Guide to Market Assessment for BDS Program Design

A FIT Manual By Alexandra Overy Miehlbradt

April, 2001

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ISBN 92-2-112570-X

First published 2001

The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers.

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Printed in Switzerland BRI/ART Acknowledgements

The writing of this guide benefited from the input and assistance of many people. First, I owe my gratitude to Jim Tanburn, Gavin Anderson and Margot Lobbezoo from the Inter- national Labour Organization. They provided support throughout the conceptualization and writing of the guide, including sharing ideas, reviewing drafts and providing encourage- ment. They also provided information and insights based on the ILO market assessments in four countries. Thanks to Dorothy Riddle of Service Growth Consultants Inc. who provided information on her own methods for service market assessment. Thanks to those that reviewed the first draft of the guide: Jim Tomecko and Marshall Bear. I send my appreciation to Dr. Ned Roberto, the marketing research specialist in the Philippines from whom I l e a rned many of the consumer re s e a rch techniques and tools described in this guide. Thanks to Ronald Chua who was a co-manager with me of the USAID Philippines study and provided many helpful ideas. My appreciation goes to Prashant Rana of GTZ who, together with Jim Tomecko, provided information and ideas from the GTZ BDS markets assessment in Nepal, as well as to Sandeep Ghosh, the manager of the GTZ Nepal consumer research from the marketing research firm, ORG-MARG. Thanks to Ellen Minzner for editing and proofing the guide. Lastly, many thanks to my husband, Holm, who gave me the energy, time and persistence to finish the guide.

III

Table of contents

I. INTRODUCTION TO THE GUIDE ...... 1 II. WHY CONDUCT A MARKET ASSESSMENT? ...... 4 III. WHAT INFORMATION CAN A MARKET ASSESSMENT PROVIDE? ...... 5 IV. WHAT ARE THE LIMITATIONS OF MARKET ASSESSMENT? ...... 7 V. WHAT PARTS OF A MARKET CAN BE ASSESSED? ...... 9 VI. WHAT INFORMATION IS NEEDED IN A MARKET ASSESSMENT? ...... 11 VII. HOW CAN THIS INFORMATION BE GATHERED? ...... 13 VIII. CONDUCTING CONSUMER RESEARCH ...... 14 A. USAGE, ATTITUDE, IMAGE MARKET STUDY ...... 15 1. Multi-Service Market Survey ...... 15 2. Single-Service Market Survey ...... 16 3. UAI Survey Design...... 17 4. Survey Questionnaire ...... 19 5. Conducting the Survey ...... 20

B. FOCUS GROUP DISCUSSIONS ...... 20 1. Goals and Objectives ...... 20 2. Study Design...... 21

IX. CONDUCTING SUPPLIER DIAGNOSTICS ...... 24

X. WHAT ARE THE CHALLENGES IN INFORMATION GATHERING? ...... 27 A. CHOOSING A MARKETING RESEARCH FIRM ...... 28 B. WORKING WITH A MARKETING RESEARCH FIRM...... 29 C. MANAGING YOUR OWN CONSUMER RESEARCH ...... 31 D. GATHERING INFORMATION FROM SUPPLIERS...... 31

XI. HOW CAN MARKET RESEARCH DATA BE ANALYZED? ...... 32 A. ANALYSIS OF A SINGLE BDS MARKET ...... 32 1. Analyzing UAI Data...... 32 • Estimating Market Size ...... 33 • Calculating Market Penetration ...... 34 • Estimating How Much SEs Spend on a Service...... 35 • Analyzing Awareness, Reach, and Retention ...... 35 • Understanding Rates of Consumer Adoption ...... 36 • Segmenting the Market...... 37 • Identifying a Service’s Real Competitors ...... 39 • Analyzing Service Features...... 39 • Comparing Suppliers ...... 41 2. Analyzing FGD Data ...... 41 3. Analyzing Supplier Diagnositc Data...... 42 B. COMPARATIVE ANALYSIS OF VARIOUS BDS MARKETS ...... 43

V XII. HOW CAN MARKET ANALYSIS BE USED FOR PROGRAM DESIGN? ...... 48

A. STEP 1: CHOOSE ON WHICH MARKET(S) TO FOCUS ...... 48

B. STEP 2: LIST MARKET PROBLEMS AND OPPORTUNITIES...... 49

C. STEP 3: PRIORITIZE MARKET PROBLEMS AND OPPORTUNITIES ...... 49

D. STEP 4: DEVELOP INTERVENTIONS TO ADDRESS KEY MARKET PROBLEMS AND OPPORTUNITIES ...... 50 XIII. WHAT ARE WAYS TO KEEP MARKET ASSESSMENTS COST EFFECTIVE? ...... 53

APPENDICES Appendix A: Samples and Models of Market Assessment Tools ...... 57 Sample Quantitative Study Design from GTZ Nepal ...... 57 Model UAI Questionnaire ...... 61 Sample Multi-Service Survey Questionnaire from the ILO in Indonesia...... 65 Sample Discussion Guide for Focus Group Discussions from GTZ Nepal ...... 73 Sample Analysis of the Advertising Market in Nepal from GTZ ...... 77

Appendix B: Recommended Resources for Market Assessment...... 87

Appendix C: List of BDS Market Assessments Conducted or in Progress ...... 89

VI List of figures, tables and examples

FIGURES: 1 Markets are the context for all BDS Programs and SEs ...... 4 2 BDS Market Development Program Design ...... 6 3 Parts of a Market ...... 9 4 Information Needed from a Market Assessment ...... 11 5 Overview of Market Assessment Process ...... 12 6 Flow of a UAI Survey...... 20 7 Marketing Research Roles and Responsibilities...... 29 8 Analyzing Market Assessment Data ...... 33 9 Fast Consumer Adoption ...... 37 10 Slow Consumer Adoption ...... 37 11 Understanding Supply Side Problems...... 43 12 Finding Demand-Supply Gaps...... 43 13 Market Roles ...... 44 14 When is there potential for intervention? ...... 44 15 Number of Firms Purchasing BDS in Nepal ...... 45 16 Relative Effectiveness of some BDS Markets in Nepal ...... 46 17 Potential for Expansion of BDS Markets in Indonesia ...... 47 18 Using Strengths and Weaknesses to Find Market Opportunities ...... 50

TABLES: 1 Estimated Market Size for Cellular Phones in the Philippines...... 33 2 Estimated Market Size – Accounting, Financial Advice and Taxation Services in Nepal . . . 34 3 MSE Awareness, Reach and Retention of ICT Services in the Philippines ...... 35 4 Awareness, Understanding, Reach and Retention of BDS in Nepal...... 36 5 Importance and Satisfaction Data from Bayantel PCO Survey ...... 39 6 Analysis of Bayantel PCOs in Meeting Customer Demand for Service Features ...... 40 7 Importance and Satisfaction Data from Cell Phone Survey in the Philippines ...... 41 8 Types of Suppliers for some BDS in Nepal...... 45 9 Awareness, Understanding, Reach and Retention of some BDS in Nepal ...... 46 10 Strengths and Weaknesses of BDS Markets in Nepal ...... 49 11 Matching Market Weaknesses/Opportunities with Interventions ...... 52

EXAMPLES: General Market Assessment Objectives – GTZ Nepal ...... 4 Service Innovation – ILO Zimbabwe ...... 7 Market Assessment in a Very Weak Market – ILO Cambodia ...... 8 Tools in Use for Market Assessment ...... 13 Information Collection for Market Assessment – GTZ Nepal ...... 15 Specific Market Assessment Objectives – ILO Thailand ...... 15 Specific Market Assessment Objectives – GTZ Nepal ...... 15 Services Studies – ILO ...... 16 Defining a Service from the Consumer Perspective – USAID Philippines ...... 17

VII A Service Description of Email – USAID Philippines ...... 17 Components of a UAI Survey Design...... 17 Stratification of a Survey Sample – GTZ Nepal ...... 19 A Sample of Service Features ...... 19 FGD Respondents – GTZ Nepal ...... 22 A Demand-Supply “Gap” – GTZ Nepal ...... 24 Sample Components of an Overall Analysis of Consumer Research Data ...... 30 Sample Components of a Single Service Analysis of Consumer Research Data ...... 30 Cooperation with Marketing Research Firms – ILO ...... 30 Analyzing Survey and FGD Data Together – GTZ Nepal ...... 42 Prioritizing Market Weaknesses – GTZ Nepal ...... 50 Choosing Interventions – GTZ Nepal...... 51 Resources Used for Market Assessment – ILO ...... 54

VIII Acronyms

BDS Business Development Services

FGD Focus Group Discussion

GTZ Deutsche Gesellschaft für Technische Zusammenarbeit (German Agency for Technical Cooperation)

ICT Information and Communication Technology

ILO International Labour Organization

MSE Micro and Small Enterprise

PCO Public Calling Office

SE Small Enterprise

UAI Usage, Attitude, Image (Market Study)

USAID United States Agency for International Development

Definitions

These terms are defined as used in this guide. As different terms are still being used in the BDS field, these definitions may or may not reflect how the terms are used in other BDS publications. Benefits (of a service): What a consumer gets out of a service, for example assistance in making transactions faster, a way to save time, contacts with new customers, prestige or a feeling of competence. Business Development Services: Any service used by an enterprise to assist in business functioning or growth. Consumer: A potential or actual user of a service. In many cases in the guide, this refers to the population of SEs or some segment thereof. Consumer Researc h : Tools designed to get information about a market directly fro m consumers. There are both quantitative and qualitative consumer research tools. Customer: An entrepreneur or enterprise that has either purchased a service or acquired it through another type of commercial transaction. Demand: The extent to which consumers want to purchase a service. Embedded Services: Services that are acquired as part of another commercial transaction, for example when a technology supplier provides training to his/her customers as part of the purchase of the technology. Facilitator: An international or local institution which has as its primary aim to promote the development of local BDS markets. Currently, most BDS facilitators are public institutions, NGOs or project offices of donors, usually funded by governments or donors.* Fe a t u r es (of a service): The attributes or characteristics of a service that ensure a consumer get benefits from a service and that create customer satisfaction, for example the length of a training course, the friendliness of attendants at a telecommunications center or the speed in responding to a request for consulting services. Manager: The person within a donor or facilitator who will make the design decisions for a BDS market development program. M a r k e t: The interaction of demand and supply for a particular business development service. A market includes consumers, suppliers, transactions and factors that affect these. Market Opportunity: A situation in a market that shows potential for increasing the number of transactions in the market, for example unmet demand for services from a particular consumer segment. Market Weakness or Problem: A situation in a market that is suppressing the number of transactions in the market, for example a lack of products with the benefits and features that consumers want.

* From the Committee of Donor Agencies for Small Enterprise Development, “Business Development Services for Small Enterprises: Guiding Principles for Donor Intervention” 2001 Edition.

XI Marketing Research Firm: A company that conducts res e a r ch on markets in order to help their customers understand various markets, expand their sales or – typically in this guide – design a BDS market development program. Multi Service Study: A market assessment focused on a variety of business development services. Researcher: The person within a donor, facilitator or supplier who is managing a market assessment study. Single Service Study: A market assessment focused on a single business development service or a small set of related services. Small Enterprises (SEs): Mi c r o, small and medium scale enterprises. These size categories are usually defined by the number of employees or by assets but these definitions vary by country, institution and objective. No precise definition is adopted here. Supplier: Any firm, institution or individual that provides business services directly to SEs. In this guide, the term includes private sector firms, public or donor funded institutions, business associations, government agencies, etc. In other BDS publications, the term , “provider,” is sometimes used. Supply: The availability of services in a market. Transaction: The exchange between a customer and a supplier of a service.

XII I. Introduction to the Guide

Over the last several years, the business facilitators and, to a lesser extent, suppliers development services (BDS) field has expe- conduct practical and valid market assess- rienced a major shift in strategy. There is ments that will be useful to them in design- now a great deal of support for the idea that ing BDS market development programs. developing markets for business services is the best way to enable a large proportion of T h e re is still relatively little experience on small enterprises (SEs) to obtain the busi- market assessment for BDS program design. ness services they need and want. 1 However, the guide aims to bring together the BDS field’s best knowledge, experience Evidence to date shows that private sector and recommendations in market assessment markets already exist for a variety of busi- to date. It is meant to give donors and facil- ness services in many of the areas where itators who now want to pursue BDS market BDS programs work 2. There is also a wide development programs practical advice on variety of donor and government supported how to conduct a market assessment. The p rograms which provide services to SEs. hope is that the guide will help donors and There was broad consensus at the last Com- facilitators conduct useful market assess- mittee of Donor Agencies for Small Enter- ments leading to sound market develop- prise Development conference, in Hanoi ment programs, both as an end in itself and (April, 2000), that donors and facilitators to contribute to the knowledge of the BDS should conduct a market assessment before field in this area. The guide will be revised designing a BDS market development pro- as more experience is gained in the field. gram or when redesigning an old program. The thinking is that it is critical to under- This guide is meant primarily for managers stand the existing market before interven- in donor agencies and facilitating organiza- ing. Firstly, an understanding will help tions that are planning to design a BDS donors avoid distorting existing markets and market development program. It will also possibly lessening outreach to SEs. Sec- be useful to organizations supplying BDS ondly, it will help programs to take advan- that are interested in using market assess- tage of market opportunities to extend out- ment to increase their sales, expand their reach and improve the quality of services outreach and improve their services. for SEs. T h ree examples are used throughout the Despite the consensus that market assess- guide to illustrate the concepts and tools ment is important, many donors and facili- discussed: the International Labour Organi- tators admit that they are not sure how to zation (ILO) assessments of BDS markets in conduct an assessment and how to use the Indonesia, Ghana, Cambodia and Thailand, results for program design. This guide aims the GTZ assessment of BDS markets in to fill that gap. The guide will help donors, Nepal and USAID’s study of information and

1 For more on market development, see the papers from the Committee of Donor Agencies for Small Enterprise Development International Conference in Hanoi, April 2000. Website: www.ilo.org/employment/sedonors 2 For example, see Gavin Anderson “The Hidden MSE Service Sector – Research Into Commercial BDS provision to Micro and Small Enterprises in Vietnam and Thailand” Donor Committee Conference in Hanoi, 2000. Website: www.ilo.org/employment/sedonors

1 communication services in the Philippines. GTZ Assessment of the BDS Market These three examples are briefly described in Nepal below to introduce the reader to the goals and context of the studies. In 1999, GTZ conducted an assessment of BDS markets in Nepal in order to design a p rogram to develop several BDS markets. ILO BDS Market Assessments The ultimate goal of the program is to stimulate the growth of the private sector in Starting in October 2000, the Intern a t i o n a l Nepal. The formal assessment started with a Labour Organization initiated assessments consumer survey of 504 enterprises in Nepal of the BDS markets in four countries : regarding their knowledge, use and percep- Indonesia, Ghana, Cambodia and Thailand. tions of 13 types of business services. The The objectives of the studies are: b a c k g round re s e a rch for the survey came f rom talking with business associations, •To identify opportunities for BDS devel- GTZ’s extensive experience in enterprise opment interventions. development in Nepal and the pre-test of • To establish a baseline for the BDS devel- the survey itself. The survey was followed opment activities. by 15 focus group discussions on the nine • To test the methodology of utilizing services in which GTZ was most interested market assessment as a first step in initi- after seeing the results of the survey. Finally, ating BDS market development. GTZ conducted supplier diagnostics by vis- iting and interviewing a range of BDS sup- In each of these countries, the ILO plans to pliers. The assessment did not focus only on start a program to develop several BDS mar- SEs, but instead on all types of enterprises kets for SEs. Each of the studies started with in Nepal. However, the vast majority of the a survey of SE consumers with sample sizes enterprises included in the study were small f rom 300 to 500. The surveys investigated as this is the nature of business in Nepal. 3 SEs’ awareness, understanding, usage and opinions about a wide range of business services, such as telecommunications, train- USAID Study of Information ing, various types of marketing assistance, and Communications Services courier and transport, information in the in the Philippines media and financial management services. F rom the surveys, the ILO aims to get a In 1998, USAID, under the Microenterprise basic understanding of the demand for SEs, Best Practices Project managed by Develop- a picture of supply from the consumer per- ment Alternatives Inc., conducted a study of spective and some indications about oppor- in f o r mation and communication technology tunities for market expansion. These studies (ICT) services for micro and small enter- a re supplemented by interviews with BDS prises (MSEs) in the Philippines. The aim of suppliers and informal re s e a rch on BDS the study was to determine if ICT services markets. At the time of writing, the surveys w e re useful to a broad range of MSEs and have been completed and data analysis is how these services could be delivered on a on going. This version of the guide uses wide scale. The study focused on the exist- available examples from these studies. A ing market for ICT services through thre e later version will fully incorporate the find- case studies: Bayantel Public Calling Offi c e s ings of the ILO market assessments and pro- (PCOs), the Laguna Small and Medium gram designs. Enterprise Service Center and a re g i o n a l study of cellphone use. A consumer survey was conducted for each of the case studies and a detailed diagnostic conducted on each supplier. While this study was not originally designed as a market assessment per

3 For more information on this study, see Jim Tomecko, “The Application of Market Led Tools in the Design of BDS Interventions” from the Committee of Donor Agencies for Small Enterprise Development International Conference in Hanoi, April 2000. Website: www.ilo.org/employment/sedonors or contact GTZ in Nepal.

2 se, the tools used yielded a good picture of How Can this Information be Gath- the market, its problems and opportunities. 4 ered?: This section discusses the sources of information for a market assessment. It lists Description of the Guide various tools for gathering market assessment information from these sources and The guide first addresses the reasons for describes on which tools the guide focuses. market assessment, the information that an Conducting Consumer Researc h : T h i s assessment can and cannot provide and the section describes how to use two consumer i n f o rmation an assessment aims to gather. re s e a rch tools for market assessment: the The guide concentrates on the practicalities Usage Attitude Image market study and of conducting a market assessment and Focus Group Discussions. It discusses the using the information for program design. objectives and study design for each of Examples are included in each section to these tools. help the reader see how the concepts in each section have been applied. Each sec- Conducting Supplier Diagnostics : T h i s tion of the guide is briefly described below. section describes what information is I n t roduction to the Guide: This section needed from suppliers in a market assess- briefly describes why the BDS field is now ment and how that information can be gath- i n t e rested in market assessment and the ered. aims of the guide. This section also includes What are the Challenges in Information brief descriptions of the studies that are Ga t h e r i n g ?: This section describes some of used as examples throughout the guide. the difficulties in information gathering Why Conduct a Market Assessment ?: faced by organizations that have conducted This section addresses why market assess- market assessment to date. It discusses ment is important for BDS programs and strategies for overcoming these difficulties. outlines the goal of market assessment. What Information Can a Market Assess- How Can Market Research Data be Ana- ment Pro v i d e?: This section provides an l y z e d ? : Market assessment data is not overview of how market assessment infor- useful for program design until it is eff e c- mation can be used for program design. It tively analyzed. This section details tools for discusses what information a market assess- analyzing data from consumer research and ment can generate to help a program man- supplier diagnostics for two purposes : ager choose the service markets on which understanding a single BDS market and to focus and design market development comparing various BDS markets. It shows interventions. how to answer the key questions of market assessment using market research data. What are the Limitations of Market A s s e s s m e n t?: This section discusses what How can Market Analysis be used for i n f o rmation a market assessment can not P rogram Design? : This section describes p rovide and the limitations of curre n t how to use the information from a market market assessment methodologies. It pro- assessment to design a market development vides some suggestions for ways to handle program. It shows how the key points from these limitations. the market analysis can be used to help What Parts of a Market can be make two key program decisions : which Assessed?: This section describes the com- service market(s) to focus on and what ponents of a market. It details on which interventions to use to develop the chosen components market assessment focuses. service market(s). What Information is needed in a Market What are Ways to Keep Market Assess- A s s e s s m e n t?: This section describes the ment Cost Eff e c t i v e?: This section i n f o rmation that a market assessment aims describes the costs for market assessment to gather. It details the key questions that a with examples from USAID and the ILO. It market assessment should answer about discusses ways to keep the costs of market various components of the market. assessment to a minimum.

4 For more information on this study see Alexandra O. Miehlbradt and Ron Chua, “Series of Papers on Information and Communication Technology Services for Micro and Small Enterprises in the Philippines” Development Alternatives Inc., under the USAID Microenterprise Best Practices Project. Website: www.mip.org

3 II. Why Conduct a Market Assessment?

Understanding the BDS market in which a acting as a competitor in the market p rogram operates is important for all pro- place. It is important to understand the grams for two key reasons (See Figure 1): market to avoid harming those existing • BDS markets are the context for all BDS systems that benefit SEs. p rograms, because programs offer services to SEs which, most likely, other sup- So, even if the explicit goal of a program is pliers are also offering. In order to get the not to develop BDS markets, it is helpful to most out of programs, it is important to gain a basic understanding of the BDS understand the BDS market context in market through a market assessment. which they operate. This understanding is even more critical • BDS programs affect the markets in when the aim of the program is to develop which they operate because they are the BDS market. Most BDS market development programs aim to do one or both of the Figure 1: Markets are the context for all following: BDS Programs and all SEs • a d d ress problems in the market which a re limiting SEs’ acquisition of the BDS they want. • exploit market opportunities for improv- Programs ing SEs access and use of the BDS they want.

BDS Markets An understanding of the market enables a BDS program manager to pinpoint market problems and opportunities. The goal of a BDS market assessment con- SEs ducted for the purpose of program design is to identify problems and opportunities in the market which could be addressed by the program for the benefit of SEs.

Example from GTZ of Market Assessment Objectives Program Design Decisions Information Needed

• What service markets should • What services do enterprises demand? GTZ focus on? • What types of enterprises demand which • What consumer segments services? should GTZ target? • Where is there unmet demand for services? • Who should GTZ work with? • What is the capacity of suppliers? • What interventions should GTZ • What problems are constraining various BDS use to stimulate BDS markets? markets that GTZ could address?

4 III. What information can a market assessment provide?

The goal of BDS market development pro- • suppliers are not able to innovate new gram design is to identify interventions or products that consumers demand. strategies by which the program can addres s Many of these problems point to an oppor- priority market problems and opportunities. tunity. For example, if services do not have A BDS market assessment can provide infor- the features that consumers want, impro v- mation on ing service features will attract more cus- • what problems exist in a market, who do tomers. If suppliers are not able to innovate they affect and how severe are they, and new products that consumers demand, • what are possible opportunities in a t h e re is an opportunity for new pro d u c t market for serving SEs. development. A market assessment can also identify other market opportunities, for For example, some of the market problems example a benefit that consumers are get- that an assessment can identify are as fol- ting from services but suppliers are not lows: using in their marketing. This presents an • consumers are not aware of or do not opportunity to attract more SEs to the serv- understand services, ice by advertising the benefit. There may be • consumers do not value the benefits of a market segment that suppliers are not the service, serving but that has considerable potential • consumers are risk averse and so do not demand for services. want to try a new service, • free services are suppressing consumers Once these problems and opportunities are willingness to pay for services, identified, a program manger can then • t h e re are no appropriate services for decide which of them is a priority for the some consumer segments, program based on: • some consumer segments, such as • which problems are most severely con- women or microenterprises, do not have straining SEs’ access and use of the BDS access to services, they want or which opportunity has the • services are poor quality, most potential for benefiting SEs and • services do not have the features that • which problems or opportunities does consumers want, the implementing organization have the • suppliers lack the skills they need to offe r capacity to address. quality services, Then a program manager can design strate- • suppliers are not good at marketing their gies to target those particular market prob- services, lems or opportunities. (See Figure 2) 5 • suppliers are not skilled in managing their businesses, Choosing a Market • suppliers do not see the value in serving some consumer segments, Because markets for different business serv- • suppliers are reluctant to compete with ices are often very different, with their own subsidized services, particular problems and opportunities, most • suppliers do not have appropriate pay- BDS market development programs choose ment or financing mechanisms, to focus only on one or a few services. That

5 Adapted from the Springfield Centre BDS 2000 Training Course, module by Marshall A. Bear and Alexandra Miehlbradt.

5 Figure 2: BDS Market Development Program Design

MarketMarket AssessmentAssessment MarketChoose Assessment a Market

UnderstandMarket the MarketAssessment and Identity How do various Constraints and Opportunities markets compare?

ChooseMarket Priority Assessment Constraints and Opportunities What are the problems and opportunities in the market? Choose MarketInterventions Assessment to Address Priorities way they can gain a good understanding of frame is needed. An organization will prob- each of those markets and design effective ably need more interventions and the programs. But how do managers decide on growth in the market will be slower than in which BDS markets to focus? Market assess- a slightly more developed market. Interven- ment can also provide some comparative ing in markets that are already working data on diff e rent BDS markets to help a effectively risks distorting the market more manager choose on which service markets than developing it. 6 Evidence to date shows to focus. that there is considerable variety in the level of effectiveness of diffe r ent markets, but that Most program managers will have a range completely non-existent markets are rare. of criteria for choosing which business services to promote. The list might include the Despite this thinking, some programs are donor or implementing organization’s his- also having success with introducing com- torical focus or area of expertise or an inter- pletely new types of services. While it ini- est in serving a particular target group, such tially appears that there are no transactions as women, or subsector, such as garm e n t in these markets, an innovation meets the pr oducers. Another important criteria is: can needs of SEs that were not interested in the program make a difference in a particu- services before. While the time frame for lar BDS market? Market assessment can pro- reaching a high level of demand for com- vide comparative information on the pletely new services is generally longer than demand for and supply of services in differ- im p r oving and adapting existing services for ent markets. An analysis of this information the SE market, it may have the potential to can provide an estimate of the relative effe c - reach SEs that would otherwise not demand tiveness of various BDS markets in general services. or for particular consumer segments. The p rogram manager can use this inform a t i o n Another important criteria is to intervene in to help make a choice of BDS markets on a market where the implementing organiza- which to focus. tion has the capacity to effectively addre s s the particular problems and opportunities. Intervening in markets that are weak but Some organizations will be better at stimu- where some transactions are taking place is lating demand for services; other might be likely to provide the quickest re t u rn on better at helping start up new suppliers. investment. Intervening in markets that are Matching the capacity of the organization to extremely weak where there are few or no the market problems and opportunities pro- transactions is difficult and a long time vides more chance of success.

6 Gibson A., Hitchins R., Bear M., “BDS Market Development: A Guide for Agencies.” Draft, December 2000. Forthcoming from the USAID Microenterprise Best Practices Project managed by Development Alternatives Inc. Website: www.mip.org

6 IV. What are the limitations of market assessment?

While market assessment is very helpful for program design, it is not an infallible recipe Example from the ILO of Service Innovation that, when followed, provides all the infor- FIT Zimbabwe is a private business focused on mation needed to develop a BDS market. In developing the business services market for the information analysis and pro g r a m small enterprises. The firm was started part l y with assistance from the ILO. In 1998, FIT Zim- design process, there is still considerable babwe started a business magazine called “Busi- need for creativity, intuition and determina- ness Connect” aimed at the small business tion to succeed, just as in the private sector. market. The magazine has a circulation of 10,000 in and around Harare and is profitable based on advertising revenues from both large and small The key limitation of market assessment is businesses. Business Connect has sold adverti s e - that it provides a picture of the current and ments to more than 320 small enterprises in past market and some indications of trends H a r a re in its first 22 months and has done US$28,388 in business to date. The idea for Busi- in the market. It does not show what will ness Connect originated from looking at similar happen in the future. There f o re, the infor- publications in developed countries, market mation from a market assessment must be tests of selling small business briefs in Kenya and combined with an entrepreneur’s eye to the brief market surveys of small and large businesses in Zimbabwe indicating the demand for fu t u r e to determine the best ways to expand advertising space and links to each other. How- and develop a market. This is particularly ever, there was no similar magazine in existence true for new and very innovative services and the private sector rejected the idea because other eff o rts in the past had failed. The main that do not resemble anything curre n t l y reason for failure was that the magazines were being purchased and sold. It is difficult for sold for a subscription fee, while Business Con- consumers to provide an opinion of these nect is distributed for free and paid for solely types of services because they can not envi- out of advertising revenues. By using a different business model, FIT Zimbabwe was able to start sion how the services will help them. On a new service for SEs that is both profitable and the supply side, often a diff e rent business helpful for SEs. model than currently exists is needed to Source: Shorebank Advisory Services: BDS Research in Market Access and Wo r k f o rce Development Services for Small develop and sell very innovative services so Businesses, “P rofile of FIT Zimbabwe: Business Connect a picture of current supply may not provide Magazine”, Draft March, 2001. the needed information. Market re s e a rc h can be particularly unreliable in helping managers predict the future demand for may not focus and where consumers have innovative services. In fact, a conventional limited knowledge about products. For analysis of the potential of these pro d u c t s example, large and successful steam shovel might lead managers away from developing m a n u f a c t u rers were initially not intere s t e d them because they appear less pro m i s i n g in producing hydraulic backhoes because than adaptations of current products. these smaller cheaper machines could not accomplish the large jobs that customers The private sector has found that a focus on typically purchased steam shovels for. How- the development of innovations is an impor- e v e r, after the backhoe was developed, it tant complement to a more conventional became clear that it was a useful and strategy of improving products based on cheaper alternative for smaller jobs. Eventu- customer feedback and standard market ally the sales of the hydraulic backhoe re s e a rch. This is particularly important for replaced sales of steam shovels for small the low-end market where current suppliers jobs. This example illustrates that focusing

7 solely on current consumers’ opinion may Embedded Services: C u r rent methodolo- ob s c u r e the potential for radical innovations gies for market assessment have been taken in business services. Market assessment f rom private sector marketing re s e a rc h . must co-exist with strategies to test innova- These methods were developed to assess tive services in market development. 7 formal sector markets in which transactions a re the traditional fee-for-service variety. Market assessment also has particular limi- Adaptation of the methodologies for the tations in the following areas : development community have helped make them more appropriate for the partly forma l , Very Weak Markets : Quantitative market partly informal markets that are common for assessment methodologies, such as a survey BDS for SEs. However, this adaptation of SE consumers, may not be very useful if needs to go further. In particular, the the markets for BDS are very weak. The methodologies need to be better suited to p roblem is that much of the data from a capturing embedded services, where an SE survey in a very weak market will not be acquires a business service in the course of statistically significant. Even with a rel a t i v e l y another commercial transaction. la r ge sample size (400+), the number of purchasers in a very weak market may be so Those organizations that are pursing BDS low that most of the data analyzing service market development say that test marketing use is not significant. In extremely weak and trial and error are still needed in pro- markets, the number of SEs that are aware gram design and implementation. Test mar- of many services is even too low for further keting is often also an invaluable part of analysis. A more useful approach to market l e a rning what new products and services assessment in very weak markets may be the SE market will bear. Flexibility and qualitative methods such as focus group dis- openness to changing strategies that are not cussions or one on one interviews with SEs. working are also an essential part of adapt- While these methods will not yield statisti- ing a market development strategy to cally significant data, they can provide a feel changing market conditions. Market assess- for the current market and some clues about ment is an important and useful tool but it how a market might be developed. does not eliminate risks in program design and implementation. Rather, it increases the potential for impact while at the same time Example from the ILO in Cambodia of increasing the need for creativity and inno- Market Assessment in a Very Weak Market vation in program design and implementa- The ILO conducted a quantitative analysis of the tion. market for a wide variety of BDS in Cambodia through a survey of SEs. For some services, the s u rvey was useful. For example, awareness of fixed line telephone services, product transport and advertising were all above 80%. Usage of these services and calling centers was high enough to permit useful analysis. However, the markets for many other services were so weak that much of the quantitative data was not useful. For example, awareness of management training services among SEs is only 6%; awareness of accountancy services is only 3% and a w a reness of courier services is only 8%. The usage of these services is too low to permit any analysis of usage patterns. While the survey provided the ILO with some information about the knowledge of services and the use of a few services, it did not provide a good picture of use and demand for many services. In order to help choose which services to promote and what i n t e rventions to pursue, the ILO plans to use qualitative res e a r ch methods and test marketing of services.

7 Christensen, Clayton M. The Innovator’s Dilemma, Harvard Business School Pr., 1997 offers a thorough analysis of this problem as well as strategies for systematically addressing it in product development.

8 V. What parts of a market can be assessed?

A market is generally defined by the fol- Figure 3: Parts of a Market lowing characteristics: • a geographical boundary such as a country, region or municipality; Economic Environment • a consumer group such as all enterprises, Demand all SEs, women-owned enterprises or garment manufacturers; • a service or group of services such as Transactions telecommunications, training or marketing assistance. Supply Regulatory Cultural/Social The heart of a market is demand from SEs, Environment Environment supply from BDS suppliers and transactions between the two. But a market is also affected by its environment: the regulatory e n v i ronment, the economic enviro n m e n t , and the cultural and social enviro n m e n t . • SEs’ satisfaction with services as a proxy (See Figure 3) To date, market assessments for quality have focused on the heart of the market: • a comparison of suppliers as judged by demand, supply and transactions. This is SE customers not because the environment is not impor- • types of suppliers in the market tant but because practitioners feel that • locations of suppliers a d d ressing problems and opportunities at • how customers learn about suppliers the heart of the market is more focused. A which points to suppliers’ marketing more focused project is more likely to suc- channels ceed in the limited context of a pro g r a m . The rest of this guide will focus on assess- • suppliers’ roles in product development, ment of demand, supply and transactions. a w a reness raising and gathering customer feedback and how well they are Within demand, a variety of factors can be performing them examined, for example: Within transactions, a market assessment • SEs’ awareness of services can provide information on: • SEs’ understanding of services • the size of the market in terms of number • SEs’ reasons for trying or not trying a of SEs buying or acquiring services service • the size of the market in terms of the • SEs’ reasons for their choice of supplier monetary value of transactions • which market segments (e.g. women, • market penetration : the percent of SEs men, microenterprises, service enter- that have purchased or acquired services prises etc.) are or are not acquiring • SEs’ trial of services for the first time services • SEs’ purchase or acquisition habits Within supply, some of the factors about (amount spent, frequency of use etc.) which an assessment can provide informa- • trends in SEs’ purchase or acquisition of tion are: services

9 A comparison of these factors for diff e re n t TIP: Although, an assessment may not focus on markets can help a program manager the environment in which the market operates, a reasonable understanding of this environ m e n t choose in which markets to intervene. An is important for putting the results of the assess- analysis of these factors for a single market ment in context. The more the res e a r cher is famil- will point to the types of problems and iar with the economic, re g u l a t o ry and cultural opportunities that a program can address in environment of the country, the easier it will be to accurately interpret the assessment data. order to strengthen the market.

10 VI. What information is needed in a market assessment?

In order to understand one or several mar- Demand : kets, a variety of information about demand, • What types of SEs are using which supply and transactions is needed. (See services? What types are not? 8 F i g u re 4 ) At the most basic level, it is • What benefits are SEs looking for fro m important to know who is offering business services? services, who is acquiring business services • How aware are SEs about services ? Do and the characteristics of the transactions they understand the benefits of services? between the suppliers and buyers (type of transaction, frequency, price etc.). Beyond Transactions: this, it is important to learn what consumers • How big is the market? What percent of know about business services, what they SEs have tried a particular service? a re looking for in business services and what they feel they are getting. It is impor- • Why do SEs use the services? Why not ? tant to find out what types of suppliers are • What percent of SEs acquire services providing services and the capacity of these th r ough fee-for-service transactions, serv- suppliers. Lastly, it is important to discover ices embedded in other commerc i a l alternative ways that SEs get business serv- transactions, services paid for by a com- ices other than from suppliers, for example mercial third party and free services? from friends, colleagues or within their own • How are the services delivered? How do businesses. SEs want services to be delivered? • What are the service features that SEs The following is a list of important ques- want? How satisfied are SEs with the cur- tions that a market assessment should rently available supply? address. • What prices are SEs paying for services?

Figure 4: Information Needed from a Market Assessment

THE MARKET

DEMAND TRANSACTIONS SUPPLY

INFORMATION NEEDED

8 Adapted from Springfield Centre BDS 2000 Training Course, module by Marshall A. Bear and Alexandra Miehlbradt.

11 Supply: 9 A basic analysis of this information will enable a re s e a rcher to compare the eff e c- • What types of suppliers exist? tiveness of one market to another. A more • What range of products is available? in-depth analysis of this information for a single market will enable the researcher to • What are the strengths and weaknesses identify problems and opportunities in the of current suppliers? market. Figure 5 shows the process for a • What substitutes for BDS do SEs use? market assessment and program design. 10

Figure 5: Overview of Market Assessment Process

Gather Information, e.g.: awareness and usage characteristics of users desired benefits and features suppliers and service products

Form a Picture of the Market, e.g.: market segments overall consumption market penetration competition among suppliers

Analyze Market Problems, e.g.: low awareness? low trial? low repeat use?

Pinpoint supply side weaknesses, e.g. Pinpoint demand side weaknesses, e.g. not enough supply poor understanding inappropriate services difficulty paying up front weak suppliers use of substitutes

Identify Market Opportunities

Prioritize Weaknesses and Opportunities

Design Intervention(s) to Address Priorities

9 Alexandra Miehlbradt and Mary McVay, “E m e rging Good Practices in Business Development Services BDS Seminar R e a d e r” for the First Annual BDS Seminar in Turin, Italy, September, 2000 sponsored by the International Labour Org a n i z a t i o n . Website: www.ilo.org/employment/bdsturin 10 Adapted from Gibson A., Hitchins R., Bear M., “BDS Market Development: A Guide for Agencies.” Draft, December 2000. Forthcoming from the USAID Microenterprise Best Practices Project managed by Development Alternatives Inc. We b s i t e: www.mip.org

12 VII. How can this information be gathered?

There are a variety of sources for the infor- market assessment tools. Key inform a n t s mation as well as tools to get it. Information that can be helpful include the following: 12 can come from: • business service industry experts • consumers (SEs), • leading service firms • suppliers, • g o v e rnment officials responsible for the • business associations (of either con- service industry sumers or suppliers), • g o v e rnment officials responsible for SE • government agencies, or promotion • key informants. • donors involved in SE promotion • key input suppliers or marketers of SE Tools in Use for Market Assessment products • Consumer Marketing Research • industry associations that include many • Supplier Diagnostics SEs. • Key Informant Interviews • SE Surveys Particularly if a re s e a rcher is not familiar • Subsector Analysis with a country context, key informant inter- • Market Testing views are an invaluable way to get a preliminary understanding of the status and issues in BDS markets for SEs. The most important source is consumers – the SEs - because only by seeing services t h rough their eyes can practitioners pro- Example from GTZ Nepal on Information mote services that they want. The next sec- Collection for Market Assessment tion is devoted to using consumer research GTZ had three parts to their market assessment. in market assessment. A closer look at sup- 1. They started with a quantitative survey of pliers through supplier diagnostics is often enterprises about their awareness, usage and an important compliment to consumer opinions on a variety of BDS. The background research. It enables the researcher to under- res e a r ch for the survey was done by talking to business associations and also relied on GTZ’s stand more about the strengths and weak- considerable experience in SE promotion in nesses of current suppliers, what roles they Nepal. The pre-test of the survey was also ar e undertaking in the product development used to hone the questionnaire. and marketing processes and how well they 2. Based on the results of the surv e y, GTZ con- are performing those roles. These two tools ducted focus group discussions with promising consumer segments on those serv i c e s ar e the ones that have been used most often they thought had potential for interv e n t i o n . in formal market assessments to date and 3. La s t l y , GTZ conducted informal interviews with are the focus of this guide. 11 a variety of suppliers to get their ideas on different service markets and also their reaction Key informant interviews are often an to GTZ’s preliminary program design ideas. important first step to using the more forma l

1 1 For more information on the tools not covered here, see Mary McVay and Alexandra Miehlbradt, “E m e rging Good Practices in Business Development Services BDS Seminar Reader” for the First Annual BDS Seminar in Turin, Italy, September, 2000 sponsored by the International Labour Organization. Website: www.ilo.org/employment/bdsturin 12 This list is partially from Dorothy Riddle, Service Growth Consultants, “Summary of Methods Used to Assess Business Services Markets in Developing Countries,” unpublished paper, June, 2000.

13 VIII. Conducting Consumer Research

F o rmal market assessments to date have The following two marketing research tools adapted commercial marketing re s e a rc h have been used to help choose BDS serv- tools to the needs of BDS market assess- ices and design market development inter- ment. These tools are designed to get accu- ventions. rate and useful information from consumers • Usage, Attitude, Image (UAI) Market in order to expand the sales of suppliers. St u d y . A UAI is a consumer res e a r ch tool They yield specific information on what SEs that generates a broad, quantitative over- demand, how satisfied they are with cur- view of a market and can pinpoint spe- rently available services and how to cific market constraints and opportuni- improve the supply of services. ties. It was designed to look at the market for a single service but has been adapted T I P: C reativity in how questions are asked can also to function as a tool to compare a help to lessen the limitations of market assessment. For example, asking where SEs get the variety of services and understand BDS benefits of a service is more useful for under- markets in general. The UAI gathers in- standing informal service markets and embed- fo r mation through a survey of consumers ded services than asking where SEs get a service. – either SEs in general or a specific con- Asking SEs who are their most important business links may yield more information about sumer segment or group. By using random service substitutes, particularly in weak markets, sampling, the UAI generates a statistically than asking what SEs use instead of a particular significant picture of the market. UAI sur- service. These kinds of questions are particularly appropriate for qualitative research. veys require skills in marketing research and statistical analysis but a re a s o n a b l y small sample of 100-500 can yield accu- Consumer re s e a rch uses a variety of tech- rate data on an entire market. niques to get information directly from consumers. Both quantitative tools and qualita- • Focus Group Discussion (FGD). FGDs tive tools are available. Quantitative tools a re targeted discussions with groups of offer statistically significant – and therefore consumers managed by a facilitator. Dis- reasonably accurate – data on the market. cussions with service users focus on con- Quantitative tools are best for providing a sumers’ experiences with the services, picture of reality in the market. Qualitative their reasons for using them, their satis- tools offer more depth of inform a t i o n , faction with them, and what they want which is often easier to interpret and apply changed. Discussions with non-users to market development and/or incre a s i n g focus on how they get the benefits of the suppliers’ sales. However, qualitative infor- service elsewhere, why they don’t use mation is not statistically significant and the service, what would make them buy th e re f o r e might not yield an accurate picture the service and what service feature s of the whole market. Qualitative inform a- they would want. FGDs are a qualitative tion is most useful for gaining a depth of tool that yields specific ideas for market- understanding about issues in the market. ing and improving services. FGDs Qualitative information can help a res e a rc h e r re q u i re specific skills in order to obtain understand why the market looks as it does objective information, but are quite easy and interpret the trends in the market. and affordable to conduct. 13

1 3 Alexandra Miehlbradt and Mary McVay, “E m e rging Good Practices in Business Development Services BDS Seminar R e a d e r” for the First Annual BDS Seminar in Turin, Italy, September, 2000 sponsored by the International Labour Org a n i z a t i o n . Website: www.ilo.org/employment/bdsturin

14 The sections below describe how to use The challenge for a multi-service market each of these tools. survey is to balance these two objectives. The first objective suggests that the survey cover a wide variety of BDS. To achieve the A. Usage, Attitude, Image second objective, the survey should gather Market Study as much depth of information on each service as possible. However, getting the desired An adapted version of the UAI market study b readth and depth would make the ques- can be used either to study the markets for tionnaire too long, so compromises must be a variety of services or the market for a made on each. Often additional depth of single service. The objectives for each are information can be added to the assessment slightly diff e rent, as is the questionnaire . through another tool, such as FGDs and/or However, many of the other aspects of the supplier diagnostics. two surveys are similar. Below the objectives of each are discussed, followed by a general discussion on the UAI survey design Example from the ILO in Thailand and questionnaire. of Market Assessment Objectives The ILO’s objectives for their market assessment in Thailand were as follows: 1. Multi-service Market Survey • To establish the current usage, including a w a reness, reach and retention of business Very often, a program manager starts the services among SEs in Thailand. p rogram design process without having • To identify specific demand for services that decided on which BDS to focus. In this case, is not being fulfilled by existing service provi- the program manager wants an understand- sion in Thailand. ing of the markets for many BDS. This •To highlight business opportunities for com- i n f o rmation will help the manager decide mercial service provision to SEs in Thailand. on which services to focus. But because most programs do not have the time and resources to conduct two consumer surveys Example from GTZ Nepal during the program design process, the of Market Assessment Objectives manager also wants the survey to yield G T Z ’s information objectives for the consumer i n f o rmation that will help him/her design survey were as follows: market development interventions for spe- 1. To make a reasonable estimate of private sector consumption of BDS in general and cific BDS markets. specific business services in the last year. 2. To describe current awareness, reach and T h e re f o re, a multi-service BDS market retention of various business services. survey usually has two goals: 3. To describe the main customer segments for • To help a program manager choose on BDS in general and specific business services. which BDS to focus. 4. To describe various consumer segments’ use of BDS in the past year and consumers’ re a- • To help a program manager design sons for not using specific services. market development interventions for 5. To describe basic trends in the consumption one or several BDS markets. of BDS over the past 3 years as well as the expected direction of future consumption in To achieve these goals, the survey has two the next year. information objectives Decision Goal Information Objective Services to Investigate

A Comparison of the The first decision in a multi-service survey is which services to study. A range of ten to Choose Services Effectiveness and ➨ Problems in various BDS twelve services appears to work well – Markets giving sufficient breadth without making the survey too long. The services should be An Understanding of chosen based on what seems important to Design Problems and small business people in the country as well Interventions ➨ Opportunities in specific as what services the organization might be BDS Markets able to promote.

15 development interventions without the Example from the ILO of Services Studied need for additional research. The ILO studied the following business services in T h e re f o re, the goal of a single-service Cambodia: survey is: • Telecommunications • to gather sufficient information about a • Courier market in order to design appro p r i a t e • Money Transfer market development interventions. • Product Transport and Delivery • Advertising With this goal, the key information objective • Information through Print, Radio and TV is: • Internet Access • to understand the nature and magnitude • Trade Fairs and Product Exhibitions of market weaknesses and opportunities • Training (Management and Technical) in a specific BDS market. • Financial and Taxation Advice • Accountancy and Bookkeeping Specific objectives for a single-service • Links to New Customers survey might be: • Sales on Commission Basis • To understand current awareness and • Business Tours knowledge about the service. Other services to consider are: • To understand current purchase and • Computer Services usage habits as well as trends within • Legal Services these. • Counseling/Advisory Services •To gauge customers satisfaction with the • Secretarial Services service and reasons for use. • Research • To understand non-buyers reasons for • Marketing and Sales Support not purchasing the service. • Storage and Warehousing • To gain information on the diff e re n c e s • Design Services among consumer segments on the • Equipment Leasing and Rental above. • Packaging In f o r mation Needed Before Starting a UAI Survey Rather than limiting the study to pre c o n- ceived ideas about which services are pop- It is important in any UAI survey, but par- u l a r, it is helpful to do some advance ticularly in a single service survey, to define re s e a rch to determine the list of services. the service as the consumer does. A good For example, GTZ talked to business asso- understanding of what consumers see as the ciations in order to develop a list of services key benefits and features of a service will for their market assessment survey. Another lead to a good questionnaire. In addition, if option is to have informal conversations the researcher has a basic idea of the differ- with business people about what services ent ways the service is acquired, s/he will they get and want. be able to write a better questionnaire with more specific questions. 2. Single-Service Market Survey While a lot of this information will come from the survey itself, there are a number of A single-service market survey is appropri- methods which can be used to gather infor- ate for an organization that has alre a d y mation about consumers views prior to writ- chosen the service on which to focus and is ing the survey questionnaire: ready to design market development inter- • customer feedback to suppliers, ventions. A single-service market study can actually focus on several services, but no • focus group discussion conducted prior m o re than 3-4, particularly if they are to the UAI, related. The main diff e rence between this • i n f o rmal conversations with entre p re- study and the multi-service study is that neurs that have used the service, m o re depth of information on the market • key informant interviews, for each service can be gathered. This infor- • the pre-test of the UAI questionnaire mation may be sufficient to design market itself.

16 Example from the Philippines of Defining a Service from the Consumer Perspective The study of information and communications services in the Philippines found that consumers see very different benefits in these two services. Supplier is selling… Consumer is buying…

Facilitate transactions Communications ➡ Save time and money Get quick answers

Identify new markets Information Services ➡ Identify new inputs Aid in business growth

A useful exercise is to write a description of • type of SE targeted (either all SEs or only the service benefits and features from the those SEs that belong to a particular consumer perspective prior to writing the group, for example a specific subsector, questionnaire. women only, or micro enterprises only)

A Service Description of Email (from the Philippines ICT Study) A reasonable estimate of the total number of Email allows you to send a message to another SE consumers in the market will aid with the person through a computer. You provide your analysis of the survey data. If the market is written message to an attendant who types it very small, it may be possible to actually into the computer and sends it. The message count the number of SEs in the market. appears on the computer of the person you want to send it to very quickly - within a minute A l t e rnatively, a household survey can be or two. You can also receive messages this way. conducted to reasonably and accurately The person you want to communicate with must estimate the SE population. However, if have access to a computer because email can only be sent via computers. This is a very quick these options are not possible, the re- and convenient way to send a message. It’s s e a rcher will need to use secondary data cheaper than a long distance phone call or fax and/or key informants to estimate the market and the price does not depend on distance. size. Possible sources of data might be: • g o v e rnment data on re g i s t e red enter- 3. UAI Survey Design prises or census data The survey design elaborates what the • donor or institution supported surveys of survey will cover and how it will proceed. enterprises (particularly useful if they In addition to the study goals and objectives include the informal sector) and a list of the services to be studied, the • key informant suppliers (either suppliers following describe the components of the of BDS or of materials SEs purchase) survey design. • key informants in government or donor organizations Components of the UAI Survey Design • Goals and Objectives Consumer Segments • List of Services to Study • Market and Survey Population • Consumer Segments to Study Not all SEs want and acquire the same serv- • Sampling Methodology ices in the same ways. One important com- • Data Tables ponent of market assessment is understand- • Data Analysis ing how diff e rent consumer segments behave diff e rently. The questionnaire will include questions about the re s p o n d e n t s Market and Survey Population and their businesses, which will enable the The definition of a market includes: re s e a rcher to divide the respondents into • a geographical boundary (town, pro v- consumer segments and analyze their ince, country) behavior separately. The segments will be

17 defined by the characteristics asked in the way to get a random sample is to first divide questionnaire. These should be characteris- up the geographical market into units (usu- tics that make a difference in the way busi- ally administrative units like villages, munic- ness people look at and acquire business ipalities etc. is easiest.). Then geographical services. For example, in many culture s units are selected randomly where inter- women and men access services differently views will be conducted. A random place and often want diff e rent service feature s . and direction inside each unit is chosen for Similarly, micro enterprises and small enter- the interviewer to start. Then the inter- prises behave and want diff e rent things viewer goes building to building and inter- from services; trading enterprises and man- views each qualified SE that s/he finds. 1 4 ufacturing enterprises behave and want dif- Any sampling technique is valid as long as ferent things from services. it ensures that respondents are chosen randomly from the survey population. A Sampling of Segmentation Characteristics: T I P: In addition to choosing respondents, it is Type of business i m p o rtant to outline the practical methods for Size of business by number of employees finding and reaching them. The ILO found considerable challenges in reaching informal, ru r a l Size of business by sales businesses because most marketing re s e a rc h Age of business f i rms are not familiar or comfortable with this Gender of owner consumer group. The logistics of reaching these Single/Joint/Family ownership g roups is also a challenge. In some culture s , Age of owner reaching women is a challenge. For example, in some cultures, female interviewers are needed Education level of owner to interview women entre p reneurs and male Basis of competition (price, quality etc.) interviewers for men entrepreneurs.

Sampling Methodology Sample Size: If a good estimate of the total size of the survey population is available, The sampling methodology includes who is the required sample size can be calculated an eligible respondent, how will re s p o n- using statistical methods based on a desired dents be chosen and how big will the accuracy level. However, many private sample size be. s e c t o r-marketing re s e a rchers use a rule of thumb: a random, unstratified, sample size Respondent Eligibility: An eligible re s p o n- of 100. For a population over 10,000, this dent owns and/or manages and SE. In order sample size will yield a 95 % confidence to determine if the business is an SE, a level and a margin of error of +/– 10% , workable definition for SE needs to be assuming that the maximum data variability developed. A definition based on less sen- is 0.25. This is a level of accuracy that many sitive information, such as the number of f i rms in the private sector find acceptable. employees is better than one that depends Ho w e v e r , it is also important to consider the on more sensitive information, such as sales e ffectiveness of the markets to be studied or profits. Because the questionnaire asks and the consumer segments on which the about businesses’ purchasing decisions, it is re s e a rcher wants information. Those con- important that respondents are the owners ducting BDS market assessments are finding or mangers of the businesses – otherwise that if the market is weak, a sample size of answers are likely to be inaccurate. 100 will not be large enough for much of Choosing Respondents: In order for the the data on usage to be statistically signifi- survey to be valid, respondents must be cant. Therefore, the weaker the market, the chosen at random from the survey popula- larger the sample size needed to get statisti- tion. Ideally, the survey respondents would cally significant data on usage. Otherwise, be chosen randomly from a list of all SEs in data on some consumer segments will not the survey population. However, most probe statistically significant. A larger sample grams will not be able to get or make a list size is needed to capture more information of all SEs in the survey population. Another on a variety of consumer segments.

14 Alexandra Overy Miehlbradt “Outreach and Market Development Survey Guide” under the USAID Microenterprise Best Practices Project – Field Research on the Performance Measurement Framework, managed by Development Alternatives Inc. and the Small Enterprise Education and Promotion Network, November, 2000. Website: www.mip.org

18 S t r a t i f i c a t i o n: In many cases, a re s e a rc h e r questions that the re s e a rcher wants may want to stratify the sample, in other a n s w e red about the market. This can be words purposefully include a certain used to check the list of data tables to number of SEs from a specific group such as e n s u re that all the needed tables will be a specific subsector or size of SE. Stratifying generated. It is also a good tool for discus- the sample enables the researcher to ensure sion among re s e a rchers to make sure that that a statistically significant sample is gath- everyone is clear on what information the e red from specific groups of SEs, which survey will gather. See Appendix A for an might not happen if a purely random example of a quantitative study design from sample of SEs is surveyed. This is particu- GTZ Nepal. larly important if the program aims to reach a specific group of SEs such as micro enter- 4. Survey Questionnaire prises or a growing subsector. The researcher may include any number of con- The questions in the survey flow from the sumer segments in the survey. However, i n f o rmation that is needed. A model ques- stratifying the sample means that the total ti o n n a i r e showing the information objective, sample size will need to be larger because data tables and sample questions, and a the number of SEs in each group surveyed sample questionnaire from the ILO in Indone- must be statistically significant – in other sia are included in Appendix A. As a rule, the words must be enough to give a reasonably questions in a UAI follow the flow below: accurate representation of the whole popu- • Screening Questions lation of that group. If the number of SEs •Aw a reness and Knowledge of the Ser- chosen from each group is proportional to vice(s) the number from that group in the overall • Acquisition of the Service(s) – how, from SE population, then the sample will still rep - whom resent the overall SE population. Otherwise, the researcher will have to adjust the figures • P u rchasing Behavior – price, amount, in the data analysis in order to represent the frequency etc. overall SE population. • P e rceptions of Use – reasons for purchase or non-purchase, satisfaction etc. GTZ Stratified its Sample Using the Follow- • Personal Data used for consumer seg- ing Groups: mentation • Industry (micro, small, medium and large) • Retail – Fast moving consumer goods In a single-service UAI, the section on per- • Retail – Durable goods ceptions of use will be significantly longer • Wholesalers and more detailed than in a multi-service • Travel Agents survey. For a single service study, this sec- • Hotels tion will elaborate consumers’ feelings of importance and satisfaction with specific Data Tables fe a t u r es of the service and service suppliers. The study design includes a list of the actual F e a t u res of both service and service data tables that will result from the survey. supplier can be included together, as a Making the list enables the re s e a rcher to consumer generally does not diff e re n t i a t e en s u r e that s/he has not left anything important out. It can also be used to check the A Sample of Service Features: q u e s t i o n n a i re to make sure that all of the • delivering the service at the time promised i n f o rmation needed can be gathered using • delivering precisely what is promised the questionnaire. See Appendix A for a • providing error-free service • rapid response to the initial request for serv- sample of a data table list. The list of data ice tables makes it clear to those conducting the • consistency of service provision survey what is expected as a result. • customizing the service to the customer’s needs Data Analysis • convenient office hours • friendly and helpful staff The study design includes a discussion of Source: Dorothy Riddle, “Summary of Methods Used to Assess the analysis that will be conducted on the Business Services Markets in Developing Countries.” Unpub- data from the survey. It outlines the specific lished, June, 2000.

19 between the two. In a multi-service study, times must be revised based on the realities this section will be more brief and general. of a questionnaire. When writing the ques- t i o n n a i re the re s e a rcher may discover that Multi-service studies may also include sub- some of the information s/he wants can not jective comparisons of diffe r ent services. For be gathered using a survey questionnaire example, a questionnaire may ask a respon- format. Or s/he may find that the question- dent to identify which business services are n a i re is too long and the amount of infor- important to him/her. Because this informa- mation to be gathered must be re d u c e d . tion is less factual than other information in This process repeats itself when the pre-test the questionnaire, it should be examined in is conducted. The pre-test will show the the context of other data. However, it can researcher if the information s/he wants to be useful in helping a program manager gather can be gathered in a survey format. decide the services on which to focus. The design and questionnaire are often not finalized until after the pre-test is con- 15 5. Conducting the Survey ducted. Data tabulation can be conducted using any Figure 6 shows the flow of a UAI survey. relevant software package. Several org a n i- Figure 6: Flow of a UAI Survey zations have found that SPSS is functional and sufficient. It is useful if the pro g r a m Specify the Objectives manger is familiar with the software so that s/he can do additional analysis of the data beyond what a survey firm or other researcher provides. Develop Survey Write Design Questionnaire B. Focus Group Discussions

Conduct Pre-Test Focus group discussions (FGDs) are a facil- itated discussion among a group of similar consumers about one or several services. They are a good compliment to a UAI Conduct the Survey survey in a market assessment. Although the information obtained from FGDs is not nec- essarily re p resentative of all consumers, it tends to be richer and more specific than Tabulate Data survey data. The data is easy to interpre t and very useful to suppliers in impro v i n g their services. FGDs also often generate ideas for new or slightly diff e rent services. Analyze Data

1. Goals and Objectives

Make Decisions In market assessments to date, FGDs have been used after a multi-service UAI in order to deepen the researcher’s understanding of The objectives specify what decisions the the market. In this case, the goal is to help p rogram manager wants to make. The the program manager add specific details to analysis of the data should provide the man- a market development plan, such as how ager with the information s/he needs to the program will help suppliers to improve make the decisions. p roducts or how the program will help While the development of the survey design increase demand for services. The informa- follows directly from the objectives, it some- tion objectives in this case are:

15 For more information on conducting surveys in general, see Casley, D.J. and Lury, D.A., Data Collection in Developing Countries, Clarendon Press, Oxford 1981; and Roberto, Eduardo L. User-Friendly Marketing Research, Life Cycle Press (Asia), Manila, 1996.

20 • To understand the reasons for the • To understand better why people who responses in the UAI survey. recognize the importance of a particular • To get more specific information about business service, do not actually buy it. how consumers view the service(s). •To identify issues which hinder purchase •To get specific ideas on how to improve of services by small enterprises and ways service products and increase demand. that this can be addressed. • To get ideas on how to convince non- Focus group discussions can also be useful purchasers to try a service. before a single-service UAI in order to gain enough information to develop a good survey questionnaire. In this case the goal is Choice of Respondents to help the res e a r cher formulate approp r i a t e The decision of who to talk to depends on and specific questions about the service for who can give the information needed to the UAI survey. The information objectives achieve the objectives. For example, if the are: objective is to learn why entre p re n e u r s • To understand how consumers acquire decide to purchase a service for the first services (delivery mechanisms, fre- time, the respondents should be those that quency etc.) have purchased services, preferably those • To identify the service benefits and that became buyers recently. If the objective features that are important to consumers. is to learn what motivates repeat purchases • To gather information on the reasons that and the features that generate consumer sat- consumers do or do not purchase serv- isfaction, the respondents should have pur- ices. chased the service multiple times, pre f e r- ably from diffe r ent suppliers. If the objective is to learn what would motivate non-pur- 2. Study Design chasers to try a service, the re s p o n d e n t s The study design outlines who will be should be those that show an interest in the included in the groups and what the focus service but have not yet purchased it and of the discussions will be. In addition to the those that became new buyers recently. goal and general objectives, the following Focus group discussions generally include describes the components of the study 8-12 respondents per group. Each gro u p design. should be homogenous with respect to their acquisition of the service (purchasers or Specific Objectives n o n - p u rchasers) and factors which make social groups comfortable in the culture The objectives will guide the topics for dis- such as income level, social status and cussion in the groups. The aim is that the gender. This helps to make the respondents FGDs yield specific data on each of the comfortable and ready to freely discuss their topics in the objectives. Objectives for FGDs views. after a UAI might include: • To understand better why consumers Discussion Guide chose to purchase a business service the first time. The discussion guide is a key form of com- • To understand better how consumers dif- munication between the researcher and the f e rentiate among service suppliers and facilitator(s) for the groups. Generally writ- make their choice of service supplier. ten by the re s e a rc h e r, it outlines what the facilitator should ask respondents and what • To understand better what motivates a re the desired outcomes of the discussions. repeat purchase of a business service. In addition to the goals and objectives of the •To generate a list of specific service ben- FGDs, the guide includes a list of questions efits that consumers want. for each objective for each type of gro u p . •To generate a list of service features that Together with the list of questions, it is help- produce satisfaction among consumers. ful to make suggestions about what areas of •To get ideas on how to improve services the topic to probe and what types of exam- to make them more appealing to con- ples the researcher is interested in. Because sumers. it is difficult to predict how long a gro u p

21 FGD Respondents for GTZ Market Assessment in Nepal After conducting a UAI survey, GTZ wanted more information on nine services. A marketing research firm designed FGDs to gather this information. The groups were divided by consumer segment and each group discussed 2-4 services. In all 15 FGDs were conducted, approximately 60% from urban areas and 40% from rural areas.

Purchasers: Non-purchasers: 2 groups of small manufacturers 2 groups of small manufacturers 1 group of medium manufacturers 1 group of medium manufacturers 1 group of lage manufacturers 1 group of small hotels 1 group of small hotel owners/managers 1 group of medium hotel owners/managers 1 group of wholesalers 1 group of durable retailers 1 group of small travel agencies 2 groups of medium and large travel agencies will discuss a given topic, it is also helpful – did the respondents get something to provide priorities so that the facilitator from the service they didn’t expect? can make sure to cover those topics that are – what ideas do respondents have for most important to the researcher. A sample other benefits they could get from the discussion guide from GTZ Nepal is service? included in Appendix A.

For example, if one of the objectives of the Management and Reporting study is to learn what benefits entrep re n e u r s expect from a service, questions included in The researcher and the facilitator(s) should the guide might be: discuss prior to the study, how the groups • What did you expect from the service the and the recording will be managed. For example, a common length for FGDs is last time you purchased it? 1 2 hours: ⁄2 hour for ice breaking, 1 hour of • When you discussed your intention to 1 discussion and ⁄4 hour for summing up. The p u rchase the service with a friend or extra fifteen minutes are used based on the family member, what did you tell them facilitator’s discretion. The key to FGDs is about why you planned to purchase the that the respondents use actual examples of service? their experiences rather than too much the- • Do you feel you got what you expected o retical discussion. It is important that the from the service? facilitator does not allow one person to • What do you and other members of your dominate the group but rather encourages business (manager, employees, family comments from everyone and sets a tone members involved) feel about the results w h e re all respondents feel comfortable of the service? expressing their opinions. • What more do you wish you could get from the service? Usually, each session is recorded. The tapes • Areas to probe: are transcribed and analyzed, preferably by – what were the expected and actual several people to get diff e rent interpre t a- results of the service on the business tions. Usually, both the transcribed record- (e.g. increased sales, incre a s e d ing and the analysis are given to the employee satisfaction, made business re s e a rc h e r. The re s e a rcher should specify contacts etc.) what s/he wants in the analysis and the – what were the expected and actual fo r m it should take. For example, should the results of the service on the person results of each group be reported separately (made him/her feel more competent, or should the results of the groups be com- made friends, feel more important as bined in a single re p o r t? If the re s e a rc h e r a result of using the service etc.) does not speak the local language, should a

22 translated transcription of the groups be can understand the processes that con- provided? sumers go through when making decisions and judgements on services. Finally, it is As this is not a quantitative study, all important that neither the facilitator nor the answers are relevant, not only the majority re s e a rcher pass judgement on the re s p o n- opinion from each group. It is important for dents opinions as right or wrong – the aim the re s e a rcher to get specific quotes and of the study is to understand the consumer examples from the groups in order that s/he point of view.

23 IX. Conducting Supplier Diagnostics 16

In supplier diagnostics, the researcher takes a closer look at the supply side of the Example from GTZ Nepal of a Demand-Supply “Gap” market by interviewing and observing sup- In the market for management training, focus pliers. Supplier diagnostics are a helpful g roup discussions with non-users showed that complement to consumer re s e a rch. The consumers want new products that addre s s descriptions of the suppliers interviewed specific business problems. Interviews with combined with the consumer re s e a rc h management training suppliers showed that while suppliers were somewhat aware of this should help the re s e a rcher develop a pic- demand, most training courses they off e re d t u re of supply overall. The aim of the w e re generic, “o ff - t h e - s h e l f” management researcher should be to answer these ques- training courses. The suppliers were selling these generic courses mainly to donors and found this tions: market stable and profitable. In this enviro n- When information from all suppliers ment, many suppliers were risk averse to creating new products and trying to sell them direc t l y interviewed is taken together, what are to businesses. In addition, suppliers said that the key problems with supply? they were not sure exactly what products and product features were in demand. This research W h e re are the opportunities for new showed a demand-supply “ g a p .” Consumers p roducts, marketing strategies or new want new products with diff e rent pro d u c t suppliers? f e a t u res but suppliers are not creating new products. So u rc e : Marshall A. Bear, “P S P ’s Offer to BDS Suppliers : Con- Supplier diagnostics enable the re s e a rc h e r sultant Report for GTZ/Private Sector Promotion Pro j e c t . ” to see market issues from the suppliers’ unpublished, January, 2000. points of view. Taking a closer look at suppliers also helps the re s e a rcher explore some of the supply side weaknesses found with a set format and specific items to inves- during the consumer research and pinpoint tigate. Or, the researcher can interview sup- m o re precisely suppliers’ weak points. pliers with a more loose format and less set When looking at both the consumer data agenda with the aim of exploring issues and the supplier data, it is useful to analyze with them. This kind of less formal form a t “gaps” or areas where consumers and sup- can also often act as an entry point for suppliers have diff e rent points of view. For plier technical assistance. example, SEs might be interested in a par- The number and types of suppliers to inter- ticular service but not like the pro d u c t s view depends on the nature of supply. A available. Suppliers might think that there is consumer survey and/or FGDs can provide no demand from SEs, so they do not target the names and/or the types of suppliers that the market. These “g a p s ” often point to a are present in the market. Other sources of potential area for intervention. information on suppliers are: • Chamber of Commerce directories Supplier diagnostics can be very formal or mo r e informal, depending on the breadth of • Business association membership lists in f o r mation the res e a r cher wants. For exam- • Yellow pages ple, the re s e a rcher can interview suppliers • Donor agencies

16 This section benefits from the ideas and input of Dorothy Riddle from her paper “Summary of Methods Used to Assess Business Services Markets in Developing Countries, unpublished, June, 2000. and Marshall A. Bear.

24 Although it would be helpful if the Ownership and Relationships: researcher could then make a list and inter- • Who owns the supplier ? What is the view a statistically significant sample of the structure of ownership? suppliers, this is not possible. Neither a con- • How long has the supplier been in oper- sumer survey nor FGDs will lead to a full list ation? of the suppliers in the market – instead they • Does the supplier have any partner will provide a sample of suppliers. A list organizations/companies? drawn only from re g i s t e red suppliers will leave out the informal sector, often an • With what organizations (associations, important source of business services. other businesses, government agencies) T h e re f o re, the re s e a rcher should aim to does the supplier maintain regular links? interview a cross section of the types of Why? suppliers identified in the consumer Market Expansion Strategies: research. S/he should interview as many as • How is the supplier trying to increase its needed for the re s e a rcher to feel that s/he customer base and sales? has a good grasp of the problems and opportunities for diff e rent types of suppli- • What barriers do management perc e i v e ers. When analyzing the results, the in expanding their business? res e a r cher should bear in mind that they are • Do the strategies correspond with the not statistically significant but rather a issues found during the consumer sample of suppliers’ view points in the same research? way that FGDs yield a sample of consumers’ • Is the supplier creating new products that view points. the SEs want? Even for more informal interviews, the Capacity : researcher should make a list of the factors • What are the supplier’s strengths and to examine. Some of the factors are weaknesses? described below. However, the list should • Does the supplier have the necessary also derive from the findings of the con- skills, people and facilities to deliver sumer research. For example, suppose that products that consumers want? the consumer survey showed that trial of services is low and the FGDs showed that • What percent of annual expenditure is consumers are risk averse in trying new used for staff training? services. Then, supplier diagnostics should • Does the supplier have good marketing? include an investigation into the types of • Does the supplier have good business marketing strategies that suppliers are using management? to induce trial. The re s e a rcher should also • Does the supplier have sufficient finan- d e t e rmine if suppliers are aware of this cial re s o u rces and good financial man- p roblem and what mechanisms they have agement? used to address it. • Does the supplier understand consumer d e m a n d ? Does the supplier re g u l a r l y Factors to Include in Supplier Diag- gather customer feedback and use it to nostics improve products and marketing? Product/Market Mix: • How do these strengths and weaknesses • What products does the supplier offer? position the supplier relative to con- • Who are the supplier’s customer seg- sumer demand? ments? (manufacturers ETC.) It is useful to conduct a standard business • Is the product and market mix clearly analysis of each supplier interviewed. defined? Private Sector Orientation : In countries • Does the product/market mix match the w h e re donor support for BDS is stro n g , p i c t u re of consumer demand from the many suppliers may be serving donors as consumer research? well as, or instead of, the private sector. • Do product benefits and features match • What percentage of revenues comes consumer demand? f rom donors, government agencies and • What is the volume of services sold? private businesses?

25 • Does the supplier recognize him/herself – not eligible for the same tax incentives as a business or primarily as a social and policy support as goods prod u c e r s organization? – lack of training for staff • What is the supplier’s perception of sell- – lack of financing to support gro w t h ing to private consumers? and staff development • What proportion of sales comes from the – lack of awareness by customers of the private sector? value we provide • Is management entre p reneurial or – lack of customer willingness to pay for bureaucratic? good quality service – lack of information on what con- Views of the Market: It is useful to get sumers want suppliers’ opinions about the market and – etc. the problems they face. The following ques- • What does the supplier think needs to be tions often help identify “ g a p s” between done to remove the barriers mentioned? demand and supply. • What one action does the supplier think • What does the supplier view as the major would best help him/her to improve the barriers to providing good quality serv- quality of services? ices to customers? • What changes in the supplier’s business – competition from government agen- does s/he think would enable him/her to cies or donor financed programs expand and reach new customers?

26 X. What are the Challenges in Information Gathering?

T h e re are a number of challenges to gath- developing countries, it can be difficult to ering useful and accurate data on BDS mar- find and interview low-income entre p re- kets in developing countries. This section neurs. They may be concerned about outlines some of the key challenges. answering questions because their businesses are informal or they may just be too P e rhaps the most significant challenge for busy. In some cultures, it is difficult to i n f o rmation gathering in market assess- gather information from women. They may ments is to keep it reasonably simple and be reluctant to talk with male interviewers practical. Assessments to date have shown or concerned about answering questions in that gathering and analyzing basic data is general. Particular strategies are needed to more useful than trying to gather too much ensure that this consumer segment is repre- or too complicated data. Because markets sented in the sample. keep changing and no assessment will cap- t u re the whole picture of a market, it is To date, all market assessments with which better to gain a basic understanding in a the author is familiar have used the assis- simple and practical way, rather than make tance of a marketing re s e a rch firm. It is the exercise so complicated that analyzing useful to have the assistance of a marketing the data is extremely difficult. research firm for any fairly large study or if the re s e a rcher has little experience with TIP: It is tempting to try to gather market data marketing re s e a rch. A marketing re s e a rc h and program impact data at the same time. f i rm has the experience to handle diff i c u l- Experience has shown that this does not work well. The questionnaire becomes too long, sam- ties in sampling and information gathering pling issues are complicated and re s p o n d e n t s ’ as well as to provide helpful advice on the answers may be biased. study overall. In addition, a marketing res e a r ch firm can be invaluable in the analy- Assessing BDS markets re q u i res a mixture sis and interpretation of market assessment of private sector tools and development data. However, most marketing re s e a rc h knowledge. While private sector tools and companies are not used to gathering data techniques are very useful in assessing mar- on the informal sector and non-fee for serv- kets and suppliers, they are usually ice transactions. There f o re, re s e a rc h e r s designed for formal markets. As with any need to help them address this weakness in information gathering on SEs in developing i n f o rmation gathering. The following two countries, there are the difficulties of cap- sections discuss the challenges of choosing turing accurate data on informal sector and working with a marketing res e a r ch firm. enterprises (both consumers and suppliers). In addition, BDS markets are rarely solely A marketing research firm may not be nec- based on fee for service transactions. Cap- essary if the study is fairly small and the turing other types of transactions such as re s e a rcher has some experience with mar- embedded services and those paid for by a keting re s e a rch. For example, if the study third party is difficult. focuses only on the customers of one or several suppliers or is conducted in a very Gathering data from some consumer seg- limited geographical area, a marketing ments is difficult. For example, like other research firm may not be needed. The third types of research on low-income groups in part of this section discusses possible

27 challenges that a re s e a rcher might ence with informal markets, the manage- encounter if s/he chooses to manage the ment should make an effort to understand in f o r mation gathering without the assistance what types of businesses should be of a marketing research firm. included in the study and why. If the marketing re s e a rch firm does not understand Most marketing research firms only conduct the reasons for the assessment, they can not consumer re s e a rch and some backgro u n d design and manage an appropriate study. re s e a rch. They do not conduct supplier diagnostics or use other tools not focused Willing to customize: The management on consumers. There f o re, these aspects of should be ready to put together a study that the study need to be conducted by the meets the particular needs of the res e a rc h e r . re s e a rching organization or a consultant. This should include an appropriate combi- The last section in this part discusses the nation of tools, sampling strategy, geo- challenges of getting information from sup- graphic coverage, data processing and data pliers. analysis. The firm should explain how their p roposal meets the specific needs of the study. Particularly in data processing and A. Choosing a Marketing analysis, some firms have the tendency to fit Research Firm any study into a generic template. This template may be a good starting point but With consumer re s e a rch at the center of a should be customized to the needs of the market assessment, it is usually best to client. choose a private sector marketing research f i rm. These firms specialize in gathering T I P: It is very important not only that the mar- in f o r mation from consumers about their atti- keting re s e a rch firm can generate accurate numbers but also that they can present them in tudes and practices in purchasing goods a helpful way. Ideally, the firm will be able to and services. A social research firm may be effectively analyze the data. Look for a firm that less useful because they have less experi- stresses professionalism not only in data collec- ence in gathering and analyzing informa t i o n tion but also data presentation and analysis. The firm may reserve its best analysts for its big cus- on markets. For example, social re s e a rc h tomers or those likely to purchase marketing f i rms generally do not have the necessary re s e a rch often. Find out in advance who in the experience in phrasing questions about pur- fi r m will analyze the data and try to negotiate for chasing that marketing research firms have. a senior analyst. In some countries, there are firms that do both marketing and social re s e a rch – they Able to deliver : The firm should have the may be ideal if they have experience both technical capacity as well as the manpower with analyzing markets and with gathering available for the study when needed. It is i n f o rmation from low-income people helpful to check references to find out if the and/or informal sector enterprises. firm usually delivers the agreed outputs on time and the quality of their on-going serv- When choosing a marketing re s e a rch firm , ice throughout and after the study. the following characteristics are important: Capacity to interpret data : It is more dif- Easy to talk with: The marketing research ficult to effectively analyze data than to f i rm should be willing and capable of gather it. Many marketing res e a r ch firms can describing their re s e a rch capacity and generate accurate numbers. Far fewer can making a proposal in non-technical lan- e ffectively interpret those numbers to help guage. The management should be willing a researcher identify concrete problems and to explain any technical terms or tools that opportunities in markets. When checking they plan to use in the study. references, find out to what extent the firm Ready to listen: The marketing re s e a rc h analyzes data and judge if the type of analy- firm management should ask a lot of ques- sis they do will help in designing BDS tions about the goals and objectives of the market development interventions. If the study, any prior res e a r ch that has been done f i rm chosen does not have this capacity, it and any information available about the may be necessary to identify someone else topic. Particularly if they have little experi- to help with the data analysis.

28 B. Working with a Marketing consumer survey. “ M” denotes the market- Research Firm ing res e a r ch firm, “R” the res e a r cher and “J” jointly. The re s e a rching organization may want to It is helpful to outline who will do what and initially contract the marketing res e a r ch firm how the joint responsibilities will be shared to conduct a consumer survey and decide in the contract. For example, for the joint later if focus group discussions or other responsibilities, the re s e a rching org a n i z a- tools should also be used. Or the firm could tion can make an initial draft, the marketing be contracted only for background focus research firm comment and the researching g roup discussions with the possibility of o rganization finalize—or the other way also doing the follow up survey. This not around. only gives the re s e a rcher flexibility but an opportunity to test the relationship with the The contract should include the number of marketing re s e a rch firm before spending interviewers and supervisors, the duration more money. It is helpful, however, to dis- of the interviewer training, how interview- cuss the possibility of additional re s e a rc h ers will be supervised, how the data will be with the firm to determine if they will have cleaned and tabulated including the soft- the staff time available for more re s e a rc h ware package and how it will be presented, after the initial study and motivate the firm including if the re s e a rcher will received a to provide quality work. soft copy of the data tables. It is very important to specify what type of What should be included in the con- data analysis the marketing firm will contract? duct. For example, will they just pro v i d e Figure 7 suggests what tasks should be car- data tables? Will they provide a rep o r t ? If so, ried out by the marketing research firm, the what topics and analysis will be included? re s e a rching organization and jointly for a Particularly if the res e a r ching organization is not very familiar with the country context, it is important that the marketing res e a r ch firm Figure 7: Marketing Research Roles and does some analysis. This way, the firm can Responsibilities bring its own experience with the context of the country into the analysis of the data. Specify the Objectives – R Those that have conducted market assessments have found two types of reports par- Develop Survey Write ticularly helpful. One is an overview of the Design – J Questionnaire – J data and an analysis of what the data means for BDS markets in general, for particular BDS markets and for particular consumer segments. The other is an in-depth analysis Conduct Pre-Test – M of each individual BDS market studied. The in-depth analysis are useful not only for donors and facilitators who want to design market development interventions but also Conduct the Survey – M for suppliers who want to increase sales and expand into new markets. See Appendix A for an example from GTZ Nepal.

Tabulate Data – M The process for focus group discussions is s i m i l a r. The re s e a rching organization must specify the objectives. Determining the respondents and writing the interview guide Analyze Data – J can be collaborative. The marketing re- s e a rch firm will conduct the FGDs but it i s often helpful for the re s e a rcher to be present, both to understand the data as well Make Decisions – R as to offer suggestions from one focus

29 g roup to the next. The marketing re s e a rc h Tips for on-going cooperation with a firm will offer some summary and analysis marketing research firm of the data as agreed upon in the contract. The more on-going contact between the researcher and the marketing research firm Sample Components of an Overall Analysis the better. Not only will this help the mar- of Consumer Research Data keting re s e a rch firm understand what the • Description of the Study – Overview of BDS Markets re s e a rcher wants, it will also help the – Market Size and Penetration researcher understand the data, what infor- – Expenditure on Services mation it can provide and its limitations. – Market Distortion – Reasons or Purchase and Non-Purchase – Reasons for Choice of Supplier If possible, it is helpful to have a represen- – Perceived Value of BDS tative of the researching organization in the • Comparison of Service Markets country where the re s e a rch is being con- – Relative Demand ducted throughout the study. This presence – Comparison of Suppliers per Market – Market Effectiveness allows the marketing re s e a rch firm to get – Market Issues quick answers to questions and the – Market Potential researching organization to understand the • Comparative Analysis of Consumer Segments context of the information generated. For • Analysis of Individual Service Markets example, it is useful for the re s e a rc h i n g • S u m m a ry of Problems and Opportunities in organization to attend the interviewer train- BDS Markets ing for a survey. That way the re s e a rc h e r can make sure that the questions are being explained with the correct meaning. It also Sample Components of a Single Service allows the researcher to explain directly to Analysis of Consumer Research Data the interviewers the purpose of the study. • What consumer segments are aware of the This knowledge will help the interviewers service? appropriately solve any problems that arise • What consumer segments are buying the during interviewing. service? • What is market penetration for various consumer segments? Example from the ILO of Cooperation with • Which consumer segments purchase services Marketing Research Firms multiple times? In all four of its studies, the ILO found that regu- • What is the market size for various consumer lar monitoring and dialogue with the marketing segments? re s e a rch firms was even more important than • What is the average annual spending on the the content of the contract. The ILO conducted service per consumer segment? two visits to each firm from headquarters, one • What are the trends in expenditure on the to design the study and one to monitor its service? progress. In each country, the ILO also had an in- • How often do entre p reneurs purchase the c o u n t ry re p resentative that maintained re g u l a r service? contact with the marketing re s e a rch firm. This • Why do entre p reneurs decide to purc h a s e allowed the ILO to address potential pro b l e m s the service? before they lessened the value of the research. For example, all the firms initially had diff i c u l t y • W h e re do entre p reneurs get inform a t i o n understanding the size and type of businesses about the service? the ILO is interested in. They were used to work- • How do entre p reneurs choose their serv i c e ing with formal businesses. The ILO worked with supplier? the firms to help them understand how to rea c h • What consumer segments have potential for very small, informal businesses. expanding the market? • What strategies should suppliers pursue to reach these consumers? • What benefits from the service do consumers While it is helpful if the contract spells out want? do they get? the roles of each organization, questions • What service features do consumers want? and issues will always arise. For example, it do they get? is often necessary to make changes to the • How could the service be improved? survey design and questionnaire after the • What are the key market problems and survey pre-test. It is helpful if the researcher opportunities? Source: GTZ Individual Service Market Profiles and marketing re s e a rch firm can sit down together to discuss these changes and the

30 implications. Similarly, a focus group dis- D. Gathering Information from cussion design might need to be adjusted Suppliers after the first several groups are conducted, if the information being gathered is not The first difficulty in gathering inform a t i o n what the researcher needs. The more these from suppliers is finding out who they are. p roblems can be discussed promptly and The consumer re s e a rch should yield the openly, the more likely it is that the names of suppliers. However, those con- researcher will get the information that s/he sumers who use informal sector suppliers needs. may be reluctant to name them. The consumer re s e a rch should, however, pro v i d e some information about the types of suppli- C. Managing Your Own Consumer ers that consumers use and how important Research each type is in the market. It is important to gather information from all the diff e re n t If a development organization chooses to types of suppliers, particularly those in the manage its own research, it is still advisable i n f o rmal sector who may have diff e re n t to hire the technical assistance of a market- issues from formal sector suppliers. It is also ing re s e a rch specialist for a few days. often helpful to compare suppliers that have Because most development org a n i z a t i o n s received assistance from govern m e n t lack the experience in marketing res e a rc h , and/or donors with those that have not. The this help is invaluable in making sure the comparison might show that subsidized and study and questionnaire are designed unsubsidized suppliers have different busi- appropriately and helping with the analysis ness strategies. The diffe r ences may indicate of the data. For example, a marketing areas that need to be addressed in expand- research specialist could spend a few days ing unsubsidized supply. helping with the design and questionnaire and a few days assisting with the analysis. It may be difficult to get some suppliers to discuss their business strategy, marketing Some of the challenges that a development strategy and revenues. There are several o rganization will face in managing their strategies to encourage suppliers to discuss own survey are: their businesses: • gathering sufficient background informa- • The re s e a rching organization or inde- tion to estimate the total consumer pop- pendent contractor can guarantee that ulation the information will be kept confidential • ensuring that the sample of consumers is and not reported on a supplier by sup- random plier basis. While this limits how the • defining the services to be studied from re s e a rching organization can use the the consumer perspective i n f o rmation, it may yield more accurate results. • phrasing questions from the consumer perspective • The researching organization can offer to trade information for information. The • keeping the questionnaire concise information from the consumer research • analyzing the data from a market assess- is very valuable to suppliers. They may ment perspective be willing to provide information about their businesses in exchange for infor- A marketing re s e a rch specialist can help a mation from the consumer re s e a rc h development organization handle these about the market for their services. issues. 17 The best interviewer also puts the supplier at ease and generates an atmosphere of trust by being up front about what the information given will and will not be used for.

17 For more tips on conducting consumer research see A. Miehlbradt with R. Chua “Technical Note: Applying Marketing Research to BDS Market Development,” available on the USAID Microenterprise Best Practices Website: www.mip.org

31 XI. How Can Market Research Data Be Analyzed?

Data is not useful until it is analyzed in a • To present a picture of the market, way that is helpful for program design. including market size, penetration, Those that have conducted market assess- tr ends, customer purchase habits and sat- ments have found that they yield a larg e isfaction, key reasons for purchase and quantity of information. Some of it is critical non-purchase and key factors in compe- for program design. Some of it is not. Ana- tition – both for the market as a whole lyzing the data and using it effectively for and for particular consumer segments. p rogram design takes some time and cre- •To pinpoint key weaknesses and oppor- ativity. tunities in the market as a whole and for particular consumer segments. An effective data analysis will yield an overall picture of a BDS market as well as pin- Quantitative data should be the backbone point problems and opportunities in the of a market research analysis. This data rep- market that the program could address. resents all consumers’ views and habits in the market. Analyzing this data provides a In order to design interventions to develop picture of the reality in the market. Qualita- a particular market, the researcher needs to tive data, from FGDs, supplier diagnostics analyze the data on that particular market. If and other sources, can fill in the gaps in the researcher aims to chose on which serv- understanding from the quantitative results. ice(s) to focus a program, s/he will need to The qualitative data will help the researcher do a comparative analysis of various BDS understand why the picture of the market markets. In some cases the two types of looks as it does. Put together, this analysis analysis overlap, when a re s e a rcher finds will enable the res e a r cher to pinpoint weak- common problems and opportunities in the nesses and opportunities in the market for a markets for several different services. In this particular service. (See Figure 8. 18) case, the res e a r cher may develop a prog r a m a round these problems and opportunities 1. Analyzing UAI Data 19 that can improve the markets for several dif- f e rent services. This may be a particularly Some information from a UAI will be quite useful strategy if several of the services are straightforward and will point immediately offered from the same suppliers. to market weaknesses or opportunities. For example, if only 10 percent of SEs surveyed a re aware of the service, there is a clear A. Analysis of a Single BDS need to address the lack of inform a t i o n Market t h rough awareness raising activities. Data on where SEs learn about the service will The objectives of analyzing a single BDS help practitioners determine how to pro- market for the purpose of program design mote the service. For other data, it is useful are: to have tools to interpret the results. Several

1 8 This figure is adapted from the Springfield Centre BDS 2000 Training Programme, module by Marshall A. Bear and Alexandra Miehlbradt. 1 9 This section is from A. Miehlbradt with R. Chua. “Technical Note: Applying Marketing Research to BDS Market De v e l o p m e n t , ” 2000 reprinted with permission from Development Alternatives Inc. under the USAID Microenterprise Best Practices Project with minor revisions.

32 Figure 8: Analyzing Market Assessment Data

A picture of reality Quantitative Analysis in the market + Reasons behind the Qualitative Analysis market picture

Market Weaknesses and Opportunities helpful tools are outlined below. While the service. Information on market size can help information that the tools yield can be used a re s e a rcher understand the level of for various purposes, the tools are org a n- demand for a service and the amount of rev - ized according to the main BDS market enue that is made from offering the service. development goals they addre s s: under- With this information, a supplier can esti- standing the overall market, incre a s i n g mate possible revenues from gaining a 10% demand, and developing and impro v i n g share, for example, in the market; a donor services. can monitor the growth in the overall size of the market. Understanding the Overall Market Some of this information will come from the The tools in this section help the researcher estimate of the total consumer population gain an overall picture of the market and its done at the beginning of the study. For health. A weak market, for example, would example, Table 1 shows how the MSE be characterized by very small size, low market size for cellular phone service in the penetration and low amounts spent on the Philippines was estimated. service. Segmenting the data for market size, penetration and amount spent enables A market size estimate is calculated as: the re s e a rcher to see which are the stro n g % of MSE customers that regularly use the and which are the weak segments of the service market. x the total number of MSEs in the surv e y population • Estimating Market Size 20 x average MSE frequency of use x average MSE amount spent per visit/use of Using usage data, a researcher can estimate service the market size, in monetary terms, for the

Table 1: Estimated Market Size for Cellular Phones in the Philippines

Calculation Data Source of Information % of registered MSEs who 15% MSE surve y : Interviewers randomly chose potential res p o n d e n t s own a cellular phone from all MSEs. Fifteen percent were users and, therefore, qualified for the survey. x the total number of 474,466 (1995 figure of registered MSEs from the Bureau of Small registered MSEs in the and Medium Business Development of the Department of Philippines Trade and Industry) x average amount MSEs 1,100 calculated from the MSE survey data spent per month x months in a year 12 = estimated market size 939,442,680 pesos per year (US$23,486,067) Source: MSE Survey from Philippines ICT Study, MBP.

20 This technique is from Dr. Ned Roberto, User-Friendly Marketing Research, Life Cycle Press (Asia), 1996.

33 Table 2: Estimated Market Size – Accounting, Financial Advice + Taxation Services in Nepal

Consumer Sample Customers Total Spending Segment Avg. Sample Sample Proportion # of firms # of firms % of Rupees US$ % of Spending Base Buying Buying in Nepal buying total Total Manufacturing 0.222 59,427 13,186 79% 132,320,408 1,945,888 79% <10 employees 8,215 83 17 0.205 55,692 11,407 68% 93,706,822 1,378,042 56% 10-19 employees 17,214 75 27 0.360 1,840 662 4% 11,402,554 167,685 7% 20-49 employees 12,474 48 22 0.458 875 401 2% 5,002,594 73,568 3% <50 employees 31,010 47 33 0.702 1,020 716 4% 22,208,438 326,595 13% Retail 0.092 29,000 2,656 16% 16,874,803 248,159 10% Large and Medium 7,600 61 7 0.115 12,000 1,377 8% 10,465,574 153,905 6% Medium and Small 3,500 59 4 0.068 16,200 1,098 7% 3,844,068 56,530 2% Durable 14,200 31 7 0.226 800 181 1% 2,565,161 37,723 2% Wholesale 14,625 25 6 0.240 3,000 720 4% 10,530,000 154,853 6% Travel Agencies 42,528 35 20 0.571 161 92 1% 3,912,576 57,538 2% Hotels 40,563 40 19 0.475 170 81 0% 3,275,462 48,169 2% Total 0.180 91,758 16,735 100% 166,913,249 2,454,607 100% Source: BDS Market Assessment Survey in Nepal, GTZ

Using data from Southern Mindanao where the survey was conducted, to estimate the TIP: It is useful to compare market penetration of diff e rent market segments to determ i n e market size for the entire country makes the where there are weak points in the market. For estimate somewhat unreliable but at least example, the penetration of the women-owned allowed the researchers to get a rough idea enterprise segment may be less than men- owned enterprises. Knowing this, the res e a rc h e r of the national market size. can then look for the reasons behind the differ- In the Nepali BDS market assessment, ences in market penetration. re s e a rchers were able to estimate the market size from diff e rent business segments. Table 2 shows how the estimated Market penetration is calculated as the market size for accounting, financial advice number of users of a service divided by the and taxation services for various consumer total number of enterprises in the market. segments was calculated. The data on the The definition of “user” may vary according number of firms in Nepal was gathered from to the service and circumstances. For exam- various industry and government sourc e s . ple, a telephone service user may be an SE These estimates will enable GTZ to monitor that uses telephone services at least once a the absolute and relative consumption of m o n t h ; but a training user may be an SE various business services from diffe r ent con- that has attended a training course in the sumer segments. last five years. If embedded services are a big factor in the market, the researcher may want to include services acquired thro u g h • Calculating Market Penetration any means or calculate market penetration If the survey included a random sample of for fee for service transactions and all trans- all SEs, as opposed to only users, it is pos- actions separately. In Table 2 above, the sible to calculate market penetration. If only p roportion buying can be considere d users were interviewed but SEs were con- market penetration. For example, 21 % of tacted randomly to see if they qualified for enterprises with less than 10 employees in the survey, market penetration can also be the manufacturing sector have purc h a s e d calculated. The Philippine cellular phone accounting, financial advice and taxation survey contacted MSEs at random within a services. While the Nepal study defined user defined geographical area and interviewed as having ever purchased the service, most those MSEs that owned a cellular phone. By had purchased services recently. keeping track of the number of MSEs contacted, re s e a rchers were able to calculate It is useful for donors and facilitators to the market penetration level: 15% of MSEs. monitor the level of market penetration in

34 Table 3: MSE Awareness, Reach, and Retention of ICT Services in the Philippines

Service Awareness Reach Retention (% aware of service) (Of those who are aware, (Of those who have tried service, % who have tried service) % who used it in the last month) Phone (long distance) 100 77 94 Fax 76 37 100 Money transfer 96 74 44 Telegram 100 68 47 E-mail 28 7 * Internet 35 3 * Source: MSE Survey from Philippine ICT Study, MBP

order to gauge improvements in re a c h i n g • Analyzing Aw a reness, Reach, and SEs. It is useful for suppliers to know the Retention level of market penetration in order to esti- To build a market for a business develop- mate the potential for market expansion. ment service, BDS practitioners must make sure consumers know about the service, try the service, and keep using the service. In • Estimating How Much SEs Spend marketing terminology, the percentage of on a Service consumers who know about the service is called the “ a w a reness ratio.” The perc e n t- Usage data can provide information on how age of consumers who are aware of the much SEs spend on a service. For example, service and who then try it is called the the cellular phone survey in the Philippines “reach ratio.” Lastly, the percentage of con- showed that MSEs spend an average of 737 sumers who have tried the service and who pesos (US$18.43) per month on business continue to use it regularly is called the calls. The personal information on re s p o n- “retention ratio.” dents showed that respondents’ average monthly sales, ignoring outliers, are approx - The UAI market study provides information imately 33,000 pesos (US$825). There f o re , on each of these three parts of marketing MSEs spend approximately 2% of their aver- the service and helps a donor or supplier age monthly sales on cellular phone busi- determine where to spend available funds: ness calls (737 pesos/33,000 pesos). Know- on raising awareness, on convincing SEs to ing how much MSEs spend on a service try the service, or on improving the service gives some indication of the importance of so that SEs continue using it. the service to MSEs. The researchers in the Philippines felt that 2 % of monthly sales Table 3 shows the awareness, reach, and represents a significant ongoing investment retention ratios for various ICT services from in communications. This tool can also be a survey of public calling office users in the used to measure if SE customers are increa s - Philippines. For the Philippines study, an ing their usage of a service. MSE was judged a w a re of a service if the respondent said he or she had heard, read, Increasing Demand or seen something about the service and could accurately describe what the service The analyses in this section show the level is (as judged by the interviewers). R e a c h of demand for the service. However, it may was the number of MSEs who had tried the not be immediately apparent from an analy- particular service compared with those who sis if a problem is caused by weak demand- w e re aware of the service. R e t e n t i o n w a s side or supply-side issues. For example, low the number of MSEs that had used the serv- SE understanding of services may be due to ice in the last month in relation to those lack of interest in the service or because who had tried the service ; use in the last suppliers do not have good strategies for month was adopted as a proxy for the reg- educating the SEs about their product. ular use of the service.

35 Table 4: Awareness, Understanding, Reach and Retention of BDS in Nepal

Service Awareness Understanding Reach Retention Production Advice 81% 45% 15% 89% Management Training 88% 60% 28% 63% Trade Fairs 96% 58% 27% 73% Advertising 100 % 75% 58% 88% Source: BDS Market Assessment Survey in Nepal, GTZ

Table 3 shows that each service has its own the service if they could correctly define the marketing challenges. For example, only 37 service. The resulting information pin- percent of those who are aware of fax serv- pointed two major constraints to market ice have tried it. A fax service supplier development of those services traditionally needs to spend the majority of available supported by donors: lack of understanding re s o u rces for promotion on convincing of services and entrepreneurs’ reluctance to MSEs to try fax service. A facilitator might try services even if they understand them. want to help suppliers design marketing Dissaggregating the data by consumer seg- programs around inducing trial. The reten- ment showed that these problems were par- tion ratio for fax shows that the design of ticularly acute among SEs. Table 4 shows the fax service is good and that fax is valued the awareness, understanding, reach and by the MSEs that use it because all those retention information for four business serv- who have tried it have become re g u l a r ices in Nepal. The first three services have users. There f o re, suppliers and facilitators been traditionally supported by donors can feel confident that fax services are meet- while the last, advertising, has not. ing MSEs’ needs. In Nepal, one of GTZ’s initial strategies In contrast, both telegram and money trans- included efforts to assist suppliers of serv- fer services enjoy reasonably high re a c h ices traditionally supported by donors to sell ratios but low retention ratios. Telegram and services to the private sector at full cost. money transfer suppliers need to determine Based on the above information, GTZ why MSEs do not continue to use these included, in its program support, activities services. In the Philippines, the likely rea s o n to increase the understanding of services is that MSEs are turning to substitute prod- among entrepreneurs and assistance to sup- ucts—checking instead of money transfer pliers for trial marketing. GTZ was able to and phone or fax instead of telegrams. encourage suppliers to target the private sector by showing them that once an entre- Both the awareness ratio and reach ratio of p reneur tries a service, s/he often comes e-mail and Internet among MSEs is very back, as illustrated by the high re t e n t i o n low. To successfully build the market for r a t i o s . 2 1 Aw a reness, reach and re t e n t i o n these services, a practitioner or donor information is critical to donors and practi- would first need to increase awareness of tioners in determining how to stimulate the service and its benefits among MSEs. It demand for a business service. might then be necessary to offer induce- ments for customers to try the service, for example a free trial use or free demonstra- • Understanding Rates of Consumer 22 tions. Adoption A graph that plots when users of a service In the Nepal study, “a w a re n e s s ” was first began using the service shows how fast divided into two parts. Entrepreneurs were consumers adopted the service. There are judged aware of the service if they had two basic ways that the market accepts a heard of it. They were judged to understand new service.

21 Marshall Bear, “PSP’s Offer to BDS Suppliers – Consultant’s Report” for GTZ, Nepal. unpublished draft, January, 2000. 22 This tool was developed by Everett M. Rogers and published in E. M. Rogers and F. F. Shoemaker, Communications & I n n o v a t i o n s: A Cross-Cultural Appro a c h, New Yo r k: Free Press, 1971, and originally presented in E. M. Rogers, D i ffusion of Innovations, New York: Free Press, 1962.

36 Figure 9: Fast Consumer Adoption Figure 10: Slow Consumer Adoption

Year First Started Using the Service Year First Started Using the Service

Fast Consumer Adoption—the service is not possible to be absolutely certain accepted by the market very quickly. because the beginning of this curve is Demand rises sharply immediately fro m “ m i s s i n g .” The possible answers on the when the service is introduced until it tapers qu e s t i o n n a i r e were only “be f o r e 1994, 1994, off as a high level of market penetration is 1995, 1996, 1997, and 1998” so data on the reached. first part of the curve were not gathere d . Many users started using the service before A graph for this type of service is re p re- 1994, re p resented by the first point on the sented by the theory line in Figure 9. The line at almost 40 percent. The graph and vertical axis shows SEs that are curre n t l y other information from the survey indicate using the service during that year. The infor- that demand from new users has started to mation comes from the survey question: level off since 1997. Thus, suppliers cannot “When did you first start using the service?” expect many new customers for money When the data are plotted, the number that transfer service in the future. started using the service in 1990 are added to the number that started using the service Slow Consumer Adoption—only a few in 1991 to give the total number using the consumers try the new service during the service in 1991. The total is then added to first few years that it is off e red. Then the the number that started using the service in service finally catches on and many more 1992 for the total number using the service consumers start using it. Eventually, in 1992, and so on. demand from new consumers declines as the service reaches a high level of market For a service that is adopted quickly, a sup- penetration. A graph of this type of service plier does not need to put a lot of money is illustrated by the theory line in Figure 10. into promotion. The service catches on through word of mouth. However, the sup- For those services that take a while to catch plier needs to have his or her organization on, a supplier must put a lot of effort into ready to offer a high volume of the service promotion and be prepared to weather sev- quickly. If the supplier is not ready, cus- eral lean years before the customer base tomers will have to be turned away or the starts to grow significantly. A donor aiming quality of the service will suffer as the to stimulate this type of market might use a demands of the market put a strain on the voucher program when the service is intro- organization. In this type of market, a facil- duced in order to stimulate trial of the serv- itator can help suppliers develop systems to ice and thus increase demand faster. Alter- rapidly expand capacity or provide venture natively, the donor could provide seminars capital to new suppliers to help incre a s e for suppliers on how to promote the service supply. and induce trial in the early stages.

The Philippine PCO survey showed that The Philippine PCO survey showed that money transfer (represented by the second domestic long distance fax is the type of line on the graph) is probably the type of service that MSE consumers adopted slowly service that consumers adopted quickly. It is in the beginning. The first point on this line

37 re p resents all those that started using the information can help the practitioner better service before 1994. This curve starts soon t a rget these SEs or change the service to after the introduction of the service when reach a diff e rent market segment. Under- demand is still low and growing slowly. But standing market segments can help a donor between 1995 and 1996, demand for direct quantify and monitor the reach of the serv- long distance fax began to increase more ice to various types of SEs. rapidly. The curve is not “f i n i s h e d” in the sense that a high level of market penetration The Philippine study, for example, showed has not been reached so demand from new that the bulk of MSEs that use PCOs are in users is still rising rapidly. It appears fro m trading, with most of those in either food the last data point, however, that demand and beverage or general merchandise. The f rom new users may be starting to decline remainder are mainly in services, with only slightly. 1 percent in manufacturing. Although the proportion of MSEs in trading in the Philip- As illustrated in the graphs from the Philip- pines is substantial, the proportion of PCO pine study, the data from the survey often customers in trading appears significantly do not show an entire theoretical curve, higher than in the general SE population, either because the start date for using the while the percentage in manufacturing service in the questionnaire is later than the appears low. A national survey in 1993 introduction of the service or a high level of showed that 40 percent of registered micro, market penetration has not yet been small and medium-sized enterprises were in reached. In this case, the re s e a rcher must manufacturing. make an educated guess as to what part and which type of curve the data represent. This The three Philippines surveys indicated that will help the researcher determine how fast MSEs with higher sales and wider markets demand is likely to rise for the service in the a re generally more interested in inform a t i o n immediate future. services than smaller MSEs operating only in local markets. This led the re s e a rchers to A check of the demographic characteristics conclude that growth-oriented MSEs are of SEs at various points on the consumer m o re interested in information services adoption curve can help a practitioner targe t while survival-oriented MSEs are mainly likely new users of a service. A practitioner i n t e rested in communications services. can determine the characteristics of those Building a market for information services SEs that used the service first, the “innova- from survival-oriented MSEs would require t o r s , ” those that tried it next, the “f o l l o w- developing a new type of service than what ers,” and those that waited until it reached is currently off e red, one that met smaller a high level of market acceptance before MSEs’ needs for local information in a trying it, the “laggards.” For example, in the timely, convenient, and user- f r i e n d l y Philippine study, the ICT service innovators manner. tended to be male-owned, sales/trading businesses with higher than average sales In the Nepal study, demographic inform a- and household incomes. The laggards, tion on respondents was combined with which only recently started using various usage data to quantify market segments for telecommunications services, tended to be various services. For example, the survey newer, female- or family-owned businesses. showed that, in monetary terms, the market for many services is still dominated by large c o m p a n i e s ; 57% of the market for legal • Segmenting the Market services and 89% of the market for adver- As BDS practitioners know, SEs are not a tising comes from manufacturers with over homogenous group. Micro enterprises are 50 employees. However, SEs re p resent an d i ff e rent from small enterprises. Female important market segment for some serv- e n t re p reneurs may have diff e rent business ic e s ; 37% of the market for communications constraints than male entre p reneurs. Per- and correspondence services and 56% of sonal and business information on survey the market for accounting/financial/taxation respondents can help a practitioner identify services comes from manufacturers with which type of SEs use the service. This less than 10 employees. This information is

38 Table 5: Importance and Satisfaction Data from Bayantel PCO Survey

Features Importance Satisfaction # Who Rated Feature Distance # Who Rated Feature Distance Extremely Important From Mean Very Satisfied From Mean Accuracy 89 14 31 –3 Privacy 82 7 28 –6 Cleanliness 81 6 57 23 Clarity of connection/page 79 4 52 18 Confidentiality 77 2 21 –13 Comfortable waiting area 76 1 47 13 Comfort while using services 76 1 26 –8 Friendly/helpful attendants 75 0 35 1 Waiting time 70 –5 26 –8 Clear layout 70 –5 25 –9 Convenience of the location 69 –6 32 –2 Variety of services 65 –10 34 0 Distance from business 65 –10 32 –2 Mean 75 34 being used to help decide on which services donor can study these sources either to get to focus market-stimulating interventions ideas for designing a service or to find ways and to monitor the market size from SEs for to build up and improve upon these source s various services. of the service rather than start a new service. Developing and Improving Services 23 The analysis in this section is particularly • Analyzing Service Features useful for understanding problems on the Features that a supplier designs in a service supply side of the market and identifying determine the benefits that SEs get from the opportunities for suppliers to increase the service. Service features often determine if sale of services. SEs will purchase a service and, given a choice, from whom they will purchase it. A UAI market survey provides two types of • Identifying a Serv i c e ’s Real Com- i n f o rmation that enable a BDS practitioner petitors to analyze service features. The first is data Often, the competition for a business devel- on how important various features are to opment service does not come from another SEs. The second is the satisfaction rating the formal organization offering the same serv- SEs give suppliers of the service on these ice. Instead, it comes from informal services features. This information can be plotted on or systems that provide the same benefit to a matrix (an example is shown in Table 6), the SE. For example, the competition for a which shows a single supplier’s or all sup- market information service might be infor- pliers’ strengths and weaknesses in meeting mation from SEs’ customers and business SE demand for service features. A single associates. Donors are interested in learn i n g supplier can use the matrix to improve the if a BDS program is actually displacing pri- appeal of his/her service relative to the vate sector suppliers, many of whom are competition. A facilitator or donor can use i n f o rmal. A UAI market study can identify the matrix to determine if services in the i n f o rmal suppliers or business service sys- market are appropriately designed for SEs tems by asking respondents: If you cannot and design a program to help suppliers get this service, what will you do? increase the appeal of their services to SEs.

The answers will tell the res e a r cher how SEs Table 5 shows importance and satisfaction get the benefit of the service from other data from the Bayantel PCO survey. The first s o u rces. From there, a BDS practitioner or column shows the number of re s p o n d e n t s

23 This technique is from Dr. Ned Roberto, User-Friendly Marketing Research, Life Cycle Press (Asia), 1996.

39 Table 6: Analysis of Bayantel PCOs in Meeting Customer Demand for Service Features

High Satisfaction Low Satisfaction

Strengths Weaknesses High Importance Cleanliness (6, 23) Accuracy (14, -3) Clarity of connection (4,18) Privacy (7, -6) Comfortable waiting area (1, 13) Confidentiality (2, -13) Friendly/helpful attendants (0,1) Comfort while using service (1, -8) Waste Indifference Low Importance Variety of services (-10, 0) Clear layout (-5, -9) Waiting time (-5, -8) Convenience of location (-6, -2) Distance from business (-10, -2) Source: MSE Survey from Philippine ICT Study, MBP who ranked the feature as extremely impor- The matrix re p resents how the supplier is tant. The second column shows how far doing in satisfying the customers’ demands t h i s number is from the mean number of for service features. The top left box shows respondents ranking each feature as the supplier’s stre n g t h s — w h e re consumers extremely important. The last two columns are satisfied with features that are important show the same information on the satisfac- to them. These strengths should be main- tion with Bayantel PCOs. tained and promoted. The top right box rep - resents the supplier’s weaknesses—where When analyzing feature ratings, practition- customers are relatively dissatisfied with ers tend to use the number of people who features that are important to them. A sup- stated the feature was extremely important plier should prioritize addressing these or are very satisfied instead of the actual weaknesses to become more attractive to average rating of respondents (on a scale customers. The bottom left box re p re s e n t s f rom 1 to 4) because these figures usually wasted money—features that customers are yield a bigger diff e rence among the satisfied with but that are relatively unim- features and thus make it easier to analyze. portant. A supplier should reallocate the Marketing experts have also found that money spent on these features because cus- e x t remely important/very satisfied figure s tomers do not really care about them. The a re often more accurate than the average bottom right box shows features that the rating. supplier should not worry about. Customers are not very satisfied with these features but To analyze these data, plot the features on they do not care about them much either, so a matrix like the example shown in Table 6 it does not matter if they are dissatisfied for the Bayantel PCO data. Put the features with them. with higher than average importance and higher than average satisfaction in the top Table 6 shows that Bayantel is doing a rea- left box. Put the features with higher than sonably good job of meeting MSEs demand average importance but lower than average for service features. They offer a clean offi c e satisfaction in the top right box. Put the fea- with a comfortable waiting area, clear con- t u res with lower than average importance nections for telephone use and friendly but higher than average satisfaction in the attendants – features that MSEs think are bottom left box. Put the features with lower important. This matrix was used to recom- than average importance and lower than mend that Bayantel improve the accuracy, average satisfaction in the bottom right box. privacy and confidentiality of services as In Table 6, the numbers in parenthesis indi- well as provide more comfort while talking cate the distance from the mean, as shown on the phone. Bayantel does not waste in Table 5. The first number is the distance much money on useless features. The com- from the mean importance, and the second pany does not need to use res o u r ces to ven- is the distance from mean satisfaction. t u re into a wide range of other services –

40 Table 7: Importance and Satisfaction Data from Cell Phone Survey

Features: % of Respondents % of Respondents Who Were Very Who Said Feature Satisfied Was Extremely Important SMART PilTel Extelcom Globe Wide coverage 86 60 54 20 22 Portable/handy 84 65 58 68 44 Clarity of connection 83 55 58 44 44 Quick service 80 52 58 20 33 Waiting time for phone 71 50 46 32 44 Ease of application 71 58 48 44 22 Service location 61 47 52 36 44 Purchase location 47 45 54 40 44 Source: MSE survey from Philippine ICT Study, MBP variety of services is not important to MSEs. all customers are very satisfied with many of As waiting time is not a significant feature the features they care about. A donor inter- for MSEs, Bayantel does not need to ested in stimulating this market might pro- i n c rease capacity in its offices to re d u c e vide suppliers with information on technol- waiting time. ogy for improving the clarity of connection on cellular phones and making phones smaller and more handy. A facilitator might 24 • Comparing Suppliers want to offer a seminar for suppliers on pro- Importance and satisfaction data can also be viding quick service. used to compare various suppliers of the service and find opportunities in the market 2. Analyzing FGD Data for improving on current supply. The Philippine cellular phone user survey col- lected data on several cellular phone sup- T I P: Remember that FGD data does not neces- sarily represent the whole market. It is only the pliers. Table 7 compares the various cellular opinion of selected consumers. FGD data should phone suppliers by showing the percentage be used to explain weaknesses in the market of respondents who said they were very sat- found using quantitative data or provide additional ideas on a market opport u n i t y. It should isfied with each feature from the suppliers. not be construed to indicate any market pro b- The features are listed in order of impor- lems or opportunities that do not support the tance to MSE cellular phone users. quantitative results.

It is clear in this example why SMART is the Analyzing FGD data is generally easier than market leader among MSEs. SMART had the quantitative data. The comments and sug- highest rating for the features that MSEs care gestions from consumers can often be about most : wide coverage and portable/ applied directly to helping suppliers handy phones. Extelcom and Globe cannot i m p rove their products. Sometimes, con- compete on wide coverage—the most sumers’ comments about the features and important feature for MSEs. Although PilTel benefits that they want will point to their is better than SMART at satisfying customers u n realistic expectations of what suppliers for four service features: clarity of connec- can off e r. In this case, a facilitator might tion, quick service, service location and consider strategies to educate consumers p u rchase location, these features are less about services. In other cases, FGD re s u l t s important to MSEs than wide coverage and will show an opportunity for a new kind of portable/handy phones. p roduct that consumers want. To addre s s this, a facilitator could help suppliers Table 7 shows that there is considerable develop and commercialize new pro d u c t s . potential for improving the supply of cellu- Because FGDs are conducted by consumer lar phone services to MSEs. Less than half of segment, the data will show diff e rences in

24 This technique is from Dr. Ned Roberto, User-Friendly Marketing Research, Life Cycle Press (Asia), 1996.

41 what various consumer segments want from 3. Analyzing Supplier Diagnostic services. This information can help suppli- Data ers target particular consumer segments with the products that they want. When analyzing supplier diagnostic data, the re s e a rcher aims to answer two key Example from GTZ Nepal of Analyzing questions: Survey and FGD Data Together • What is the nature of market pro b l e m s In the market for consulting in business planning on the supply side? and management, GTZ’s quantitative surv e y showed that market penetration among manu- • What are the key gaps between demand facturing enterprises is only 5%. The low market and supply? penetration was explained by a lack of understanding and a lack of willingness to try this serv- To answer the first question, the researcher ice. Understanding of the service among manufacturers is only 59% and reach is only 12%. tries to determine why suppliers have par- The focus group discussions with small manu- ticular weaknesses shown in the consumer f a c t u rers who think consulting is an import a n t data. Figure 11 (following page) shows sev- service but who have not purchased it yet shed eral examples of how supplier diagnostic light on the reasons for these numbers. Small m a n u f a c t u rers said that the do not purc h a s e data might explain findings from consumer consulting services because they do not have research. any information on service suppliers – which begins to explain why reach among these enter- To answer the second question on demand- prises is so low. The small manufacturers are looking for three business benefits from con- supply gaps, the researcher looks for areas sulting services: where consumers and suppliers have differ- • to maintain the quality of production ent points of view on the market. Figure 12 • to strengthen management functioning and (following page) shows several examples of • to develop business strategies for the future. demand-supply gaps. These gaps often pin- Small manufacturers recognized that consulting point areas for intervention because they s e rvices could offer them an advantage in an increasingly competitive market. show where demand and supply do not H o w e v e r, the discussions with small manufac- meet. The facilitator can then develop turers also showed some of the areas of confu- strategies to bring supply and demand sion about the service that contribute to a lack closer together. of understanding. Small manufacturers wanted consulting services in production, management and planning combined. Some also confused When analyzing supplier diagnostic data, it training and consulting services. Small manufac- is important to consider the roles that must t u rers also wanted consultants to provide spe- be played in a market. Figure 13 shows cific information on the future of the client’s 2 5 market and to help the entrepreneur make new some of the key roles in a market. In a business contacts. These comments show that healthy market, there are a variety of organ- small manufacturers have unrealistic expecta- izations that may perf o rm these roles. In tions for what consulting services can deliver. many cases, suppliers will perfo r m all of the With these expectations, it is likely that those small manufacturers who have tried consulting roles. In other cases, there are businesses s e rvices have been dissatisfied. Dissatisfaction that develop and sell service products to leads to negative word of mouth inform a t i o n suppliers as well as help suppliers develop among small manufacturers that further sup- their capacity to deliver products. In some p resses entre p reneurs’ valuation of the serv i c e and willingness to try it. It also explains the rela- markets, service industry associations may tively low retention rate for services – only 59% p e rf o rm some roles such as helping to among manufacturing enterprises. develop supplier capacity. In some cases, From this analysis, it is possible to pinpoint sev- government may be performing some roles eral key problems in the consulting market for small manufacturers: such as providing information to con- • e n t re p reneurs lack information about consumers. But in all healthy markets, all these sulting services and suppliers roles are being performed. • e n t re p reneurs have unrealistic expectations for consulting services When analyzing supplier diagnostic data, it • suppliers are not communicating eff e c t i v e l y with potential consumers. is helpful to determine which of these roles ar e being played by suppliers and how well.

25 Adapted from A. Gibson, R. Hitchins and M. Bear, “BDS Market Development: A Guide for Agencies.” Draft, December 2000. Forthcoming from the USAID Microenterprise Best Practices Project managed by Development Alternatives Inc. website: www.mip.org

42 Figure 11: Understanding Supply Side Problems

Consumer Data Shows: Supplier Diagnostics Shows:

Suppliers do not think that small enterprises T h e re is a lack of appropriate products for are a viable market. OR small enterprises. ➡ Suppliers do not know what service benefits and features small enterprises want.

Suppliers do not have the capability to market their products effectively. Consumers do not understand what OR services can offer. ➡ Suppliers do not see consumer education as important to their businesses.

Suppliers are not targeting service enterprises Very few service enterprises try training OR services. ➡ Suppliers do not have effective strategies for inducing trial among service enterprises.

Figure 12: Finding Demand-Supply Gaps

Consumer Data Shows: Supplier Diagnostics Shows:

Small enterprises are interested in Legal suppliers do not see small enterprises purchasing legal services. ¹ as a viable potential market.

Retail businesses do not like the available Suppliers think that retail businesses do training courses. They want different types not see any benefits in training services because they are not focused on business of courses. ¹ expansion.

Service businesses are unaware of suppliers Suppliers think that very few service that sell accounting services ¹ businesses want accounting services.

If some roles are not being perf o rmed by If suppliers are not gathering and using suppliers, who, if anyone, is perf o rm i n g consumer information, it may be helpful to them? pr ovide them with consumer information, to support their efforts to gather consumer Answering these questions may begin to i n f o rmation or to develop the marketing point a program manager toward possible research market. market development interventions. For example, if suppliers are not developing new products or are not doing it well, there B. Comparative Analysis may be the need to help them develop of Various BDS Markets products, to support the start-up of product development businesses or to bring in sup- The aim of a comparative analysis of vari- pliers from other countries to adapt and ous BDS markets is to provide inform a t i o n franchise products. If suppliers are doing a that will help an organization choose on poor job of providing useful information to which services to focus a pro g r a m . T h e consumers, there may be a need to help choice of which services to promote will them with their marketing or to develop a depend on other factors besides the market, “BDS yellow pages” or consumers’ bureau. such as the experience of the implementing

43 Figure 13: Market Roles How this information is interpreted depends on the implementing organization. For Generating Ideas example, one organization may prioritize those services for which there are alre a d y suppliers and aim to strengthen those sup- Developing Products pliers. Another organization will choose the services for which demand from their target group is strongest. An organization special- Developing People and Suppliers izing in helping start new suppliers might choose a service where there are relatively Providing Information to Consumers few suppliers. The weaker the market, the m o re investment is probably needed to develop it and the longer the time frame for Delivering Services market development. The stronger the market, the more potential there is for distorting what is already working about the Assessing Performance and the Market market. Most organizations will choose to develop markets that are neither extremely organization, the area and target group and weak nor very strong. However, which mar- the context of the program. However, infor- kets to choose from the many that are some- mation from the market should play an what weak may depend on other factors. important role in choosing which services to F i g u re 14 below shows how the potential promote. for intervention varies with the strength of the market. 26 When comparing several diff e rent markets for services, there are four key questions to Level of Demand explore: • How does demand for different services The level of demand for various services compare? can be gauged, to some extent, by: • What suppliers exist for each service? • the number of SEs purchasing services, • How effective is each market? • the size of the market in monetary terms, • What is the potential for expansion of and each market? • market penetration.

Figure 14 When is there potential for intervention?

LEVEL OF MARKET DEVELOPMENT Non-existent Effective market market EFFECTIVE SUPPLY/WEAK DEMAND NO SUPPLY/ WEAK SUPPLY/EFFECTIVE DEMAND EFFECTIVE SUPPLY/ NO DEMAND WEAK SUPPLY/WEAK DEMAND EFFECTIVE DEMAND

Intervention is Good potential Limited potential extremely for Intervention for intervention difficult, limited potential Interventions have Markets are the ability to build effective and private Nothing to build on on existing activity sector is vibrant

2 6 A. Gibson, R. Hitchins and M. Bear, “BDS Market Development : A Guide for Agencies,” draft, December 2000, forthcoming from the USAID Microenterprise Best Practices Project managed by Development Alternatives Inc. We b s i t e: www.mip.org

44 Figure 15: Number of Firms Purchasing BDS in Nepal

Services

Although these figures do not factor in those of the BDS markets. Information that would SEs who are interested in purchasing serv- also be helpful is the percent of each market ices but do not like what suppliers have to that is fee-for-service, embedded services, of fer or are getting services some other way, free services or other types of transactions. it does give a rough idea of the level of This will provide information on the type of demand. p rogram that might be useful in each market. For example, if embedded services Fi g u r e 15 shows the number of firms buying are the most popular way for entrepreneurs each business service from the GTZ Nepal to acquire services, a program may want to market assessment survey. It is clear fro m use strategies to stimulate the supply of this graph that many firms are interested in embedded services. services which donors do not traditionally support such as communications and corre- Table 8: Types of Suppliers for some spondence, advertising and accounting and BDS in Nepal financial advice. % of Customers Using Service Suppliers Each Type of Supplier Individual Small Firm Large Firm A UAI survey will not provide the number Advertising 7 53 40 of suppliers for each service. Getting this Trade Fairs 7 22 71 information is very difficult. However, it can Mgmt. Consulting 31 22 47 pr ovide a sampling of either actual names of Prod. Training 17 26 57 suppliers or types of suppliers in the market and their relative popularity with consumers. This information will give the Market Effectiveness researcher some understanding of the availability and sources of supply for each serv- Aw a reness, Understanding, Reach and ice. Table 8 shows the percent of purchas- Retention provide a good understanding of ing consumers that use each of three types the relative effectiveness of diff e rent BDS of suppliers : individuals, small firms and markets. For example, Table 9 shows the large firms. Many of the individual suppliers awareness, understanding, reach and reten- are in the informal sector. This gave GTZ an tion for five of the services in GTZ’s market idea of the characteristics of supply in each assessment in Nepal.

45 Table 9: Awareness, Understanding, Reach and Retention of some BDS in Nepal

Service Awareness Understanding Reach Retention Advertising 100% 75% 58% 88% Accounting/ Financial Advice 99% 69% 47% 94% Management Training 88% 60% 28% 63% Production Training 80% 48% 12% 61% Research 75% 45% 4% *

Figure 16: Relative Effectiveness of some BDS markets in Nepal

Non-Existent Effective

Based on this information, these service reflect market potential. Projecting which markets can be approximately placed on a markets have the potential to expand and continuum from non-existent to effective as which do not relies on SEs’ opinions about shown in Figure 16. services and the possibility of purc h a s i n g them in the future. While this is less accu- Intervening in the re s e a rch market would rate than relying on facts about SEs’ current re q u i re considerable long-term investment purchase habits, it may provide more infor- and is questionable considering there are mation about market potential. other markets with more demand and w h e re less investment will probably have One rough measure of the potential for m o re impact. The markets for pro d u c t i o n market expansion is the number of entre- and management training are weak– tar- preneurs that say a service is important but geted programs might be able to addre s s who have not yet purchased it. In Indone- some of the weaknesses. The markets for sia, the ILO calculated this measure of accounting/financial advice and advertising potential by calculating the percent of SEs are quite effective overall. However, analy- that said a service was important to be sis of diff e rent market segments might competitive in their businesses but who had reveal weak markets for specific types of not yet purchased it. Figure 17 below shows enterprises that would justify intervention. the results of this analysis. For example, the market may not be working well for women-owned enterprises, Combined with data on current purc h a s e mi c r o enterprises or service enterprises. Any habits, this analysis provides a basis for intervention in these markets should be choosing the service markets on which to careful not to distort what is already work- focus. In the case of the ILO in Indonesia, ing well. this analysis indicates that advertising, technical training and media information are the Analyzing Market Potential BDS markets with the most potential for expansion. While analyzing the current status of the market is useful and accurate, it may not

46 Figure 17: Potential for expansion of BDS Markets in Indonesia

Full service advertising 52

Technical training 44

Info in newspaper 43

Support advertising 42

Info on TV/radio 38

Exhibition showroom 31

Management training 29

Courier/product transport 28

Sale of stands 28

Financial/tax advisory 28

Messaging service 27

Accounting/book-keeping 27

Courier/parcels 27

Sales on commission 25

Internet – Own PC 22

Internet cafes 21

Call centers 21

Courier/tranfer of money 18

Fixed line telecom. 12

Organized domestic tour 9

47 XII. How can market analysis be used for program design?

Market analysis should help the researching Step 2: List market problems and opportu- organization: nities. • choose the service market(s) on which to Step 3: Prioritize market problems and concentrate, and opportunities. • d e t e rmine what strategies to use to Step 4 : Develop interventions to addre s s develop the chosen market(s). key market problems or opportunities. To make both these decisions, the researching organization combines the inform a t i o n Each of these steps is described below. In f rom the market assessment with intern a l many cases, it may be necessary to go back considerations, including the organization’s and forth between these steps. For example, pr ogram objectives, experience and capacity. in Step 1 an organization’s managers may choose to focus on the transport and delivery market but find in Step 4 that the organ- TI P : While market data can provide a lot of infor- ization is not well suited to addressing the mation, choosing services and interventions also relies on the judgement of the program man- problems and opportunities in this market. ager to make the best match possible between Therefore, the managers may decide to go his/her orga n i z a t i o n ’ s capabilities and the poten- back to Step 1 and consider a different serv- tial impact on the markets. The first decision ice. It is particularly necessary to look at may not work well. Markets may change. Tr i a l and error is always needed. Donors implement- Steps 3 and 4 together. The problems and ing market development programs say that opportunities that are most pressing in the staying flexible and being willing to change market may not be ones that the organiza- approaches is essential to success. tion can effectively address. There f o re, the o rganization may have to focus on some- Market analysis will point to a number of what less severe problems or less promising weaknesses and opportunities in a given opportunities but address them more effec- market. Usually, even within a single con- tively. sumer segment such as service SEs, there a re a wide variety of market issues. Some market problems seriously re p ress the A. Step 1: Choose on which market, others less so. Some opportunities market(s) to focus may appear very promising, others smaller. A given donor or development organization The comparative market analysis will yield may be able to address some problems and the following outputs: opportunities but not others. The key to • an assessment of the relative demand for using market analysis for program design is various services. to determine how to make the most impact • a description of suppliers for various on BDS markets (or a particular market seg- services. ment) given the implementing orga n i z a t i o n s • an assessment of the relative eff e c t i v e- capacities and limitations. ness of various service markets. • an assessment of the potential for expan- Using market analysis for program design sion for the various service markets. can be done in four steps: Step 1: Choose the market(s) on which to Based on this information, a program man- focus. ager can choose which services look the

48 Table 10: Strengths and Weaknesses of BDS Markets in Nepal

Demand Supply

Strengths • consumers are aware of services • suppliers exist • economic growth is fueling demand • suppliers have the capacity to help word of mouth advertising is strong businesses solve their problems Weaknesses • consumers have a limited understanding • suppliers products are inappropriate of services • marketing is poor • consumers often do not recognize that • suppliers lack market information they have a business problem that needs • private and donor supported outside help suppliers’ behavior is distorted by • consumers are risk averse subsidies • free services are decreasing the willingness to pay

private sector will choose to focus on the T I P: Choosing the service markets on which to training market. But an organization solely focus is not the only starting point for program design. The market assessment may show that a focused on small manufacturing enterprises number of markets have a common market will choose the advertising market. weakness, such as low reach or suppliers with weak business skills. In this case, a manager may T h e re are no absolutely right or wro n g choose to focus a program around addre s s i n g answers in the choice of service markets. these weaknesses in a range of markets rather The aim is to choose service markets where than focusing on only a few markets. The program might aim to teach suppliers of a variety of the organization can have the most impact s e rvices marketing strategies to induce trial or in developing the market(s) to achieve its business skills. particular objectives. most promising for his/her program. A man- B. Step 2: List market problems ager must balance the considerations fro m and opportunities this information with the knowledge of his/her organization and program. For The analysis of the chosen market will yield example, if the organization is likely to a picture of the market and a list of the choose a strategy of working with suppliers, p roblems and opportunities in the market. two important considerations are that there One way to summarize this information is to is a good level of existing demand and there make a matrix of the market’s strengths and is a good pool of suppliers to work with. If weaknesses. For example, in Nepal, GTZ the organization has a lot of experience in saw similarities among several markets in demand stimulation, the manager might pri- which they were interested. The stre n g t h s oritize the markets with the most potential and weaknesses found in these markets and a reasonable level of supply, even if could be mapped on a matrix as shown in c u r rent demand is somewhat low. If the Table 10. o rganization has either experience or a Looking at this matrix, it is possible to pick mandate to develop new services, the man- out various market opportunities. Several ager might choose a less developed market. examples are shown in Figure 18. If the program has a short time frame, the manager might choose a more developed At this point, the manager lists all market market where less investment and less time weaknesses and opportunities that the data will still yield significant impact. suggest, ignoring the magnitude. The choice will also be affected by the orga - nization’s objectives, target group and his- C. Step 3: Prioritize Market tory. For example, overall the data might Problems and Opportunities suggest focusing on the training market. But the consumer segment of small manufactur- The key criteria on which to prioritize ing enterprises might be more interested in market problems and opportunities is the advertising services. In this case an organi- extent to which addressing the pro b l e m zation whose overall aim is to develop the would help develop the market. Making this

49 Figure 18: Using Strengths and Weaknesses to find Market Opportunities Strength or Weakness: Market Opportunity:

t a rget growing enterprises with serv i c e s economic growth is fueling demand ➡ that help businesses expand

develop customer referral programs word of mouth advertising is strong ➡ that effectively create a sales force for the service

suppliers’ products are inappropriate ➡ develop new products

develop or improve marketing suppliers lack market information ➡ research services for service suppliers judgement re q u i res not only an analytical be aversely affecting the market. How- eye but also some entrepreneurial thinking. e v e r, if the government is unlikely to For example, addressing a problem which change this policy due to political con- affects many consumers or many suppliers siderations, focusing on this pro b l e m will have more impact than addressing a may be a dead end. problem that only affects a few. If a particular consumer segment is clearly eager to At the end of Step 3, a manager will have a p u rchase services but does not like what list of market problems and opportunities in suppliers are offering, focusing on this order of priority to his/her organization. opportunity may have more impact than a d d ressing another consumer segment Example from GTZ Nepal of Prioritizing where there is less demand. Market Weaknesses In addition to judging where it may be pos- Based on the market assessment data, GTZ Nepal sible to have the most impact, there are decided that the lack of appropriate pro d u c t s was one of the most severe constraints in a several other criteria to keep in mind when number of BDS markets. With economic growth prioritizing market weaknesses and oppor- fueling demand, they thought that developing tunities. new products presented a significant market opportunity. This idea was supported by the FGD • O rg a n i z a t i o n / P rogram Focus: If an data that showed that some consumer seg- organization focuses on a particular con- ments wanted products with diff e rent benefits and features than suppliers were currently offe r - sumer segment, weaknesses and oppor- ing. On the demand side, they recognized that tunities for this segment will take prior- consumers’ limited understanding of serv i c e s ity. and risk aversion were also significant market constraints. While GTZ felt that free services were • O rganization Experience and Capac- also a serious market problem, they thought i t y: An organization may want to focus that addressing this problem would be a long on the problems and opportunities that it term endeavor. has experience and/or the capacity to address. For example, if an organization is experienced in advocacy, addressing a D. Step 4: Develop interventions weakness resulting from inappro p r i a t e to address key market regulations may take priority. problems and opportunities • R e a l i s m: T h e re may be some severe weaknesses or promising opportunities The last step is to determine what program that is it not possible to address. For strategies will address the priority market example, free government services may problems and opportunities and effectively

50 work most effectively to address various T I P: Many market development strategies market weaknesses and opportunities. a d d ress more than one market pro b l e m . F o r example, a voucher program might addresses the following market problems: The choice of strategies to address a partic- • consumers’ lack of willingness to try services ular problems or opportunity will depend • consumers lack of information about services not only on what a manager thinks will • suppliers reluctance to target new markets work best in a particular market situation • suppliers’ risk aversion to developing new but also on the capacity and experience of products the organization. It is important that a man- But most market development strategies may also have some negative effects on the market. ager choose interventions that his/her For example, a voucher program may also o rganization has the capacity to addre s s . in c r ease SEs’ feeling that services should be sub- When a manager is designing interventions, sidized. s/he may decide that his/her org a n i z a t i o n Making sure that the market development impact outweighs the market distortion impact does not have the capacity address a prior- is one of the keys to designing effective strate- ity weakness or opportunity. In this case, gies. the manager may choose to go back to Step 3 and consider other weaknesses and opportunities or go back to Step 1 and con- develop the market. An organization may sider other service markets. choose to focus narrowly on a single problem or opportunity or somewhat more b roadly on several related problems and Example from GTZ Nepal opportunities. However, it is helpful not to of Choosing Interventions focus on too many problems and opportu- Considering the priority problems and opportunities, particularly at first, as this may dilute nities, GTZ decided to focus their program on the effectiveness of each strategy. Like other product development and commercialization in a variety of service markets. The program aims enterprise promotion programs, it is better to address both supply and demand side issues. to start smaller and more focused and A focus on product development aims to expand or diversify as an organization gains a d d ress the problem of a lack of appro p r i a t e experience in developing the market. p roducts. Helping suppliers to commerc i a l i z e those products lessens the risk to suppliers of developing new products and also addresses the priority problems of consumers lack of under- T I P: Because many organizations are trying to standing about services and risk aversion to get away from dictating what types of serv i c e s trying services. en t re p r eneurs want, managers may be rel u c t a n t On the supply side, GTZ assists suppliers to to consider a strategy of demand stimulation. gather market information and develop new However, weaknesses in a market exist on both p roducts. GTZ has also brought in foreign sup- sides, demand and supply. Stimulating demand pliers to trial market new services with the pos- b y, for example, helping entre p reneurs see the sibility of franchising them to local suppliers. On value of services or more effectively diagnose the demand side, GTZ subsidizes initial costs and their own business problems is a valid market provides technical assistance for advertising and development strategy. Private sector businesses trial marketing of new products. Advertising and often stimulate demand through advert i s i n g . trial marketing is aimed at stimulating demand. Business associations also often play a role in This mix of interventions builds on GTZ’s experi- demand stimulation by increasing entre p re- ence in working with BDS suppliers and promot- neurs’ awareness of business problems. When ing business services. deciding what strategies to pursue, consider In addition, GTZ is using its position as a long both sides of the market. t e rm donor in Nepal to encourage donors to rationalize subsidies for BDS with the aim of lessening the market distortion created by fre e Table 11 (following page) shows some services and supplier subsidies. strategies for addressing various market weaknesses and opportunities. The weak- At the end of Step 4, the manager will have nesses and opportunities may be true for all the basic outlines of a program design to SEs or they may be true only for a particu- address key market weaknesses and oppor- lar consumer segment, such as women, tunities. From here, the manager will mi c r oenterprises, trading enterprises or rural develop and test the chosen interventions. enterprises. The table only shows some examples based on what we know now. Following these four steps for pro g r a m The BDS field is still learning what strategies design is often not straightforward and is

51 Table 11: Matching Market Weaknesses/Opportunities with Interventions

Market Weakness/Opportunity Possible Interventions

Consumers lack information about services • Develop a BDS yellow pages • Open a BDS consumers’ bureau • Help suppliers improve their marketing • Implement a voucher scheme Consumers do not have the capacity to pay • Assist suppliers to develop payment options for services up front (installments, on credit, etc.) • Promote embedded services • Promote third party paid for services (for example where advertisers pay for part or all of a service in which their products are advertised) • Help consumers purchase services in groups to lessen the costs Consumers are risk averse to trying services. • Provide suppliers with technical assistance to improve trial inducing strategies (coupons, one free trial service etc.) • Implement a voucher scheme Consumers do not see the value of services • Assist suppliers to improve advertising • Assist suppliers to develop customer referral programs Consumers want services packaged together • Broker agreements among suppliers to develop packages of services • Provide venture capital and technical assistance for suppliers to diversify Service products lack the benefits and • Assist suppliers to develop and commercialize new features that consumers want products • Bring in suppliers from other countries to adapt and franchise appropriate products Suppliers are risk averse to targeting new • Provide suppliers with information on the viability of a consumer segments, such as women, new consumer segment micro enterprises or the service sector. • Subsidize some of the costs in targeting new consumer segments • Develop a risk sharing plan with suppliers for the costs of product development and advertising for new consumer segments Suppliers lack market information • Develop or improve marketing research services/suppliers • Provide suppliers with market information • Teach suppliers how to gather market information Suppliers lack business or technical skills • Provide training and technical assistance to suppliers • Assist training suppliers to develop and sell appropriate products to other BDS suppliers There is insufficient supply in the market. • Provide venture capital to suppliers to expand • Design a program to assist start-up suppliers Free services are distorting the market • Advocate with government and/or other donors to rationalize BDS subsidies Regulations adversely affect the market. • Advocate for changes in the regulations. also not a guarantee of program success. It p roblem must be addressed first. While is not always clear which market problems using market assessment for pro g r a m or opportunities to prioritize. There is usu- design will put an organization on good ally more than one strategy to address a footing, testing out strategies and being will- given market problem. An organization may ing to try different strategies to address var- start out using one strategy to address a par- ious market problems and opportunities is ticular problem and find either that the strat- essential to program success. egy is ineffective or that another market

52 XIII. What are ways to keep market assessments cost effective?

Market assessment using the tools described the survey helped ensure that the survey was above is quite cost effective. For example, appropriate for the local context. the study in the Philippines included three consumer surveys of 100 consumers each Time and in-depth supplier-diagnostic case studies of two suppliers as well as interviewing The Philippines study took approximately four of a range of other suppliers. The study months from start to finish, as follows: a l s o included background re s e a rch on the Forming the team: One-and-a-half weeks i n f o rmation and communications sector a s a whole. The following describes the Designing the study: Two weeks, including resources used for this study. 27 writing the design, having it reviewed by the marketing specialist and others, and making revisions. People Designing the questionnaire: Two weeks, Managers/Researchers. The Philippine study including the same review process as above. had two manager/re s e a rchers, who split the work of designing and overseeing the con- P re - Testing the Questionnaire: One week— sumer surveys and conducting the background actual interviewing took only two days but time re s e a rch and supplier diagnostics. It would was needed to travel to the survey site, go over have been possible to do the study with only the questionnaire with the survey team, organ- one manager, but it was helpful to have two to ize the interviewing, identify respondents, and s h a re ideas. Although neither re s e a rcher is a copy the questionnaires. marketing specialist, both had experience with BDS as practitioners and some background in Questionnaire Revisions: One week, including marketing. another review. Marketing Specialist. The Philippine study Survey: Two weeks. had the advice of a marketing specialist at critical junctures during the study. The study used Tabulation: Three weeks. 4 days of the specialist’s time. Analysis: Two-and-a-half weeks. Survey Te a m / C o m p a n y . The Philippine study used a professional Filipino survey com- Report preparation: Two weeks. pany experienced in marketing surveys. The survey team had a manager who coordinated the pre-test and interviews and acted as a liai- Money son between the interview team and the study managers. The team manager also trained the 2 Funds were primarily used to pay the research supervisors and 10 interviewers. The team team. The only key assets used by the survey included a translator who translated the ques- firm were a computer and software for tabulat- tionnaires from English into local languages. It ing the results of the survey. In the Philippines was helpful to have an experienced survey most survey companies charge a fixed rate per company because their personnel made useful interview for surveys. The rate depends on suggestions on the design and implementation t h e length of the questionnaire, the data of the survey. Having a local company conduct t a b l e s re q u i red and other services needed

27 Reprinted from A. Miehlbradt with R. Chua “Technical Note: Applying Marketing Research to BDS Market Development” Development Alternatives Inc. under the USAID Microenterprise Best Practices Project, 2000.

53 s u c h as translation. The company conducting Choose Respondents Appropriately the Philippine study charged appro x i m a t e l y P800 (US$20) per interview for the following When choosing whom to interview, there services: a re some short cuts that can be taken to • commenting on the survey design and ques- d e c rease costs, depending on the inform a- tionnaire tion needed. A consumer re s e a rch survey • translating the questionnaire into local lan- can focus on one of three types of con- guages sumers: all consumers, service users or cus- • field testing the questionnaire and prov i d i n g tomers of a particular supplier(s). Each has feedback pros and cons. • f o rmatting the questionnaire for the interviews All consumers: Funds permitting, this is the • printing and copying the questionnaires p re f e r red option for a BDS market assess- • hiring and training interviewers ment. Interviewing all consumers enables • conducting interviews the re s e a rcher to get a full picture of the • supervising interviews market by understanding how both users • cleaning and tabulating the data and non-users view the service. However, • producing data tables this is also the most costly option. The Travel expenses for the survey team and tax sample size will need to be large enough to we r e extra. Although some firms will design ensure that data on users is statistically sig- and revise the questionnaire, in this case, nificant. Getting a random sample of all the research managers did these tasks. consumers can also sometimes be difficult. Service users: This is the second best option for a BDS market assessment. The Example from the ILO of Resources Used for Market Assessment researcher will not get a full picture of the market because data from non-users will be The ILO expended the following re s o u rces to absent. However, a smaller sample size can conduct quantitative surveys in four countries. be used while still ensuring data on users is The resources listed below do not include those for qualitative research. statistically significant, which usually cuts down on costs. This is a good option if the C o s t s: In each country, the ILO contracted a re s e a rcher only needs a picture of the use marketing research firm to design and conduct the quantitative surveys. The firms also did a of the service in the market, rather than the basic analysis of the resulting data. The study in whole market. each country cost the following: Thailand: US$10,500 Customers of a particular supplier(s) : T h i s Cambodia: US$5,200 option limits the information gathered to Ghana: US$12,200 only customers of particular suppliers rather Indonesia: US$10,000 than the whole market. However, consider- Ti m e: The ILO estimates that each study able information can still be gained on how required approximately 15 days of ILO staff time customers’ view and use the service. This is for discussions with the firms and monitoring the most inexpensive option and is easy to the pro g ress of the study. The initial studies re q u i red more time ; the subsequent studies conduct. The sample size can be relatively somewhat less. The ILO conducted 2 visits from small because only users will be inter- headquarters to each country: one to interview viewed. Getting a random sample is re l a- and contract the firms and one to monitor and discuss pro g ress. An in-country ILO re p re s e n t a- tively easy because suppliers often have a tive also maintained frequent contact with each list of customers or customers can be inter- marketing re s e a rch firm. After contracting the viewed on site when they come to use the f i rms, each study took approximately 10 weeks service. This option may be appropriate for to complete. suppliers or small development org a n i z a- tions with quite limited resources that want While market assessments are not very some basic information on customer behav- expensive, there are a number of strategies ior rather than an understanding of the that can help get the most information for whole market for a service. available money.

54 Get Expert Help As a rule, the further away from the market an organization is and the bigger and more It may seem paradoxical that hiring expert complex the organization is, the more help saves money, but generally having f o rmal and extensive market re s e a rch is expert advice saves considerable time for needed. For example, large companies have the implementing organization. Marketing on-going contact with customers but their re s e a rch firms and specialists have done decision makers are removed from this con- many consumer studies and can answer in tact by a large and complex org a n i z a t i o n . a few minutes the questions that it would T h e re f o re, large companies generally con- take development professionals hours to duct formal and extensive market assess- sort out. Having expert advice in the data ments, not only because they can but also analysis stage can enable the researcher to because they need to. Development organ- get significantly more useful inform a t i o n izations have varying levels of contact with fr om available data than if s/he analyzed the consumers from none to quite a bit. How- information alone. ever, this contact is usually not transaction- oriented. There f o re, most development Use the Most Efficient Combination o rganization interested in a BDS market of Tools need to conduct some market assessment. However, the extent of the assessment will Not all tools are appropriate or necessary depend on their level of regular interaction for every market assessment. It depends on with consumers and the extent of the infor- the circumstances and information needed. mation needed. If the development organi- It is helpful to start out with some back- zation only works in a few towns and is in g round re s e a rch, formal or informal and constant contact with consumers, the then choose one tool to begin a study. Ana- market assessment can be relatively small lyzing the data from this study will help the and informal. If the development organiza- re s e a rcher decide if additional inform a t i o n tion is a donor that works on large or coun- is needed and what tool would be most trywide scale and has less frequent interac- appropriate to gather it. It is also important tion with consumers, a more formal and to consider what information is needed. For extensive market assessment is needed. example, if the researcher is interested only in the potential of new products in the market, there are marketing re s e a rch tools that deal specifically with this issue – a UAI type consumer survey may not be needed.

Match the level of information needed to the implementing organization SEs generally do not conduct extensive marketing re s e a rch and many thrive anyway. So why do development organizations need to assess the market? Assessing the market is a proxy for extensive, on- going and transaction-oriented contact with consumers. SEs have this contact every day. Development organizations do not.

Appendix A:

Samples and models of market assessment tools

Sample Quantitative Study Design from GTZ Nepal

Below is the actual survey design elaborated by GTZ as a basis for discussion with the marketing re s e a rch firm. Some changes were made to the design after consultation with the marketing research firm, notably on stratification of the sample and sampling methodology. The data analysis design was also refined as GTZ recognized what information was needed for program design.

Consumer Research on the Use of BDS by the Private Sector in Nepal Survey Design

I. Research Goal (awareness, reach and retention for various BDS), firms’ reasons for not using services, With this study, the researchers aim to gain customer segments for various BDS and the a basic understanding of the consumption consumption level of the identified cus- of business development services by private tomer segments. This information will be sector companies in the urban areas of compared with data on the universe of pri- Nepal. This information will be used to vate sector companies in Nepal and data on inform the design of a program to stimulate the consumption of BDS in other countries. the market for BDS in Nepal. The data will also be used as a baseline to measure the After the survey, the researchers will exam- impact of the program on the development ine the demand for key business services of the BDS market in Nepal. from key consumer segments through focus g roup discussions. With this tool, the The research aims to examine the “big pic- re s e a rchers aim to understand better the ture” – encompassing a wide range of busi- range of ways in which consumers experi- ness development services and the universe ence the use of business services. The focus of urban private sector firms in Nepal. The group discussions aim to explore how con- goal of this focus on breadth is to compare sumers perceive, choose, evaluate and the relative use of various services and to value BDS. The consumer research will also understand better consumer segments of be complemented by a study of BDS sup- BDS demand. There f o re, the focus of the pliers in Nepal. survey will be gathering basic aware n e s s and usage data on multiple services among Taken together, this information will be a randomly chosen cross section of all pri- used to identify the marketing challenges vate sector firms in selected urban areas of for BDS as a whole and for various services Nepal. in Nepal, to forecast future trends in the The data from the survey will be used to BDS market to the extent possible and to describe private-sector consumption of BDS make decisions regarding the focus (geo- in urban areas of Nepal: the level of con- graphic, customer segments, services) and sumption for various services, basic infor- strategies to stimulate the BDS market in mation about the consumer market for BDS Nepal.

57 II. Survey Objectives • Business Age (start date) • Education Level of Owner/Manager 1. To make a reasonable estimate of private (respondent) sector consumption of BDS in general and specific business services in the past year. 2. To describe the current awareness, reach V. Sampling Methodology and retention of various business services. Criteria for Respondents: All types of pri- 3. To describe the main customer segments vate sector firms in the selected urban areas for BDS in general and specific business of Nepal are eligible for the survey. Respon- services. dents must be the owner or manager of the 4. To describe various customer segments’ firm so that they have a reasonable knowl- use of BDS in the past year and con- edge of the use and expenditure on busi- sumers’ reasons for not using specific ness services. For large firms, another senior business services. person may be the respondent. 5. To describe the basic trends in the consumption of BDS over the past 3 years as Sampling Method: The survey will be car- well as the expected direction of future ried out in selected urban areas of Nepal. consumption in the next year. These urban areas have been chosen because they are reasonably representative of all urban areas in Nepal. The survey will III. Business Services t a rget four segments of the private sector : to be Investigated m i c roenterprises, manufacturing, retail and services. Within each consumer segment, • Accounting, Financial Advice and Ta x a- f i rms will be chosen at random from all tion Services firms in the selected urban areas of Nepal. • Computer Hardware and Software , Lists of firms in each urban area will be used including Maintenance to select firms at random except for the • Advisory in Business Planning and Man- micro segment where another random sam- agement pling method may be necessary. • Advisory in Legal Processes • Advisory in Production Pro c e s s e s / O p e r- Sample Size: The total sample size will be ations 500, divided among the four consumer seg- • Management Training ments. The sample size for each consumer • Production Training segment will be decided upon based on the • Technical Training number of firms in the universe for that seg- • Communications and Corre s p o n d e n c e ment and the importance of the segment to (including Couriers) the BDS market. The sample size for each • Secretarial (including Documentation) consumer segment will be large enough that • Trade Fairs the results are statistically significant. • Advertising • Research

VI. Data Tables IV. Parameters of Consumer Segmentation The data for each of the four consumer The market for BDS will be segmented segments in the survey will be tabulated and using the following variables: analyzed separately. • Business Type (manufacturing, service or sales/trade and appropriate subcate- Awareness of Services: gories thereof) • % of respondents aware of each service • Business Size by Number of Employees (overall and by each consumer segment • Business Size by Registered Capital variable) • Business Size by Sales in the Last • % of respondents correctly defining each 12 Months service (overall and by each consumer • Ownership (foreign vs. Nepali) segment variable)

58 Usage of Services: not using a service for each service (over- • % of respondents who have ever tried all and by each consumer segment vari- BDS in general and each service (overall able) and by each consumer segment variable) Perceived Valuation of Services: • number of services ever purchased by each consumer segment variable and the • importance of each service to business average number of services ever pur- survival - % of firms stating each impor- chased for each consumer segment vari- tance rating and average (overall and by able. each consumer segment variable) • when each service was first used by • importance of each service to firm com- respondents (overall and by each con- p e t i t i v e n e s s / g rowth - % of firms stating sumer segment variable) each importance rating and average • when each service was last used (overall (overall and by each consumer segment and by each consumer segment variable) variable) • f requency of use for each service and Respondent Characteristics: average frequency of use in the last year (overall and by each consumer segment • % of respondents in each business type variable) category • f requency that firms use some type of • type of business of respondents for each business services (aggregate of the fre- service quency for specific services) overall and • % of respondents in each firm size cate- by each consumer segment variable gory by number of employees • average number of employees of users of • last BDS supplier for each service overall each service • how respondents learned about last BDS • % of respondents’ firms which are suppliers for each service (overall and by Nepali, foreign or jointly owned each consumer segment variable) • ownership of firms for users of each • % of firms who have used more than one service supplier • % of respondents in each business age • suppliers that respondents have tried and category (less than 1 year old, 1-2 years stopped using by service old, 3-5 years old, 6-10 years old, more • monetary value of use of BDS in the last than 10 years old) 12 months in general (aggregate of the • age of business of users for each service specific services) and each service and • % of respondents in each firm size cate- average value of use in the last year gory by registered capital (overall and by each consumer segment • size of firm by registered capital for users variable) of each service • a p p roximate change in expenditure on • % of respondents in each category of all business services used over the last 3 sales in the last year years (overall and by each consumer seg- • average sales of users of each service ment variable) • % of respondents in each schooling • a p p roximate change in expenditure on category each service used over the last 3 years • average schooling of users of each (overall and by each consumer segment service variable) • anticipated, approximate change in e x p e n d i t u re on all business services in VII. Data Analysis the next 12 months (overall and by each The above data will form the basis for the consumer segment variable) following information and analysis: • anticipated, approximate change in expenditure on each service in the next Consumer Segments : What kind of firms 12 months (overall and by each con- are using BDS in general and specific serv- sumer segment variable) ic e s ? (using the consumer segment variables outlined above) Reasons for Non-Use of Services: Market Demand: What was the size of the • % of companies stating each reason for market (in monetary terms) over the last

59 year for BDS in general and for various us about the demand for business services? services? What are the implications for interventions Aw a reness, Reach and Retention: W h a t designed to stimulate the BDS market? is the level of awareness about various BDS Change in Market Demand: Has demand in the private sector and in various con- for BDS in general and for various services sumer segments ? What percent of firm s i n c reased or decreased in the last 3 years? have actually tried various services? What How might we expect demand to change does this say about consumers’ willingness next year (based on past trends and con- to pay for business services? What percent sumers’ purchase intention)? of firms continue to use various services Suppliers: From what type of suppliers do (using use in the last year as a proxy for f i rms purchase their business services? continued use)? (In general and by con- Which consumer segments favor particular sumer segment as appropriate). What does types of suppliers? How do various con- this say about the quality of services avail- sumer segments learn about BDS suppliers? able in the market? What are the implica- What are the implications for improving the tions for improving the BDS market? BDS market? Consumer Adoption Rates : How have Value of Services to Consumers : W h a t various BDS been accepted by the market p e rcent of sales do firms in various con- (slowly or quickly)? What might we expect sumer segments spend on various business for the future rate of adoption? What are the s e r v i c e s? How do firms perceive the value implications for marketing BDS and for sup- of various business services for business plier capacity? s u r v i v a l? for business gro w t h ? What does Reasons for Non-Use : Why aren’t firm s this say about consumers’ perception of the using specific services? What does this tell need for services in their businesses?

60 Model UAI Questionnaire

The table below shows the information objective, data tables and sample questions for the quantitative part of a market assessment, using a UAI style consumer survey. The ques- t i o n n a i re should be adapted to the needs of the re s e a rc h e r / p rogram, the services being studied and the local circumstances.

Information Objective Data Tables Sample Questions

1. Screening Questions: N/A How many full- or part-time workers (including To determine if respondent paid/unpaid and family) does your business have is qualified for the survey. now? 25 or less = proceed more than 25 = terminate N/A What is your current role in the business? owner/manager/relative of owner = proceed other = terminate

2. Awareness of Services: % aware of service Have you heard, read, or seen anything about To determine how aware SEs % understanding ? are of various BDS. service What have you heard, read, or seen about ? (Train interviewers to judge understanding of service) 3. Acquisition of Services: % using service Have you ever purchased, acquired or received To gauge the level of usage (market penetra- ? Explain that service can come in the market and under- tion) from any source – buyers/suppliers, other busi- stand where SEs are getting nesses, formal or informal service suppliers, services. family/friends etc. Dates of last use When was the last time you used ? To quantify market size and market penetration for each Types of service Where or from whom did you get service on a paid and non- suppliers and % of the last time you got it? paid basis. SEs getting serv- (Typology of suppliers should be determined in ices from each advance.) type of supplier To learn who is providing BDS to SEs. % paying directly Did you pay for the service the last time you got it? for service

4. Purchase Behavior: Prices paid How much did you pay the last time you got To understand customers’ Volume of ? current purchase and usage purchase What did you get for that? (e.g. 4 hours consulting, habits and practices. sent one domestic fax) Methods of How did you pay the last time you got ? (up front, commission, barter etc.) monetary basis. How customers How did you find out about ? To understand when and suppliers how customers get services. % who are repeat Have you purchased or received To gather information on users more than once? prices for services. Frequency of use How often did you use (paid or not) in the last 2 years? To identify informal alternatives for various BDS. % who are repeat Have you paid for more than purchasers once? Frequency of How often did you purchase (pay for) in the last 2 years?

When use started When was the first time you ever purchased or received ?

Competitor/ For users: If you cannot get what substitute services will you do? For non-users: If you need to , how do you do it?

61 Information Objective Data Tables Sample Questions

5. Perceptions of Use: To Satisfaction with Compared to your expectations, how satisfied were understand users’ percep- suppliers you the last time you got ? tions of services. Extremely satisfied Somewhat satisfied To gain a basic understand- Somewhat dissatisfied ing of reasons for service use and non-use. Extremely dissatisfied Reasons for use Why did you decide to use ? To understand to what (among users) Determine sample answers through advance extent existing suppliers are research and/or pre-test- e.g. satisfying SEs. Divide data tables • My business was growing and I needed the into fee for service service. To understand how SEs dif- customers, • I saw a problem in my business that needed out- ferentiate among suppliers. embedded service side help. customers and non-paying • It was free. consumers. • A friend/colleague recommended it. AND What is the main purpose for which you use ?

Reasons for non- Why have you not used ? use (among non- (ask only if aware and understand service) users) Determine sample answers through advance research and/or pre-test. e.g. • I don’t need that service for my business. • I don’t know any suppliers. • It’s too expensive. • It’s not worth the price / not good value. • The suppliers I know are not good.

Reasons for Why did you choose over choosing supplier other suppliers? (among users) Determine sample answers through advance research and/or pre-test. e.g. • It was the only one I knew • It was the cheapest. • It was free. • The supplier has a good reputation. • The supplier was recommended by a friend/colleague. • Their advertisement convinced me. • It was the closest to my business. AND Have you ever changed the supplier from the previous one to a different one? If so, why?

6. Personal data: To learn Business type— Is your main business registered with a government about the market segments formal or informal agency? for each service. sector Business type— What is your business? To understand the differ- subsector ences in awareness, usage and demand from different Age of business When did your business start? consumer segments. Gender of Who owns the business? entrepreneur Location of Where is your business located? business

Age of How old are you? owner/manager

62 Information Objective Data Tables Sample Questions

Business sales What were the sales of the business last (name relevant period)? (Use show card with categories) Basis of competi- On what primary basis do you compete with others tion in your industry? (price, quality, customization of product/service, uniqueness of product/service, reliability and consistency of delivery/after sales service) Income level Into which category does the monthly income of family of from all sources of your family fit? (Use show card respondents with categories.)

Respondents’ edu- What level of schooling did you complete? cation level

The questions below can be included in a multi-service UAI to provide the researcher with additional information that may be helpful in choosing on which services to focus. These questions can be placed at the end of the “perceptions of use” section.

Information Objective Data Tables Sample Questions

Comparative Assessment Importance Rank- How important is for meeting the of Services: To gauge rela- ing of services for minimum requirements of your business? tive demand for different meeting minimum Extremely Important BDS among SEs. business requirements. Quite Important A little Important To identify services where demand exceeds supply and Not Important possible reasons for the Importance Rank- How important is for making your imbalance. ing of services for business more competitive? competitiveness Other services that Are there any other services that you think are important are/might be important to your business?

% unaware who Now that you know that is avail- might purchase able, how likely are you to buy it? service (among Definitely will buy unaware or not purchased) Probably will buy Probably will not buy Definitely will not buy

63 The questions below can be included in a single service UAI in order to gather more depth of information on the service features and benefits that consumers want. These questions can go at the end of the “perceptions of use ” section.

Information Objective Data Tables Sample Questions

Satisfaction with Importance rank- I will now read to you a list of qualities and features Services: To gather in ing of service of suppliers. Please rate these depth information on features features according to how important they are to consumers’ expectations you in a supplier. Would you say and satisfaction with that is to you: services. extremely important, quite important, a little important, not that important, it depends on ______(ask respondent to specify) To understand what features consumers want in a service. A list of 10-15 features that consumers find important should be determined through advance research, e.g. To gauge consumers’ satisfaction with service features • Distance from my business from current suppliers. • Convenience of location • Friendly staff. To understand what bene- • Knowledgeable staff fits consumers want from a • Professionalism service and if they are getting those benefits. • Confidentiality • Tailoring the service to my needs • Length of service • Flexibility in meeting my schedule Satisfaction rank- Now, may I ask for your opinion about the service ing with service supplier(s) you have used? Compared to your features expectations (or to each other if there are more than one), please tell me if you are: very satisfied, a little satisfied, a little dissatisfied, very dissatisfied. Go through the list of features for each supplier the consumer has used.

List of expected When you purchased what benefits benefits from did you expect to get for your business and your- service self? Determine a list of benefits through advance research e.g. • increased sales • business contacts • legal certification • prestige • a wider perspective on my business • specific advice on solving a business problem • access to new markets • information about new suppliers

Satisfaction with Now please tell me, to what extent did you get service benefits those benefits when you used the service from : fully, somewhat, a little, not at all. Go through each benefit the respondent named for each supplier the respondent has used.

64 Sample Multi-Service Survey Questionnaire from the ILO in Indonesia

This questionnaire was used by the ILO to assess the markets for a wide variety of services in Indonesia. The questionnaire was designed and administered by a private sector marketing res e a r ch firm, based on ILO specifications. The questionnaire was written and administered in Bahasa Indonesia.

PROJECT: TITAN FIELD EDP

JOB #: J3742 questionnaire #: questionnaire #:

DATE:

RESPONDENT NAME: SUPERVISOR # POSITION/TITLE: CHECKER # NAME OF THE ESTABLISHMENT/COMPANY: VERIFIER # ADDRESS: CODER # KEYPUNCHER # TELEPHONE: INTERVIEWER NAME: INTERVIEWER # LENGTH OF THE INTERVIEW (MINUTE):

Good morning/afternoon/evening. My name is ______(MENTION NAME & SHOW YOUR ID CARD). I’m an interviewer from Taylor Nelson Sofres, a leading market re s e a rch company in Indonesia. Today we are conducting a study and we need to get your input. To make sure that we are getting a representative data, we have a few opening questions. May I interview you for a few minutes? Your responses will be kept strictly confidential.

SCREENING A. Could you please tell me the main business type of this establishment? (If a business is involved in more than one area, choose the one that provides the most income)

Manufacturing wood 1 textile 2 metal 3 QUOTA food 4 drinks 5 others (specify) 6 Agro Business growing & selling 7 processing 8 QUOTA others (specify) 9 Trading wholesaling 10 QUOTA retailing 11 Service education 12 travelling 13 transportation 14 QUOTA accommodation 15 repairing 16 others (specify) 17

65 B. How many people are involved in this business, including family members and employees who really work at this establishment?

1 – 5 1 6 – 9 2 QUOTA 10 – 15 3 16 – 20 4 21 or more 5 Terminate if more than 20

C. Are you the owner or one of the owners of this establishment?

Yes 1 No 2

D. Are you the person who makes decisions on management and purchasing for the company?

Yes 1 No 2

INTERVIEWER: If respondent is not owner or main decision maker on management or purchasing for the company, ask to see that person for further Interview.

Record Gender Male 1 QUOTA Female 2

MAIN QUESTIONNAIRE Awareness of Services For Q1-Q4c use the table in page 4-5

SHOW CARD Q1 Which of these services have you heard or read about? Any others besides these on the list?

For Each Service Aware of:

ONLY FOR SERVICES CODED IN Q1 SHOW CARD Q2. Are you aware of where you could buy or receive this service?

Yes 1 No 2

ONLY FOR SERVICES CODED IN Q1 SHOW CARD Q3. How well do you know about this service?

Not Well 1 Somewhat 2 Very well 3

SHOW CARD All Aware of the Service Q4a. Have you used ____ (service aware in Q1) ever? If yes, have you used ____ (service aware in Q1) in past 2 years?

66 Importance of the Service ONLY FOR SERVICES CODED IN Q1 SHOW CARD Q4b How important is _____ (the service) for meeting the minimum requirements of your business?

extremely important 4 somewhat important 3 somewhat not important 2 extremely not important 1

SHOW CARD Q4c How important is ____ (the service) for making your business more competitive?

extremely important 4 somewhat important 3 somewhat not important 2 extremely not important 1

INTERVIEWER: Ask Q5-Q25c for a service used in the last 2 years (answered in Q4). After that, repeat Q5-Q25c for other services answered in Q4.

Service Used In Past 2 Years ______(answered in Q4) write answers in answer sheets

Q5. When was the service used for the first time?

Date ______

Q6 When was the last time you used this service?

Date ______

Q7 Have you used the service more than once?

For the Services Used More Than Once

Q8 How often did you use this service in past 2 years?

Q7 Q8 Yes 1 ______times No, just once 2

Purchase and Payment

SHOW CARD Q9 Did you pay every time you used this service?

pay every time 1 paid sometimes and got free sometimes 2 free every time 3 Others (specify) _____ 4

67 Q10 Did you get _____(service used last time)_free or did you have to pay for it?

Free 1 –> GO TO Q14 Paid for it 2

If Paid: SHOW CARD Q11 How did you pay last time?

up front 1 in installments 2 on commission 3 barter 4 on regular service 5 as invoiced 6 Others (specify) ______7

Q12 How much did you pay the last time you got the service?

Q13 What did you get for the amount you paid for the service?

SHOW CARD Q14 Compared to your expectation, how satisfied are you with the service used last time?

Extremely dissatisfied 1 Somewhat dissatisfied 2 Somewhat satisfied 3 Extremely satisfied 4

SHOW CARD Q15 From your experience, how satisfied are you with this service provider?

Extremely dissatisfied 1 Somewhat dissatisfied 2 Somewhat satisfied 3 Extremely satisfied 4

Reasons For Using The Service SHOW CARD Q16 Please tell me why did you decide to use this particular service?

If more than one reason: SHOW CARD Q17. Which is the most important reason to you?

Q16 Q17 My business was growing and needed the service 1 1 I saw a problem in my business that needed outside help 2 2 It was free 3 3 A friend/colleague recommended it 4 4 Others (specify) ______5 5

Q18 If this service is not available to you, what would you do?

Q19 What kind of improvement would this service need to make it more beneficial for your business?

68 Service Provider SHOW CARD Q20a Who was the provider of the service you used the last time?

government 1 donors / NGO 2 business partners or business acquaintance 3 friends or family 4 private commercial provider 5 Others (specify) ______6

Q20b Name of service provider

______

SHOW CARD Q21 How did you find out about this service provider for _____(service used in Q4)?

From advertisement 1 Recommended by friends/colleagues 2 Recommended by other type of business people 3 Others (specify) ______4

SHOW CARD Q22 Why did you choose this particular service provider over other service providers?

If more than one reason: SHOW CARD Q23 Which is the most important reason to you?

Q22 Q23 It was the only one I know 1 1 It was the cheapest 2 2 It was free 3 3 The provider has good reputation 4 4 The provider was highly recommended by friends/colleagues 5 5 The advertisement convinced me 6 6 It was the closest to my business 7 7 Others (specify) ______8 8

Q24 Have you ever changed the service provider for____(service)?

Yes 1 No 2 ➔ GO TO Q25b

If Changed: SHOW CARD: Q25a Could you tell me why?

Not satisfied with the service provided 1 Now there are more service providers to choose 2 Others (specify) ______3

69 SHOW CARD Q25b How did your expenditure on ____(service purchased) during the last year compare to the previous year?

Much more 5 A little more 4 Same/unchanged 3 A little less 2 Much less 1

SHOW CARD Q25c How do you expect your expenditure on ____(service purchased) will be in this coming year compare to last year?

Will be much more 5 Will be a little more 4 Will not changed 3 Will be a little less 2 Will be much less 1

INTERVIEWER: Ask Q26-Q28 for services aware of but not used (code 1 in Q1 but not coded in Q4). Ask the questions per service and after finish repeat for the next service.

If the Service Not Used but Well Aware Of

SHOW CARD Q26 Why have you not used the service?

If more than one reason: SHOW CARD Q27 Which is the most important reason to you?

Q26 Q27 Timeframe of the service is too long 1 1 Cannot leave the family to go and get the service 2 2 The service was delivered by a person that does not respect me 3 3 The service was delivered by a man 4 4 The service was only delivered by women 5 5 My husband/wife does not allow me to get the service 6 6 It was not free 7 7 Do not feel the need 8 8 The cost to obtain it is too expensive 9 9 Others (specify)______10 10

SHOW CARD Q28a What have you done to get that kind of benefit when you need it, without getting from the source available?

Ask someone in my family to do it for me 1 Ask help from friends/colleague 2 Ask help from the government agency related to the problem 3 Others ( specify) ______4

70 SHOW CARD Q29b Let’s imagine that you are capable to get the service, how likely are you to buy it in the next 1 year?

Definitely will buy 4 Probably will buy 3 Probably will not buy 2 Definitely will not buy 1

INTERVIEWER: Ask Q29 for services not aware of (not coded in Q1). Ask the questions per service and after finish repeat for the next service.

For the Service Unaware Of:

SHOW CARD Q29 Now that you know that this service is available, and let’s imagine that you are capable to get the service, how likely are you to buy it?

Definitely will buy 4 Probably will buy 3 Probably will not buy 2 Definitely will not buy 1

Ask All, Write the Answers Here

Q30a Any other services you think important to your business?

SHOW CARD Q30b And how important it is?

extremely important 4 somewhat important 3 somewhat not important 2 extremely not important 1

Q31a Any other services you think would make your business more competitive?

SHOW CARD Q31b And how important it is?

extremely important 4 somewhat important 3 somewhat not important 2 extremely not important 1

71 Business Data Q34 When did the business start?

Date ______Month ______Year ______

Q35 Can I have some detail about people working here?

Full Time Part Time (at least 10 hours a week) Total F/T Adult Female Under 16 Total P/T Adult Female Under 16 Paid Unpaid

SHOW CARD Q36a How was the company/group formed? Registered 1 Not-registered: Family run 2 Not-registered: Group of people 3 Others (specify) _____ 4

SHOW CARD Q36b On average, how much is the turnover of this business in a month? Below Rp. 1.000.000 1 Rp. 1.001.000 – Rp. 2.500.000 2 Rp. 2.501.000 – Rp. 5.000.000 3 Rp. 5.000.000 – Rp. 10.000.000 4 Rp. 10.001.000 – Rp. 15.001.000 5 Rp. 15.001.000 – Rp. 20.000.000 6 Rp. 20.001.000 – Rp. 25.000.000 7 Rp. 25.001.000 – Rp. 30.000.000 8 Above Rp. 30.000.000 record______9 Refused 10

Personal Data Q37. May I know your age? 18 – 20 01 21 – 24 02 25 – 29 03 30 – 34 04 35 – 39 05 40 – 44 06 45 – 49 07 50 – 54 08 55 – 59 09 60 or older 10

Q38. What is your highest education received? No formal education 1 Primary level 2 Lower secondary level 3 Higher secondary level 4 Lower vocational school 5 Junior college degree 6 Bachelor degree 7 Master degree or higher 8 Other (specify) ______9

Thank you very much for your cooperation

72 Sample Discussion Guide for Focus Group Discussions from GTZ Nepal

The document below was elaborated by GTZ as the basis for discussing the focus group discussions with the marketing research firm. The guidelines were revised based on input f rom the marketing re s e a rch firm. In addition, the marketing re s e a rch firm pre p a red a detailed proposal on how respondents would be chosen, how the groups would be designed (consumer segment, services for discussion etc.), the timeframe of the study and the costs.

Guidelines for Focus Group Topics for FGDs (in order of priority): Discussions N o t e: Gather the actual contact names of service suppliers that participants have Goal of FGDs: To gain ideas for stimulating used, those they thought of using, but didn’t the market for the services studied by and those they plan to try out next time they i n c reasing the quantity of demand and need the services in the category studies. improving the quality of supply. This can be gathered during the section on “service features that diffe r entiate suppliers” Objectives of FGDs (in order of priority): or at another time that is appropriate. 1. To understand better why consumers Getting this information is a priority. choose to purchase each business service for the first time – to generate a list of For Users: “decision factors” which may be condi- 1. Decision factors for first time purc h a s e: tions internal to their businesses, com- How did you decide to purchase the petitive pre s s u res, government re g u l a- service for the first time? Ask participants tions, interaction with other business to explain, step by step, what led them to people, advertising by the service decide to purchase the service for the providers etc. first time. Decision factors to probe: 2. To understand better what motivates • the internal aspects of their business repeat purchase of the business service – that led to the decision (e.g. to generate a list of expectations and increased/ decreased sales, wanted to benefits which consumers get from the reward employees for good work by service and a list of service features that sending them for training, time and generate satisfaction or dissatisfaction in money was available etc.) consumers. • how they found out the service was 3. To get ideas on how to improve services available to make them more appealing to con- • competitive pressures sumers – to generate a list of ways to • government regulations improve each service. • interaction with other business people 4. To understand better how consumers dif- (e.g. recommendation from another f e rentiate among service providers and business person make their choice of service provider – to • personal contacts (e.g. re c o m m e n d a- generate a list of service and marketing tion from a family member or friend features that consumers use to differenti- or family member/ friend pro v i d e s ate among service providers. service) For basic services only: • advertising by a service pro v i d e r 5. To understand better if and how pur- (even informal advertising thro u g h chasing a low end business service moti- word of mouth) vates a consumer to purchase other, Encourage one or a couple of participants higher value adding, business services – to explain their experience. Use the gro u p to generate a list of service features and to fill in the gaps by probing, “How did other factors that encourage business your decision process differ from < >?” “ Was there a step before after using low end services. this for you that helped you decide to

73 p u rchase the service ?” “So, <> led you to believe you needed the step? Why?. How would you change the service – what were the factors that led you p rocess to make it better for you ? Ask to actually purchase the service?” participants to explain their purchase and Ask the participants to mention what were their experience of use of the service the most significant or important decision- (including any post service follow-up). making factors in their decision to purchase Ask participants what they expected at the service (although this is not statistically each step, if they got what they expected, significant, it may give us some intere s t i n g if they were satisfied or dissatisfied and leads). Make sure the discussion focuses not why, and how they would change it to only on what made the participants believe be better. Areas to probe: they needed the service, but what were the • physical appearance of the service actual motivating factors in their decision to provider facilities PURCHASE the service. • tangible things that came along with the service – for example written 2. Benefits (actual and potential) of the materials for training service: What did you expect to get from • interaction with the personnel of the the service the last time you purc h a s e d service provider – include everyone it? When you discussed your intention to participants had contact with (e.g. the p u rchase the service with a friend or receptionist or who ever they first family member, what did you tell them e n c o u n t e red, the trainer, a manager, about why you planned to purchase the secretary, etc.) s e r v i c e? Do you feel you got what you • aspects of the service process (e.g. for expected from the service? What do you training – the curriculum, the food, the feel you got ? How did you and other location, the trainer, the training members (manager, employees, family methodology, paying for the training, members involved) of your business feel making inquiries about the training about the results of the service? What etc.) m o re do you wish you could get fro m • other customers of the service the service? Areas to probe : p rovider (e.g. other participants in a • what were the expected and actual training, other exhibitors at a trade results of the service on the business fair) (e.g. increased sales, incre a s e d • if and how service provider was employee satisfaction, made business responsive to the needs of customers contacts etc.) • if and how service provider is caring • what were the expected and actual and interested in customers results of the service on the person • if and how participant was made to (e.g. made him/her feel more compe- feel comfortable through out the tent, made friends, feel more impor- process tant as a result of attending the trade • if service provider personnel are fair/training, etc.) knowledgeable and courteous • did participants get something out of • if and how personnel convey confi- the service they did not expect? what? dence to the customer • ideas participants have for other ben- Lead one or several participants thro u g h efits they could get from the service. their experience of purchasing and using Encourage participants to share examples of the service. Use other participants to fill in actual expectations and actual experienced the gaps – “How was your experience dif- benefits of the service rather than theoreti- f e rent from <>? ” cal benefits of the service or what the serv- “ <> wants to change ice “should” deliver. <>, what would you change to make the serv- 3. Service features important to repeat pur- ice better for you? ” “ Would <> make you intere s t e d What did you expect during your use of in purchasing the service again? What else the service ? At each step, did you get did/would make you interested in attending what you expected ? We re you satisfied another training course/another trade fair ?

74 4. Service features that differentiate suppli- end services (e.g. increased confi- e r s : How did you choose the supplier dence in purchasing external services, you chose the first time you purc h a s e d liked interacting with people outside the service? Subsequent times you pur- the business etc.) chased the service ? What were the • experience of the service that made or aspects of the service provider that made might make participants proceed from you think that they offe r ed a quality serv- purchasing low end services to higher ice that would deliver the expected ben- end services (e.g. satisfaction with efits and be worth the price? Areas to p u rchase, unexpected benefits fro m probe: using the service, think other cus- • physical appearance of the service tomers of service provider represent a p rovider facilities – what about the group participant would like to be in, physical appearance suggested quality liked getting out and away from the to the participant? business for a short time, etc.) • interaction with personnel of the serv- • f e a t u res of the service that made or ice provider – what did the personnel might make participants proceed from say or do or look like that made the purchasing low-end services to higher participant think the service would be end services (e.g. friendly personnel, worth it? nice facilities, attractive communication • written materials about the service – materials, convenient location etc.) what did the materials say or look like that convinced the participant? For Non-users: • other forms of advertising of the serv- 1. Reasons for non-use: What type of busi- ice – what was it about the advertising ness problems do you have in your that convinced the participant? enterprise related to management / mar- • recommendations from others – what keting / production (depending on serv- did they say that convinced the par- ice)? How do you solve these problems ticipant? n o w? Where do you get information to • satisfaction with a previous purchase solve these pro b l e m s? Why have you never used <>? Are a s For basic services only: to probe: 5. Factors in building demand for services: • pricing (both amount and payment Did you or are you likely to purc h a s e terms) other business services as a result of • suppliers (don’t know any, think they using <>? Why or why aren’t good) no t ? What about the service made/makes For those participants who know suppliers you interested in purchasing other serv- but think they are not good or worth it – ic e s ? What other services did you/do you what makes them think the suppliers are think you might purc h a s e ? From the not good ? (e.g. bad re c o m m e n d a t i o n s , same service provider or a different serv- unconvincing advertising, unre s p o n s i v e ice provider? Areas to probe: personnel, bad appearance etc.) • i n t e rnal factors of the business that made or might make participants pro- Then proceed with the other topics, except ceed from purchasing low end serv- that the questions change from “what did ices to higher end services (e.g. busi- you do ? ” to “ what would you do?” For ness growth, increase in sales, example: diversification of products etc.) • e x t e rnal business factors that might Decision factors for first time purc h a s e : that made or might make participants What would make you decide to purchase p roceed from purchasing low end <> ? Decision factors to services to higher end services (e.g. probe: i n c reased competition, potential new • the internal aspects of their business markets etc.) • competitive pressures • personal factors that made or might • government regulations make participants proceed from pur- • recommendation from another business chasing low end services to higher person

75 • personal contacts (e.g. re c o m m e n d a t i o n • aspects of the service process (e.g. for from a family member or friend or family training – the curriculum, the food, the member/ friend provides service) location, the trainer, the training method- • convincing advertising by a service ology, paying for the training, making provider inquiries about the training etc.) • different pricing (cheaper or better pay- • other customers of the service pro v i d e r ment terms etc.) (e.g. other participants in a training, other Encourage one or a couple of participant to exhibitors at a trade fair) say what might make them purchase the • how the participant would expect the service. Ask others if that is a key factor for service provider to be responsive to the them or what other factors are more impor- needs of customers tant to them. • what knowledge participants would expect the service provider personnel to Benefits (actual and potential) of the serv- have ice: What would you expect to get from the • how participants would know if this is a service if you purchase it? Areas to probe: good service provider (before, during • what are the expected results of the serv- and after purchase) ice on the business (e.g. increased sales, Lead one or several participants through a i n c reased employee satisfaction, make hypothetical experience of purchasing and business contacts, ISO 9000 certification using the service. Ask them what would etc.) make them satisfied at each stage. Use other • what are the expected results of the serv- participants to fill in the gaps ice on the person (e.g. make him/her feel mo r e competent, make friends, feel more Service features that differentiate suppliers : important as a result of attending a trade How would you choose a supplier? What fair/training, etc.) aspects of a service provider would make • ideas participants have for other benefits you think that they offered a quality service they could get from the service. that would deliver the expected benefits Encourage participants to formulate an and be worth the price? Areas to probe: example of all the benefits that they expect • physical appearance of the service from a service. Ask other participants if they provider facilities – what about the phys- have different or additional expectations. ical appearance would suggest quality to the participant? Service features important to repeat pur- • interaction with personnel of the service chase and ways to improve the service : provider – what would the personnel say What would you expect during your use of or do or look like that would make the the service? What would make you satisfied participant think the service would be during your use of the service ? Areas to worth it? probe: • written materials about the service – • physical appearance of the service what would materials say or look like provider facilities that would convince the participant? • tangible things that came along with the • other forms of advertising of the service service – for example written materials – what advertising might convince the for training participant? • interaction with the personnel of the • recommendations from others – what service provider – include everyone par- could they say to convince the partici- ticipants would come in contact with pant? (e.g. the receptionist or who ever they first encounter, the trainer, a manager, secretary, etc.)

76 The BDS market for advertising services

The inside story

Sample Analysis of the Advertising Market in Nepal from GTZ The following document was prepared for GTZ Nepal by their marketing research firm. It includes data from both the quantitative survey and the focus group discussions. In addition to using the analysis for their own purposes, GTZ used these types of service market profiles to assist suppliers to improve their services and expand.

Current BDS market for advertising services

Who are aware of advertising services and are purchasing them as well? • Large, medium and small manufacturing establishments • Durable retailers and large wholesalers • Small and medium sized hotels • Travel agencies of all sizes

How many from the individual universes are actually purchasing (% to base)?

85.7

35.5

5.1

14.8

68.1

48.3

33.7

Who are the repeat buyers?

• All MANUFACTURING ESTABLISHMENTS,DURABLE RETAILERS,LARGE WHOLESALERS, the HOTEL SECTOR AND TRAVEL AGENCIES

77 What is the current market size (figures in lakhs of Rupees)?

88.2

126.8

72.4

18.4

16.5

52.8

178.6

175.2

728.2

Large manufacturers: Rs.10659.6 lakhs per annum

(Only the registered organised sector establishments had been taken for estimation)

What is the average annual spending per establishment? • Large manufacturing establishments Rs.15,35,000/- • Hotels Rs.88,000/- • Travel agencies Rs.64,000/- • Medium manufacturing establishments Rs.14,600/- • Small manufacturing establishments Rs.21,000/- • Very small manufacturing establishments Rs.3,900/- • Durable retailers Rs.6,500/- • Wholesalers of FMCGs/Cigarettes/Pharmaceuticals Rs.4,600/-

Is the money spent increasing?

78 Market growth in value terms (annual spending)

12,734

12,116

11,322

Annual spending (in lakhs)

• Indications are that it is a fairly steady market in terms of growth • market is growing even without any external catalytic intervention

How often do people purchase ?

• More than once a year (65.9%) • Once a year (25.7%) • Less often (9.4%)

Why did they outsource this service the first time?

Internal «pull» Business became larger and complicated, so needed help

External «push» Strongly advised by friend/colleague to try this service

Competition had started to purchase this service

What is their source of information regarding service provider?

• Some instances through printed media, i.e. newspaper advertisements • Primarily through business associates, colleagues and friends

Why a particular service provider is chosen?

Most repeated reason The company/individual has a good name in the market

Other reason They were recommended by colleagues/friends

Other reason Their professionals are very competent

79 Potential BDS market for advertising services

Where is the new and potential – not requiring this function in their market? businesses at present

• C u r rently non-buying establishments whose decision makers think that this So, who are these people? service is very important for the gro w t h of their business • None among the given categories. Estab- • F rom among the above, the establish- lishments are either buying the service or ments who do not buy for reasons other not buying because they get it done in- than house. Therefore, the potential market is – getting it done in-house the existing market.

What features do buyers or potential buyers look for when outsourcing advertising services?

SMALL ESTABLISHMENTS Post as well as Kantipur), the Rising Nepal, City Nepal, etc. SMALL HOTELS AND SMALL MANUFACTURERS • However, this should not be taken as the rule but rather, an exception to the rule. Although some of the small hotels and small The usual procedure was still to get ref- m a n u f a c t u rers were actively into spending e rence from acquaintances who had money on advertising, very concre t e used this service in the past. notions about why and how they advertise could not be elicited. They appeared to be buying this service because such was the Benefits from the service tr end with the rest of the industry. However, some degree of useful information could be SMALL HOTELS elicited from the FGDs with the small hotels, especially in the realm of service feature s . • Due to advertisements, business contacts The following sections provide the findings. have developed with travel agencies. This was a bonus for most of the small hotels as they were primarily targ e t i n g Decision factors behind first time the customers. purchase •Tourists had also come after reading the • Reasons behind purchasing this service advertisements. Since most tourists came the first time is the same as it was for all p re p a red with a bit of backgro u n d other customers – wanting to tell knowledge on the hotel, the proprietors prospective buyers about what is on sale could develop personal rapport with and thereby, increase the turnover of the them easily and this gave them a chance establishment by roping in new buyers. to know their mentality. This aspect has The intention being - to be one step had a positive impact on their business. ahead of the competition.

• Here was one group of participants who SMALL MANUFACTURERS had actually got information about suppliers through published sources. The • The expected benefits which all buyers dailies which carried this inform a t i o n looked/hoped for from outsourcing this were the Kantipur publications (both the service were:

80 – Business growth bridges the gap between the pro d u c e r s – Sales increase and the consumers. – To expand the field of consumers

• The small manufacturing units, in their How did they choose a supplier own yardstick, had mentioned that the above-expected results had been rea l i z e d SMALL MANUFACTURERS to some extent. • They either chose the advertising agency • The decision to advertise had also nearest to their business premises or the resulted in unexpected gains for some. one that off e red them services at the One small unit dealing in production and cheapest cost. sales of ‘thanka’ artwork had advertised for their wares. This had been seen by a • For most, the agency that was ultimately doctor in Poland who had contracted chosen had the right contacts and cre- them to prepare a logo for him. dentials to reach the information about • On the flip side, several of the re s p o n- their products to the proper consumers. dents had mentioned that having advertised, they now get frequent visitors to • The Kantipur Publications, which has the their offices seeking donations. l a rgest selling English and Nepali newspapers in the market at present, were the primary targets for ad space. Naturally, Service features important this agency had the edge over the others. to improve the service

SMALL HOTELS MEDIUM AND LARGE ESTABLISHMENTS • For most small hoteliers, the current rate charged for advertisements is very high. Decision factors behind first time The common plea was that such a serv- purchase ice needs to be made cheap and effe c t i v e so that a wider spectrum of people can LARGE TRADE ESTABLISHMENTS access it. • The rationale or intention behind pur- •Tourist guide, which is very widely read, chasing advertisement space for the first should have more provisions for small time (and even now) is to inform the hotels to publish their advertisements. prospective buyers about product range, features, guarantee offers and quality. • As tourists mostly use the maps, hotel owners have been using this as a vehicle •To inform people about after sales serv- of communication. This is one feature ices provided by the shops on purc h a s- they wanted to be enhanced in scope. ing the products. This was deemed to be an important feature for the growth and promotion of the trading business. SMALL MANUFACTURERS •To stand up and survive in the world of • The respondents wanted to stick to the competition, both in sales as well as basics – the ads should be simple & clear, price. attractive to the customer, affordable for the buyers and placed in the right medium and at the right time so as to LARGE MANUFACTURERS reach the consumer group that purch a s e s or are interested to purchase the prod u c t . • Apart from the usual motive of information dissemination on new pro d u c t s , • The advertising media should be popular l a rge manufacturers out-sourced adver- among the target audience so that it tising in order to give notice to the cus-

81 tomers of publication of balance sheet as • In the pharmaceutical field, the situation per government specifications. is more structured. Once a new dealer is identified, people from the pharmaceuti- • Even in the case of large manufacturers, cal company (whose products are going the decision to use advertising agencies to be stocked) and also from the Nepal was not always internal to their busi- Chemist & Druggist Association nesses. In this segment as well, person- a p p roaches the proprietor of the nel deployed by the service pro v i d e r s ou t l e t / p h a r macy. In most cases, the com- had proved to be crucial factor in ‘clinch- panies themselves pay for the advertise- ing’ the decision in favour of outsourcing ment expenses. this service. • Personnel from the Connection Ye l l o w • In other cases, recommendations by well Pages make visits to trade outlets for wishers were usually the factor responsi- advertisement commitments. This is a ble for first time purchase. good case of service coming to the doorstep.

MEDIUM MANUFACTURING • What needs to be concluded is that trade ESTABLISHMENTS outlets (not business houses) hardly a p p roach an advertising company for • While the reasons for advertising for getting their layouts designed. The prev a - medium establishments were the same as lent practice is to contact (or be con- they were for the large trading establish- tacted by) the people who are selling ments, the only new feature that can be advertisement space and they simply pay mentioned is that through advertising in for the opportunity. The service provider g reetings card, they wanted to establish takes care of the rest. themselves in the society.

• As before, these people did not have to LARGE SERVICE ESTABLISHMENTS v e n t u re out in search of a service (HOTELS) p ro v i d e r. Rather, they came to contact the clients themselves and put in a • For hoteliers, increase in spending on request to advertise. business promotion (through advertisements) meant increasing revenue. There LARGE SERVICE ESTABLISHMENTS was no ambiguity in this matter and (HOTELS) every large hotel owner knew this and practiced this as well. • For hotel owners, the primary intention behind spending money on advertising is • Ho w e v e r , the common complaint against to let foreign tourists know about the the present lot of service providers was location of their hotels and inform them that they tend to give adequate attention about their service features. to the clients till the time they get the contract. There a f t e r, one can hardly get any response from them.

How did they come to know • Another major drawback being faced by of the suppliers the hotel industry regarding advertising is that since the government imposes tax LARGE TRADE ESTABLISHMENTS AND on the same as well, they cannot spend MEDIUM MANUFACTURING ESTABLISH- as much as they would like. MENTS

• In several cases, buyers are advised by family and friends who might have read about or used the service pro v i d e r s themselves.

82 Benefits expected and derived Service features important from the service for improving the service LARGE TRADE ESTABLISHMENTS AND LARGE TRADE ESTABLISHMENTS AND MEDIUM MANUFACTURING ESTABLISH- MEDIUM MANUFACTURING ESTABLISH- MENTS MENTS

• The primary benefits which spenders • Designing and presentation of advertise- would like to derive from advertising are ment would need to be improved. The that the customers would be attracted, layouts need to be developed attractively sales will increase and their business will so that people would be attracted by it. expand. In this context, the ads need to be kept simple and understandable. • Members of the Connection Ye l l o w Pages were all praise for the facility. • Generic ads do not serve the purpose. Their attraction is that along with adver- They should be designed to reach the tisement space, which they paid for, they specific and potential customers. a re provided with free post box, sent magazines every fortnight, given fre e • Prices have to come down. Pre s e n t l y , pathological test and a membership gold- they feel that they are not getting value card by which discounts can be obtained for money. Interestingly, most buyers f rom other member organization. Other wanted annual contracts, i.e. once given agencies can take up the cue from this a certain amount of money, the agency service provider and perhaps expand should provide them service throughout their business. the year.

• The unexpected result which most of the • There was a lot of stress on maintaining buyers got from availing this service was post service follow-up. This clearly indi- that the government charged them addi- cates that buyers wanted some sort of tional tax on the basis of money spent on accountability to be attached with the advertisements. contract.

• Regarding post service follow-up, again LARGE MANUFACTURERS the example of Connection needs to be taken. All the subscribing re s p o n d e n t s • Most of the large manufacturers had had informed us that the Connection gained positively by advertising. They sales team personally contacts them had all confirmed that their individual repeatedly and explains what and how sales had increased after placing the ads. much market and customer the publica- Most of their new customers had tion reaches. i n f o rmed them that they had come to know of this establishment only after • In line with the accountability issue, reading in the advertisement. buyers wanted some provision of war- rantee and guarantee of the quality of the • T h e re were also stories of unexpected ads. gains. One of the respondents had a call f rom a touring Indian businessman (on holiday) who went back and placed an LARGE MANUFACTURERS order worth Rs.20 lakhs. • The larger establishments, who were spending more money on advertising, wanted more out of their investments. They wanted the chosen agencies to not only develop advertising schemes according to budget, but also pro v i d e advisory in ad planning.

83 • The re q u i rement is that the supplier wants to give to the tourists and not miss should know and take care of the pur- out on crucial features because the com- pose of advertising - whether it is for petition is very tough. The location of the i n t roduction of a new product or for hotel has to be spelled out very lucidly in p romotion of an existing product or for the advertisements. just informing the people about various schemes. Since all these require different t reatments, the agency should have the What are they looking for in versatility to manage it. a service provider

• A good agency should inquire with the LARGE TRADE ESTABLISHMENTS AND client before they go in for a reprint of MEDIUM MANUFACTURING ESTABLISH- the same advertisement. Since the market MENTS is dynamic, message contents would change very frequently. • The professionals should be trained and must have thorough knowledge of the • The experience of most buyers was that technique of advertising, not just design- suppliers were very caring and persistent ing. until the time they bag the order. How- ever, after the contract is over and the ad • They should have a well-defined client has come out, they do not contact the servicing policy whereby pro s p e c t i v e clients for feedback about the impact of buyers can judge for themselves the their creation. A good agency will have degree of their professionalism. to do that if they want to continuously improve upon their capabilities. • They should be in a position to come up with advertisement packages, which leaves scope for clients to provide feed- LARGE SERVICE ESTABLISHMENTS back and chose the best-fit option. (HOTELS) • The service providers will have to • The pricing charged by the agencies has approach the clients themselves and dis- to be reasonable so that the industry can cuss with them the specific purpose of advertise throughout the year and regu- the advertisement. Only through this dia- larly. logue will they be able to come out with meaningful ads. • It was recognized that advertising in the e l e c t ronic media was very eff e c t i v e . • A good service provider should come H o w e v e r, the costs involved were too back to the client for feedback and ask high for most of the establishments. whether the advertisement has aff e c t e d their business or not. This will then be a • Instead, it was recognised that lots could learning process for both the parties. be done in the print media as well. How- e v e r, to gain leverage, the re s p o n s i b l e • The first contact with a service provider agency had to ensure that the advertise- is usually through the sales team. Since ment is brought out in a newspaper/ first impressions matter a lot, the person magazine whose distribution is wide- making the call has to be pleasant, spread and that the ad itself is colourful responsive and be willing to explain enough to attract attention. things.

• The timing of the ads should match with the peak seasons of tourist inflow.

• It is important for the service provider to be in regular interaction with the client before finalizing the ads. The ads should give all the facts that the hotel owner

84 How was a particular service dents, commissioning an advertising provider chosen agency directly was hardly ever the case. Instead, they all bought advertisement LARGE TRADE ESTABLISHMENTS AND space from magazines and newspapers MEDIUM MANUFACTURING ESTABLISH- who in turn took care of the cre a t i v e MENTS aspects of the product.

• In most cases, the companies whose • For these buyers, it made more sense to p roducts are stocked themselves chose advertise in Kantipur because it has a the agency and paid the bill as well. larger circulation as well as a wider and more efficient delivery network as com- • In other cases, the companies themselves pared to, say, Gorkhapatra. recommended the name of the service p rovider (the agency selling the ad • Apparently, Kantipur was also preferred space) to the shop owners who were because it has the capacity to publish ads told to take out the ad in their publica- that reached them only 12 hour prior to tion. the publication whereas in Gorkhapatra, the ads should reach 48 hours prior to LARGE MANUFACTURERS the publication.

• Among the larger establishments (it was • Kantipur would also publish ads that are the same case with the large trading reached to them just one hour prior to its establishments as well), C O N N E C T I O N publication but charge 25% extra for this is a popular source for outsourc i n g urgency. advertisement. For many, the N E PA L TRAVELLER and DESTINATION NEPAL • The provision of getting the Ye l l o w a re also standard and good outlets to Pages for free with each annual sub- place ads in because they also enjoy a scription of Connection (or buying their sizeable foreign readership. What must ad space) was considered to be a very be remembered is that for these respon- good incentive by the buyers.

Appendix B:

Recommended resources for market assessment

From the Development Field Crouch, Sunny and Matthew Housden, Mar- on Why/How to Conduct Market keting Research for Managers. Butterworth Assessments: Heinemann, Oxford, 1996.

Committee of Donor Agencies for Small Roberto, Ned, U s e r-Friendly Marketing Enterprise Development, “ Business Devel- R e s e a rc h. Life Cycle Press (Asia), Manila, opment Services for Small Enterprises : 1996. Guiding Principles for Donor Intervention, 2001 Edition” Section 2.1. February, 2001. Rust, Roland T., Anthony J. Zahorik and Web s i t e : ww w . i l o . o r g/ e m p l o y m e n t / s e d o n o r s Timothy L. Keiningham, Service Marketing, Chapters 5-6 and Part IV. Addison-We s l e y , Gibson, A., R. Hitchins and M. Bear, “B D S New York, 1996. Market Development : A Guide for Agen- c i e s” Chapter Two. Development Altern a- tives Inc., under the USAID Microenterprise From the Development Field Best Practices Project. Forthcoming. We b- on Assessments Conducted: site: www.mip.org Anderson, Gavin, “The Hidden MSE Service McVay, Mary and Alexandra O. Miehlbradt, Sector – Research Into Commercial BDS “E m e rging Good Practices in Business Provision to Micro and Small Enterprises in Development Services – BDS Seminar Vietnam and Thailand,” for the Interna t i o n a l R e a d e r” Chapter IV. For the First Annual Labour Organization for the Committee of Seminar Turin Italy, sponsored by the Inter- Donor Agencies for Small Enterprise Devel- national Labour Organization, September, opment International Conference in Hanoi, 2000. We b s i t e : w w w . i l o . o rg / e m p l o y m e n t / April 2000. Website: bdsturin www.ilo.org/employment/sedonors

Miehlbradt, Alexandra O. with contributions Miehlbradt, Alexandra O. and Ron Chua, f rom Ronald T. Chua, “Technical Note: “Series of Papers on Information and Com- Applying Marketing Research to BDS munication Technology Services for Micro Market Development” Development Alter- and Small Enterprises in the Philippines” natives Inc., under the USAID Micro e n t e r- Development Alternatives Inc., under the prise Best Practices Project, 2000. We b s i t e: USAID Microenterprise Best Practices Pro- www.mip.org ject, 1999. Website: www.mip.org

P h a n s a l k a r, SJ and MS Sriram, “B u s i n e s s Development Services for Small Scale Enter- From the Private Sector on Tools prises in India: A Case Study of Hyderabad, and Issues related to Market Andhra Pradesh ” for the Department for Assessment: International Development – Britain, for the Committee of Donor Agencies for Small Christensen, Clayton M. The Innovator’s Enterprise Development International Con- D i l e m m a, Harvard Business School Pr. , f e rence in Hanoi, April 2000. We b s i t e: 1997. www.ilo.org/employment/sedonors

87 Riddle, Dorothy, “What Do We Know About 10-14 September, 2001 in Turin, Italy. For BDS Markets? ” for the Mekong Pro j e c t information, see website: Development Facility – IFC for the Commit- www.ilo.org/employment/bdsturin tee of Donor Agencies for Small Enterprise Development International Conference in Small Enterprise Education and Pro m o t i o n Hanoi, April 2000. Website: Network, “State of the Art in Business www.ilo.org/employment/sedonors Development Services for Small Enter- p r i s e s”. 16-21 July, 2001 in Wa s h i n g t o n Tomecko, Jim, “The Application of Market D.C., USA. For information, see website: Led Tools in the Design of BDS Interven- www.seepnetwork.org/bds.html tions” for GTZ for the Committee of Donor Agencies for Small Enterprise Development Springfield Centre, BDS 2001 Training Pro- I n t e rnational Conference in Hanoi, April gramme. 5-23 August, 2001 in Glasgow, 2000. Website: Scotland, UK. For information, see website: www.ilo.org/employment/sedonors www.springfieldcentre.com

BDS Training Programmes that will include Market Assessment :

I n t e rnational Labour Organization, BDS Seminar “Em e r ging Good Practices in BDS.”

88 Appendix C:

List of BDS market assessments conducted or in progress

Below is a list of the formal market assessments with which the author is familiar that used some of the tools described in this guide. There may be other assessments, conducted or on-going, by other organizations.

GTZ – Assessment of BDS Markets in s w i s s c o n t a c t @ b o l - o n l i n e . c o m, addre s s : Nepal, 1999. For more information, see Jim Business Development Services Programme Tomecko, “The Application of Market Led – Bangladesh, C/O SDC, Embassy of Tools in the Design of BDS Interventions” Switzerland, House B 31, Road 18, Banani, for the Committee of Donor Agencies for Dhaka, Bangladesh, fax: +880 2 882 3497. Small Enterprise Development International C o n f e rence in Hanoi, April 2000. We b s i t e: Swisscontact – Assessment of BDS Mar- w w w . i l o . o rg / e m p l o y m e n t / s e d o n o r s O r kets in Pakistan, 2000. For more informa- contact Prashant Rana at GTZ Nepal, email: tion, contact Fasih uz Zaman at Swisscontact [email protected] in Pakistan, email: ss e p @ p e s . c o m s a t s . n e t . p k

I n t e rnational Labour Organization – USAID – Study of Information and Com- Assessments of BDS Markets in Thai- munication Technology Services for land, Cambodia, Indonesia and Ghana, M i c ro and Small Enterprises in the 2000-2001. For more information, contact P h i l i p p i n e s, 1998. For more inform a t i o n , Jim Ta n b u rn at the ILO in Geneva, email: see Alexandra O. Miehlbradt and Ron Chua, [email protected] “Series of Papers on Information and Com- munication Technology Services for Micro Swisscontact – Assessment of BDS and Small Enterprises in the Philippines ” Markets in Bangladesh, 2000. For more Development Alternatives Inc., under the i n f o rmation, contact Deepak Adhikary USAID Microenterprise Best Practices Pro- a t Swisscontact in Bangladesh, email: ject, 1999. Website: www.mip.org