Getting Market Research Right
Richard Whiting has been living and working in France for over 20 years. He has dealt with a variety of recent and established businesses and their proprietors, promoting his companies' business-to-business services and selling residential property.
REDUCING YOUR RISK THROUGH MARKET RESEARCH
Success in a certain type of business in the UK does not mean it will necessarily be a success on the other side of the English Channel. Or being a successful businessperson in the UK does not mean you will automatically become successful in France. The aim of market research is to test the project and reduce the risk factor as much as possible before launching the company or business. A market research report should be clear and easily readable for you and your advisors and any organisations helping with finance. Use it with the Business Development Plan (see Chapter 4). It should provide both an ideological and practical foundation for your future business.
Organisations such as Cabinets d’études (consult Etudes de marchés in the pages jaunes phone directory or www.pages-jaunes.fr) or Marketing Studies departments of universities provide invaluable and unbiased information, knowing how to present it and how and where to find it. They will, however, not necessarily have previous practical or study experience of the particular product or service. Ideally work with one of them, incorporating your own findings, to produce the final report. See also addresses given at the end of this chapter.
The national business creation agency (APCE) claim that the reason for 70 per cent of business failures in the early years is inadequate or no previous market research.
READING YOUR MARKET RESEARCH REPORT
A market research report should produce or confirm the following:
- 1.The size of your planned market. Is it large enough for your requirements? Can you reach it? Can customers pay for what you are offering?
- 2.Define or redefine precisely the type(s) of goods or service for different types of customers.
- 3.Prices that the market will support bearing in mind competition and your projected profit margins. (The French public are particularly good at shopping around for quality products at a good price. They are, however, suspicious if something is too cheap and they are prepared to pay a high, but not exaggerated, price for a de luxe product or service provided they are convinced of the quality.) Below-cost pricing is only authorised for clearance sales and certainly not to launch products. Don’t be afraid to use the Internet as a wonderful tool to check out competitive products, their prices and the overall market’s growth.
- 4.Marketing methods, including publicity and advertising and their costs, selling and delivery/distribution. The latter will have a direct bearing on the final choice and locality of business premises.
- 5.Percentage share of the overall market targeted enabling you to project turnover figures.
Socio-professional and demographic information (as provided by professional Marketing Departments) on potential customers, including buying habits and purchasing power, should be investigated, as should details of market share held by the existing competition (and likely to be obtained by newcomers to the market) and how the former get their business. Overall general factors such as the political and economic climate and likely legislation which could have positive or negative effects should also be taken into account. In 2007 there will be parliamentary and presidential elections.
SOURCING INFORMATION ON YOUR MARKET
If professional assistance is not sought, which is often the case with small business projects on a tight budget, be prepared to spend at least several weeks to do the job properly yourself. A general market survey should first be undertaken, followed by a survey seeking precise information for your product or service, finishing with field research.
The general survey should provide as much information as possible on recent and likely future developments in the general sector which interests you. The situation in a similar sector in the UK that you have just left, or are planning to leave, will not necessarily be the same in France. Similarly, the overall national picture in France may be more or less encouraging than your area or région if you are only going to operate locally. Read the national and local papers (many of the latter have a weekly economic report looking at prospects and business successes in the area) and of course the trade and specialist magazines. France has a tremendously wide range of magazines and periodicals: probably more than any other country in Europe. And, of course visit Trade and Business Start-up fairs (Salons professionnels and Salons de créations d’entreprises) for the latest information, ideas and new contacts.
You should then look at your market in detail: its potential; possible customers; the way it’s developing and trends (les tendances). At this point, officials in trade or professional associations and chambers of commerce should be contacted. They are normally prepared to give free advice, although you may have to pay for reports with market statistics and analyses. Most French administrative set-ups are extremely departmentalised, so don’t be put off by initial refusals. Insist politely with your enquiry until you are conducted to the right person. An appointment may of course be necessary. Trade fairs (see above) are very useful in this respect as people manning association and chamber of commerce stands are there to meet people for immediate discussions.
TESTING THE MARKETPLACE
The final step is meeting and testing the marketplace and future customers. On a national scale an opinion-poll company will have to be used if face-to-face discussion with customers is part of the test. If your French is adequate and the future market is local, carry out the poll yourself. It should have multiple choice questions or just a ‘yes’ or ‘no’ possibility and avoid asking for a hypothetical buying decision as this can scare people off and encourage ‘false’ answers. The questionnaire used should be approved or designed by a professional. There’s not much point in getting superb answers to the wrong questions! Surveys by phone cover a lot of people in a relatively short period of time. The questions need to be brief and, unless your French is excellent and you’re used to telephoning customers, a télé-marketing company should be used. Face-to-face polls with more questions than a telephone enquiry will supply in-depth information. On-line ‘chat’ sessions within appropriate websites also provide rapid answers and information. A combination of all these methods is not a bad idea. Mail shots by post with pre-paid envelopes have notoriously poor return rates, even to well-targeted addresses taken from professional directories or to a purchased potential customer address list that corresponds to your product. (These should not be confused with marketing mailshots as part of your sales promotion activity, once the business is established, which can have good results.)
Is the market information you have obtained sufficiently precise? Does it give detailed figures on the market share for your project enabling a realistic projection of turnover and will you be able to attract customers (and revenue) almost immediately? Even if you have not used or cooperated with a professional person or company to produce the market research report, consider getting it analysed by a specialist business creation company as they will give an unbiased opinion.
USEFUL VOCABULARY
USEFUL ADDRESSES AND WEBSITES
General start-up information
APCE, 14, rue Delambre, 75014 Paris.
National business start-up agency. Information in English, covering procedures, taxation, legal structures, statistics, etc.
Market research
This website provides a list of companies, by geographical area and type of business, carrying out market surveys.
Confédération nationale des juniors entreprises (CNJE), 48, rue Montmartre, 75002 Paris
For a list of business students’ associations carrying out market surveys. Students are supervised by their lecturers.
Magazines and periodicals
The following publications may provide useful information on market research.
Défis, 204, boulevard Raspail, 75014 Paris
L’Entreprise, 14, boulevard Poissonnière, 75009 Paris
Challenges, 10–12, place de la Bourse, 75002 Paris
Courrier Cadres, 51, boulevard brune, 75014 Paris
Published consumer surveys and economic, financial and statistical information
Credoc, 142, rue du Chevaleret, 75013 Paris
This website provides information on a list of consumer surveys which can be purchased.
Dafsa, 117, quai de Valmy, 75010 Paris
A company providing information on expensive, but excellent, statistical and economic reports by market/product sectors.
La documentation française, 29, quai Voltaire, 75007 Paris
A website with information provided by the French civil service, which can be borrowed or studied if you are at their office in Paris.
Exhibitions and trade fairs
Fédération des foires et salons de France, 11, rue Friant, 75014 Paris
This website offers information on dates and venues for forthcoming fairs and exhibitions.
A website providing information on dates and venues for forthcoming trade fairs.
Trade guilds and chambers of commerce
Assemblée des chambres françaises de commerce et d’industrie, 45, avenue d’Iena, 75116 Paris
A good website for addresses of all the chambers of commerce.
Assemblée permanents des chambres de métiers, 12, avenue Marceau, 75008 Paris
See this website for addresses of all trade guilds.
