There is a sort of buzzword as one goes up to the higher echelons of business, corporate, industrial, and marketing worlds. And they link it to business growth, competitive positioning, investment returns, and increased market share. Those benefits are merely part of the sum of industrial market research.
The paybacks of market research do not only impact businesses and industries individually. When taken collectively, the resulting financial success of every significant player contributes to national economic growth.
One can find a perfect example of the research’s impact by taking a look at the world’s current biggest economies. Once you have that data up, match it to the latest information on the most prominent global gainers on market research revenue.
Whether you consider the Top 10 or just the Top 5 nations from each set of data, their correlation is conclusive: industrial market research works. And it works considerably enough that the worldwide revenues of the research and data industry reached $80 billion this year. For comparison, that is $4 billion more than that of last year.
So, what makes market research work so well? Does it work only among large enterprises? One can get the answer to these questions by having a clear understanding of the nature of industrial marketing. However, you might get intimidated by the business or corporate jargon that usually make up most of what you will find from Google.
Thus, it can be summarized into three basic principles that you have to remember. Once you have a hold on these three, you will know the relevance of market research and how it could apply to your business.
Industrial buyers are more professional and better informed.
One of the more prominent aspects of industrial marketing is the type of buyer involved. There are just two types of buyers: consumers and industrial buyers.
Consumers generally get their products or services by direct purchase, and their typical transaction process is likewise straightforward. The average consumer only has basic and minimal technical knowledge about most of the purchased products.
On the other hand, industrial buyers are the exact opposite of consumers. Industrial buyers are not only knowledgeable about the purchased products. They are technical professionals and highly qualified about their target products.
Therefore, industrial buyers may even require specific features of specifications that are unique to their sector or business that would not be available to any other company.
The purchasing decision process is more complicated.
Since you are dealing with a specialized type of consumers who are technically proficient and informed about their target product, the resulting transaction with them is complex. Some factors contribute to the complexity, and one of them is product complexity.
There is also a higher degree of organizational interaction required that affects product complexity. It means that there are more levels of decision making involved to come up with the desired specifics of the product.
Buyer concentration is another factor that lends to the complexity of purchasing. What that means is that since industrial buyers are comparatively fewer than consumers, they can afford significant leverage when negotiating for the product cost.
Industrial product demand derives from consumer product demand.
Another noticeable thing about industrial products is that they eventually become consumer products. Thus, consumers drive the demand for a particular industrial product. These industrial products would then undergo processing to become the final product for the typical household consumer.
Besides, you could say that industrial products are typically raw materials that need to go through manufacturing to become consumer goods. But they are not limited to raw materials. Generally, industrial products get categorized as such if they get purchased by commercial enterprises, governments, and institutions.
The three basic principles should pretty much lay down an essential understanding of how industrial market research works. By looking into how these principles come into play with corporate transactions, purchases, growth, and positioning, market research becomes a powerful tool towards profitable decision-making.