Market research key to business success

Consumers are constantly changing. Instant noodles, for instance, were originally developed for consumers to pour in boiling water, close the lid, wait for five minutes and then they were ready to eat. However, research by Saha Pathanapibul shows more Thai consumers are now "cooking" the instant noodles rather than using the quick method.

Take another case. Ten years ago, 80 per cent of beds and mattresses sold in Thailand were 1.82 metres in size and 1.52-metre mattresses were never very popular. But in the past few years, Index Living Mall said, the market for 1.52-metre beds and mattresses have doubled because of a boom in the condominium market.

Top executives from Saha Pathanapibul, Index, Central Pattana, Muang Thai Life Assurance, and the British Dispensary agreed that market research is a must to conduct business successfully.

Saha Pathanapibul director Pennapha Dhanasarnsilp said dried instant noodles found it more difficult to succeed in the Thai market than the soup-type noodles, because Thai consumers were too lazy to pour out the water after boiling it. Noticing the consumers' behaviour, Nissin came up with an instant-noodle product with special packaging that allowed consumers to pour out the excess water more easily, she said.

Citing another example of changing consumer trends, Pennapha said, in the past, a majority of consumers would "brew" the instant noodles but now more people were cooking the instant noodles and adding ingredient they liked.

"Market research needs to be conducted regularly because consumers have always been changing," Pennapha, whose company sells Mama, the best-selling instant-noodle brand in Thailand, said.

Index Interfern managing director Kijja Pattamasattayasonthi said that initially, the company found sales at its bed-and-mattresses division in the Index Living Mall retail outlets quite disappointing.

This was because the company was applying the same sales methods as department stores had been using - allowing sales representatives from each mattress brand to compete against each others in a bid to lure customers.

"We researched this and found out that customers were not happy," he said.

On recognising that each mattress costs several thousand baht, Index stopped the sales-representative system and instead put up a "sleeping clinic" with specialists to measure the customer's height, weight and back-bone structure to help them find the most-suitable mattress. As a result, sales shot up more than 100 per cent and the success rate of closing a sale surged, while customer satisfaction rose, he said.

However, companies cannot rely solely on conducting research on end users to anticipate a future trend. Citing the case of rising popularity of 1.52-metre beds, Kijja said Index discovered the trend by talking to real-estate project developers.

"[Property] developers are the leading source for information on how we are going to develop our [beds and mattresses]," he said.

Central Pattana's (CPN) executive vice president for marketing Nattakit Tangpoonsinthana agreed that interviewing "key performers" was most helpful in saving time.

CPN, he said, regularly held lunches with its major trading partners to check current market moods.

Nattakit said market research was a necessity for companies, who should not depend on their executive's common sense alone.

"Market research is very important, especially for making a strategic decision. It not only helps in evaluating whether a project is worth the money spent, it should also be used to find out where we should focus," he said.

British Dispensary president Sutee Ratanakin said executives should not complain about spending money on conducting market research because they should go for facts rather than depending on their gut feel.

"A sample size of 150 to 200 people is okay. [Market research] is a kind of risk management," he said. "But we do not need to believe market research a 100 per cent."

Muang Thai Life Assurance president Sara Lamsam said he had to use market research to prove if his Bt500 million to Bt600 million spending on advertisements fulfilled the company's brand-building objective.

pichaya@nationgroup.com