Market Research Australia

There are so many differences between B2B and consumer markets and this is certainly the case when contemplating market research in Australia. The differences do not necessarily reside in the products or services within these markets themselves, but instead, in the manner in which these products are transacted, and in the relationships which naturally exist between parties.

“Market Research Australia” firstly needs to appreciate and understand that B2B marketplaces are characterized in the following ways:

• Complexity of the purchase decision - Typically much more complex when it comes to purchase decisions (as the financial and non-financial value of business purchases is often high). There are often several stakeholders involved. For example, there are research and development staff, procurement staff, accounting staff, suppliers, external consultants, etc…. It is seldom that decisions are taken exclusively by individuals.
• Derived Demand – as all demand in B2B markets is ultimately derived from some manner of demand in a consumer market. As an example, a company might manufacture chemical products, which when added into cement, cause the cement to set more quickly. This chemically dosed cement will then be on-sold to cement companies, who then sell their product to building companies, who in-turn build homes for families.
• Ability to switch supplier – Another challenge for “Market research Australia” is understanding the important switching costs and triggers. When operating in a business to business marketplace, if the supply of a product becomes interrupted, it might prove difficult to switch or substitute suppliers. There can actually be many varied reasons for this. For example, the company may be operating in a market where there are very few alternatives available. But even if there are alternatives available, the act of switching may have significant cost and time implications for the production of those goods.
• Smaller customer bases - B2B markets are regularly characterized by smaller numbers of transacting customers and often a smaller customer base creates many more opportunities for relationship building with business contacts.
• Personal customer relationships – Yes another challenge for “Market research Australia” is understanding the importance of personal relationships. In order to sell products, many companies representatives personally call on key customers, providing a chance for personal relationships to develop. In many markets this is the key selling mechanism
• High value spend – Some transactions can be very significant in value and where the Pareto rule applies, 80% of the financial value will be driven by 20% of customers.
• Technical products - Products can be technical in nature. Customers usually want very precise information about what the products are capable of.
• Differences in the explicit ways in which product benefits are marketed - Industrial companies typically do not have the marketing nor communications budgets that might be a fact of life within larger companies. Because of this, advertising campaigns are usually smaller, and targeted around opportunities to see, touch and feel the product itself. In these markets, trade shows and good old “word of mouth” and referrals still play a vital role.

For the market researcher, these differences in B2B markets can present many challenges. Market research Australia is faced with the demanding task of designing research in order to extract and capture this intelligence.