Business Development into New Markets
Client needs:
As part of its business development, our client was preparing for a major launch into the Electrical Contractor market. Though the company already participated in this market, there was a business development requirement for added impetus in this area. The client’s offering in this market had not been specifically tuned to the needs of customers and, as a consequence, our client’s penetration of the market was low. Our client needed to create a business proposition to support an investment proposal aimed at significantly increasing share in this market place. In particular, it was desired to understand the service elasticity of the market so that the additional investment required could be gauged against likely returns.
Business development needs:
The aim of this project was to support desk research being carried out within the client company, by identifying the issues and business agendas of electrical contractors.
The key issues were:
What are the key characteristics that customers look for from a supplier, and
What would differentiate one supplier from another?
The nature of this project was qualitative research, in which we needed to explore the attitudes and aspirations of a representative selection of electrical contractors. After segmenting the contractors, we determined that the sensitivities between locally competing contractors would render focus groups an ineffective method for data collection.
Key outcomes:
The electrical contracting industry was found to be a vertical hierarchy in which there was no clear stratified competitive demarcation. For our client this meant that there were likely to be few dominant customers with price pressures being industry set as opposed to individually negotiated. Contractors tended to start work early in the day, and finish correspondingly early. They are sensitive to unproductive time and require quality goods with high stock availability. For our client, part of whose standard offer is high stock availability, this meant no major logistic disruption to entering this market i.e. lower cost of entry.
This study revealed an interesting and attractive market for our client. As a unique business development, there was a relatively low cost of entry to a market where most customers have 2 or 3 main suppliers, but have little discretionary time.
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