Tip 172: Market research work is in demand

I was reviewing my invoices for my freelance market research work that I undertook during my free time over the past 2.5 years. It added up to USD$45,000. Did not realise that the few thousand dollars every project would add to a sizeable amount over time. As I reviewed the different projects that I researched on, it covered different industries and different geographic locations, though mostly focused on Japan. Although, Japan is a fairly developed market with saturated competition, it is the second largest economy in the world. Many companies who wish to enter the Japanese market, would first need to understand the market dynamics, how to gain market acceptance and obtain market information that is mostly published in the Japanese language. The companies would want to know insider information of their competitors such as sales numbers by product types and product models, instead of just general sales figures reported in spreadsheets for public listed companies. They would want to know competitor's distribution channels and their marketing strategies, competitor's top customers and top selling products, country's change of regulations in case there are market opportunities, as well as pricing information of different competing products in the market including margin earned by the distributors. All this require foreign language abilities to research on the internet, as well as locating key people to interview through my LinkedIn network.

For instance, I researched on the children workbook market in Japan dominated by reputable publishers like Shogakukan, Kodansha and Gakken who also held copyright to the manga and cartoon characters they used in the workbooks. Yet, my research demonstrated that specialized tuition and kids learning schools such as Kumon and Benesse are beginning to steal the limelight by influencing parents to spend substantial amounts on their recommended workbooks instead of shopping in the bookshops. Then, there is the research on the window, door and shutter market of Japan dominated by players such as Tostem, YKK AP and Sanwa Shutters. Due to the size of these companies and the relationships they build with large general contractors such as Kajima and Taisei, new market entrants simply find it difficult to penetrate the market unless they have a just-in-time order procurement extranet linked with the construction contractors. Foreign new entrants would also find it a challenge to have detailed product manuals in Japanese for each product model including hardware part, listing the components of each item and usage instruction with the Japanese user in mind. Companies such as YKK AP also has built a reputation in curtain wall and skylight technology catered for Japanese buildings with its strict fire resistance standards that construction companies would be likely to choose only them.

In one of my research, I found out that Japanese consumers usually do not read food product labels compared to Western countries as they trust the manufacturers. A company that was manufacturing non-additive starch was interested to know from supermarkets, retailers and convenience stores if clean labels on natural products would increase sales. Another such regulatory example was the introduction of REACH, a European Union regulation requiring registration of chemical compounds of any items imported to EU. A chemical trade show organizer was interested to know if Japanese chemical companies were interested in such topics of discussions and what other factors would meet their needs in international trade shows such as networking events or availability of interpreters and translators.

There are Japanese information that are not widely available on the internet such as the JAL Passage card that is exclusively for corporate clients in Japan by invitation only. A competitor wanted to know the number of accounts they had and average spending per account, the criteria for openning such accounts, how travel agents work with the department, the number of employees within that department and its total revenue and expenses year by year. The only way to obtain the above information is by interviewing with tact the head of the department himself. That would probably be as difficult as interviewing the IT department decision maker from the Ministry of Defense as requested by an IT network security company new to the Japanese market. Probably interviews with any Japanese can prove tiresome as they seek to be accurate in anything they say, while such researches would require insights and foresights into the industry. A large sample size interview on distributors and manufacturers of portable and bench power tools and measuring tools in Japan encountered just exactly such a scenario. Yet, when piecing together the jigsaw puzzle of the different interviews, I could inform the new entrant that the main players are Makita, Hitachi, Ryobi, Bosch and National for power drills, while bench tools include others such as Kosuku and Shindaiwa, and measuring tools include Tajima and Hilti.

Besides Japan, I did a research on the Malaysian market for FRP (fibre glass) floor grating whether pultruded or molded for vessels, offshore, chemical and waste processing plants. The main players in Malaysia are Polymer Composite Asia (PCA) Sdn Bhd, Yi Sing Composite Industries Sdn Bhd and OGPM Services Sdn Bhd. Also, did a research on generators for commercial boats in Germany, Turkey, Netherlands, Italy and Japan with players such Masegenerators, Lindberg, Volvo Penta, Scania, Koler, Caterpillar Marine, Deutz, Cukurova Ithalat Ve Ihracat Turk A.S. and Yanmar.

This blogpost should find a lot of google hits. Feel free to contact me for detailed research information on any of the above topics if you are willing to pay a small fee by paypal. Market information can help you make better strategic decisions that will cost you less especially in challenging times.

(Photos show Inokashira zoo and park, Tokyo. Two of the photos show a Japanese plum blossom (ume) where you would get the pickled umeboshi, and not a cherry blossom as the oval shape petals here would demonstrate).