Once regarded as a luxury by business-to-business marketers, the market for B2B research and insight is growing steadily, encompassing every industry and region. As a result, prioritising insight needs is a significant challenge.
Product
In developed B2B markets, customers regard product quality and durability as a "hygiene" requirement. Companies with low quality are not in business for long, leaving serious players to differentiate on the extended offer, such as service. In developing markets, good quality becomes a key differentiating factor only for those customers who demand it. However, this gap is closing fast.
The "must-have" product insights in Western countries, therefore, concern how to keep differentiating the product range and service package to maintain market share and margins. NPD and product evolution research are a key priority, with product and concept testing particularly important. Customer-experience research and customer-journey mapping assess the extended offer in detail. Conversely, B2B product research in developing countries is relatively rare; where it exists, it commonly involves testing whether a Western-designed product appeals to the local market.
Price
Value-added pricing is common in developed markets – buyers are willing to pay more for a superior, extended offer. In developing economies, the willingness to do so is far less prevalent; most B2B buyers relate price primarily to quantity.
In both types of market, pricing research is commonly neglected by B2B buyers. There are numerous ways to obtain insights that maximise pricing strategy, from competitive-intelligence-pricing research to quantitative-pricing research techniques.
Western clients tend to premium-price in developing markets, communicating high quality to a small part of the market and receiving high margins in return. In developed markets, the picture is far less clear, with customers generally more demanding and high-quality competition more prevalent. We would make two recommendations to businesses in any market: always obtain pricing insight – no other type of insight will have a greater impact on your bottom line; and, if in doubt, price high. Once a low price point has been communicated to a B2B market, it is impossible to raise it without offering greater value.
Place
Western businesses often underestimate the difficulties associated with routes to market in developing economies. Whereas channels in the home market may be long-established, those in a developing one may be unrecognisable, fragmented, ephemeral and dependent on local knowledge. Another common mistake is to underestimate the importance of a permanent, on-the-ground presence and local-language capability.
That said, these difficulties are generally caused by a lack of commitment from the business rather than a lack of insight. Market-research agencies and market-entry consultants are adept at performing value chain analysis and constructing market maps in most countries. B2B firms are, however, often surprisingly unwilling to implement the best channel strategy having obtained this insight.
Promotion and positioning
In any B2B market, branding promotional messages should focus on customers’ "hot buttons": these are product quality or price in developing markets; service, brand, consultancy and other value-added messages in developed ones. Promotional routes will also differ. Direct mail is increasing in prevalence in most developing B2B markets, but remains a scarcely used and ineffective channel in these countries. Relationship-focused promotion, such as trade shows and site visits, is key, since trust in brands is in short supply.
This final element of the marketing mix is frequently researched by insight agencies, with most businesses effective at implementing the recommendations.
Price is the most difficult component of the marketing mix for B2B companies to get right, and the issue with most potential to affect the bottom line. Paradoxically, it is also the issue businesses are most reluctant to research. Regardless of geography, B2B companies should move this type of insight up the priority list. Few investments will benefit your business more.
Matthew Harrison is the chief executive of B2B International
| Profile |
| Personal philosophy I have a friend who believes that every year a man should change his house, car, wife or job. I don’t agree with that, but I do believe that change is fundamentally a good thing. |
| My most bizarre "insight" Loughborough was the destination for the world’s first ever package holiday. |
| If I could ask one question of the universe, it would be Why Loughborough? |
| I get my best insight from never conducting the same project twice. |