Market Research Resources Archives | Page 41 of 44

Entering the Chinese market is a strategic priority for many brands. But like any market entry project, whilst the rewards are great, so are the risks. Success relies on conducting nuanced research so you’re able to develop a comprehensive Chinese market entry strategy. In this article, we’ll share our top tips for getting this right based on our experience helping brands across categories break into the Chinese market. You can also conduct our ultimate guide for market entry for further information.

The pros and cons of getting into China

Potential market entry benefits and barriers in China

Benefits to explore	Barriers to consider
There’s money to be made there. It’s a huge and growing economy.	China is incredibly competitive – with both domestic and foreign brands in play.
Consumer appetite is evolving all the time, creating openings for new brands, products and services.	It’s dangerous to make assumptions about the state of the market – and long-term planning can be tough.
Wealth is spreading, creating evolving demand and growth in most categories.	There are still huge differences between the top-tier cities and the rest; and between urban and rural markets.
Chinese consumers tend to like branded goods and seek out quality where they can.	Domestic Chinese brands have upped their game into premium spaces.
“If you can make it there…” Learn the lessons from breaking into China, and you’ll have valuable insights for other international expansion.	China has some unique attributes – including tough regulation of key industries and some long-standing consumer attitudes that might never shift.

All that being said, China is obviously a vast market, with 1,394,000,000 people. That means even capturing a small niche or focusing on one region or even city can result in big revenues.

China has more than 600 cities often broken down into four tiers. First-tier cities including Beijing, Shanghai, Guangzhou, Tianjin and Chongqing are usually classified as having a GDP over $300bn (about the size of the entire South African economy). In these, and the tier-two cities, there is widespread demand for products and services that aren’t being catered for domestically.

And despite the fast development of homegrown brands, for many consumers, overseas brands retain an allure. So although the execution of any brand proposition needs to adjust to the needs of the market – and in a country as diverse as this, market research proves itself invaluable in this respect – a look at China must be a consideration for any growth-minded business.

Stay ahead

Get regular insights

Keep up to date with the latest insights from our research as well as all our company news in our free monthly newsletter.

When to consider developing a China market entry strategy

We see a few different prompts for brands wanting to explore the Chinese market. One is where similar products or services are performing well there, with attributes that might be replicable. For example, we’ve seen strong demand for premium Korean cosmetics recently – it’s a sign similar propositions might fly. In niche areas such as luxury handbags and cars these is a persistent strong demand for foreign brands.

Those buying patterns are highly visible. But we can also pick up less obvious trends in consumer behaviour that give clues as to potential in China. For example, we’ve seen a growing love among the Chinese middle classes for avocados. (It’s not just 2016-vintage millennial hipsters!) That suggests possibilities for brands that take the time to probe shifting attitudes.

In the first case, then, we’re looking for product features and brand offering. In the second, we’re exploring new consumer behaviours – although in each case we need to evaluate whether this is a fundamental change in consumer mindsets, or just a fad.

Underlying all that needs to be the economic rationale for entering the Chinese market. We might be able to detect strong potential demand. But will the costs of entering and sustaining this vast market – especially given its competitive nature – make sense? Remember that China has a number of regulations on commerce and media. We’ll come back to that later, but it has a bearing on the risks, and therefore the economics, of market entry.

Don’t be arrogant – success in China isn’t guaranteed

It should be obvious by now that one of the biggest opportunities is bringing in a premium, overseas brand to woo and wow the expanding Chinese middle class. But don’t be fooled by that stereotype – and don’t assume that you can just transplant existing brand approaches and expect to deliver results.

For a start, the way you deploy advertising and tailor packaging will be crucial. Chinese consumers will often be swayed by the way brands are presented, so understanding exactly how people are responding to the brand image and packaging can’t be ignored.

Then don’t assume just because you’re a foreign brand that you’ll attain a ‘premium’ differentiation. Fifteen years ago, there was almost an automatic patina of exoticism attached to non-domestic brands; they were more likely to be seen as classy and rare, helping maintain margins. Today, local brands in many categories are considered to be delivering a premium, too. And for many consumers, reliable quality and attractive features are the acid test, not the brand image.

Categories are not universal

Market research can reveal exactly how your brand might be received, and whether or not it’s going to attract any kind of premium. It’s also extremely useful at understanding which parts of any given category represent an opportunity in China – and which might be duds.

At a recent industry conference, we heard how a extremely well-known global drinks brand approached this problem. Ideally it would have rolled out its full slate of premium-branded alcoholic beverages, creating leverage around ad spend, logistics and exploiting halo effects. But while whisky is a strong segment in China, for example, wine is a much smaller niche.

At that point, another decision comes into play: research might show you which sub-categories are worth pursuing. But you also think how to enter these sub-categories. For that luxury drinks brand, for example, do they pitch the quality of the alcohol? Is it trying to project ‘conviviality’ for consumers? Is it the product heritage – seeking that ‘foreign premium’ angle? Or is it the look and feel of the products on the shelf?

The same rule applies the other way around. Yes, there are categories that are highly unlikely to be fertile ground for overseas brands – such as food, for example. It’s intensely competitive, demands a sensitivity to local tastes … but yet there might be openings in the right niche.

Or take transport. In electric vehicles, China is some way ahead of most non-Chinese manufacturers. But outside that sub-category, partnerships with local auto-makers and dealers could yield good results. Research can help uncover where these niches might be.

Learn from others – analysing the China market entry strategy adopted by others can set you up for success

The Chinese market has been growing at pace for 40 years, so at this point there are few areas where someone else in your sector hasn’t had a go at joining the fray. Indeed, many big global businesses will have in-house experience of breaking China – and making sure the lessons from one brand, product, category or local market entry are learned for subsequent attempts is obviously crucial.

Then look at the history of the category – there will almost certainly be rival brands that have tried and failed to launch in China before you (and some that have succeeded). Analysing what they did right and wrong can reveal all kinds of lessons.

Marrying those insights with up-to-date and well-briefed market research is a recipe for success. The phasing goes something like this:

Work out where the existing opportunities lie – what can we see from published market data, the level of competition, and products or services doing well in similar markets (especially in South East Asia – countries such as Indonesia and the Philippines are also fast-evolving, diverse, vibrant and digital)?
Evaluate local competition, emerging players, and regulatory and economic risks. These will include local rules on product specifications, or potential requirements to partner locally.
Work out why there’s a gap – and why you’re well placed to exploit it. Landscape studies should also highlight consumer appetites that will help or hinder progress.
Look at who’s failed doing something similar and why; and who’s made their inroads work, and why.
Research the evolution of the market – things change fast. Who’s up-and-coming? What are the evolving consumer habits? How will you stay on top of changes?

“Can my brand expand in China?”

Regardless of what you want to test, brand is a key issue in Chinese markets. Food, for instance, is a crowded market, so launching a new product to stretch the brand is always tricky. Research can tell you whether halo effects will work in China – and how to exploit (and not devalue) existing brand equity.

For example, we recently worked with a confectionery company on the possible launch of a newly acquired brand in China. We ran taste tests, but also explored what the new brand might mean to Chinese consumers versus how it would be perceived under the umbrella brand of the parent company.

China is a fairly mature market, and there were a similar products in the market. So was it worth bringing in the new brand? Should they use the parent company’s branding to muscle into the segment? A big issue was how the new product might alter the existing overarching brand story if that was the case. Should it be a standalone brand?

We focused on one tier one city to establish the opportunity. In tier three or four cities, responses might have called into question the brand strategy – but the top-tier cities where a particular strategy might work are a very sizeable market on their own. But it’s still worth developing insights to frame that brand strategy, not just tailor a product.

The product’s premium taste and lavish packaging made its core product a hit for gift-giving Chinese, even at premium prices. But this project showed there are important areas for research to test what powers a brand has in new spaces in a market as sophisticated as China.

Research – set a baseline, monitor change

China’s rapid evolution means ‘the future’ is much nearer than many people think, however. We can assess the probable changes over the short term; the plausible over the medium term; and the possible in the long term. But when we research Chinese markets and opportunities, it’s extremely wise to keep an eye on what looks ‘long term’ because it can arrive quicker than in many other markets.

That’s one reason for entering the market with as detailed an understanding as possible is important: yes, it might change quickly – but you need a solid framework for local conditions and consumer attitudes to ensure you can monitor what’s changing, how fast and in which direction.

The good news is that Chinese consumers, very broadly, tend to be very tech-savvy. (The WeChat platform, for example, is more widespread than Facebook – with about a billion active monthly users, it’s near-universal – and has many more practical applications.) This tech-savviness is particularly useful for conducting online research, allowing for fast-turnaround methodologies and investigating consumers outside the big tier one cities. In short, it’s ideal to capture rapid changes from the baseline. And unlike some Western markets, China’s older population seems determined to be digital, narrowing the gap we see in some other countries’ research approaches.

But we would rarely suggest only conducting research online. In the huge markets of the big cities, face-to-face research is still the best way to test behavioural and experiential aspects of consumers’ lives and tailor your approach to their unique expectations and requirements.

Top tips for market research in China

Be open about what you want to achieve in China and be realistic about who the product or service might appeal to. China is huge and diverse, so pace yourself and target realistically.
Calibrate your results. It can feel daunting competing in a crowded marketplace with strong domestic rivals. But it’s a long game: what look like tiny positives from research compared to other markets can be valuable toe-holds, establishing your brand for more serious revenue growth later; or guiding your focus on high-potential niches.
Tailor your questions. You can’t be too assumptive about what people might be prepared to pay for a product or service and asking standard questions in surveys and focus groups might not help. Get your research team to develop a China-specific (and even city-specific) research plan to get into the nuances.
If it’s online, think mobile first. Not everyone has a laptop but due to encountering a “technological leapfrog” most people have a smartphone. You can conduct extensive studies very flexibly with mobile methodologies.
Test the tech. China does have more controls on internet activity than most. Test that the research platform functions properly, especially if running a study from outside its borders.
Work with local experts. Research teams with local knowledge and experience will be invaluable. These tips come as second nature and on-the-ground teams or those in the region with an intimate knowledge of China. They will provide essential depth to research – and frame insights more meaningfully.
Think about the media. Consumers love to use their phones to research brands and products, and especially influencers and social media users. Willingness to try brands often stems from these forms of media.

In most other markets – that are less fast-moving or exciting as China – your traditional strategies can secure your traditional wins. In China, research can tell you how and where you might chip away at competitors to help you target your offering more effectively – winning a slice of this lucrative market. It can also help you create a China strategy where the wins look entirely different – and deliver results that make a real difference.

If you’re considering entering the Chinese market, get in touch to discuss how we might be able to help you to build your China market entry strategy.

Market research is hugely valuable to any organisation. But understanding how consumers and decision-makers think and behave is rarely more important than when you’re trying to understand non-native markets. International business is big business – but it’s also a big investment. There are a host of issues to consider when you’re conducting international market research (for more, read our article on the topic). But getting the language right is perhaps the most obvious hurdle. So how is international market research affected by language differences?

Imagine you’re running a brand tracker to understand how your organisation is perceived across the world. You’ll need to localise the research in dozens of markets and yet still be able to draw broad, universal conclusions. For this, you’ll need to translate the survey into many different languages, whilst maintaining consistency of meaning and controlling for different emotive weights in the various dialects. Fail to do this, and the results you’ll get back could be misleading.

Why language matters

It’s not just language, of course. According to research from Columbia Business School, there are: “important cross-cultural differences in the processing, evaluation, and judgment of brand and product information. Much of this work suggests that cultural differences stem from pervasive socio-cultural … factors. For example, a good deal of research demonstrates that people have broad, culture-specific cognitive dispositions … which can guide consumer behaviour.”

But the same paper also stresses that language is a huge factor: “in recent work conducted in a consumer behaviour marketing context, we have found that structural aspects of a language can in fact critically affect one of the most basic aspects of consumer behaviour – categorisation of products. Grammar, phonology and semantics are fundamental building blocks to a linguistic system and should therefore have an impact on consumer behaviour.”

It’s not just what you say, then – but also how you say it, and to whom. All of which adds up to language, localisation, translation and interpretation as crucial building blocks of any international research project. Getting it wrong can be disastrous …

When language goes wrong

Many brands have learned the dangers of ignoring local idiom when they move into new markets. When Coca Cola first entered the Chinese market signs for ‘ko-ka-ko-la’ (the closest phonetic translation) were understood by locals as ‘bite the wax tadpole’ or ‘female horse fastened with wax’ depending on the tone.

This real life example highlights important language considerations, both in terms of asking the right questions and understanding the meaning of the answers when you’re working abroad.

Speaking their language

But hang on a second: isn’t all this slightly moot in the age of instant machine translation? Google Translate can handle dozens of languages, and even Microsoft Word now has a built-in translation function. While machine translation is improving in quality, it lacks subtlety, it struggles with idioms, and it misses the emotional salience that’s important to both qualitative and even quantitative research.

That’s even more important now that AI-type systems are being deployed to pull out topics, themes and even sentiments from research results. With systems like these, the meaning of local dialect or cultural implications could be missed. From a semiotic perspective, then, there are huge challenges with using AI for translation and analysis.

Another option could be to hire a language graduate to translate your surveys and responses. It’s true this is a step-up from the automated approach. But even if you can find a translator you trust, ensuring they understand the subtleties of local dialects and cultural nuances (see below) and the technical aspect of market research language is much harder. That’s where market research agencies like Kadence – with international offices across the globe and native speakers in house – come in handy. Having team members who instinctively understand the need to localise language and know how to do it is a major plus. After all, language and meaning evolve even over short time-spans so keeping up to date with trends and sayings is massively valuable. In Germany, for instance, 1200 new words and counting have come into being over the course of the pandemic.

The devil in the detail

The reason why all this is important is that just as culture varies widely between and within international markets, language has local subtleties. Even within English, there are layers of meaning that illustrate this point. Take the word ‘love’. He loves popping down to the shops with his mates on Saturday afternoon. She loves it when Leeds United score. They love their mum. She makes love to her sweetheart. They bask in God’s love. These are all very nuanced – and to a competent English speaker their varied meanings are obvious.

Then lots of countries have multiple languages – China, Malaysia, Belgium, Switzerland… there’s a very long list of places with minority language groups that a research project approached in the wrong way could marginalise. (Wikipedia has your back.)

Even when the language is clear, the nuances might not be. In Canada, for example, you need translators who know Quebecois, not just French. If you’re running field research in Mexico, you could stick to Spanish; or try to ensure the Spanish translation is appropriately localised for Mexican idioms; or even think about the indigenous languages that are still spoken by a minority of the population.

In the Philippines, Filipino and English are designated official languages. But Spanish is commonly spoken (a legacy of its own colonial role), as well as Tagalog, Minna and even Arabic.

That poses interesting questions about how your sample might be affected by language choice. Remember: you might only be interested in affluent consumers in a given market, say, and that means choosing the dominant language is no problem. But for a genuine look across a country – regionally and socially – a different approach might be needed.

Tone and culture – how these differences can affect international market research

Then tone has to be calibrated, too. Understanding why emotions are triggered in different cultures or regions is really important. In eastern Germany, for example, the long history of the Stasi secret police means that even though the country reunified 30 years ago, suspicion about intrusive questions lingers. That means a deftness in your translations will be important.

In France, questions about sexuality or religion are usually considered unacceptable unless you carefully rephrase the survey to yield the information you need. It’s true even in English: what’s the difference between ‘a hobby’, ‘a pastime’ and a ‘personal skill’? How might asking about those different categories affect the kind of responses you’d get?

Cultural salience is also a stumbling block. Someone in a focus group might quote a nursery rhyme to evoke a particular emotion or assumption. A native might pick up a lot of meaning; a foreign translator might understand the context; but a machine translation is just going to give a verbatim that lacks any appropriate meaning.

Practical considerations when it comes to language differences in international market research

When it comes to qualitative research, a lot of the nuance you need comes from non-verbal cues, and those are much harder to evaluate. Here, it’s not even a question of your translation services, you need ‘boots on the ground’.

From a quant perspective, there are practical considerations around research-specific translations. Some text will appear much longer when translated. For example:

ا هي المدة منذ زيارتك الأخيرة للطبيب؟
自您上次看医生以来有多长时间？
Wie lange ist Ihr letzter Arztbesuch her?
How long since your last visit to the doctor?
Berapa lama sejak kunjungan terakhir Anda ke dokter?
Gaano katagal mula noong huli mong pagbisita sa doktor?
¿Cuánto tiempo ha pasado desde su última visita al médico?
Combien de temps depuis votre dernière visite chez le médecin?
நீங்கள் கடைசியாக மருத்துவரிடம் சென்றதிலிருந்து எவ்வளவு காலம்?

That might mean the translation of survey questions has to be tweaked to be more practical or accessible to users depending on the format or technology being used in the field. It’s another reminder that having a single, integrated agency working on the project – handling the research design as well as the fieldwork and analysis – will bring many benefits.

Stay ahead

Get regular insights

Keep up to date with the latest insights from our research as well as all our company news in our free monthly newsletter.

Beyond language – thinking about local context in international market research

We’re always mindful that when a global brand puts forward a research hypothesis, not only do we need to translate the language, but we need to be able to contextualise that hypothesis for individual markets. Equally, you also have to be able to take local outputs and fit them into a balanced global interpretation. A lot of that depends on the purpose of the research. Are we looking to assess uniform global products? Work out which markets to target? Tailor products or positioning for a local audience? That will shape how we make insights actionable for a brand.

This is where brands and their research agencies need deeper levels of understanding. Exposure to local culture, language, attitudes and even research norms makes a big difference to the value a project can deliver.

Ultimately, research projects need to be localised, not just translated. Miles in the US and UK; kilometres mostly everywhere else. That applies in a host of areas, not just weight and measures. Most people outside America are familiar with the frustrations of ‘US Letter’ being the default paper size in many software products! Ask a French sample how many pounds they would like to lose on their next diet, and you might get some confused responses.

Aiming for transcreation

With so many factors on top of the raw translation, many brands choose to ‘transcreate’ their research projects for new counties, not just translate them.

What is transcreation in translation?

Transcreation is “the process of adapting a message from one language to another, while maintaining its intent, style, tone, and context. A successfully transcreated message evokes the same emotions and carries the same implications in the target language as it does in the source language.” (Thanks again, Wikipedia.) This makes it the go-to approach for the many research projects that seek to reveal consumer attitudes or emotions to particular brands, products or categories.

In research terms it means identifying the purposes of the research – looking at the brief and how the insights will be used within the organisation – and asking how best those requirements can be met within different countries or regions.

Clearly many of the outputs may need to be standardised. But if the local research team understands the brief and the outputs, if they can parse the emotional intent of the research, they can recreate the desired level of investigation and effectiveness in another language. That might mean changing the actual content well beyond simply translating.

But it does also mean that the intent of the research project is translated, not just the words of a survey. Ultimately, marketers will get more value from their international research if they work with an agency that can deliver against the broad brief and desired outputs from a project using people with a deep understanding of different markets.

Looking for support with international market research?

At Kadence, we have offices in 10 countries across the world. We’re proud of the diversity within our offices too – with project teams spanning colleagues from Sweden to Taiwan. To understand how we can help you navigate the challenges of international marketing research, take a look at our international market research capabilities or get in touch to discuss a project.

A usage and attitude study (U&A) is a brilliant way to understand the market for a given product, brand or category. It gives you a snapshot of how things stand, particularly for brands that people are aware of and use. But it’s also a technique that can help you understand what brands they might consider using – revealing important information about the competitive landscape.

Usage and attitude study objectives

We see that brands looking to embark on a U&A study tend to want to achieve one of the following objectives:

1) To inform what to do next

A usage and attitude study is often commissioned by a marketing team that wants to get some real clarity around the position of their brands in order to build a firm foundation for what they’re going to do next. It’s hard to feel confident about big decisions – such as promotions, product changes, advertising or even brand extensions – when you don’t have an up-to-date view of awareness, usage patterns or perceptions of the brand against competitors. Any of these factors could be pivotal in key marketing decisions.

2) To challenge assumptions

We also often see new management teams or marketing leads coming into a group or a brand management role who are keen to test the temperature around usage and attitudes before weighing up their own strategies. It’s extremely useful for senior decision-makers to have fresh data from a usage and attitude study to challenge long-held assumptions within their team.

3) To create benchmarks

A third use-case is running a usage and attitude study as the first phase of a wider project that might include additional waves of research. Here, we’re creating a clear benchmark for the follow-on work. This is often the case with new product development, for example, or a planned expansion into a new or international market. The U&A study can provide valuable background and context for everything that follows.

4) To understand how changes impact your organisation

One other interesting usage and attitude study objective is to measure the impact of events or major changes – not just after a marketing campaign or change to a product, but in the wake of shifts in the environment. Clearly the Covid-19 pandemic is a perfect example. The dislocation to consumption patterns may have lasting effects for particular brands and products, so a fresh usage and attitude study is a valuable tool for resetting baseline assumptions. But we might also be talking about the entry of a new player into the market, or a shift in infrastructure (such as 5G network roll-out or other innovative tech).

This gives us a useful list of applications:

Create a snapshot of consumer attitudes to your brand ahead of key decisions.
Assess the current and potential size of the market.
Place your brand in a competitive context.
Challenge assumptions about your brand and products.
Set a benchmark and context for deeper research.
Measure the impact on brand or product of major change.
Test opportunities for brand extension such as new products or markets based on consumer behaviour.
Spot gaps in the market allied to target consumer attitudes.
Develop a deeper appreciation for consumer engagement.

There are other applications – but at its heart a U&A study is designed to give you a firm foundation for almost any decision around a brand or a product.

Kicking off a usage and attitude study

For us as a market research agency, the first phase of a U&A project is something we call ‘immersion’. We spend time looking at what the client already knows about their customers and markets, exploring any data they have so we can either benchmark the study we’re going to conduct, or identify gaps in their understanding of usage and awareness ahead of the new study.

Immersion can sometimes highlight areas where previous research conducted by the organisation has missed crucial aspects of brand awareness; or where they can’t explain sales patterns showing strengths or weaknesses in key areas. The more detailed the immersion process, the better: it will help shape and focus the brief for the research to come.

Of course, sometimes a huge data dump isn’t available, or it’s a little out of date. That doesn’t mean a fresh U&A project will be less valuable. Far from it: while it’s true a decent picture of the situation can inform how we run a U&A study, starting fresh can be even more valuable, setting a new, up-to-date baseline for the marketing team and creating a foundation for future research projects and performance evaluation.

The phases of usage and attitude research

Just as a usage and attitude study can often set a baseline for further research or marketing decisions, the starting point for a U&A study is also creating a baseline – asking respondents for the products and brands that come to mind in a given category, entirely unprompted.

Clearly U&A research is designed to explore how consumers feel about, or use, specific brands too. So the next stage is to test their awareness of those brands. That ‘prompted recall’ phase might also include information about what brands in the category the respondents have used – or even have considered using. It creates a more colourful picture of usage and attitude patterns in the category.

At this point, you can dive into more detail: which brands are perceived as ‘premium’? Which brands excel in certain areas, and which perhaps aren’t so highly regarded? The aim in this phase is to get an idea of the relative strength of the competition. And it’s here your own brand’s place in the larger landscape probably comes into focus.

You can also ask in more abstract terms about product categories or even specific SKUs to get a more granular picture – which can be very useful as context for insights centred on your own brand.

So the sequence for exploring usage and attitude is pretty straightforward, and actually maps nicely onto traditional conversion models, such as the classic sales funnel:

Unprompted recall of brands or products in the category.
Level of awareness when prompted.
Level of consideration of the brand or product.
Levels of agreement with various statements about the brand.
Usage of the brand or product.
Repeat usage or promotion of the brand.

In most cases, it’s also useful to build out the same funnel – levels of awareness, consideration, usage and advocacy – for competitor brands too. Understanding how they compare – not least in terms of demographics – with the brands in question can be among the most valuable insights for your marketing team.

And for many clients, usage and attitude research can be an essential tracker study, measuring the change in usage and awareness at regular intervals. This is especially useful when you’re conducted major projects such as new product launches or marketing and advertising efforts. Usage and attitude research is a superb way to measure their effectiveness.

Methodology: “measure twice, cut once”

While the questionnaires for usage and attitude research might seem formulaic, there is a good deal of market research expertise that goes into optimising the value of the resulting insights.

A great example is the importance of sampling. In any survey, the sample should be genuinely representative of the population you’re interested in. You need to avoid skewing the demographics towards a younger, more brand-conscious audience, for example, if you’re going to secure a valid perspective of attitudes across your market.

But for very specific categories, sample selection is even more important. We worked recently on a usage and attitude study for a well-known manufacturer of farm machinery. Taking a general sample here is a little pointless. But even if you’re selecting for a particular group – in this case, farmers – you still need to carefully calibrate the sample. We looked at their primary crop types, the size of farms, regional representation and much more – so that the sample was as representative within that group as possible.

The old carpenter’s adage “measure twice, cut once” is the rule here. Getting the sample right (and using proven methodologies more generally) will secure much more compelling and reliable insights later on.

Online methodologies were already an option for usage and attitude studies prior to Covid-19 lockdowns, and obviously they have been critical during 2020 and 2021 when access to people face-to-face has been limited. They’re very efficient, too, but for usage and attitude studies it’s often sensible to augment with CATI (Computer-Assisted Telephone Interviewing) – not least in situations where a highly targeted and representative sample is needed. That’s particularly true, for example, in business-to-business environments.

Remember that research projects can be modular. We worked with one company that wanted to understand where they sat in the range cooker market – and how they stacked up against their rivals. We built a sample of people who already own that kind of cooker – then weaved a net promoter score (NPS) question set into a wider usage and attitude study. It was a good example of how a U&A study can dovetail with other research methodologies and objectives.

One other methodological point: by definition, some of the U&A questions will ask consumers or business decision-makers to be highly subjective and even emotive. That places additional emphasis on qualifying questions and careful analysis of the results.

Stay ahead

Get regular insights

Keep up to date with the latest insights from our research as well as all our company news in our free monthly newsletter.

Top tips for usage and attitudes studies

Know exactly what you want to learn from the research – it could be general background or highly specific, in-depth usage patterns.
Know what you can change as a result of the research – as well as realistic idea of how the research my shape decision-makers’ thinking. This will help prevent the research becoming unwieldy or over-generalised.
Unambiguous questions are valuable – people should have the same reference point for the survey. A usage and attitudes study should be conclusive, not a topic for never-ending debate about what people meant.
Find a neutral starting point – a baseline – for people’s assumptions and ratings. This will help frame a solid interpretation of the results.
Thinking carefully about the competitor brands you need to understand – it can be risky to ignore smaller brands or niche products.
Think about results presentation – visualising the results (showing brand strengths in different parts of the conversion funnel, say) or making under- and over-indexing against rival brands very clear.

Looking for support with usage and attitude research?

At Kadence, we have conducted usage and attitudes surveys for a host of brands. Take a look at our capabilities in this space or get in touch to discuss a project.

Conducting market research on an international scale is an increasingly common requirement. Global markets are more critical than ever, offering growth to businesses facing domestic stagnation or saturation. But international market research can be a challenge to get right. This article explores the top 5 challenges in international marketing research and our top tips for overcoming these.

What are the top challenges in international marketing research?

#1 International markets are incredibly diverse.

Some brands fail to appreciate the diversity within a region or country. You can only get an accurate picture of what people value and whether your products and services might succeed by rooting out the nuances of different geographical areas, cultures, and consumers.

#2 There can be a temptation to go too broad.

Linked to this, sometimes, when companies set out on international marketing research projects, they make the mistake of going too broad and trying to understand a region as a whole. Another error we see is firms commissioning research to target one market and then using this as a jumping-off point into others with “similar” attributes. This inevitably leads to costly mistakes as brands map their assumptions about one market onto another.

To avoid this, be clear on the emphasis of your research. Where are you looking to focus and why? Looking too broadly across a region of different markets, or exploring how an entire product range might perform, can cloud the picture.

# 3 Finding the right research partner.

The next big question is whether you have the research capabilities to conduct meaningful projects internationally. Most brands and their research partners can run domestic research projects with ease. But if you’re in the US or UK, say, going as far afield as Japan, India, or Germany requires different sensibilities and capabilities. The more international you get, the harder you must look for that kind of experience and expertise.

#4 Bringing together local and global expertise.

Misalignment is one of the biggest challenges in international market research. To overcome this, there must be a collaborative effort and a shared understanding of the mission, methodology, and insights. A research team at HQ might work with a local marketing team to understand how to position a product for success in an emerging market. But if the teams are siloed and don’t have a consistent understanding of the brief, their approach to researching the market and their findings might not help deliver on the challenge.

#5 Ensuring the project is realistic from the outset.

This is where all the other challenges in international market research come together: which markets, what purpose, the capabilities available, and the effectiveness of the output – all within a budget that makes sense. There will always be limits to what’s practical – and the last thing any client needs is to spend large sums testing international markets to no effect.

Stay ahead

Get regular insights

Keep up to date with the latest insights from our research as well as all our company news in our free monthly newsletter.

Meeting the challenges in international marketing research – tips and tricks from our experience in the field.

Get the brief and the scope right.

The more you can nail down exactly what you need to know and about which markets, the better your international market research will be. The key here is to dismiss the idea that lessons from one market can be overlaid onto other markets. Your approach might not even work in the same region, much less globally. So ensuring the brief isn’t burdened with too many assumptions, and is very clear on objectives, is key.

For research into one new international market, the brief can be clear-cut. You’ve picked a new place to trade, and you probably have some specific questions. Will the branding work? Do we need to alter the packaging? Are there particular features we need to tweak? But as soon as you broaden the scope – to, say, three new markets covering a region – the nuances become more critical in the research brief.

One solution is to ask questions at every stage. Why these three markets? What are they like? What do we need to know about purchaser sentiment there? How will a research project change what we decide to do in each market? Companies that are open with their agencies on operational and marketing strategies – rather than prescribing research about the areas they know matter in their existing markets – will see more effective results.

Understand the cultural nuances you’ll face

Everyone knows instinctively that cultural differences are both a factor in conducting meaningful research internationally – and a major reason for doing that research in the first place. ‘Market immersion’ is a key concept, and that’s all about getting to grips with the cultural context. But local nuances within new markets can catch people out.

In South Africa, for example, there are multiple cultural groups. Having local knowledge of how to tease those out is vital to breaking in South Africa.

That means one of our jobs as global research partners is challenging clients at the briefing stage to ensure these considerations are baked into the research approach and the analysis and interpretation of the results. The good news is that when you have research experts living and working in these markets as we do, cultural nuances are easier to plan around. We use this inside knowledge about people’s lives to help understand opinions, habits, and behaviors.

Don’t think language is just about translation.

Companies are often wise to the importance of understanding ‘culture’ and, as a result, adopt a cautious approach. But one mistake people make in international market research is to assume that ‘language’ is more straightforward – or that it’s just a question of running a survey or its results through Google Translate. But that’s never a good idea. It requires a much more nuanced approach.

Language isn’t just what we say but how we say it. And local variations within international markets – think Swiss German or Quebecois French, but the list is endless – further complicate the issue.

You’ll need the nuance: go regional.

Understanding local culture and language are essential in its own right. They’re also the gateway to getting out of the big cities and understanding the whole market. Tokyo is a true megacity – but it doesn’t reflect all of Japan. Paris is iconic – but its citizens have very different values to those in Marseilles, let alone rural France.

Here’s where you need to understand geography and supply chains. If you’re moving into a new international market in a limited way – or if the distribution is going to be impractical outside conurbations, say – then researching inside big city bubbles might work just fine. But for national penetration and in markets where businesses or consumers are more evenly distributed, understanding attitudes and behaviors across the country is a must.

For brands with an existing presence, existing assets on the ground are a hugely valuable resource for understanding these nuances. That could be local-office marketers or salespeople. Distributors and major customers can also offer insights. We love to work with chief marketing officers (CMOs) who have a helicopter view of a region and are clear about strategic objectives. But triangulating between them, their local marketing teams, and our local research teams in the field tends to generate better results.

Decide on the most effective methodology.

Another significant benefit of having local teams in place like ours is that they have expertise in the best methodologies to use in different markets. This is sometimes a subset of culture, but in other markets, it’s driven by the levels of technology adoption, geography, or working practices. Some examples:

In Indonesia, face-to-face research is considered the norm; telephone in-depth interviews tend to deliver a poor hit rate.
In Japan, groups respond better to moderators of the same gender, and people are more likely to undertake qual work at the weekends.
It’s not acceptable for researchers to interview women in the home one-on-one in Saudi Arabia. And across the Middle East – and many other regions – mixed-sex focus groups tend to be a no-no.

You can read about others in our guide to conducting online market research in Asia.

This is also why more open briefing processes can be valuable in international research. It’s too easy to apply a blanket methodology across a whole region and end up struggling to execute the research. Better to frame the key questions the organization needs to answer and tailor the research study to each key market.

Calibrate your responses.

Cultural and language shape the way you ask questions, and they’re huge factors in interpreting any research results, too. A keyword search on a crude translation of responses could mean missing crucial insights – or, worse, coming to incorrect conclusions.

And don’t think this only applies to qualitative, descriptive research where local idiom, slang, or cultural references might catch you out. International quantitative research also has to be calibrated by analysts with an appreciation for local nuance.

Respondents in some markets are more likely to agree with statements than others. For instance, you’re more likely to see people agree with statements in India than in Japan. Even the way you phrase questions – not just translate them, but the nuance in the question itself – will affect the consistency in scores you can achieve between different cultures.

That’s particularly important for big global brands with a very set idea about how they do their brand equity or NPS studies. The alternative is to develop a more organic approach so that the questions allow you to reflect local nuance. It might be as simple as using a four-point rather than a five-point scale in markets where respondents are most likely to sit on the fence.

Use market research as a tactical, not just strategic, lever.

It can be tempting to seek broad answers from international market research: “Will this product work in this market?” Or: “How should we tweak the service offering to meet this country’s needs?” These will help brands decide on strategic issues. But the more nuanced the approach, the more likely it is that the research will feed into local tactics for a brand, making its international investments work even harder.

That’s a common theme in research: properly granular insights ought to help with several decisions. It’s not just a ‘go/no-go’ binary, but research should inform everything from pricing to choice of distribution channel, support for local sales operations, to targeted advertising.

A new era for international research

We’ve moved on from an earlier era when global brands assumed continent-scale uniformity. Even if a business sees an opportunity in ‘Latin America,’ has an ‘Asian strategy’ or issues financial reports for ‘EMEA,’ serious decision-makers know they need to go, at the very least, to the country level for insights that will help their plans succeed. And they understand that it can be counter-productive to seek out ‘apples to apples’ comparisons between markets when a little nuance can go a long way.

More recently, one factor that’s complicated the picture is the global Covid-19 pandemic. Because so much commercial activity is managed remotely, there’s a temptation to run multi-market studies with a uniform online methodology. If everyone in the world is attending focus groups via the same videoconferencing app, what’s the difference?

The risk here is that the vast advantages of technological solutions are watered down in the hunt for low-cost, ‘big picture’ regional results. Online research can be conducted quickly and flexibly. And clients can immerse themselves in research projects more easily, gaining their own insights into consumer reactions on the other side of the world.

But research that is tailored, for example, to local respondents’ cultural norms will yield much better results. You can quickly adapt a methodology to a market when you have local research expertise and a clear idea of the brand’s mission. For instance, recognizing that in India, you’ll need to avoid any methodologies that rely on lengthy video inputs, and instead, combining text, image-based and short video tasks will get you the insights you need.

The most successful companies understand that an international project is more complex than handing a research agency a questionnaire and generating uniform results across every territory.

You know your product or service better than anyone. We know the right questions and methodologies to get you where you need to go. Our local teams understand the cultural norms, and good translations – culturally and linguistically – can bring it all together. Find out about the regions where we can conduct international market research or get in touch to speak to us about an international project

Have you heard the story about Steve Jobs dismissing consumer market research as a tool to shape new products? The driving force behind the Mac, the iPod and the iPhone famously said in a 1985 Playboy interview, “We were the group of people who were going to judge whether it was great or not. We weren’t going to go out and do market research.”

It is, of course, one of the most widely debunked stories in business. Apple does conduct consumer market research – and is, arguably, in its pre-eminent position precisely because it innovates using insights generated by analysing in incredible detail its consumers’ behaviours and the market appetite for its products. (There’s video of a young Jobs extolling the virtues of market research for these purposes – it’s 90 seconds well spent.)

The fact is, most new products are very similar to things people have seen before. For every genre-busting innovation there are tens of thousands of new iterations of existing ideas, tweaks to brands and updates to proven sellers. In most cases, some kind of market research will have shaped the new iteration and how it was conceptualised; helped stand up the business case for it; framed the marketing; and guided its introduction to consumers. So how does market research help businesses design and launch successful new products?

Using market research for product development at each stage of the innovation funnel

There are lots of different ways to describe the innovation process, broadly broken down into three phases: ideas, concepts and creation. It’s not a science with a standard formula, however, but there are some common steps. For example, some experts recommend breaking the process into 5Cs:

Capture intelligence about market gaps and organisational potential.
Connect opportunities to capabilities.
Convert ideas and available resources into concepts for products.
Confirm these products are viable in the market.
Conclude by executing a market entry plan for them.

Another way of thinking about it is a series of questions that need to be asked at each stage of the product development process. Market research can help answer them all.

1: What’s the opportunity?

Desk research, analysis of existing customer data and some qualitative investigation can help frame likely areas for innovation. In many cases, an organisation will face an internal problem – overcapacity, falling margins, consumer appetites shifting away from existing products – that also frame the need for new products. The output here is an extrapolation of big trends to identify emerging needs, changing behaviours and whitespace for innovation.

2: What ideas might thrive there?

In some organisations, internal R&D will have a ready supply of potential innovations that might be applied to the opportunity. More likely, R&D and marketing teams will benefit from a brief developed from the ‘opportunity’ phase to direct R&D in more concrete areas. This process might include brainstorming inside the organisation or more formal ideation sessions with an external research agency. At this point surveys can be harnessed to give more shape to the ideation process. In the search for an iterative new product (rather than a genuine technological innovation) there might be 30 broad ideas that can be tested in quantitative surveys to thin down the field.

3: What concepts deliver on those ideas?

In the next stage, focus groups and market analysis can clarify which concepts ought to progress further by exploring the strengths and weaknesses of each idea. This is also where the innovation and R&D efforts of the business are properly moulded around consumer and market insights – and some iteration takes place to align the two. Note that research here isn’t just among consumers in the core market. Channel partners, consumers and suppliers in adjacent industries are all valuable sources of insight and inspiration. For example, when Kadence worked with an airline to develop new first and business class seats, we looked to bedding experts, audiophiles and high-end restaurant maîtres d’hôtel to shape the concepts.

4: How might those concepts perform in the market?

By this point, an organisation should have narrowed its ideas down to a small number of solid concepts. At this stage, a large-scale quantitative survey can be used to identify the concept with most potential to take forward, as well as the size of the potential customer base.

5: What’s the investment case for launch?

The insights gained from market and concept testing will allow numbers to be attached to the product at this point. What might revenues be? What’s the cost to produce the product or service? With research around pricing, what’s the margin likely to be? Does this justify retooling a factory or investment in marketing? This is the “go/no go” point for a new product.

6: What should the final product look like?

Using the research on market potential and consumer attitudes to the new idea, a business can shape decisions on final feature set, ancillary products or services (again, both quant and qual market research will illustrate the need or potential for these), packaging, marketing and pricing.

7: How do we get it out to market?

Research can also highlight optimum product launch strategies, including distribution, adverting and partnerships to make the most of both existing markets and potential follow-ons – whether that’s mass-market adoption for a product designed initially for a niche or early adopters; new demographic segments; or launch into different international markets.

Stay ahead

Get regular insights

Keep up to date with the latest insights from our research as well as all our company news in our free monthly newsletter.

The known unknowns for new products

There are broadly two types of business keen to answer these questions. First there’s the radical innovators, the people who come up with brand new ideas and product concepts and want to understand whether they stand a chance in the market. This group are interested in ‘unknown unknowns’, the broader trends in consumer behaviour that might hint at acceptance of a brand new idea. We’ll come on to these Steve Jobs types later.

The second, much larger, group understands the innovation funnel in more detail and seeks data to optimise a pipeline of new products. They are interested in ‘known unknowns’ and using the answers to justify, shape and execute a launch.

For this group, the challenge is modelling the potential performance of a new product against a number of variables already visible in the market. These organisations often have a sophisticated process in place to test new ideas and are keen to benchmark any new product in order to validate investment. They will have an algorithm for product development. The more variables they can pin down using market research, the higher the confidence in making those investments.

‘Benchmarking’ in this case might be looking at the performance of products within the target market; or evaluating consumer attitudes to particular features or benefits. This makes it a largely quantitative methodology.

This kind of quantitative approach is often applied with good reason. Standardised questionnaires and clear, consistent methodologies can help ensure that the market research process is more reliable and easier to interpret. And for many larger organisations with a wide portfolio of potential innovations, a fixed investment budget and the need for reliable returns, this rigour can be highly valuable.

But beyond simply looking at the “go / no go” result, it’s important to dig into the reasons why products didn’t pass this hurdle. This can provide valuable insights to inform future development.

Competitor analysis can also reveal opportunities for developing successful product iterations. Research might include:

Rivals’ marketing strategies – what’s their targeting and messaging; what are they missing?
Customer satisfaction with competitor products– where are there discontents that might be satisfied by your product?
Other gaps in the market – such as different price points or localised versions for international consumers.
Other competitor strengths and weaknesses – consider brand halo effects or financial status.
Early-adopter behaviours – in similar markets or using new technologies that might be adapted to your own target markets.

A word of warning – New Coke and the importance of taking the right approach to market research for new product development

But it’s not always done right. There’s no shortage of case studies of new product launches that didn’t go well. And often that’s not because an organisation didn’t do any market research. It’s because they didn’t use it deftly enough.

New Coke is a great example. Coca Cola is an innovative business and wields one of the greatest brands in history. In the 1980s, management decided to rebuild its dominant position with a new formula. Clearly this was a huge decision, and as a market research powerhouse, it took no risks. It spent $4m on development and conducted over 200,000 taste tests across the US to research how consumers would score the new flavour against rival Pepsi. And based on those tests, New Coke was going to be a hit.

But management made a series of errors. In a classic case of confirmation bias, they tended to put more weight behind positive views expressed in focus groups, ignoring those who warned a change would turn them off the brand. They discounted emotional feedback on their brand. And they over-focused on differentiation with Pepsi, which had long marketed itself as the sweeter product.

One big mistake was conducting sip tests instead of researching how consumers would feel drinking a whole can of the sweeter formulation. But narrowing down their research focus – ignoring the context for consumption – they ended up launching a product that turned consumers off the brand altogether.

The error, then, was not failure to conduct market research. It was failure to treat research objectively and apply appropriate methodologies. Management sought justification for their decision – not confidence that it was the right one.

The impact of market research on new product development – giving you the confidence to guide a product launch

The key word here is ‘confidence’. Even iterating an existing product entails risks. Using market research for product development helps reveal and manage that risk – and allows decision-makers to test rigorously against hypotheses for new products, rather than head off down potentially blind alleys.

Note that qualitative research plays a crucial role in helping product developers fine-tune their approach and create innovations more suited to particular audiences. And as the New Coke example shows, qual research can capture the emotional components of product change much better than quantitative analysis might. Every new product launch is a balance between gains and losses for the consumer and understanding that balance is vital.

When it comes to qualitative research, organisations shouldn’t just ask themselves whether to conduct it, but how to conduct it. Whilst central location testing for instance, allows you to ensure the product is experienced in a consistent way during the testing process pandemic lockdowns have obviously accelerated this shift towards at-home testing. New technologies are helping. Augmented reality (AR), for example, is an ideal way to help consumers visualise new products even at the concept stage. Using their mobile phones, they can ‘see’ products in their own home or a work setting, providing valuable depth to qualitative studies at even earlier stages. This is something we’ve piloted with Asahi to test their London Pride packaging and are seeing a number of benefits, such as respondents using AR organically noticing and commenting on small visual details that aren’t picked up by other respondents assessing a 2D concept.

Using market research to guide blue-sky thinking

So we can test against quantitative benchmarks to validate new product development. And we have qualitative studies to test emotional reaction to new products and shape their evolution in ways that will make them more successful. There’s also a third way of using market research for product development: coming up with new ideas in the first place.

This is often called ‘ideation’ and it’s an area where market research has played a key role since the birth of the industry – regardless of what Steve Jobs said. He was right that consumers are typically quite poor at predicting what might define or satisfy meet their own future needs. But understanding how R&D and human appetites come together is core to the market research offering.

Take a dairy business, as an example, that’s facing a slow decline in consumption. One solution would be to increase the appeal of organic products. How might they craft a brief to their own product development team?

Working with Kadence, the company use a structured approach to frame where this innovation might gain some traction in the market. Using proven research techniques, they also explored possible options for further innovation. These can be tweaked and repositioned using further research.

This approach can be further optimised if like us, the research agency has an in-house creative team that can quickly visualise concepts based on consumer feedback. We worked with a global beverage brands wanting to relaunch its range to make this happen. Based on focus groups, we were able to redesign the packaging in a matter of hours in a way that capitalised on insights from the research.

One other process to consider: the ideation sprint. Rather than gradually piecing together some R&D, market analysis and internal feedback before gradually building out a new product for consumer testing, this involves getting all the stakeholders into a project group together to develop new ideas within a short timeframe.

Kadence has conducted these sprints with food manufacturers – where that combination of chefs, technicians, marketing experts, salespeople and researchers working in concentrated bursts over a couple of days can see a menu of ideas created, tested with consumers and refined incredibly quickly. And because these sprints are cross-departmental, buy-in for the new product internally is much greater.

Concluding thoughts

Product development is risky even when you’re not launching a category-busting innovation or changing the world. New flavours, revived branding, tweaked feature-sets or version updates can upset existing product performance or result in costly investment in ideas that might not fly.

Far from stifling product development, market research can deliver reassurance and confidence at every stage, helping inform the choice of new products to pursue, their key attributes, how they might be marketed and what contribution they make to a business operationally and financially.

This is an area where Kadence has extensive expertise. Find out more about our product development research services or get in touch with us to discuss a brief.

As internet penetration has increased across the world, online market research has seen rapid growth. The COVID-19 pandemic acted as a catalyst for further adoption as restrictions on face-to-face contact meant that businesses had to embrace new research approaches. The result? Many companies experiencing the advantages of online research for the first time. What’s more, the widespread adoption of tech during the pandemic – particularly amongst audiences that were traditionally easier to reach offline – means that online market research is a now a viable way of engaging more people than ever before.

In this guide we’ll:

Explore the key advantages and disadvantages of online market research
Explain the different methodologies available to you and when to use them
Share our top tips for setting your project up for success, moderation and analysis

What is online market research?

As the name suggests, online market research is a type of market research where data collection takes place on the internet. In this way it differs from more traditional forms of market research where data collection takes places offline (either in person or over the phone) such as focus groups or telephone interviews.

What are the main advantages and disadvantages of online market research?

Advantages of online market research include being faster and in some cases, cheaper to conduct than face-to-face market research, meaning that you can obtain results more quickly. One of the major disadvantages of online market research is that it relies on the people you’re trying to reach having access to the internet and as such it may not be suitable for all audiences. Some online qualitative methodologies also require a degree of tech savviness, and a longer time commitment than offline approaches.

Beyond this:

Online market research is particularly useful for global projects. If you’re looking to enter a new market and don’t have boots on the ground, online market research can help you build your understanding without having to fork out for flights and focus groups. It’s also well suited to multi-market research as you can conduct research in a number of countries in parallel to identify common trends.
Online research can help you get closer to customers and bring them to life for stakeholders. In a focus group or a face to face interview, you only have a short amount of time to get to know respondents. In contrast, some forms of online qualitative research take place over a series of days, weeks or even months. This allows us to dig deeper and build a richer understanding of customers and their needs than we might offline. Some methodologies even allow you to set photo and videos tasks. These result in rich multimedia outputs can be used to bring customers to life for stakeholders.
Online techniques allow for a more iterative approach to research. The longitudinal nature of some online qualitative methodologies means that it’s possible to adapt your discussion guide as the research progresses to capitalise on emerging insights. This is particularly effective for product development research. For example, in an online community, you can share initial concepts with consumers, iteratively improve them based on feedback and then put them back into the community for further testing. This approach allows you to build and refine the concepts as the research progresses.
Online market research can be good for sensitive topics. Many online methodologies offer a greater degree of anonymity than face to face research. As such, they can be better suited to discussing difficult subjects such as illness or sex.

What type of business questions can online market research help me answer?

Online market research is extremely versatile and can be harnessed to explore a broad range of challenges, including:

Better understanding your target market
Product or service development
Brand and advertising research to guide marketing strategy
Determining customer satisfaction

What are the main methodologies used in online market research and when should I use them?

There are a number of different research tools you can use to collect data online. They include:

Online surveys

An online survey is the primary method for collecting quantitative data online. Online surveys can be completed by your customers or respondents can be sourced from an online panel (a group of people that have agreed to take part in online research). If you opt for this route you can build a representative sample and extrapolate your findings to the wider population.

When to use an online survey

To understand trends and patterns of behaviour e.g. buying habits
To understand attitudes towards your brand versus the competition
To compare different groups (e.g. by age, gender or market) to understand similarities or differences
To track metrics over time e.g. brand awareness, customer satisfaction

When to avoid an online survey

Projects where you need to qualitatively explore an issue with consumers to understand motivations and the “why” behind behaviours
Projects where you need to co-create with consumers to iteratively improve an idea

Top tips

It can be tempting to pack your survey full of questions but you need to be mindful of time. An online survey should take a maximum of 15 – 20 minutes to complete. Any longer than this and you risk seeing respondent fatigue or a significant proportion of people dropping off before the end. This will mean that fieldwork will take longer to complete.
Mix up the type of questions you use to keep the survey engaging for respondents

Online communities

Online communities are a qualitative technique for exploring a topic over a number of days, weeks or even months. Pre-screened respondents are invited to a secure online platform where they take part in a number of activities each day. This can involve discussing topics in groups, one on one or taking part in video, photo or audio tasks.

When to use an online community

To deepen understanding of a target audience
To explore content preferences and consumption
To test audience attitude and brand perceptions
To test new ideas with consumers – this can be anything from products and services to packaging or new marketing concepts. Online communities are particularly well suited to this. Many platforms enable consumers to mark-up concepts so you can gather in-depth feedback whilst also protecting the confidential nature of the stimulus, through functionality such watermarking or setting videos to self-destruct once they’ve been watched.

When to avoid an online community

When you need to explore a topic with consumers on an individual level

Top tips

Do your research on the types of platforms available. Each offer different functionality so go back to your objectives to ensure you’re selecting most suitable for your project and what you want to achieve.

Digital depths

A digital depth is essentially an audio or video interview which takes places online. These tend to last about 30 – 90 minutes. A typical programme might involve 15 – 20 interviews per market, although this can vary based on your business objectives.

When to use a digital depth

To explore in-home brand or product usage or explore attitudes towards particular brands or products
To gain B2B market insights

When to avoid a digital depth

Projects where you require respondents to share and bounce ideas off each other
Projects that require large sample sizes as running 100s or 1000s of depths online or offline is just not feasible

Tops tips

One of the challenges levelled against online research is that it can be harder to build rapport online. To overcome this, consider pre-tasks that allow you to get to know the respondent beforehand and help them feel comfortable. This can be anything from asking them to complete a short diary task to some quickfire WhatsApp questions before you get started.
Be aware of market differences. In markets that have traditionally favoured face to face methods, using video as part of a digital depth is a must for engendering trust.

Digital ethnographies

The objective of a digital ethnography is to view a consumer’s life as it happens. Ethnography emerged as an offline discipline, but developments in technology mean that it is now possible to conduct ethnography online. From 360 cameras to smart home technology right through to the humble old smartphone, there are a number of tools you can use. And in some cases, these new approaches can uncover insights that you just would not gather when there’s a researcher in the room.

When to use digital ethnographies

To explore in-home brand or product usage or to explore attitudes towards particular brands or products
To identify unmet needs
To understand cultural differences between markets

When not to use digital ethnographies

Projects where you need respondents to bounce ideas off one another

Top tips

Not everyone will be suited to take part in digital ethnography. You need respondents who are open and willing to let you into their lives. One way of doing this is to include a casting phase as part of the project to identify the right people to participate.

Online focus groups

An online focus group is where a group of pre-screened respondents are invited to join a private online platform for a few hours. Like an in-person focus group, a moderator will guide the discussion, which can be either text or video based.

When to use an online focus group

To test attitudes and responses to concepts and ideas at a high level
To sense check ideas quickly with consumers

When not to use an online focus group

To obtain detailed inputs from respondents at a one-to-one level

Top tips

If you are used to running focus groups in person, don’t automatically assume that online focus groups are the next best thing. Depending on what you’re trying to achieve, another methodology may better meet your objectives.
If you’re running a video based online focus group make sure that you’re able to see all of the participants at once. This will help in interpreting non-verbal cues and bringing people into the conversation.

Questions to ask yourself when designing your online research approach

As you can see, there are a number of different online methodologies available to use, each with their own distinct use cases, benefits and drawbacks. To help you design the best research approach, we’d recommend asking yourself 5 key questions:

What am I trying to achieve? Some clients come to us dead set on using a particular methodology. We’d advise against this. By starting with your business objectives and then considering which methodology best allows you to meet these, you’ll be in a much stronger position to design an effective research approach.
Do I need to collect quantitative or qualitative data? If you’re looking to conduct research at scale, you’ll need to opt for an online survey whereas if you want to explore a topic qualitatively, there are a number of different options available.
What depth of insight do I require? Are you sense checking an idea or do you need to explore needs in real detail? This will have implications for the methodology you choose.
Do I need to speak to consumers one-on-one or in a group? Different methodologies and platforms facilitate a different type of engagement with respondents. Think carefully about which you require up front.
Which markets am I exploring? Not every methodology will work in every market. There are cultural factors and connectivity issues you’ll need to consider. For instance, if you’re conducting research in India outside metros or tier 1 cities, you’ll need to make sure your approach is mobile optimised but doesn’t require too much bandwidth. Or if looking to test concepts in China, you’ll need to do so in a one-on-one setting due to the Chinese habit to moderate answers and avoid causing offence in group environments. Our guide to conducting online research in Asia, can help you consider the best approach to take in each market. Remember, if you’re running a multi-market project, you don’t need to use the same methodology in every country. Harnessing an approach that will ensure you can answer your business objectives is more important than consistency of approach.

Stay ahead

Get regular insights

Keep up to date with the latest insights from our research as well as all our company news in our free monthly newsletter.

Setting your online research study up for success

So you’ve decided on the best methodology for your study. The next step is to get into the nitty gritty of setting up the project. Here there are a number of key things to consider.

Simplicity. When you’re writing your questionnaire or discussion guide, focus on making it as easy as possible to understand. Cut out the jargon to ensure a consistent understanding amongst respondents.
Flexibility. For online qualitative projects, it’s worth building in an element of flexibility into your discussion guide. This will allow you to delve into emerging insights during the course of the research.
Cultural nuances. We talked about the importance of culture when selecting your methodology. It’s crucial to bear this in mind throughout the entire research project. When you’re writing a questionnaire, preparing a discussion guide or designing specific tasks, consider how cultural differences might affect participants’ responses. For instance, in Japan people tend to avoid giving negative feedback so you use a traditional 5 point Likert scale here you’ll find that most people will answer somewhere in the middle, making it hard to ascertain the trend. To get a clearer go / no-go result, you’ll want to consider a 4 point scale in this market.
Testing and training. Some online qualitative research approaches rely on external technology platforms. Make sure you build in a comprehensive testing phase to ensure these work across different browsers and in different markets, particularly if you’re using a tool for the first time. You should also consider preparing training materials for respondents. What might seem intuitive to us as researchers, may be not be as straight forward for the person taking part in the research.

How to moderate online research

Moderation is arguably even more important online than it is offline. So what should you bear in mind?

Don’t forget the basics. Just because the research is taking place online doesn’t mean that you can forget everything you’ve learnt about great moderation. Dress appropriately and try and mimic face-to-face interactions – even something as simple as waving hello at the start of an interview can help to build rapport and set someone at ease.
Read the (virtual) room. Sometimes what people choose not to say can be as revealing as what they do.
Do your homework. Earlier in this guide, we mentioned the value that pre-tasks can bring. Even a short WhatsApp exchange can be useful in helping you to understand more about a respondent and how they feel about certain topics so you can get the most out of them in the session.
Curate the conversation. Unlike a focus group or an interview which might only last 90 minutes, online communities take place over a longer period and therefore require ongoing moderation. Moderators should think about how they curate the conversation by connecting individual respondents up to foster group discussion.
Conduct research in the local language. If you’re running a project in another country, use local language moderators who’ll be able to understand and draw out local nuances.

Analysing online research projects

Online market research is often considered to deliver more bang for your buck than a face-to-face approach because of the sheer amount of data you can collect. This is particularly true of online communities due to their longitudinal nature. As such, you need to carefully structure your analysis, ensuring you’re focusing on the ‘so what’ for your stakeholders.

There are also cultural considerations to take into account when it comes to analysis. You’ll need to bear in mind that consumers in different markets can answer questions differently when you’re interpreting the data. For instance, when asking about interest levels or purchase intent, the figures you see in ASEAN developing countries tend to be higher than in other markets. Even within markets, there can be regional differences to take account of. In Vietnam, for instance, there are cultural differences between consumers in the two major cities – Hanoi in the North and Ho Chi Minh in the South. Those in the North tend to favour products from well-known brands, while those in the South are more open to trying new things, and this is reflected in the data you see from these areas.

Considering harnessing online research in your own organisation?

This is where we’re in our element. Find out about some of our online methodologies like online surveys or online communities or get in touch to discuss a project.

Many global economies are defined by stagnant growth, falling populations and saturated markets, making growth for brands a tricky proposition. In many ‘emerging markets’ there are still big opportunities grow… if you keep your eyes open.

Many businesses are looking to fast-growth, high-energy markets outside the so-called ‘developed’ economies to fuel their expansion. Unlike congested and sometimes shrinking economies in ‘the west’, many parts of the world are seeing rapid population growth, fast-rising incomes and are adopting transformative technologies without the burden of legacy investments. The result? Vibrant new opportunities for businesses.

But while entering any new market is a challenge for brands, moving into these more dynamic economies – often with very different cultures, business practices and consumer expectations – can be particularly tricky. Berlin isn’t the same as Birmingham, but many of the norms in both markets are recognisably similar. Head to Beijing or Bamako, and the assumptions you make about brand, product and business practices will be challenged.

Take a phased approach to understanding the opportunity afforded by new markets

The best way to understand your opportunity in different markets is to take the traditional phased approach to research. This involves the following considerations.

Which markets might we look at? Consider the number of consumers, the country’s income levels and the stability of its economic and political structures. You can also examine the maturity of business practices and think about geographic location, transport links and accessibility in-market.
What’s the macro environment like in a market we want to enter? Revisit all the above, in more detail. Focus on specifics – such as the transport and tech infrastructure; and business support networks (such as accounting firms or legal protections on IP) – and how the trends are evolving in those areas.
How does the competitive landscape affect its attractiveness? Pay attention to other outsider brands and how they’re doing; but also domestic rivals and potential competitors poised to move into adjacent markets.
What are the practical issues for market entry? In new markets further afield, transport links, language barriers, different cultural norms and local regulations can throw up roadblocks.
How do we adjust our product, service or messaging to optimise our offer there? As above, but remember that very different cultures and climates can challenge even the most basic assumptions about how a product will perform.

Step away from the generalisations

It’s vital to acknowledge that ‘emerging markets’ aren’t as uniform as the term suggests. Far from it. There are so many variations by region or category that talking about common features of ‘emerging markets’ is a dangerous over-simplification. And there are as many differences within countries as between them. This particularly true in countries where rapid urbanisation has seen a break with traditional cultures outside cities.

(That’s true for any generalisation, of course. Alcohol brands, for example, can’t even treat the US and Canada the same. North of the border, there are drinking-age laws set province-by-province, massively complicating online alcohol sales. They might look the same in terms of development and even geography and demographics. But they’re not.)

That’s not to say there are no rules that apply to entering markets that share particular attributes. The pace of economic or population growth, or the expansion of middle-class consumers with disposable income, might always be a feature of your selection process for target markets.

But in many categories, consumption is growing so quickly that only the real beneficiary of a ‘toe in the water’ market entry is likely to be knock-off brands and domestic substitutes able to adjust output more responsively to local conditions, especially where legal protections for intellectual property are less secure for global players.

All these caveats mean that in-depth research into new-market consumer appetites, infrastructure and competition is just as important in growth areas as it is in more mature markets.

Stay ahead

Get regular insights

Keep up to date with the latest insights from our research as well as all our company news in our free monthly newsletter.

Assessing new markets – 5 key considerations

All that being said, knowing the likely biggest points of difference when entering markets with strikingly different fundamentals is still important. Five things to consider:

1. Affordability

In many emerging markets, disposable income may be much lower for large parts of the population. For global products, that means understanding the more affluent segments better and targeting marketing appropriately. For localised or commodity products, the question is cost. Can you use local manufacturing, logistics and even branding to deliver your product to a mass market?

2. Distribution

Getting product to consumers might be more challenging. For brands that rely on developed economy logistics partners, understanding infrastructure constraints, developing local contacts and ensuring quality of service is crucial. When Haagen-Dazs first entered China, it set up its own warehouse and delivery network to ensure the product reached consumers correctly.

3. Localised branding and marketing

What works well in Boston, may not succeed in Beijing. Cultural understanding is key to ensuring that your marketing and branding hit the spot further afield. Caveat: remember the urban/rural split. Many urban consumers are ‘world citizens’ and expect to be treated as such.

4. Watch for local rivals

The cachet of being a global brand can help enter emerging markets. But cost, customisation and the risk of ‘brand colonialism’ can make more assumptive Western brands seem out of touch and vulnerable to local alternatives.

5. Native teams

As a global market research agency, we benefit from having local teams in the markets we evaluate for clients. This means we understand the cultural context, consumer trends and broader macro situation. It is possible to enter emerging markets at arms’ length. But having local people in decision-making positions is the surest way to avoid clumsy cultural or operational missteps.

Look for leapfrog opportunities

There are plenty of upsides to emerging markets, too, beyond simply vast numbers of new customers. In some cases, our research will throw up opportunities that just aren’t available in mature markets at all.

Look at the way different platforms have developed to cater to the nuances of local markets, for example. In many fast-developing economies, traditional channels have been leap-frogged by the adoption of newer technologies. This often happens where older tech infrastructure has attained much less penetration, allowing a newer tech to fill a void.

In many African countries, for example, low population density and long distances between conurbations means traditional copper or fibre telecoms can be limited. But mobile telecoms are more practical and affordable. They offer a plethora of additional over-the-top services that have led to an e-finance and e-commerce boom. Entering those markets will require different thinking about distribution – as well as marketing and payments using creative local solutions.

Remember, e-commerce is not the same everywhere

The Philippines is another good example. In other countries, Facebook might be just part of your online marketing toolbox. But there, Facebook has attained an absolutely dominant position in e-commerce – for one simple reason. With lower average incomes, Facebook and local mobile companies realised their penetration was constrained by the cost of network data. So almost every plan has free Facebook data regardless of contract status. For market entry success in the Philippines, Facebook is going to play a big role.

But we need to distinguish between being available on those platforms on the one hand; and entering a market on the other – which involves boots on the ground. Yes, that’s more investment. But you’re also surrendering less of your margin to platform owners and logistics providers.

A staged approach to entering less well-understood markets, starting with the more popular local social networks or e-commerce platforms, allows you to refine the consumer profile. Companies also get time to get to grips with the legal and financial frameworks that might shape future involvement; and see how local fulfilment clarifies their operational options.

Don’t assume that tried and tested e-commerce strategies from the US and Europe will work everywhere in the world, however. Amazon, for example, simply doesn’t have a presence in some markets. In others, consumers can use the site, but limitations on distribution and other logistics mean delivery times, cost and availability are prohibitive. Local research about the best platforms for reach and fulfilment is a must.

Lazada, Shopee, Zalora and Carousel, are some of the top e-commerce sites in South East Asia. These names may not be familiar to firms outside the region. But they can play a crucial role for testing in these markets. Again, it’s worth working with people who understand how to optimise those platforms, as well as interpret the effectiveness of marketing on them; and what the results say about the potential for deeper market entry.

Understand the technicalities of new markets

Even online entry into a very unfamiliar market can be daunting. Moving in for formal distribution, licensing or agent agreements or even setting up locally or buying into a native business brings with it additional issues that need to be researched.

European companies with experience of entering new markets in the EU can find the regulatory and legal considerations in countries farther afield a challenge. Even in the US there are federal laws and individual state regulations over companies and property to contend with. This can make establishing a new business relatively tough. And that’s considered a ‘developed’ market.

In parts of South East Asia, many European companies report lengthy delays in registering businesses. Others discover that in some markets domestic firms have particular benefits. This could be a form of protected status, or reserved access to certain kinds of contract. This is worth exploring in due diligence especially if you plan to sell to government agencies that are often required to ‘buy local’.

Don’t make any assumptions

Most of the key factors for market entry will depend on exactly which market you’re looking to enter. There are very few hard and fast rules that apply across the generalisation ‘emerging markets’.

But there is a common theme from this guide that should frame your thinking: these markets change – fast. Before committing to entering any market – and especially ones evolving so rapidly – it really pays to research the opportunity fully. This is something that Kadence has helped many clients with, allowing companies to succeed in lucrative emerging markets. Find out more about our market entry services, or get in touch to discuss a project.

It makes sense to open up new markets for a successful product or service. But how do you know whether it’s worth the investment? What makes for a potential buyer in your home territory might not apply in a new location where the total addressable market could be much smaller or many times the size. Enter the market researchers. We explain how to calculate market potential.

Estimating sales can be a chore even when you have historical and well-honed market instincts to work with. But in a new market this is even harder. There’s no historical data to review and it’s challenging to estimate the kinds of expenses and risks that might crop up.

An inability to judge sales makes the decision of whether to enter a new market much harder. Without a decent estimate – of both sales and likely profits – it’s almost impossible to decide on how you might enter and what kind of investment to make there.

What’s the market really worth?

The starting point is to get a handle on the existing market for your brand or product in the new territory. A basic market analysis is a great starting point. Typically it breaks down into:

Market sizing (current and future)
Market trends
Market growth rate
Market profitability
Industry cost structure
Distribution channels
Key success factors

But within each category, there’s lots to research. A more superficial look at the data can be helpful for a ‘first cut’ look at which new markets you might want to enter. But a deeper dive into the numbers will be essential if you’re going to properly evaluate the strategy for what looks like a high-probability candidate.

That more sophisticated analysis could take the form of a total addressable market (TAM) analysis. This looks at both the TAM itself, as well as serviceable available market (SAM). This is the portion of TAM that your company’s products or services play inside; and serviceable obtainable market (SOM), the percentage of SAM which your might realistically reach.

Best guesses?

But getting to SOM for a brand new market isn’t a simple calculation. It’s not exactly easy in markets where you’re a known quantity and understand the competitive environment, either! For businesses in mature categories and with previous experience of being a new entrant to markets, it’s possible to make educated guesses. This can be refined with local research on factors that might shape consumer behaviour.

In some industries that data might be possible to obtain – from industry associations, for example, or government agencies. In others – and particularly in product segments that a relatively underdeveloped in the market you plan to enter – sales figures might be harder to come by.

Then there’s the difficulty of calculating market share. You will know what it might cost in contracts, infrastructure and marketing to build share in existing markets. But the assumptions may be way off-base for a brand new market.

Stay ahead

Get regular insights

Keep up to date with the latest insights from our research as well as all our company news in our free monthly newsletter.

Talk to people

At this point there are two avenues:

Research sales results that have been achieved by other companies like yours. They don’t even need to be in precisely the same line of business. The lessons of other companies looking to sell into the new markets can reveal both the optimum routes in, the barriers to adoption and the appetite for new brands.

That might even mean contacting other businesses to ask their experience of making the adaptation to the new market – as well as learning about potentially important busy and slow seasons, noteworthy business practices and quirks of the system that might not have a direct bearing on the size of the opportunity, but will allow you to adjust your assumptions.

Talking to local partners, however, is probably the best way of calibrating your expectations. Even if you plan to enter a market by establishing a local entity and investing in your own facilities and marketing, you’ll still be working with many different counterparties. This can span everything from local professional services firms such as lawyers and accountants, to warehousing, distribution or media buying agencies.

They ought to be able to offer anecdotal evidence at the very least; at best, they’ll have insights into the size of the market and chances of capturing that crucial market share. And if the route to market entry is contracting with a local distributor, licensees or franchisees, their sense of the opportunity could be invaluable.

But above all, rigorous quantitative and qualitative market research will reveal a great deal about attitudes and appetites for your brand or product. The more you can contextualise the hard data on existing spend and potential market growth with consumer insight, the more realistic your evaluation will be.

Focusing on behaviour

One other way to address uncertainties about how a new market might embrace a product or service is to think not about that category, or even look at domestic rivals’ sales and strengths. It’s to create a strategy based on consumer behaviours.

If you can analyse why your brand, product or service is successful in its existing markets and break down the results into some key motivators or even behavioural traits of your consumers, it might be possible to assess where those traits are visible in a new market before you enter. In what situations is your product used? What type of people love it? What are those customers’ attitudes across different domains? What role does it play in their lives – and why?

That will require some pretty deep insight into the market you want to enter. Clearly it’s a more useful investment to make if there are other positive signals to encourage you in – fundamentals such as infrastructure, spending power or pre-existing local interest in your brand or product.

How good is your cost analysis?

Knowing your potential sales, market share and growth are all important. But the scale of the opportunity isn’t just sales – it’s profit. And even seasoned businesspeople can misstep when it comes to keeping costs under control in their market entry strategy. Here’s a brief list of costs that won’t affect domestic-only businesses:

Shipping costs – which can also fluctuate wildly, as we’re finding out during the COVID-19 pandemic. Consider, also, capacity. Shipping out of markets with a high balance of trade deficit (Europe, US, UK) to major exporters (China, for example) is much easier than going the other way.
Legal expenses – from registering a business in a new location, sorting out licensing, contracts, the right insurance cover… and complying with local regulations on everything from product labelling to anti-bribery laws.
Foreign taxes – and other local accounting quirks, which might be different depending on your headquarters domicile and the mode of entry into the market.
Translation services – for everything from contracts and technical specs, to instruction manuals and marketing.
Recruitment and HR – even a light-touch market entry will benefit from putting some employees into the new market to oversee set-up and manage local relationships.
Travel expenses – for the above, but also for ongoing check-ins with local teams or business partners.

What do you know about rivals?

Some lucky businesses will find an overseas market where there are few local rivals, legal and business structures that allow them to port across their defensive attributes from existing markets and a ready but as-yet-untapped consumer base. But those will be rare. So to properly understand the market potential, you’ll need competitor analysis. Our typical approach to this considers:

Who are your rivals in that market? Not just currently selling what you want to sell, but addressing your potential customers, too.
What is their range of products? How easily might they change?
How do they pitch their consumers? What messages are they using? Which channels?
What is their competitive advantage? What’s their cost base like? What could you replicate – and where can you out-compete them?
What’s their market share? How fragmented in the competition? What opportunities does that present either in terms of the industry cost-base or even acquiring smaller rivals?
What is their company structure? If they outsource (for supply or support) or license (to address the market), could those be vulnerabilities increasing your potential strength?

In summary

A lack of prior experience and knowledge can make it challenging for companies to assess the potential of new markets. We help lots of business overcome this – not just through the use of primary and secondary market research, but also by having people on the ground in many countries and regions to add specific local knowledge.

This creates a much more rounded view of the market potential – and the optimum ways to tap into it – than simply applying a cookie-cutter approach to market entry. The key steps:

Understand the demographic and economic drivers that underpin the total market for your products or services.
Think laterally about the broader factors – such as the types of consumer and cultural attitudes – that dictate market size.
Analyse existing market activity to deduce a TAM, SOM and SAM.
Conduct consumer research to evaluate your specific opportunity in the market.
Competitor intelligence will help you test assumptions about potential market share gains.
Rigorous local insights into costs and risks will reveal the profit potential – the ultimate rationale for market entry

Find out more about our market entry services, read our expert guide to market entry or get in touch with us to discuss a project with our team.

Trusted by

Market segmentation studies help businesses understand the distinct groups of people that make up their market. They work by grouping customers with similar attributes. This allows companies to identify and target the segments with most value to the business.

What is the purpose of market segmentation?

One of the big questions we get asked about this type of research is “what is the purpose of market segmentation?”

It’s not uncommon to hear people asking:

“What’s the value of focusing in on specific segments rather than trying to appeal to the mass market as a whole?”
“Surely, my best chance of success comes from targeting anyone and everyone that could buy my product, rather than on particular groups?”

In short, we don’t believe it does. Market segmentations can be powerful tools for any business. Targeting specific high-potential segments makes commercial sense and boosts the bottom line. Why?

First of all, not all customers are of equal value to your business. Imagine you’re a charity. Not everyone gives equally. They’ll be those that donate small amounts every now and again. They’ll be others that consistently contribute bigger sums, driven by a connection to your cause. It makes business sense to understand the latter segment. That way you can better appeal to these people and actively target them in your fundraising and marketing campaigns.

The second is that customers are different and have different needs. This is important to recognise for a whole host of business activities – from product development to marketing to customer service. By understanding who you are targeting and shaping your strategy around their needs, you can cut through and create a better experience for your customers.

(Take a look at our guide to market segmentation for more insights on how to better understand your market).

How market segmentation studies can inform your strategy

The results of a market segmentation study can guide strategy development in the following areas:

Designing more successful products and services

Successful product and service design relies on meeting customer needs. Rather than trying to be all things to all people, focusing on specific segments allows you to really understand the pain points your target customers face. You can use this to inform product and service design, helping you to create solutions that really delight.

Developing more effective marketing campaigns

Segmentation studies help you understand who to target. They can also reveal how to speak to your target customers. The result? You’re able to spend your marketing dollars more wisely and achieve greater cut through with your comms.

There are numerous ways for marketers to segment their audiences and tailor marketing easily. Email marketing to granular digital advertising to name but a few. Against this backdrop, a one-size-fits-all-approach is not enough. Segmentations allows you create sophisticated marketing strategies based on the principle that different consumers respond to different messages.

Offering more relevant customer service

Segmentations don’t just benefit marketers. They can have impact right across a business. We’ve worked with companies to empower their customer service reps by helping them understand the different type of customers that exist. For instance, we worked with a dating app to build a segmentation and integrate it into their CRM system. That way, when a customer interacted with the brand, it was easy for the customer service team to see which segment they belonged to. This approach can be really valuable. It helps customer service reps to react in the most appropriate manner to meet the customer’s needs and the company’s corporate objectives.

Using your resources most effectively

Segmentation studies can be really useful in helping businesses understand where to focus their time, money and resources for maximum effect. Insight from a segmentation study can inform how you spend your marketing budget, determine where you focus your sales staff or how you deliver your customer service.

Whether the applications of segmentations are made to product development, marketing, service or resource / budget allocation, ultimately they help businesses to better understand their target audiences and become more customer centric. The result (and the ultimate purpose for conducting a segmentation)? You’re able to create superior customer experiences that meet and exceed your customers’ needs.

Stay ahead

Get regular insights

Keep up to date with the latest insights from our research as well as all our company news in our free monthly newsletter.

What does a typical market segmentation study look like?

Like all of the market research projects we work on, each segmentation is designed around our client’s needs. That said, most segmentation projects involve the following stages:

Immersion

The first step in any successful situation is immersion. This is where the agency tasked with creating the segmentation works closely with key stakeholders in a series of workshops. The purpose of these sessions is to understand the existing knowledge within the business. This can allow you to begin developing hypotheses for potential segments. Immersion sessions align key project stakeholders, ensuring that the segmentation delivers for the business. The immersion stage also has a role in establishing buy-in to the project early on. This will encourage greater adoption of the segments in the long term

Fieldwork

Next comes the fieldwork itself. This allows the business to understand more about its customers and gather the data needed to create the segments. The fieldwork stage will typically involve a quantitative study for collecting this data. However, the research that takes place around it can differ from project to project. Some segmentations we run involve a qualitative stage up front to test hypotheses. Other involve omnibus studies to determine the incidence of customers and non-customers in the wider population.

Creating the segmentation solution

After the data has been collected, data analytics allow us to find the survey variables which best define the segments. We work closely with stakeholders to create a segmentation solution that is:

Actionable (allows you to target the segments at both a tactical and strategic level)
Future-proofed (will stand the test of time)
Intuitive (easy to understand)

This stage of a segmentation also typically involves understanding the current and potential value of the segments and detailed analysis to understand the individual characteristics of each segment. It’s also when the all-important segment naming takes place. Giving segments memorable names shouldn’t be underestimated. This allows people across the business to instantly grasp what that segment is about. This can be crucial for helping embed and encourage adoption of the segments.

Bringing the segments to life

After you’ve settled on your segmentation solution, the next stage is to bring the segments to life. A lengthy PowerPoint might give the insight or marketing team the information they need. But it’s likely to be too detailed for other functions. Developing impactful deliverables that allow people to easily understand the segments should be high on your priority list if you’re leading a segmentation. This could be anything from posters through to infographics. One of the key deliverables we see many organisations investing in is short documentary videos that bring segments to life. It’s human nature to be able to remember stories and characters better than numbers or data points. That’s why videos like these can really help segments live on in an organisation, ensuring the segments are front of mind when making business decisions.

Activating the segments

It’s not enough to hope that stakeholders will embrace and use the segments. This process needs to be actively managed. One way to do this is by running activation workshops. This is where you work closely with individual functions to help them understand the segments and what they mean for their department and their role. These sessions are action orientated, focused on understanding the opportunities and implications for strategic planning.

Segmentations can be powerful tools for businesses. Find out more about our capabilities in this area or get in touch to discuss a specific project.