1. Non-Traditional Tools for
Understanding Consumers
Prepared for:
Address to Insight Asia Conference 2005
Prepared by: Spire Research & Consulting
Date: 25 August 2005
Prepared for: Address to Insight Asia Conference 2005 Date: 25 August 2005 Page 1

2. Spire background
Spire: A strategic market intelligence firm serving enterprises in the Asia-Pacific.
We focus on holistic, strategic studies on the external business environment to
support market entry, feasibility and strategic investment decision-making.
Material for this session is drawn from Spire’s regional practice and from material
published in the Spire E-Quarterly.
To receive the Spire E-Quarterly, please email us at ejournal@spireresearch.com
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3. Thesis: Non-traditional research tools add value when used prior to
traditional consumer research programs
Non-traditional tools include:
Secondary data analysis
Expert interviewing, targeting:
Expert observers of a market
Channels
Competitor and substitute analysis
Non-traditional tools can be useful in:
Setting priorities for traditional consumer market research investment
Formulating hypotheses for testing
Adding context to better understand consumer research findings
Non-traditional tools can be a powerful source of competitive advantage in a
consumer insight program – informing recruitment criteria, questionnaire or DG
design and interpretation of results.
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4. Example: The China Beer Market
Scenario: Introducing an imported, foreign brand of beer into China
Secondary research Review consumer study objectives –
focus on promising niches?
To understand share of imported/foreign beer and trend, from
analysis of trade data
First register which are the import
Expert interviews and visits to pubs, hotels and retailers for brands that have a foothold – later
used to test consumer awareness of
products checks
those brands to work out best
To form a preliminary view on the major imported brands positioning
To later design consumer
Key Competitor analysis using secondary research questionnaire to test importance of
To analyze data on critical success factors such as bottle design competitor CSFs – e.g. is choice of
and relationships with key channels pub more important than choice of
brand
Channel interviews (distributors, retailers, pubs, hotels),
secondary research on geographic and demographic If there is need to prioritize
patterns by income and beer consumption consumer research budget, use this
to help decide focus by geography
To form a preliminary view on promising channel segments, or channel segment
customer segments and geographic regions
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5. How do non-traditional research tools add value?
The value of non-traditional tools can be seen in terms of:
Setting priorities for traditional consumer market research investment where necessary:
Selecting geographic areas of greatest interest
Prioritizing segments of greatest interest by product category or customer type
Formulating hypotheses for testing using consumer research tools
Providing context for understanding consumer research findings
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6. Identifying promising Geographic zones
We can prioritize geographic areas by looking at economic or demographic
indicators… But which ones?
Much depends on whether one is marketing “high-end” or “low-end” consumer products or
commercial/industrial products
For products with low income elasticity, we should look more at population distribution,
taking into account age, ethnic or religious demographics where necessary
For products with high income elasticity, we should look more at metrics like income per
head, household spending, retail sales or disposable income...
…though this data is not always easily available by province and city and in some cases
may need to be estimated
We can prioritize geographic areas using macro-strategic research to discover
historical sales of product by type
Secondary data may be available in some cases, eg vehicle registrations by province…
…but often, secondary data is not available and estimates need to be made based on
industry interviews
Judgments about promising geographic regions should take into consideration not only
absolute sales volumes but sales values
and the likely growth rate, taking into account product life cycles
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7. Identifying promising Product Categories
Prioritizing segments by product category, price band or customer type is another
path for non-traditional tools to add value
Product category prioritization:
Often a program of consumer research examines demand for a product category which
has a number of sub-categories, e.g. different engine capacities for motorcycles
Macro-strategic research tools can be used to elicit information on historical and forecasted
future sales by product sub-category, based on secondary data searches and information
exchange with channels and competitor producers
This helps to prioritize focus by product category, to make best use of limited budget or time
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8. Identifying promising Customer Segments
Customer segment prioritization
This objective is more problematic using non-traditional tools
Engaging with channels to understand their view of key segments can be of value
For example:
Power tools research, where non-traditional tools helped determine what proportion of the
market was DIY/home consumer versus industrial users, a critical input for prioritizing
customer segments for traditional research
Research on data-enabled phones – interviews with retailers to understand characteristics
of customers in terms of demographic profile and line of work, to validate our hypotheses
about what profile of customers to recruit for consumer research
Research on industrial equipment – arriving at a view on the most promising vertical
segments and geographic regions by starting first with competitor and channel interviews
before going on to customer interviews
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9. Formulating Hypothesis for Testing
Formulating or validating initial hypotheses for testing
can be done with the help of expert or channel
interviews and secondary research. These can relate to:
Usage and attitude towards product category and brands
Drivers of buying and switching behavior
Which competitors or substitutes have a strong position
Examples of using non-traditional tools prior to
consumer research, to generate hypotheses for
testing
Online sales of electrical and electronic goods in Japan –
competitor benchmarking suggested that Japanese e-
commerce consumers prefer a COD mode of payment
Home computer peripherals - competitor analysis helped
our client to ask the right questions during consumer
research about reactions to new competitor product
concepts
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10. Interpreting Consumer Research Findings
Non-traditional tools can provide context for understanding and making use of
consumer research data by, for example:
Understanding the reasons behind consumer research findings, for example changes in the
economy or access to credit which may impact consumer interest in a product
Quantifying the size of demographic, economic or geographic segments, so as to set
feasible sales targets
Understanding the number, distribution and companies in specific types of channels (for
example: hypermarkets, DIY retail stores, Post Office outlets, photography mini-labs), to help
plan channel programs
Elaborating on legal and regulatory requirements necessary when at the go-to-market
stage
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11. Non-traditional tools: Secondary Research
Secondary data analysis encompasses :
Published economic, demographic and industry data
The reliability of sources, even where they are Government sources, needs to be scrutinized
and adjustments made where necessary
Such data can inform the choice of consumer research method – for example telephone
penetration viewed in conjunction with income per head data can help decide if most of
the targeted segment can be reached by telephone
Product sales trend data is sometimes available from published sources, based on
underlying macro-environmental research programs
Import/export data and production data can be extracted and examined
Trade data for product categories is often grouped together to secure minimum numbers of
data points per HS code
Trade data should be adjusted for re-exports
Trade data in some Asian countries should be used with caution due to problems with
underlying data collection accuracy
For products where substantial volumes are not imported but locally produced, local
production data can be crucial…but sometimes hard to find
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12. Non-traditional tools: Secondary Research (cont’d)
Published market commentary is often very helpful in formulating hypotheses about:
Trends in product design, consumption patterns, competition, distribution and technology
Popular product sub-categories
Such commentary can be found in trade periodicals and news media, but also from
other sources such as:
Sector reports published by investment banks
Competitor press releases, annual reports and IPO prospectuses
Trade and country news websites
Example: a press released on a publicly listed competitor’s website highlighted consumer
research findings on a stationery product market in Korea
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13. Non-traditional tools: Competitor Product Analysis
Studying competitor or substitute products can yield valuable inputs for designing
consumer research questionnaires and discussion guides
For example, when researching the digital print mini-lab business, knowing that online print
websites are thriving in a country like Korea may suggest a question about when they would
print online versus visiting a digital mini-lab
Another example: when researching almonds in Indonesia, local products were
found that looked similar to almonds, known as “Java almonds.”
Consumer interviewees were shown the difference between Java almonds and Western
almonds, to ensure correct survey results
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14. Non-traditional tools: Expert Interviewing
Experts can offer input on prioritization & hypotheses for testing
Who could be experts?
Academics.
Example: Business school academic specializing in BPO, interviewed for a project on document
outsourcing
Journalists
Can be trade periodical journalists but also news media journalists with relevant specialization
Government officials
Useful because regulators can offer an understanding of the market situation, but also
because Government influences trends rather than just observing them
Trade bodies
Can be useful in cases where the trade organization has permanent staff and conducts
research.
A Delphic approach can be used to process expert feedback
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15. Non-traditional tools: Channel Interviewing
The client’s channels can be engaged using in-depth interviews or focus groups
bringing together executives with similar roles in the channel company – Spire is
experienced in both
The value of Channel interviews is similar to that for Experts
The principle to follow would be to select channels that are closest to the end-customer and
to interview the relevant individuals in the company
For some industrial and commercial products, the decision-making process can be
complex and elongated, with various tiers of channels, contactors and consultants
influencing or even making the decision to buy
Understanding novel channels will help in prompting consumers during qualitative or
quantitative consumer research. Novel but emerging channels would include auction web-
sites, Multi-Level Marketing and direct sales initiatives from manufacturers
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16. Non-traditional tools: Competitor Analysis
Studying how competitors view their customers, what new product concepts they
have placed before customers and how their activity may have impacted customer
attitudes and perceptions…
…is valuable in designing consumer research tools.
We should also study providers of substitutes and successful best practice leaders
which may not be direct competitors.
Forecasting competitor future plans can be useful.
Examples:
Using patent searches to suggest new product concepts in the competitors pipeline, which
can be tested in consumer research to determine the best counter-strategy
Studying product substitutes when researching a consumer data storage product, to
understand what was the closest substitute people now had to our client's product. In some
countries, it was flash cards and for others, back-up portable drives. Recruitment of
consumer respondents would be by ownership of the dominant product.
Studying a successful direct selling firm in Japan, learning how customers may call up
several times to ask questions before they buy – this hypothesis could be tested in consumer
research
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17. Non-traditional tools: Client Interviews
Lastly, it should be noted that interviews with client company executives
in charge of local sales can be useful in developing initial hypotheses to inform
consumer research.
Interviews or focus groups that are conducted by an external market research firm
can be more useful in eliciting frank feedback about the market situation from such
executives.
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18. Tel: (65) 6838 5355
Fax: (65) 6838 5855
78 Shenton Way #20-01
Singapore 079120
sg.info@spireresearch.com
www.spireresearch.com
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