much time

However to avoid disappointment, you must be creative when entering key-words and

narrow your search in time Once you spontaneously start to search for a subject, you

can easily find yourself going off at an interesting looking link leading to nowhere

Afterwards, you may look at your watch to find out that you have spent several hours

and failed to find any relevant informationon the subject So you need to go on the

Web again, the disappointment may be repeated etc etc Try to be prepared, creative,

stick to the subject and know when to stop

How to structure your Internet search?

Similar to all other research techniques, structure your search and write down

before-hand what you are looking for, keeping your Research Action Plan (see Chapter 2.3)

at hand You could search in the following ways:

1 Search by keyword using search engines

2 Search at Internet sites and their links

3 Search in (online) databases

4 Search at relevant information portals for your product.

Search by keyword: an example

Your Internet connection provides around 100 million websites throughout the world,

more information than any library can offer This enormous amount of information is

categorized by data providers in their own way There is no one way to carry out an

ideal search But there are some techniques and skills that save you time, especially

with regards to narrowing or refining a search

You could search in a creative way by using different keywords You also can

mini-mize the number of entries by adding codes to your keywords These codes differ

per search engine If for example, you are looking for information on the Spanish

market for luxury nuts, you could search by using the following codes:

+ (plus sign) Indicates that words must appear in each webpage

e.g link the words spain+market+nuts (omit blanc space)

- (minus sign) Identified words that should not appear in each webpage

e.g spain+market-flea market, which excludes ‘flea market’

“ ” (quotes) Indicates the exact multiword phrase you are looking for

e.g “the Spanish food market” (as e.g title of report)

AND To connect two or more words

e.g spain AND market AND nuts (try with blanc space)

OR Make combinations with words

NOT Use in combination with AND in order to exclude words

The best advice is to do it yourself and get familiar with search

techniques through trial and error In the example, you could first

search on keywords in English and later on in Spanish, which you

need to translate

Here try to set yourself a limited time e.g 1 hour and scroll per

search, a maximum of ten pages Please be aware that each page

shows the documents in which your keywords are used, which are

not necessarily the most relevant documents So try to use more

keywords, change them regularly and use different terms each time

Search engines

In addition, use a few search engines, of which google.com is the

most popular Others engines include msn.com, altavista.com

And if you are looking specifically into Spain, use Spanish search

engines You can find these at www.searchenginewatch.com or at

www.whitelines.nl

SEARCH BY KEYWORD ➧ Spanish market for luxury nuts:

• Using Explorer or Netscape, go to a search engine e.g google.com

• You can search using one of the following keywords in these or any other combinations

➧ Spanish market luxury nuts

➧ Spain + market + nuts

➧ Spain consumption nuts

➧ Mercado nuez

➧ Consumo AND nuez NOTpistachios

➧ Spain + production + nuts

➧ Spain + Gallina Blanca + nuez

SEARCH BY TOPIC

• At general sites of Spanish organisations, ministeries or statistics offices, you can

search in their database for information on nut relevant topics such as; demographic,

socio-economic, culture and daily patterns At sites of consumer magazines you can

search for information on Spanish eating and drinking habits and health issues

Search at Internet sites and their links

You can scroll through sites of organisations, companies and retailers in EU countries

and see what you can find Here you need to know the Internet address of the

organi-sation Or you can try to find the organisation by the name and the country characters

Each Internet address has a suffix or TLD (Top Level Domain name) which indicates

the nature of the organisation or the country code For example:

• .com is a commercial company • .de = Germany

• .net is a service provider • .fr = France

• .org is a non-profit organisation • .co.uk = United Kingdom

• .gov is a governmental organisation • .nl = The Netherlands

For example, if you want to know which nuts are popular in Spain, try to find out

what sort of nuts are being sold by the largest retailer In Spain, El Corte Inglés, the

largest department store, is important in food retailing and has much information

on their Internet site If you do not have the correct address, try www.elcorteingles.es

(es is the country code for Spain) or www.elcorteingles.com Otherwise, you can

type ‘el corte ingles’ as a keyword using a search engine

use your intuition to search by name and suffix

14

2

At their site you can check the food section (= alimentacion) showing their products

and prices You could also find out their purchasing policies for foreign suppliers

The useful links at their site lead you to the largest hypermarket chains Eroski and

Hipercor in Spain, both operated by El Corte Inglés

As well as companies’ own sites, governments, national statistics offices, NGOs,

trade associations, trade portals, trade fairs, trade press also have their own Internet

sites In addition, you may also find worldwide news media (e.g Financial Times)

useful; they publish articles on the EU economy, specific industries and on individual

companies

SEARCH MORE SPECIFICALLY AT INTERNET SITES ➧ URLs of useful sites related to nuts

• Have your research action plan and bookmarks near at hand

• Go to the sites of:

-The International Tree Nut Council ➧ www.nuthealth.org

- Intern Trade Press ‘The Cracker ➧ inc.treenuts.org/cracket.html

- Intern Trade Press ‘The Clipper’ ➧ www.agropress.com

- Alimarket, Spanish food magazine ➧ www.alimarket.es

- Portal for Food Ingredients ➧ www ingrid.net

- ITC, P-Maps or C-Maps ➧ www.intracen.org

- Spanish Business Platform ➧ www.spaindustry.com

- Spanish Statistics Office (INE) ➧ www.ine.es

• If the URL no longer exists, you can search for the new site using a search engine

and enter the name of the company, organisation or magazine

Search in databases

There are databases on the Internet which you can not find by search engines because

they only can be found when searching on particular websites e.g of Governments

or universities It is definitely worthwhile to do searches at these sites e.g or

www.usatrade.gov where you can come across market reports on EU countries

which are made for US exporters, which can be downloaded free

You can also buy up-to-date information reports from online databases, which might

be more specific to your product Online databases are operated by business

infor-mation providers such as LexisNexis, Marketresearch.com and market research

companies such as Nielsen, Mintel, Frost&Sullivan, Euromonitor, Snapdata etc

Also, some magazines put reports and articles available online at a

charge Often you can download a summary or table of contents of

the reports and check how well they actually cover your specific

product well

Once you decide to purchase a report, you must pay in advance by

a valid credit card Then you can download the report or have it sent

by e-mail on CD Rom or in hardcopy Most reports are expensive,

even if you can buy them in parts If you have the time, you could

continue to search for free information on other sites instead

Search at information portals

Sector based information portals are designed to be ‘one-stop-shops’ for all your

information needs They are made by knowledgeable experts in the sector

For different sectors, there are useful portals which offer comprehensive information

check out useful sites

are these reports worth the money?

3

4

These are a good starting point for your search Most of

these portals offer industry news, information about

product development, business directories, trade statistics,

news sources and sometimes a business platform

In addition, they provide information about existing, new

or upcoming regulations Internet addresses of some

interesting portals are given in Appendix 1

Further information about portals can often be obtained

from the trade press or from other online sources e.g the

CBI website at www.cbi.nl (link plaza) or the International

Trade Centre (ITC) tool P-maps (www.p-maps.org)

However these P-maps are at a charge

Specific information

Information from these sources may give you an idea about the sector, but may not

specific enough for your product or market to make the right decision

Often research for your specific product has never been done, or companies who have

done so will not share that information with potential competitors In addition, the

data in these secondary sources may be at least 1-2 year old, especially when trade

statistics were used Furthermore, southern EU countries are relatively slow in

providing statistics In the meantime, trends may have changed

Registration necessary

More frequently, you need to register in order to search on websites and have free

access to basic data and articles The registration procedure can be free of charge,

but it can be off-putting if you have to register for virtually every site you are visiting

You have to remember many different passwords, so try to use the same username

and password for each site If this is not possible and the service automatically

provides you with a password, keep a list of passwords during your search

Managing favourites or bookmarks

While searching, you come across interesting websites and addresses you can store

in your computer In Explorer you can create a map ‘favourites’ (or bookmarks),

which you can categorize by subject or by country by using ‘Organize Favourites’

To these categories, you can add useful sites as follows:

• When you are at the interesting site select ‘Favourites’ in the Explorer menu

• Click on ‘Add to favourites’ and now you can select under which category you

want to store the site You can also rename this site

Printing and saving internet pages

When searching on the Internet, you could print out the useful pages you come across

Or you can ‘cut’ and ‘paste’ the text of internet pages in a word processing program,

for example Microsoft Word Here you first select the text with your mouse and copy

it with the right mouse button Then you paste the non-formatted text using the option

‘paste special’ (under the menu ‘edit’) into a new document

information is too general or outdated

creating and organizing your favourites

16

zooming in on your specific situation

an in-depth approach which needs time

when credibility to buyers is required

talk to other exporters

2.2.3 Field research

What is it and what to collect?

Field research is the technique to collect primary data using interviews,

question-naires, store checks, observations, product testing etc This implies that you do the

collection 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 cover some of the missing information, and interviews with

buyers or consumers can be a real eye-opener You may become aware of hidden

feelings people have towards your company, country or product Even if statistics

show a growing market, field research can be crucial to take the final decision on

whether or not to go, and if so, how to do it

Field research often requires a whole process

Field research focuses on consumer or buyers’ motives (e.g why they would buy your

product instead of your competitors product), which form a basis for your positioning

strategy So it requires a well thought through and in-depth approach Therefore, each

subject (e.g market trend or price) requires a whole research process

So field research is more time consuming than desk research, where you can combine

several subjects during a process

FIELD RESEARCH

Advantages (if you do it yourself) Disadvantages

- Direct exposure gives a better feel - Usually more expensive than expected

for the market

- Chance to meet potential customers - Takes much time due to a lack of contacts

- You can adjust the list of required - Time consuming to judge the reliability

information during the field research of research specialist - see Chapter 4.2

Doing it in a reliable and professional way?

In doing field research, some different approaches can be identified Depending on

sample size (i.e the number of people selected for field research), country, budget,

you could decide to have a research specialist doing it for you If you want to give

the research results credibility to buyers, you could decide to use a more scientific

method For example by running questionnaires and interviews among a sampled

target group of consumers or buyers For details on how to work with research

specialists - see Chapter 4

Start field research in your own country

• Companies already exporting to the EU:you could talk with other exporters,

especially those who export to the markets of interest to you What do they know

that may be valuable to you? Even if they maybe reluctant - any information could

be of use However, you need to verify its relevance to your own data later on

• 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

Field research at exhibitions

A more down-to-earth approach would be to have

inter-views with key persons such as importers, wholesalers

or retailers during your visits to exhibitions in the EU

Here you should consider the following five points:

Planning of visit

If you are planning a visit to an exhibition, plan it well

in advance and not two weeks beforehand 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

Try to order a catalogue beforehand and check the site of the exhibition In this way

you can get familiar with the categories, themes and products exposed and find out

interesting stands and contacts

In your approach, you could make a following distinction:

• Visiting potential customers ➧ Checking your chances in their market

• Visiting competitors ➧ Checking how they approach their market

(You could pretend to be a ‘buyer’)

Making appointments

Try to find out the right contact person and try to make an appointment with him or

her beforehand Briefly explain that you are interested in their company, their products

and culture Once you in contact, it is a way 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 speak to someone else and

observe their products, promotion etc

The right timing

When visiting people at e.g an exhibition, choose the right timing At the beginning

of a fair, the atmosphere is usually tense with people not really being in the mood to

answer questions to someone they do not know well Try to find a quiet moment or

one of the last days of the fair, when people are more relaxed or bored

The questions

Ask a few simple ‘spontaneous’ questions from the top of your

head, already set in mind You could prepare a questionnaire

with between 10 - 15 questions for your own reference Start

the conversation by making a compliment about their product

or stand Because many people at the stand are sales staff, they

are likely to talk about their product When they ask who you are,

you briefly introduce yourself and mention that you are trying to

get familiar with their market Avoid selling your product

The conversation

Once the person carries on talking, try to get control over the

conversation by asking him some simple questions 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, rather then jumping

from one question to the another This usually generates an

ongoing conversation

an appointment to let you in

the last days are the best

• Establish his or her position and try to find out what responsibilities he/she has

within the company

• Keep the most important question for the final part and try to get a contact person

with whom you can get in touch later If the person has given you good information,

you can offer 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 e.g products, contact person, special things he was

talking about, which could be also private (e.g he visited your country last year)

Field research by doing store checks

Once you are in an EU country, you also could check some stores Here you can pick

up price catalogues and see how competitive or similar products to yours are being

displayed You could also count how much shelf space these products have Check

which products have the biggest and best (eye-level) space You also can get an

impression of in-store promotion and their merchandising tools You even could ask

a few people their opinion e.g store manager or sales staff

Field research by marketplace observations

Observation research is a technique that helps to turn the facts you have found so far

into something meaningful The most realistic and low cost technique is a marketplace

observation Here you, or a trainee or research specialist, pose as consumers (known

as mystery shoppers), watching and recording the actions of consumers in-store

In shops, you can get an impression of the staff and e.g discover that some of them

are not able to give proper explanation about e.g technical products

In your hotel, you could look at some local TV stations, where e.g commercials give

you an overall picture of what is hot, and what is not

Doing your own field research by using the Internet

You can also carry out your own field research by collecting primary data by the

Internet:

• Using electronic questionnaires with existing customers

• By tracking and tracing visitors to your website (if you have one)

• By offering added value functionalities on the website for which visitors have

to register

An example of an added value functionality is offering registered visitors subscription

to e-mail alerts or access to a virtual exhibition, 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 create a database with

prospective customers who you can approach directly

turning facts into a sensible asessment

collecting primary data by the Internet

2.3 STEP 3 Research planning

Once you have clarified your research problem and decided which research techniques

to use, you will be in the position to set out a plan of action - research planning - to

get the information you need

Categorizing data by country and subject

Start to categorize all data during collection and separate them by making small piles

Now you can recognise from which countries or subjects you have sufficient data and

what you still need to collect

When searching on the Internet, print out the useful data you find and mark it by

category e.g country, product, consumers, trends, trade channel etc Prints are easier

to read than on a screen and it allows you to highlight important information

Structuring your research by a Research Action Plan

You could use a Research action plan (see table below) which helps you to do

research efficiently and make time commitments After you collected sufficient

information, you can summarize all relevance on each subject in a brief conclusion

Once these are filled in, you have a profile of each country with some key facts and

figures These profiles give you an idea of how easy or difficult it will be to export

to that country, possible next steps or what further research is needed

A copy of a research plan is handy when searching on the Internet Undoubtedly

you will come across many subjects categorized in many different ways The plan

keeps your investigations focused on your key subjects for research

EXAMPLE RESEARCH ACTION PLAN (for the year 2004)

You could also plan the research techniques e.g starting by desk (Internet) and field

research in your own country Next, you could plan visits to desk research sources in

EU countries and prepare field research e.g at exhibitions As described in the

previous Chapter 2.2.3, planning and preparation are very important here

2 large International companies

More research needed

Growing by 3%

Growing by 2%

Wating for information

Trade Association/Portal ISO/TARIC

Trade Magazines Statistische Bundesamt, Magazines

Euromonitor Public Ledger/ITC Magazines, Companys’ Website Other sources

Mintel/ONS

Trade Association/Portal

Trade Association

2.4 STEP 4 Collecting relevant data

Once you have set up a Research Action Plan , the next step is to collect data from all

available sources in EU countries in the most effective way Finding the right sources

in more EU countries simultaneously is not an easy job

The main shortcoming of collecting data on foreign countries is that data for particular

market areas or for specific product groups is not available These countries simply do

not have governmental agencies that collect this data on a regular basis

You could start to collect relevant data in your own country Afterwards you carry on

to ‘easy’ countries, ending up in ‘difficult’ countries with few information sources

Which information is available and what is easy to find?

Review the information you already have, your internal sources, which may vary

from your own sales and foreign customer records (including prices) to easy to find

external sources This could be information from a BSO on exporting, general

infor-mation on the EU, annual reports of competitors already exporting to the EU, articles

in your local trade press and the like You can also check some of the websites, which

you already had in your favourites

Which countries to start with?

When researching the EU, you have to be aware that you cannot just look into one

country and use much of its information for other EU countries The EU market is

still complex and fragmented for many products, consisting of many market segments

with different cultures, people, languages, rules and regulations

Trade statistics are relatively easy to get, but it is mainly the market information

which is difficult to collect

Trade statistics are usually available for most EU countries and give you a rough

indication on growing EU markets Although you have to bear in mind that re-exports

can be high especially in The Netherlands and Belgium Another point of concern is

that in these statistics, products are often subdivided into very broad categories e.g

according to raw material In many cases, your specific product is within a larger

product group, which still leaves some questions to be resolved

Market information is often available for the large EU countries As countries become

more important as a market, a greater interest in basic data and better collection

methods develop The United Kingdom, Germany and France have good and up-to

date information sources Because they often provide their information according to

similar definitions, you can compare them easier

Start with the countries that have much information in English such as the United

Kingdom, Scandinavian countries and, to some extent, Germany If your native

language is French or Spanish, southern EU countries would be a good start

If you are considering entering Austria, information on the German market gives you

a basic idea e.g about trends or the mood in German speaking countries Besides,

German trade press often cover the Austrian market as well

your own information

EU countries are not

‘roughly the same’

identify growing kets by trade statistics

mar-UK, France, Germany; up-to-date information

2.5 STEP 5 Analysis - from data to information

Sorting and avoid getting lost 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 next to effective collection of data, you

need to effectively manage and use this endless stream of

information

As already mentioned in Chapter 2.3, you can stay in control

over data by categorizing them as early as possible An

overview of subjects by country you have already summarised

in your Research Action Plan It helps you see what you

have done, what is still missing, when to stop searching and

start analysis

This structured approach 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 you start

sorting data, the better it will be in the end

Filtering and matching reliable and useful data

Now you have to quickly read all data, some of which must be translated, and create

useful information You need to ‘digest’ the data and convert them into patterns

During this process, try to get relevant information on each subject, to reconcile

contradictory items, to interpolate missing information, to identify inaccurate data

and deepen the overall picture of your prospective markets

It is important to start classifying all statistical information You will find that the

collected statistical data about specific products, markets or market segments will

probably be still insufficient to make decisions Data and pieces of information on

some countries may be too old, incomplete or some pieces of statistics may leave

you with still many questions, especially when comparing EU countries

So you may have an information gap and if these gaps are too big, you will have to

do additional (field) research You then need to consider your critical information

elements, i.e what do you really need?

The major problems when analysing secondary data, especially from sources on the

Internet, are described below:

Reliability

Data collected from the Internet in particular may not be reliable or trustworthy So

check the writer of the article or report or check the sort of site you got it from

(com-mercial, personal, academic or governmental) Also, check if the sites give an address

or telephone number of a person or organisation What was your impression of the

whole site?

In addition, official statistics are sometimes too optimistic, reflecting national pride

rather than reality On the other hand, companies sometimes understate their sales

statistics in order to match their sales reported to tax authorities

Completeness

Most statistics available are two years old, which is a reasonable timeframe to know

consumption and trade statistics in each country You may get more recent data e.g

from Germany or the UK, but two year old statistics is a good basis to know the

trends in different EU countries

pick up statistics first

information gap

sometimes too optimistic

two year old statistics

as a good basis

22

This problem is caused by a lack of data in some countries EU countries also use

dif-ferent sources, methodologies and difdif-ferent ways of reporting their statistics Southern

EU countries and smaller EU countries in particular, have their own definitions and

specific categories of product groups or retailers

Therefore, try to use a single source especially for general data (demographic,

socio-economic trade statistics, retailing) It will be hard to find a low cost single source for

your specific product in e.g six EU countries

You may find this in on-line databases or in reports from business information

sup-pliers, but it will be expensive and even then, you cannot be sure of their accuracy

The best comparable data are provided by Nielsen, Gfk, Taylor-Nelson SOFRES,

IPSOS or NPD These companies are specialized in tracking and monitoring retail

sales which is analyzed through their EU branches

Relationships and Consistency

When analysing, you can also try to understand the relationship between variables

e.g price, income and retail sales For example, the relationship between high income,

single households and purchase of consumer durables (white goods, digital cameras,

audio equipment) You also could try to find out the reasons for increases or decreases

in e.g sales or of sudden peaks in imports

You could check these relationships country by country Start with Germany which is

one of the most reliable and accurate information sources within the EU

By making relationships between data, you are also checking their consistency Try

to find a relationship between your secondary and primary data as well Once these

are clear, it will give you an idea of the future development in each country You could

use this when estimating demand or forecasting sales

Organising and checking against the research problem

Once the blanks in your Research Action Plan are filled in and you have read through

and analysed information on each country and subject, you probably are now more

familiar with the EU market place - your research problem Still, it remains to be

seen if you can get all the answers to your specific product But at least you have an

indication whether you should enter some markets and how to proceed further Some

missing information can be backed up by field research, which you could combine

with your next business trip to the EU

In addition, you are now more aware of the complexity and lack of clarity of your

prospective markets e.g about the large differences between regions in these

countries So by knowing the reasons, it would be easier for you to define what to

research in a next process

All information is important for your export marketing strategy and is useful to

have in mind when talking to buyers

different sources different methodologies

country by country

primary and secondary data

familiar at last!

2.6 STEP 6 Transform information into intelligence

Explain the cause of issues and predict what will happen when

Now that all data has been collected and organised into useful information, it has to

be transformed into intelligence Try to understand and explain the cause of important

issues Then you will have to try to predict what will happen, how it will develop, and

how it can be acted upon

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 (e.g competitors)

operating in the same market

This intelligence 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 - being one of their skills

If you have to communicate the results personally,

you could present them in the form of a presentation,

instead of a written report

Whatever the form of presentation, research results

must be as short and as clear as possible

As a rule, by Keeping It Short and Simple (K.I.S.S.)

it remains clear to yourself and this will be surely

appreciated by others

The result should at least include:

• Brief explanation why the research was done

• The research objectives

• How the research was done (methodology)?

• What are the main findings (consumers, competitor trends, opportunities, threats)

• Conclusions and recommendations

• Appendices (statistics, addresses etc.)

Your report should be easy to understand for all involved and provide an indication of

what actions should follow

analysis and expertise

K.I.S.S.= Keep It Short and Simple

24

PART 3 RESEARCH AT EXPORT MARKETING STAGES

This figure gives an overview on what to research (i.e research subject) during the

Export Marketing Stages, which for the purpose of this manual are combined into

four major stages Detailed information on the export stages can be found in CBI’s

‘Export Planner’

Most research you need to do will be in the stages 1 and 3 In each stage, the role

of research differs, as shown below

• Market size (country/culture/economy,consumer and industrial markets)

• Market requirements(quality standards, ntb’s etc.)

• Trade Flows

• Market structure(supply chain, price sensitivity etc.)

• Market growth and trends

• Market targeting and segmentation

• Competitors

• Consumers / buyers

• Internal Analysis

• SWOT

• Decision and objectives

• Product and positioning

• Prices and margins

• Place and distribution

• Market Entry Strategy

• Export Marketing Plan

3.1.3 3.1.4

3.1.5 3.1.6 3.1.7 3.1.8 3.1.9 3.1.9

3.2

3.3.1 3.3.2 3.3.3 3.3.4

3.4 Chapter

3.1 STAGE 1 Export Market Analysis, Internal Analysis and SWOT

Market research during stage 1

In stage 1, you must investigate most research subjects during your Export Market

Analysis For each subject you need to find as much as secondary and primary data

as you can When collecting this data, you can follow the steps in the research process

as given in Part 2 You can use a Research Action Plan here to keep control of your

research activities

➧Firstly, you start from a broad view by becoming familiar with EU countries, their

market size, requirements, trade flows, market structure, growth and trends in these

markets All data collected on these subjects already give you a rough picture of

which countries are difficult and which countries are rather easy to enter

➧Secondly, you will have to set your priorities and choose target markets in terms of

primary, secondary and tertiary markets In this choice, you can use much of the

data gathered so far, including your chances in these markets

➧Thirdly, you narrow down your view by segmenting your primary markets and and

focus your research to get more details about your competitors and consumers and

buyers there

This approach enables you to identify and get more control over your target markets

Now you should be able to do an Internal Analysis by estimating if your company

could enter these markets

The results of your Export Market Analysis and Internal Analysis will be the main

input for a SWOT Analysis.

Try to combine subjects

In your desk research, try to combine more subjects in order to save time and costs

For example, when looking into prices, check them at all levels at once After you

have collected all price related information, you can separate this by stage and subject

Most information you will use in stage 3: price level discounts etc., but you also can

use this information for stage 1 for relevant price-related information when looking

into the subjects: market structure and competitors

• Market Entry Strategy

• Export Marketing Plan

3.1.1 Market size

Country / culture / economy

At first you can search for multi-national surveys, handbooks or articles, all giving

you a quick insight and comparison of all EU countries Another advantage of these

publications is a common approach and harmonised analysis Afterwards you can

search for details in individual country surveys and identify similarities or how

cultures in each country can differ (see example below)

Typical subjects to research and a few sources to find much of this information are:

Next, you will have to assess the markets for your product or service in each country

Depending on your product, you could focus on consumer markets or on industrial

get familiar with the EU countries

EXAMPLE CULTURAL DIFFERENCES IN HEALTH AND MEDICINE

An exporter of pharmaceuticals intended to introduce and promote his medicine range in a similar

way in all EU markets But after he did a market survey, he decided to take a different approach in

each country

There are deep-rooted differences in how people think about health, disease and medicine In

dif-ferent countries, difdif-ferent organs are believed to be the cause of illness Germans are almost

obses-sive about heart and circulation – they are Europe’s largest consumers of heart medicines Southern

Europeans assign almost mystical qualities to the liver In the UK, doctors tend to look for external

agents attacking the body and quickly prescribe antibiotics In central European countries, people

turn first to herbal treatments and hot or cold baths, relying on antibiotics only as remedies of last

resort So if you say you are tired, the Germans would say it was a cardiac insufficiency, while in

the UK they would consider you depressed.

•COUNTRY/ CULTURE/ ECONOMY ➧ A FEW SOURCES :

There are many sources on the Internet that provide macro-economic country

data The latest figures can be found at on-line newspapers For example, the

Financial Times (www.ft.com) has an extensive database with statistics of all

countries in the world Other databases include:

- www.countryreports.org

- www.eiu.com

You definitely can find most information at the national statistics offices On some

subjects, these offices make European comparisons, which are useful The

addres-ses and Internet sites of each office can be found in Appendix 2

Other country information can be obtained from Eurostat and the Organisation for

Economic Co-operation and Development (OECD):

- www.europa.eu.int/eurostat.html

- www.oecd.org

•COUNTRY/ CULTURE/ ECONOMY ➧ TYPICAL SUBJECTS AND TOPICS :

■General data such as: population trends, population by age group and sex,

trends in households, population by region, major cities, marriages, divorces

etc

■Economic data such as: GDP, household expenditure (by category), inflation,

production by sector, unemployment rate, retail sales food/non-food (by sector

or by detailed category), growing retail sectors, socio-economic trends etc

■Other data relevant for your product such as: technological developments,

health care, housing situation, education, politics, social conditions/region etc

Consumer markets

Try to collect reliable current and historical data In CBI market surveys, other market

reports, trade press and trade associations, you can find market values (in € or US$)

or volumes for your product or sector Much of the data you can collect by desk

research using the Internet (see Chapter 2.2.2 for an example)

How to define consumer markets?

To estimate the market size carefully, try to collect as much market data as you can

You will have to judge the market size using data from various sources collected

according to different definitions, for example:

•RETAIL SALES

Total sales by retail outlets in a country which sell your product Retail sales

are often measured at current or constant end-user prices Try to find retail sales

data for your product (or sector) and countries which are rather easy to find

Even if product categories are often too broad, it still will be a good method to

compare countries Please note that some sources report retail sales with sales

tax, while other sources don’t

•TRACKING DATA

Up-to-date retail sales, which is measured for specific product groups or brands

on a quarterly or yearly basis This data also provides detailed market shares and

their quarterly changes This information is collected through cash registration

systems (ECR) or scanning systems (EDI) You can buy this data from research

specialists such as Nielsen, Taylor Nelson or NPD The data is reliable but is

also expensive You may find some parts of tracking data in trade press articles

•CONSUMPTION

Consumption or consumer expenditure, which is calculated on the basis of a

large sample survey commissioned by the National Statistics offices (every

4 years) or large research companies Up-to-date statistics on consumer

expendi-ture is easy to find in the UK, France (at a cost), but difficult in Germany, The

Netherlands, Belgium, Spain, Italy and Scandinavia Euromonitor gives

con-sumption per capita figures of the EU countries, but you will have to pay for it

•INDUSTRY SALES

Often trade associations provide trade and sales statistics These sales statistics

include sales to export markets, which you will have to deduct to know the

domestic sales Sometimes the prices given at wholesale or factory level

In addition, you also need to be aware that some trade associations only give

sales figures of their own members, which is less than national sales

Typical subjects and questions when searching for data on market sizes of consumer

markets and a few sources to find this information are:

most you can find by desk research

28

•MARKET SIZE ➧ TYPICAL SUBJECTS AND QUESTIONS :

■What are the market sizes of the most important EU countries?

■Is it possible to make a good comparison between these markets?

■What are the largest markets for your product?

■How have these markets developed over the past three to five years?

■Has market growth been consistent year to year for these markets?

Industrial markets

Because the supply lines are short, market research is relatively simple compared to

consumer research Still, the research process is much the same as described in Part 2

A starting point in industrial market research is to get familiar with the supply

struc-ture, which has changed for many products in the past decade

In the past, EU manufacturers took care of the whole production process (from raw

material to finished product) Nowadays they only concentrate on the last stage of the

production process and buy assembled or semi-assembled products

If you are a raw material (or component) supplier, some typical questions are:

The sources to check are similar to those given above A few research specialists on

industrial markets are www.packagedfacts.com and www.globind.com

Calculating market size - when no data is available

When either in consumer or industrial markets, if it is hard to find data on your

speci-fic product or when there is little information available, you can calculate the market

size yourself You can verify this rough estimate of one country, with information you

already have from another country

Rough estimates of the market size of a country can be made as follows:

• Apparent consumption:In order to do this, you need production figures and trade

statistics (e.g from Eurostat - see also Chapter 3.1.3) from the countries Add to

the production (in volume or value) the imports of your product Then deduct from

this figure, the exports and the inventory level of your product in that year The

result will give you the apparent consumption at factory prices

• Apparent sales:Here you estimate the sales, if you know the number of companies

or retail outlets in a country or region selling your product By estimating their

changes in the supply structure

rough estimates- fitting the puzzle

Information on market sizes and segments is included in the downloadable

mar-ket surveys from the CBI website, at portal sites and from sites of trade

associati-ons Please note that addresses of portals sites and trade associations are included

in CBI’s link plaza on the CBI website

You can also find market reports on www.usatrade.gov or www.fao.org or buy

reports at www.marketsearch-dir.com, which are not too expensive Other

infor-mation you can find at ITC (www.intracen.org), with articles for free and most

reports at a charge

The latest reports on a wide range of products can be found at business information

providers Reports are expensive, but can also be bought in parts or by chapter:

www.marketresearch.com www.frostandsullivan.com

www.snapdata.com www.euromonitor.com

www.mintel.com www.profound.com

www.tns-sofres.com (tracking data) www.npd.com (tracking data)

•INDUSTRIAL MARKETS ➧ TYPICAL SUBJECTS AND QUESTIONS :

■What is the supply structure for industrial products?

■The main concept vendors, supplying semi-finished products to manufacturers?

■Imports / Exports statistics, average price level, sourcing / destination countries?

■What is the industrial demand in target countries?

■What are the smaller and fast-emerging markets with opportunities?

3.1.2 Market requirements

Once you have an idea of market size, you have to look into the difficulties of

ente-ring these markets You may find out that some markets have too strict regulations or

require too much investment on your part So already at this stage, you can decide not

to export to these countries and stop your research there for the time being

Nowadays, regulations and market requirements in the field of product quality, safety,

health, environment and social issues are growing throughout all sectors of the

econo-my Generally, one can say that regulations are legally binding, whereas requirements

are a reflection of the market forces Here you need to investigate the EU regulations

and requirements, which can be subdivided as follows:

1 Non-tariff trade barriers (ntb’s) ➧Quality standards

➧Environmental, social, health & safety issues

2 Tariffs and quotas

3 Trade regulations

Non-tariff trade barriers ➧ Quality standards

Even if buyers are always looking for new lines of merchandise, they tend to stay with

their current suppliers So, you must prove that your product is absolutely reliable If

you know which quality standards exist in each market, you can better prepare

your-self when approaching buyers

Typical questions when searching for information on quality standards and some

sour-ces are given below Almost all can be collected from the Internet

meeting regulations and requirements

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EXAMPLE CULTURAL DIFFERENCES IN HEALTH AND MEDICINE

Standards were often used to limit market access effectively For example, Germany protected its beer market

from the rest of the EU with a purity law This law requires beer sold in Germany must be brewed only from

water, hops, malt and yeast They also insisted to keep their sausages (‘Bratwurst’) pure by limiting the amount

of non-meat additives such as vegetable fat and protein Also Italy protected its pasta market by requiring that

pasta should be made from durum wheat In the meantime, all these standards were abolished by the European

Court of Justice and were regarded as trade violations.

In addition, definition problems were constraints in the free circulation of food products in the EU For

exam-ple, several member states have different definitions of yogurt The French insist that anything called yogurt

must contain live cultures So they prohibited the yogurt made in The Netherlands, made without live cultures.

In March 1996, the European Commission decided that only goat’s cheese or ewe’s cheese produced in

Greece could be called feta This has led to protests from the Danes, who produced feta from cow’s

cheese Still the Greeks could continue the name feta, with a long history, while the Danes had to look for

another name.

•QUALITY STANDARDS ➧ A FEW SOURCES :

International standards can be found at the ISO (www.iso.ch), the European

Com-mittee for Normalisation (www.cenorm.be), national Standards organisations and

Trade associations You can find the addresses in the appendices in CBI market

surveys Trade associations and portals in particular have the latest information on

quality and grading standards and their Internet sites usually have links to National

organisations

•QUALITY STANDARDS ➧ TYPICAL QUESTIONS :

■Are there any EU quality (management) standards to meet regarding my

product (e.g ISO 9000:2000)?

■Are these EU quality standards compulsory?

■What are the quality standards in each potential market? Are they compulsory?

1

Non-tariff trade barriers ➧Environmental, social, health & safety

issues

Other non-tariff trade barriers have become increasingly important Consumers and

buyers have been more aware of environmental issues The immediate consequences

for exporters in developing countries are:

• Regulations and requirements that aim to reduce the use of dangerous

substances

• The amount of packaging waste and to re-use and recycle packaging material

• More implementation of environmental management and assessment systems

• An increasing importance of hallmarks (labels) for a variety of products with a

growing awareness among EU consumers

• Environmentally unfriendly products will be banned from the EU market

In addition, EU consumers nowadays are also concerned more about their health and

safety Extensive legislation exists for example in the field of foodstuffs, e.g pesticide

residues, heavy metal contents, and radiological contamination

Social issues are also becoming increasingly relevant in the EU Companies are being

held accountable for their acts

A growing number of Europeans share the idea that companies have a moral

obligation towards their workers and society as a whole Although social

accountability does not necessarily incorporate obligatory measures, the

importance of ‘business conscience’ as a selection criterion for consumers is

growing

It is important to investigate which of these non-tariff trade barriers could be a

constraint for you to enter some countries

For example, in Germany, France and Scandinavia this concern is quite strong

On the other hand, if you can find out beforehand how your product can meet these

regulations and requirements, it could be your competitive advantage A first step is to

collect information on each subject by internet search and finding answers to some of

the questions below:

•ENVIRONMENTAL, SOCIAL, HEALTH & SAFETY ISSUES ➧ A FEW SOURCES :

Information about environment, social, health and safety issues, is available through

CBI’s Accessguide database Also check the national trade associations and

stan-dards organisations A database of the European commission is Euro-lex

Check the websites:

www.cbi.nl/accessguide www.europa.eu.int/eur-lex

www.ilo.org (labour/health) www.who.org

www.codexalimentarius.net (food) www.ifoam.org (organic food)

www.octrooibureau.nl (patents) www.newapproach.org (product safety)

•ENVIRONMENTAL, SOCIAL, HEALTH & SAFETY ISSUES ➧ TYPICAL QUESTIONS :

■Are there environmental regulations or requirements on the use of dangerous

substances for my product?

■What sort of raw material in my product is forbidden in EU countries?

■What kind of alternative material could I use? Is this worth the investment?

■Are there environmental regulations or requirements regarding packaging waste?

■Are there environmental managements systems to meet regarding my product?

■Are there any labels (e.g ECO-labels, FSC-label) and where to apply?

■What special legislation must be complied with regarding health and safety

issues (e.g CE norms)? In which countries?

■Are there any requirements on social accountability (e.g SA 8000)? Countries?

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Tariffs and quotas

In EU countries, trade information on products is classified under Harmonised

Commodity Description and Coding System (HS) numbers These codes must be

quo- ted in customs documentation when items are exported and imported For import

duties, a special version of the HS system is used within the EU, known as TARIC

When you know the HS code for your product, check whether its import duty is

reduced under the GSP (Generalised System of Preferences) or under the Cotonou

Arrangement for the ACP countries If so, find out what documents are required (in

most countries: form A, EUR 1)

In the same way, you can check the VATrates (ranging from 16 to 21% in EU

coun-tries) and possible EU import quotas in your target countries Most of this information

you also can find out by the Internet

Trade regulations

Besides tariff preferences, there are other specific arrangements or international

agreements These could be related to the trade of products (e.g protocols for sugar,

bananas) or to special bilateral trade agreements between your country and an EU

country If you are a Mercosur country, you may have several advantages when

entering the Spanish market Or if you are within Magreb countries (Algeria, Libya,

Mauretania, Morocco and Tunisia), there are trade agreements with the EU, which

includes a tariff reduction for all industrial products between 40 and 80%

Check if there are there any international trade agreements, which have a positive

effect on trade restrictions or barriers between your country and your target market

You could find more information in CBI’s publication ‘Exporting to the European

Union’, which can be obtained from the download plaza at www.cbi.nl or you could

check at www.wto.org

know the HS Code

of your product

agreements between your country and target market?

32

•TARIFFS AND QUOTAS ➧ A FEW SOURCES :

Information about Import duties, VAT rates and possible EU import quotas for

your product can be found in CBI market surveys More specifically, you can

search on the website of the European Commission The commission has

publis-hed a database with all import duties (including the preferences) on the Internet

You can search by product (HS Code) and country of origin on:

www.europa.eu.int/comm/taxation_customs/index_en.htm

On the same site you are able to find the latest VATrates for each EU country

and news with regards to import quotas In The Netherlands - see www.douane.nl

•TARIFFS AND QUOTAS ➧ TYPICAL QUESTIONS :

■How much is the import duty and VATfor my product in target countries?

■Are there import quotas for my product and in which target countries?

■Are there any international trade agreements which have a positive effect on

import volumes or tariffs?

2

3

3.1.3 Trade flows

A next step in your Export Market Analysis is to get an insight into the trade flows,

which gives you an overview of the trends in global supply of your product (group)

By identifying upcoming EU markets and competitive supplying countries to the EU

(e.g China), you can further narrow down your prospective EU markets

From CBI market surveys or from Eurostat CD Roms, you can obtain trade statistics

which indicate the imports and exports of your product to and from various countries

As the collection of information takes a long time, the most recent statistics are

usual-ly two years old Most trade statistics of EU countries are from Eurostat

Their figures are based on information from the Customs in all member countries,

who receive this from EU companies However, it should be noted here that this

infor-mation is given on a voluntarily basis

In Eurostat statistics, a distinction is made between intra-EU and Extra-EU trade:

• Intra-EU trade: Not all transactions are registered, such as those by smaller

com-panies when transactions are under €100,000 So, trade within the EU is not fully

represented in this category

• Extra-EU trade: Most of the trade between the EU and the rest of the world

(Extra-EU) is registered So this category is better represented in these statistics

Still, you must treat these statistics with extreme caution and regard them as an

indicator of trends in international trade In addition, the presence of the distribution

centres of large suppliers in Belgium and The Netherlands implies that large volumes

of products are re-exported from these countries to other EU markets

When researching Eurostat statistics, you must know the HS codes of your product or

product group In these statistics, values are all expressed in €1,000 and volumes are

stated in tonnes (=1,000 kg) In order to have a better idea, try to compare the trade

for your product over the past three years, to identify fluctuations in supply

When looking into trade flows, use desk research and Internet research.

trade by competitive supplying countries

just an indication of trends in supply

Trade statistics for both consumer and industrial products are available from CBI

market surveys Statistics on specific products can be directly purchased at

natio-nal statistics offices in EU countries at a charge www.cbi.nl or www.europa.eu.int/

Working with Eurostat CD Rom requires some exercise and time You need to get

used to make the right combinations of variables, as there are many possibilities

HS Codes for your product can be found on the CD Rom or at www.usatrade.gov,

where you can also find trade statistics in their reports (consumer + industrial

pro-ducts)

For agricultural products, the FAO statistical database (faostat) provides a very

useful source for trade as well as production statistics Search filters include,

pro-duct, market, volume and value as well as multiple years selection The faostat

■What are the total EU imports in volumes and values (over the past 3 years)?

■What are the imports by EU target countries (volumes/values over 3 years)?

■What are the sourcing countries for my product group – especially non-EU?

■The same questions with regard to exports and destination countries?

■Did import growth occur in large and small EU countries, even during periods

of economic recession?