For many markets, particularly business-to-business markets, there is simply no accurate information on the market size or manufacturer shares for individual product categories. Either the information does not exist, or it is too broad to be reliable or useful in market planning or decision-making. In some markets there is macro information on certain product categories; however, rarely will it be broken down by end-user or channel segments.
Developing models for market sizing and brand share is challenging, but Richmark has developed and utilized the following best practices:
- Most modeling is based upon randomness without stratification or segmentation, but Richmark believes that one should interview randomly within strata or segment
- Models without stratification assume each respondent represents the "same" purchase volume and ignore large users and the 80/20 skew typically seen in business-to-business markets, which leads to significant inaccuracies
- Richmark's methodology enables us to adjust the number of interviews by strata (e.g., more interviews for more critical stratum) and provide greater insight about market opportunities
- Definition of the universe can be difficult but is critical
- This means understanding the list(s) used, excluding non-users, and determining the respondent's span of control and the number of decision-maker's within an account
- Understand to whom the channels sell as well as what they purchase
- Test/confirm the model against known sources, e.g., the client's sales data, census data, etc.
We have extensive experience in building models for a myriad of markets/industries. Since these models are built with actual data from individuals in the market, we can then look at any type of stratum or segment and also estimate market size and brand shares. This technique can be useful simply for measuring and tracking market position, but also as a basis for strategic planning and marketing strategy development.
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