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Emprendimiento Negocios

Researching Industrial Markets:

An excellent introduction to the business world

Mexico City, June 01, 2019
Andrew L. Davis

The vocational move from a world of aesthetics and art to one of business and academics was a drastic one indeed; however, there could not have been a better education to ease the transition than an apprenticeship in the world of exploratory market research.

In order to enter the world of international business, studying an MBA was the standard recommendation, of course, and quite understandably, I complied. As a lecturer, when I try and articulate basic business concepts, however, I draw on the experience of my first job 35 years ago. This was the best education for me: getting my hands dirty by interviewing managers, engineers, professionals, experts, government officials, and other stakeholders while observing many aspects of industry and commerce.

Industrial market research is no more than presenting a landscape of the interactions that make up the functions of any industry. In more technical terms: an overview of the market size, competitive analysis, distribution network, pricing scheme and external factors facing a company interested in entering a new market or developing a market strategy. The market research companies where I worked would normally do such research for overseas companies looking to enter the Mexican market or to diversify their product range there.

The studies I would personally work on were concerned with consumer products (for example shampoo, bathroom furniture, pet food), business-to-business (engine parts, printing machines), or services (credit cards, logistics). The methodology would be flexible and creative, using a combination of exploratory interviewing and observation, followed by qualitative and quantitative analysis. We would largely compile data by asking questions to a selected sample of respondents, chosen through convenience (who was available according to the budget given by the client), judgment (who we considered being the most important market players or the best informed), or snowballing (through referrals…very important in Mexico!)

The job was especially fun and challenging because small teams were assigned to projects, which had to be completed collaboratively; this meant that we all participated in every aspect of the task: client relationship, planning, fieldwork, data analysis, and presentation.

This has been the most valuable way of learning how an industry works in a wider sense. Academics show us the way with models such as Canvas, the Value Chain, the Five Forces of Competition, or the Diamond of National Advantage; personally, I relate them to my experience in this profession when I visualized markets and industries as a general picture.
This was the trick: to see a market as a whole; to capture its size, then segment it, then understand the participants, their importance, to look at the relative value of the parts, and see in which ways products and services proceed from their source to the final consumer. If we are dealing with fresh food, for example: how important is foodservice (restaurants and hotels)? Street markets? The food industry? Should I try and sell to specialized wholesalers or straight to retailers? Should I use intermediaries/brokers or should I contact buyers directly?
If the researcher provides the client with this overview, the right kinds of the buyer can be approached and the right end users can be accessed. If not, money is wasted and export strategies fail. This picture is invaluable for me when teaching international business…the opportunity to see the industry as an integral mechanism…a business is an integral part within this scheme, supporting and depending on others.

The experience also taught me the value of finding out about the right things. Data means nothing; information means understanding something that reflects reality. Collect information helps us make correct decisions. Understanding how to obtain that information may be a lifelong quest, however, I am glad I am conscious that I am on my way.
Once the research objectives are in place, one has to go hunting…never guess if hard data cannot be found; always estimate using logical criterion if necessary. If secondary data is used, never trust it at first…go through a process of cross-checking, making sure data is logical, researching sources, asking for more opinions, double-checking with clients and colleagues, and always questioning one’s own judgment. Finding out and discovering through researching and analyzing requires time, but I have found it is a worthwhile investment. Before I understood this, good information always seemed trivial… “What is the point in wasting time when the objective is to succeed? Researching is for academics, not for business people…leave the data hunting to those who enjoy getting lost in the numbers…I have better things to do!” Wrong! Never trust others for open-and-shut market research, and this coming from a seasoned market researcher! Always confide in your own instinct and estimations based on logical and well thought-through criterion before trusting others.

Never be afraid to ask. This was always a problem of mine; perhaps the best therapy for inhibition to speaking out in this respect was sitting in front of people and knowing that my paycheck depended on placing direct questions to them. Once a good interview is underway, the researcher should never refrain from encouraging the respondent to share thoughts. It took me some time to work out that my job performance depended on results, and that the results depended on the quality of information I gave to clients. At the negotiation stage with clients, one is asked for the impossible, and the boss usually obliges; the research team must produce the goods. Sitting across the desk from a competitor with a list of queries, one is inclined to be polite and shy away from the embarrassing business of asking the dreaded market-share question, thinking it would be better to write in an N/A or to communicate a little white lie to the client. One has to go beyond the psychological barrier and coax the information out of the respondent if necessary! Clients would do their own research to cross-check my own results, of course, so I knew I had to learn how to make respondents confident enough to provide me with the right sort of information. This later gave me the confidence to perform better in job interviews, public speaking, lecturing, and negotiating. It also made me realize that asking questions is more of a strength than a weakness and that questions provide us with ammunition rather than make us look weak.

Market research taught me how to be creative and flexible in order to get what we want. Once I had an appointment to meet with a manager to better understand a market from the point of view of a leading competitor. This particular interviewee told me at the last minute that he had to leave town on a business trip, and that he would not be able to meet with me. Knowing that I was about to miss out on one of the best-informed and most willing sources, it suddenly occurred to me that the place of the interview did not have to be fixed and that the opportunity need not be postponed. I offered to be the co-pilot and ended up spending eight hours with the respondent in his car where he gladly talked about the industry. This ended up being beneficial for both of us, as I ended up with more information than from a traditional interview setting, and the respondent was able to forget about the monotony of driving by discussing something of interest with some welcome company (at least that is what I thought!) This can be applied to everyday life: If there is something urgent to talk about, why wait for the boss to receive you in his or her office, for example, when you can walk with him or her on the way to his/her meeting? Why be intimidated by a negotiator who uses the deadline tactic and tells me a contract has to be signed because his/her flight is leaving in a couple of hours and the transport is leaving for the airport in five minutes, when I can keep them company and we can discuss the remaining clauses over coffee after check-in at the airport?

One personal triumph I am particularly grateful to market research for is learning how to stand up to bullies! Happily, this is something I never had to rely on an expensive psychiatrist for. Again, there is nothing like a difficult market research interview to remedy one’s childhood traumas!

One particular experience that comes to mind was conducting an interview for a competitor in the bathroom furniture manufacturing industry located in the State of Mexico. I managed to persuade the CEO to receive me for an interview…he knew I was working on a market research project for a new competitor so I was surprised at his willingness to talk. After the normal ringing of the bell outside the facilities in Tlalnepantla and the ritual of signing in at security, I was instructed to the reception area in the usual indecorous manner. Then I was ushered into a large room with an enormous desk at the center. The CEO was sitting behind the ominous piece of furniture, inviting me to sit down in front of him, with a couple of bodyguards standing three meters behind me. I am not sure what sort of physical threat I could have posed, so I assumed they were there for intimidation purposes only.

Following the “Mejores prácticas de la Asociación Mexicana de Agencia de Investigación de Mercados”, I was honest about the study I was working on and asked the questions directly. Every time a question was asked, however, the CEO declared that the information could not be given away and the bodyguards made a step forward towards me! I then realized that I had to go against the grain and surprise the CEO; I told him I would not be intimidated and that as a foreigner I had nothing to lose and was simply there to encourage competitiveness to benefit everybody. The ploy worked…the point I learned is that using the element of surprise takes those who use aggressive tactics off guard.

One aspect that has interested me is how to engage the respondent. For me, it is all about asking questions which generate the most interest. When I get a “that’s a really good question”, I normally think I am on the right track…that means I have pushed the right button; I have touched on a subject the respondent thinks actively about. Once I was in Los Ángeles doing some fieldwork for a Mexican gas boiler manufacturing company looking to consolidate its U.S. market position for the Hispanic consumer, I was doing some observational fieldwork with the manufacturing client and his business consultant, looking at wholesalers who distributed gas boilers to retailers and plumbers; we were all getting the feeling that the exercise was not really addressing the objective of the research. It suddenly occurred to me through interviewing owners of the establishments, that there was not much in the way of brand preference and that end users were simply purchasing products as if they were commodities and basing their buying decision on price. I asked the client’s business consultant whether these intermediaries were having an adverse effect on the price, by how much and what sort of price advantage the manufacturer would have if they cut them out of the equation. That hit the button! It seemed obvious enough, but it was not something he wanted to consider as he thought it was not feasible; hearing it from somebody else made it so.

One other area of opportunity within the learning curve has been getting others to feel comfortable enough to open up. In a world where obtaining reliable information is paramount, people tend to see those who are hunting for data as aliens trespassing on their territory. It is one thing to visit, but quite another to enquire. Doing this abroad entails the problem of facing cultural differences as well as personality barriers. Once one has gained this initial trust, then the job of the researcher to get people to open up and be enthusiastic becomes easier. In one of my first assignments, I was sent to the Colonia Buenos Aires in Mexico City to conduct some informal interviews with auto parts distributors. This particular zone is a fascinating cluster activity of mechanics, dealers, retailers, wholesalers, and junkyards related to automobile maintenance. It is, however, considered not to be a recommendable place to casually hang around in. It is also very much reserved for the locals only; only clients with cash to spend are welcome from the outside. The reader can logically imagine, therefore, that the Caucasian market researcher would not be well received! So, up I showed in my two-piece suit, asking questions with my thick European accent and obviously getting nowhere. I went back to the office disillusioned and empty-handed, and my understanding boss told me to go back the next day with a pair of jeans and the company driver. The ploy worked, and the entrepreneurs opened up and reacted very well to the new approach!

At a certain age, we start reflecting on influences which left a mark on us, and we normally come up with personalities such as family members, professors or mentors. If we are lucky, we may have chosen an undergraduate or graduate program which provided us with some inspiration. Personally, I was fortunate enough to work in a medium which would provide me with an insight into the basic mechanics of business and their function within the competitive universe of an industry. This knowledge allowed me to see business as a component within an ecosystem of activity, something that has helped me in academics, consulting, research, and in trying to understand some of life’s larger issues as well.

Andrew Lee Davis Blake

Andrew Lee Davis Blake at Expertise en investigación de mercados
Profesor de negocios internacionales con historial en proyectos de investigación privados. Especializado en áreas de negociación internacional, comunicación intercultural y estrategias de internacionalización empresarial. Participa como consultor para PYMES, organiza actividades de promoción internacional.
Andrew Lee Davis Blake

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