Saturday, May 7, 2011

7-Part Series, Beyond Market Research Numbers; Part 7, Global Focus

In 2011, everyone knows the world seems much smaller than a century ago – even a decade ago. With the explosion of technology that brings images of what is going on in any region of the world to the eyes of the world instantly, and every country, including the United States, negotiating international trade agreements, companies and governments desire global insights.

Commerce has become a business world with a requisite for a view of the entire globe. Emerging markets are now larger than existing markets for many product sectors.

To expand internationally into emerging markets, and to be successful working within cultures where prior exposure has been limited, there is a vital growing need for companies to resource market intelligence with a global focus.

With market research operations spanning over 80 countries, TNS Global boasts a powerful global network. “In each country we combine the benefits of industry specialization & research expertise, to deliver powerful insights.” The TNS footprint includes Asian Pacific, Africa and Middle East, Europe, and Latin America as well as North America.

TNS notes, “Asian Pacific has the two most populated counties of China and India , two of the BRIC countries [Brazil-Russia-India-China] , and 8 of the Goldman Sachs' next 11 countries identified as potentially becoming the world's biggest economies.” They are the largest custom market research business in the Asian Pacific “with over 4,000 employees working with clients across an impressive network that spans more than 15 countries in this region.” TNS experts offer a China Blog.

Africa has a population of one billion people. If you add the Middle East, that makes it one-sixth of the world’s people. It is identified as the next major economic growth region. TNS is the largest custom market research business in Africa-Middle East. TNS notes, “Besides having staff in 17 countries, we have the capability to conduct fieldwork in any country in the region.”

TNS became the first market and social research company with a comprehensive African network able to service local, regional and global clients in all African markets. TNS provides, “No other research company has the depth of knowledge of the African consumer or the understanding of opportunities present in the rapid growth emerging markets of Africa.” They have over 700,000 conversations with African consumers.

TNS Global is the largest market research company in Europe, with a network of 33 countries covering all the major markets. They provide a “Connect with the European” website.

TNS is also the largest custom market research center in North America with their heritage going back to the 1930s in Canada and the United States. They provide a quarterly Canadian “Trends” newsletter.

Latin America is the home of TNS Global. TNS Global has been conducting research in Latin America “for more than three decades, from small studies in the countryside to large international studies for the world’s multi-nationals.” They offer a Latin America Discovery Book.

TNS US is headquartered in New York, and has many regional offices across the U.S. They are the largest custom research firm but also conduct several syndicated studies. Their U.S. based executives also combine this with international knowledge within their business sectors. Our series industry sector executives share their insights. They are:
Dennis LaFave, TNS Vice President, Automotive Sector
Mike Fridholm, Senior Vice President, Consumer Sector, North America
Bob Neuhaus, TNS Global Sector Head for Financial Services and Executive Vice President, Eastern U.S.
Tom Bueher, TNS Senior Vice President, Technology Sector

BKH: Which countries are the largest purchasers of your product sector in 2011?
DL: Auto – China, U.S. and Japan.

MF: Consumer - While the emerging BRIC (Brazil-Russia-India-China) markets, such as China, are showing rapid growth for the consumer goods companies and garnering increased focus and resources, the highly developed U.S. and Western European markets are still of great importance to date.

The U.S. and the United Kingdom are home to many global, multi-national consumer companies and established business must help to fund new market growth.

BN: Financial – The four largest countries driving purchases of our services are the US, UK, Germany and France. That said, Asia and Latin America are the fastest growing regions in the business and will grow significantly in importance in the coming years.

TB: Technology - The US is still home to the world’s largest technology companies. While its influence is eroding, countries like China and India are becoming the next great consumers and producers of technology solutions of all types.

BKH: Which countries are U.S. companies looking at closely in your product sector in 2011?
DL: Auto – China – specifically as the world’s largest and most rapidly growing market.
Brazil, Russia, India – emerging markets with still developing automotive demand

MF: Consumer – The emerging BRIC markets are of huge importance. In addition, recent focus on other emerging markets, especially Africa, has begun.

BN: Financial – The four largest countries driving purchases of our services are the U.S., United Kingdom, Germany and France. That said, Asia and Latin America are the fastest growing regions in the business and will grow significantly in importance in the coming years

TB: Technology - The new countries on the IT must-see roadmap are now Sub-Saharan African nations as well as forgotten mega-nations like Indonesia. While the impact of China on every corner of technology will be undeniable, U.S. companies are likely looking there more to identify near-in threats to their existing product lines.

Chinese manufacturers are in the midst of flooding the IT marketplace with low-priced devices that are highly functional and aimed at mass market adoption which just a few years ago would have been easy picking for major U.S. IT makers. Taiwan also has to be on the radar, as the computing devices coming from this market are already recognized as performers at parity with U.S.-based manufacturers.

BKH: What industry specifics for your product sector are U.S. companies most closely watching internationally?
DL: Auto – Generally, they’re watching penetration of vehicle ownership in emerging markets. This covers all sectors and price points in China – is more focused on entry level in remaining emerging markets. Secondarily, producers from new markets (especially China) will begin to export models (under existing brands) as well as new brands themselves.

MF: Consumer – Watching digital and mobile development and consumer behavior in the developing markets and regions, (Asia and Africa) where they are leapfrogging western markets in terms of how consumers are using their mobile phones, for example mobile banking, are offering opportunities for US companies to adopt similar techniques.

BN: Financial - The major US banks are most interested in serving the global needs of their multinational clients – including both large corporations and high net worth individuals. They are focusing on local economic issues that are critical to helping their clients capitalize on opportunities and effectively managing risk.

TB: Technology – On the opportunity side, U.S. companies are looking to leverage their leading positions in providing operating system-level resources to device makers from around the world. Device markets are ripe for U.S. networking technologies as well. Winning in this market is, however, much less assured as a win for U.S. makers.

BKH: What are the international market research clients most interested in following in the US market?
DL: Auto – Greatest interest are consistent with the concerns of U.S. OEM’s – segment trends and interests. Concern for country of brand origin is less of a concern than in previous decades.

MF: Consumer – The diversity of the U.S. population makes it really interesting for other developed markets - how companies target and communicate to specific cultures and sub segments of the population to help drive growth.

Foreign companies are watching the U.S.-based global, multi-national companies to see where they are going with digital marketing efforts, because they have significant online world experience in a more developed market.

Nevertheless, consumers in countries such as Africa are racing to the mobile world and skipping the PC-based Internet phase that the U.S. lived for years. In addition, the U.S. market may offer a glimpse to many in terms of what benefits/services could appeal to consumers in a more developed environment as people in other countries experience urbanization (i.e. Africa), or develop greater infrastructures and technological innovation in retail environments.

Finally, they seek to leverage some U.S. health and wellness solutions in emerging markets where the broad population may be facing challenges due to greater poverty or the rural nature of the populations.

BN: Financial – Just as US Financial institutions are keen to support their global clients, international firms are eager to capture a share of the US market. We expect international banks to continue to show interest in the US banks as acquisition candidates.

Their appetite will be impacted by exchange rates and relative stock prices. In addition, banks in the number of countries who previously had international expansion ambitions have been sidelined by credit problems.

TB: Technology - US is still home to the world’s largest technology companies. While its influence is eroding, countries like China and India are becoming the next great consumers and producers of technology solutions of all types.

With U.S. buyers, the question is rarely “can they afford it”, and more likely about “How can we be more attractive to the buyers?” Buyers have nearly unlimited access to products from around the globe and easy means to access low cost channels of provision at the click of a button.

International clients want to test their latest wares, establish their brands more deeply, and work to develop loyal followings. Use of research to accomplish these ends is critical. TNS enjoys its ability to serve U.S. and global clients in these ways.

BKH: Bob, specific to the financial sector, what is the impact a weaker dollar would have on financial services trends?
BN: This macroeconomic phenomenon will make acquisitions by international banks of U.S. companies more attractive and will make acquisitions by U.S. companies of foreign companies less attractive.

BKH: Bob, what is the impact of a reserve currency not based on the U.S. dollar on financial services trends?
BN: U.S. Banks are largely focused on U.S. consumers. We are seeing growing interest in the largest U.S. banks expanding their footprint with affluent clients.

TNS Global provides "Key Insight Reports” retrievable by Sector, Service, World Region, and Year.

TNS Global offers the monthly report GEMs which is “devoted to bringing you insights and information from Rapid Growth Emerging Markets.” TNS notes the focus of some of the GEMS March, 2011 issue articles, “some of them touch upon the unique influence that the Internet is having on our lives. Others reflect on the complex nature of the emerging markets and share some insights that we have garnered during our many years of researching them.”

The TNS “Next 4 Billion” report is a comprehensive and fascinating study of “The Do’s and Don’ts of Marketing to the Bottom of the Pyramid”. The report identifies key factors in the opportunity of this global market including “$5 Trillion in household income, account for more than half the world population, estimated to be 70% of the work force in developing economies, and have significant unmet needs” to name just a few.

It is important to understand the needs of and values in the developed market business model compared to the needs of and values in the bottom of the pyramid business model needs in the TNS report:
* Developed Market – Rapid Innovation, Obsolescence, Fine Segmentation, High Margins, Labor Efficiency, Mass Media, and Top Down.
* BoP Market – Durability, Consistency, Coarse Segmentation, High Volume, Capital Efficiency, Direct Selling, and Bottom Up.

TNS offers a comprehensive look at the countries that make up BRIC – Brazil, Russia, India, and China in the TNS “BRIC Source Book”.

TNS explains, “BRIC was conceived in a paper by Goldman Sachs in 2001 paper entitled ‘The World Needs Better Economic BRICs’. Over the years the BRIC acronym has become a symbol of the power and growth potential of the world’s largest rapid growth and emerging markets. Increasingly BRIC is quoted to demonstrate the shift of economic power towards emerging markets and away from developed markets such as the United States, Germany, Britain and even Japan.”

TNS continues, “Having come out of the global financial crisis better than their developed counterparts, it appears that the four BRIC markets are going to become even stronger players on the world stage… and they are beginning to flex their muscle. A perfect illustration of this is the 2010 BRIC Summit which took place in Brasilia, Brazil on April 16, 2010. This was the second formal meeting of BRIC heads of government and the agenda focused on a range of issues including closer cooperation around energy, food production, trade, investment, science, technology and infrastructure.”

Cheryl Max, TNS Senior Vice President of North American Marketing, concludes our “Beyond Market Research Numbers” series well. “Although the blurring of borders continues due to the ability to shop anywhere via the Internet, and perceptions and thoughts are shared from around the globe on social media sites, there are still striking differences in countries that require companies to understand the nuances of each market in order to be successful.”

“Research done on a global basis allows companies to understand the intricate differences and similarities across markets so that they have a better understanding of what is viable, and what isn’t. It is important for product development/launches, for marketing messages, for product naming, price sensitivity and more. For more insight on the impact of research in a global marketplace, check out some of TNS’ studies including Mobile Life, Global Emerging Marketing Study, and Youth Uprising at www.tns-us.com, www.discovermobilelife.com and www.tru-insights.com.”

Part 1, Insights From Global Leader TNS
Part 2, Automotive
Part 3, Consumer Products
Part 4, Financial Services
Part 5, Technology
Part 6, Social & Polling

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