BDS Service / Strategy
Building the capacity of consultants and other service providers to see the benefit of and to conduct target market research for the products of micro and small enterprises (SEs) with a focus on Internet-based research.
Purpose and Rationale of the Intervention
The purpose of building service providers’ capacity to conduct market research for SE products is to enable them to design, and provide their customers with, improved services. If BDS suppliers deliver input, product design, and market access services / training, they can better serve their clients if they understand the product market. For example, a supplier who provides inputs for handicrafts and garments should be aware of current trends in the target market regarding color, fabric, and style; while someone who helps clients develop a marketing program should understand the differences (the “4 Ps” of marketing) between the target markets—product, place, price, and promotion.
When is this Activity Appropriate?
This activity is appropriate when SEs want to generate increased sales in existing or new markets and when BDS providers are interested in supporting this effort. Understanding target markets can help determine if the SE is ready for market expansion and able to meet customer expectations regarding quantity, quality, pricing, and delivery schedules. If so, market research can then be used to make product design decisions and develop appropriate marketing programs. Obviously, access to computers and the worldwide web is required for Internet-based research.
Methodology
BDS providers can be trained to conduct Internet-based market research in a two- to three-day workshop though it may first be necessary to make them aware of the benefits to themselves and their clients of conducting such research. Focus group discussions (FGD) and/or taster sessions can be helpful in generating the desired interest among providers. They are described below.
Step One – Focus Group Discussion
Purpose: To discuss with BDS providers the value of target market research in enhancing the marketing and sales potential of SE products. Increased awareness on the part of providers should lead to an interest in market research training opportunities for themselves and the development of new service products for SEs.
Objectives: To meet the stated purpose, FGD key objectives are to measure and/or explore BDS provider:
1. Knowledge regarding the target markets for their clients’ products;
2. Capacity to conduct target market research relevant to their clients’ products;
3. Current usage, or willingness to use, target market information to design and develop new service products;
4. Ability and willingness to design relevant products for SEs in specific subsectors;
5. Attitude regarding the value of target market information in providing services to client SEs; and
6. Attitude towards workshops and other trainings that would help them utilize target market information to design service products for their SE clients.
Method:
Participants: BDS providers who participate in FGDs should already be serving SEs and have some knowledge of their subsector—handicrafts, garments, etc. As much as possible, commercial BDS providers should be selected for the FGDs since the ultimate goal is to understand sustainable markets. If possible 8 – 12 participants should be involved in each FGD. It is not necessary to limit discussions to specific services (e.g., product design, market access) so service providers can be mixed.
Timing: The FGDs should be planned for approximately two hours: 30 minute warm-up, one-hour discussion, and 15 minute wrap-up.
Facilitator: The facilitator should guide the discussion and try to keep it on track by encouraging everyone to speak, focusing on practical (not theoretical) issues, and not directing the actual content. The facilitator should tape the discussion to document the information.
Suggested Questions: Ask questions to encourage participation and focus discussion on the objectives outlined above.
§ What do you know about the target market for your SE clients’ products?
§ Have you ever conducted target market research for your SE clients’ products? Give an example of when you conducted this type of market research and how you used it. How easy/ difficult/ useful was it?
§ How have you used target market information to design and develop service products for your clients. Give an example.
§ To what extent would you be willing to develop products for SEs? Would you do this only as custom work or would you be prepared to develop a product or line of products for any interested SE?
§ Do you think knowledge of target market information would enable you to provide better products to SEs? If so, how?
§ What type of assistance do you need to help you use target market information to design service products for your SE clients?
Step Two: Taster Session
A taster session can be offered following, or in place of, a FGD, depending on the BDS providers, their need for further information on the topic, and available time and resources.
Purpose: The taster session introduces BDS providers to the benefits of target market research. They will learn that their clients are interested in accessing markets and increasing their sales and that by researching target markets (the market for their clients’ products) they will be better able to assist clients in achieving this goal. For example, BDS suppliers who provide product design services can help clients improve sales if they are aware of design trends in the marketplace.
On completing the taster session, BDS providers should be encouraged to attend a two-day workshop on how to conduct target market research and develop their services. A follow-up workshop then trains them to apply this information in creating of innovative marketing programs.
Reaching the Audience: In order to reach the audience, a facilitator can prepare a simple flyer that advertises the taster session. The flyer will be short and catchy such as:
|
Be a Leader—Offer the Best in Business Services Expand Your Client Base! Improve your bottom line by providing your clients with better, more useful services. Attend a free introductory session to learn how a small investment of time can help you provide services that result in satisfied customers, repeat business, and new referrals. Where: Hotel Deluxe, When: 6:30 – 7:30 PM Wednesday May 14, 2003 Call A to ZZ at 21 144 339 to book your place today A to ZZ is |
The flyer can be delivered—in person when possible, by mail otherwise—to BDS providers who are known to the facilitator to ensure maximum attendance. In addition, a low-cost advertisement could be included in the business section of a local newspaper to attract other attendees.
Training Delivery: For the taster session, the facilitator can use a combination of PowerPoint presentations (with as little text as possible and lots of pictures—more as a backdrop), a handout that focuses on benefits, client testimonials, and a pamphlet of the full course that is available.
Outline of Session: A taster session should last about one hour. It can be organized as follows:
1. Introduction of BDS facilitator and credentials (5 minutes)
2. Introduction of topic: What is target market research? (5 minutes)
3. Description of benefits of target market research (5 minutes)
4. Client testimonial (15 minutes)
5. Question and answer period (10 minutes)
6. Wrap up including description of the full course that is available (5 minutes)
7. Coffee and an opportunity for informal networking (15%20 minutes)
Note: Many marketing gurus say that a client testimonial is the strongest marketing tool available. In this case, the client offering the testimonial is a BDS provider who has learned how to conduct target market research and apply this to service development. The BDS provider will talk about the value of the training received from the facilitator, how it was used, benefits to their SE clients, and the final benefits to themselves.
Step Three: The Two-Day Workshop
Purpose: The two-day workshop introduces BDS providers to the ‘how’ of market research with a focus on the Internet. It is assumed that the ‘why’ has been adequately covered in the either or both the FGD and Taster Session.
Participants: Participants will be invited from amongst BDS providers who have attended the FGD or Taster Session. Others who express an interest (and therefore understand the topic at a basic level) could also be included. Providers may be from different sub-sectors and offer different services since the training will be relatively generic.
Outline of Session: The following is a workshop outline that can be varied according to the BDS providers and their market:
1. Day One – Morning
Introduction to using the Internet for target market research: search engines and methods for searching and refining searches. This is useful for browsing, getting a general understanding of the information available, learning different vocabularies, getting a feel for market trends and so on.
2. Day One – Afternoon
Using government, association, and industry websites in ones’ own or the target country to access market information. Valuable statistical information market growth, market share by country of export, size of overall market, quality standards, tariff details etc. are available from official sites.
3. Day Two – Morning
Competitive and product research. Researching competitors and their products and pricing strategies in the target market can provide information on what is currently available / selling and what the value proposition or niche market for the SE product might be.
4. Day Two – Afternoon
Identifying potential buyers, distribution channels, importers. Research may show that the product in question is always handled by a few key importers who have their own distribution channels (retail outlets, catalogue sales, websites, wholesalers, specialty shops etc.).
Additional Resources: A generic manual can be distributed at the workshop with optional modules for context-specific issues (country in which BDS providers reside, target market countries, subsector, etc.)
Finance and Cost-Recovery Mechanism
As a service provided by a facilitator to develop BDS markets, programs can be donor-funded. However, experience shows that BDS providers are willing to pay for this service. In order to move towards the long-term goal of fully commercial markets including private sector facilitation, it is suggested that providers be asked to pay at least a nominal fee—the cost determined by local factors, actual costs to the facilitators, and the strength of the BDS market.
How Should the Program be Evaluated
§ The number of providers who participate in FGDs, taster sessions, and workshops (there will be a funnel effect);
§ At each step, providers should be asked to complete an anonymous feedback form that asks about the value of the session to them;
§ Providers who attend the workshops should be asked to participate in follow-up meetings six months and one year after the training;
§ If the program generates a lot of interest, a follow-up FGD can be held to encourage brainstorming amongst providers and to elicit further feedback;
§ Random interviews with client SEs one year after the training to determine if they feel they are receiving enhanced services from market-aware providers (and, if possible, to find out if sales have grown); and
§ The number of workshop participants who express an interest in follow-up training on applying market information to the design of innovative service products for SEs.
Potential Impact
The potential impacts on SE businesses are as follows:
· Development of new target markets,
· Export readiness in terms of product quality, quantity, and on-time delivery,
· Increase in overall sales / profits,
· Increase in price per item (products are appropriate to target market and therefore are not rejected or sold off at bargain prices), and
· Reduced costs—SEs do not have wasted output (same as above.)
Length of Intervention
The length of intervention depends upon the product—in the case of agricultural products, if a farmer is changing his/her crop, the whole process of market awareness, training, and diversification into or development of new crops may take a few years. On the other hand, the cycle for handicrafts and garments may be as short as six months.
Illustrative Programs / Where to Get More Information
In developed markets, the process of market research, market segmentation, niche market development, etc. are well-known and proven. The idea has been applied in developing countries with mixed success. If not applied wisely, in fact, the results can be disastrous. The recent coffee crisis in countries that were encouraged to focus on a single export crop for supposed maximum return is an extreme example of the failure of market research. However, on a smaller scale, with greater prudence, considerable success can be realized.
MEDA has been involved in a number of agricultural programs that used target market research:
Program: ASOPROF, ASOMEX (Bolivian beans)
Implementing Organization: MEDA, www.meda.org
Contact Person: Steve Rannekleiv, stever@meda.org
Program: COFAM (Bean, rice and corn marketing –
Implementing Organization: MEDA, www.meda.org
Contact Person: Steve Rannekleiv, stever@meda.org
Program: Long-life Milk Products in
Implementing Organization: MEDA, www.meda.org
Contact Person: Jerome Quigley, jquigley@meda.org
In
Program: Target Market Research for Women SEs in
Implementing Organization: MEDA, www.meda.org
Contact Person: Linda Jones, ljones@meda.org
MEDA also conducts market research for organizations that wish to export products from developing countries to
Lessons Learned
The following are some of the lessons that MEDA has learned in helping organizations expand their markets. They could be included in target market research workshops for BDS providers.
§ Markets Guide the Process: A key lesson is that an intervention can only be successful if it satisfies a clear market demand. BDS facilitators and providers must ultimately assist small producers to respond to market signals in order to successfully improve their incomes.
§ Intermediaries Are Not the Enemy: It is important to recognize that intermediaries provide critical services (often embedded) to small producers. Without these intermediaries, microentrepreneurs often face impossible hurdles in getting their products to market. There is value to be had in working with intermediaries to improve services offered to clients—distribution channels, product design, inputs, market information, pricing mechanisms, etc.
§ Look at Regional Markets: Many implementing agencies have a tendency to look at large, developed markets in the
§ All of the Links Must Be in Place: “Choosing a seed is a marketing decision.” It is more effective to ensure a farmer has the right seeds to produce what the market wants than it is to look for a “magical buyer” willing to pay a higher-than-market-price for a less-than-desirable product.
§ Associations, Cooperatives and Corporations: Often, it is best to organize producers in one form or another to consolidate supply and offer a standardized, quality-controlled product. These organizations, in turn, create a stronger, more unified voice of producers for advocacy, marketing, purchasing, etc.
§ In Marketing, Inventory Control is CRITICAL: Some of the worst production—marketing failures are founded on poor inventory control.
§ Limit Risk—Hedge Your Bets: Another crucial element in marketing is timing of sales. Good management of this process can significantly enhance profitability.
§ Look to Form Alliances of Competing Businesses: Interestingly, in both
§ Annual Planning / Staff Training: An annual planning meeting can play a key role in the success of a project by allowing time for reflection, regrouping, and a chance to learn from peers. They also help to keep the entire team focused on the same organizational goals.
§ Develop Relationships Before Starting Projects: In the push for rapid results and large-scale impacts, it is important to fully understand and know your project’s clients. Take the time to develop relationships and know their needs before recommending a technical solution. As good as the solution may be, it will not work without the full support and commitment of BDS providers and their SE customers.
INTERNET RESOURCES (Please link to text below)
SAMPLE FORM―Request for Research Service (Please link to text below)
INTERNET RESOURCES
Facilitators should compile a list of Internet resources relevant to the target market. The following resources have been identified for SEs wanting to export to
General Resources re: Market Research for Exporting (primarily to
The following are examples of useful websites for general and agricultural products with a focus on export to
http://www.tradeport.org/ts/planning/index.html
TradePort is an authorized distributor of STAT-USA data. Some good market research is available from this site. You can search by country or industry.
This is a good resource for country information with a financial focus. You can access country economic profiles, news, exchange rates etc. (source Yahoo Finance)
http://www.odci.gov/cia/publications/factbook/index.html
This is also a good resource for information—political, economic, military, infrastructure—about countries (source CIA).
Trade Facilitation Office
Industry
“Reports”, a magazine published by the Publications Service of the International Development Research Centre (IDRC), relates information on research in developing countries often conducted in collaboration with multidisciplinary (and at times virtual) teams and spread out over several continents.
http://dataweb.usitc.gov/SCRIPTS/tariff/toc.html
STAT-USA/Internet, a service of the U.S. Department of Commerce, is a site for the
Agriculture-Specific Marketing Information
http://apps.fao.org/page/collections?subset=agriculture
FAO database with agricultural exports, imports, values, production, land use etc.
http://www.agr.gc.ca/infohort/infohort_e.html
InfoHort is an information collection site designed to provide up-to-date and accurate Canadian markets information on horticultural commodities. The objective is to provide all components of the Canadian horticultural industry with the necessary information to make informed decisions. For example, one can access daily wholesale prices (high and low) of fresh peas in
Market Ag offers: links to agricultural sites, wholesale market price reports, agrobusiness market information, buy and sell bulletin board, company directories and a calendar of agribusiness events. Their pricing reports aren’t very up-to-date, but they give a good overview and sometimes it’s the best to be found.
The Ontario Food Terminal Board owns and operates the largest wholesale fruit and produce distribution center in
Fintrac is a market research, information technologies and technical, consultancy firm providing specialized products and services to agribusiness, governments, and associations worldwide. This site is a good source of free information and the GAIN site (see next item) is particularly useful.
Global Agrobusiness Information Network includes a range of information on prices, trade regulations, buy and sell bulletin board, etc.
http://www.fao.org/english/index.html
“FAO is the United Nations agency that leads international efforts to defeat hunger.” The UN’s Food and Agriculture Organization’s four principal functions are: to provide technical assistance to developing countries, to provide policy and planning advice to governments, to collect, analyze and disseminate information, and to act as a forum where rich and poor nations can meet as equals. The information component is especially useful for market research, including the searchable document repository (http://www.fao.org/documents/) and the newsletter (next item.)
http://www.fao.org/WAICENT/faoinfo/economic/giews/english/fo/fotoc.htm
Published 5 times a year, “Food Outlook” provides a global perspective on the production, stocks, and trade of cereals and other basic food commodities, through an analysis of trends and prospects. Food Outlook contains analysis and statistical information on developments in the world cereal markets, export prices, and ocean freight rates. It also includes special features on the impact of El Niño / La Niña on food and agriculture, specific commodity markets such as meat and milk, cassava, sugar, and fats and oils, trends in global food aid availability and shipments, and food emergencies around the world.
This B2B portal facilitates a virtual marketplace for agricultural commodities, offering services like Live Offers for Surplus / Stock Lot Sale, Offers for Purchase, Offers for
FarmWorld was established as a world wide trading site for information on agricultural commodities and products. This site includes a marketplace where agricultural commodities can be listed for buy and sell.
The Produce Marketing Association, founded in 1949, is a not-for-profit global trade association serving more than 2,400 members who market fresh fruits, vegetables, and related products worldwide. Its members are involved in the production, distribution, retail, and foodservice sectors of the industry. In terms of free information, events such as the PMA Fresh Summit and Convention are listed. There is a fee for membership
The Canadian Produce Marketing Association (CPMA) is a not-for-profit organization representing companies that are active in the marketing of fresh fruits and vegetables in
http://www.inspection.gc.ca/english/toce.shtml
The Canadian Food Inspection Agency delivers all federal inspection services related to food, animal health, and plant protection.
The United States Department of Agriculture website contains general and market information. Some reports are available.
The
SAMPLE FORM
Request for Service ― Re: Marketing Research Report
This form is used to request a Marketing Research Report (MRR) regarding the feasibility of exporting your product or service to the North American market. A Request for Service (RFS) form should be completed for each product. If the raw material results in different end-products (e.g., raw cassava chips vs. powdered cassava starch), they should be treated as separate products and any interconnection between the two (e.g., maximum chip production would mean no starch production) should be noted.
CONTACT INFORMATION
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Phone: +1(202) 464-3771
Fax: +1(202) 884-8479
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