1. MARKET INGELLIGENCE: Getting started

2. The aim of this market intelligence training is that you know: the importance of formulating good research questions and how to do it; how to find answers to your questions and how to use online sources; how to use CBI’s Market Intelligence platform; how to turn information into market intelligence; how to perform the external analysis of an Export Marketing Plan.

3. Market research & EMP:

4. Making research work for you: Step 1: Define your research questions

5. What do you need to know? What is the overall research question? How can I successfully export Example: In order to answer the overall research question: define sub questions to work with that will lead you to your final answer!

6. Brainstorm assignment: Define your research questions! Think of what you know and what you still need to find out. Trends? Competitors? Target market? Price? Legislation? Certification? Trade agreements? Market channels? Buyers? Consumers? Segments? Demand? Imports? Market developments?

7. Example questions: Where do I start? Is Europe (or other potential target market) an interesting market? What do ‘EU’ and ‘EFTA’ mean? Next step: Find out the basics about Europe (or other potential target market). Can I approach the EU as one market? Can I get any assistance from the EU?

8. Example questions: Next step: Find out if there is information specifically for your product in your target market Is there specific information for my product? Is there specifc country information for my target market?

9. Example questions: Is there a market for my product(s)? Where does my target market import from? How much is my target market importing? Is demand growing? Is there any domestic production? Does my target market depend on imports? Next step: Find out statistical information: imports, exports, production, consumption

10. Example questions: Who are my competitors? How’s my position towards the buyer: Strong or weak? Does the competition offer the same product, or a substitute one? How can I deal with the competition? How strong am I compared to the competition? Where do my competitors come from? Do my competitors have the same trade agreements? Next step: Find out how buyers source in order to know how to sell your products to them

11. Example questions: Do my products fit the taste of the Europeans? Which styles, materials, colours sell in Europe? Which trends are expected to take off? What are EU buyers looking for? Next step: Find out current and future trends in the EU

12. Example questions: Who are the players between me and the end consumer? Where do I need to sell my products? Who is the buyer in the chain that leads me to my target group? How can I best reach my target group? Where does my target group shop? How is the retail market structured? Who are the players between me and the end consumer? In which market segment do my products fit? Next step: Find out which market channels and segments are relevant to you

13. Example questions: Are my products allowed on the EU market? Are there any standards I need to meet? Do I have to be certified? What’s the EU legislation for my product? What are the requirements? Next step: Find out legal and other requirement that EU buyers have

14. Example questions: Where can I find a buyer? How can I approach a buyer? What is a buyer looking for? How can I get a buyer to understand how great my product is? How do I do business in my buyer’s culture? Next step: Find out how buyers source in order to know how to sell your products to them

15. To sum up: You are looking for answers to questions regarding: General information: An introduction to the market and organizations Specific product-market information: Research already done Trade & demand: Statistical information imports/exports/production/consumption Competition: Determined by different forces Trends: The taste of your target market Channels & Segments: The route to your target market Requirements: Legal and additional requirements How buyers source: Understanding buyer behavior

16. The answers to your questions can be found in CBI’s Market Intelligence platform:

17. Making research work for you: Step 2: Find the answers to your research questions Step 3: Turn information into intelligence

18. 1.Once you have defined your research questions 2.you can start looking for the answers by doing your research and 3.finally analyze the information and turn it into intelligence. …but what do we actually mean by intelligence?

19. From information to intelligence Information (facts and figures) won't get you across the gap that separates your company from the EU markets What you need is intelligence: data analyses, foresights, insight into trends and business opportunities and practical considerations for action

20. How CBI does it: Peer Group session

21. Peer Group Video

22. Peer Group programme and output

23. Bear this in mind in each of the assignments you do! From information to intelligence: How you can do it After each assignment, once you’ve collected the information, you need to analyze it in view of your specific situation: - What does this mean for your product/company? - Do you need to find out more? Where? (perhaps primary sources = interviews) - Are there things you can change in order to better match the target market needs (considerations for action)? You will use CBI’s Market Intelligence platform and other online sources to find answers to your research questions.

24. Market research & EMP:

25. MARKET INGELLIGENCE: Basics

26. In order to find answers to questions such as… Can I approach the EU as one market? Can I get any assistance from the EU? Where do I start? What do ‘EU’ and ‘EFTA’ mean? Is Europe (or other potential target market) an interesting market? …the best starting point is to look at an Introduction to the EU

27. Overview Europe – basics 28 Member States 500 million people Single market: –Free movement of goods –Common customs –Largely harmonized legislation 24 official languages Different cultures Different market characteristics Member states of the European Union Candidate and potential candidate countries

28. The Basics of the EU: Sources CBI’s Database A good starting point with: Export Intelligence Manuals on EU market essentials of exporting to Europe Policy Intelligence Up to date and tailored practical Information for policy makers CBI Database: An overview of EU market essentials

29. MARKET INGELLIGENCE: Our CBI platform

30. www.cbi.eu/marketintel

31. MARKET INGELLIGENCE: Statistics

32. In order to find answers to questions such as… Is there a market for my product(s)? Is demand growing? Is there any domestic production? Does my target market depend on imports? How much is my target market importing? Where does my target market import from? …the best starting point is CBI’s Tradewatch, presenting statistics

33. Statistical information: How it works Everytime a product crosses a boarder, it is registered under an HS-code. Based on HS-codes, import and export statistics are provided. Not all products have their own, specific HS-codes, sometimes they end up in a group called ‘…and other’ or similar.

34. Statistical information: How it works cont. Production is registered using a different set of codes, in the EU manufactured goods are registered in ProdCom. Sometimes branch organizations or similar offer more specific production figures. Consumption is often not registered as such, but can be estimated by calculating production+imports-exports.

35. Discussion: How to deal with incomplete information? So… …you may not find a perfect HS-code to use …and you may not have any consumption figures for your product …or production… How can you deal with this and why is statistical information still not useless?

36. Statistical information: Sources CBI’s Tradewatch A good starting point as it will give you an overview of the sector: CBI Tradewatch: Broadcasting your Trade statistics Home Decoration Tradewatch: http://www.cbi.eu/marketintel_platform/home-decoration/136093/tradewatch

37. Statistical information: Sources From the CBI Tradewatch, you can access ITC’s Trademap (www.trademap.org), which allows you to look up developments for specific products at a national level.www.trademap.org

38. Statistical information: Sources The EU Export Helpdesk provides easy access to import/export data on trade with EU countries: http://exporthelp.europa.euhttp://exporthelp.europa.eu Choose statistics

39. Statistical information: Sources ProdCom provides statistics on goods manufactured in the EU: http://epp.eurostat.ec.europa.eu/portal/page/portal/prodcom/introd uction http://epp.eurostat.ec.europa.eu/portal/page/portal/prodcom/introd uction

40. Produce a first list containing 28 countries ranking the most promising one at the top and the less promising one at the bottom of the list. 3. Current market demand – find out: Total imports (from the ‘world’) of your product to ‘EU28’ (select ‘Region’ instead of ‘country’) Are EU imports increasing or decreasing? Imports from your country to EU28 Who are the main suppliers to EU28? (i.e. where is your competition?) Do you expect imports to decrease or increase? Assignment 1 1.Determine your HS code 2. Log in onto ITC Trade Map = www.trademap.org Log in: cbi@cbi.eupassword: cbi

41. 4. Based on assignment 2 What are the most promising markets? (countries with large market size AND good growth potential – niche markets?) Are there countries where current market size is large, but with no or little growth perspective? Are there countries that are still quite small now, but that offer interesting growth possibilities for the future? Do you see any interesting developments in certain countries? If yes, please describe. Produce a second list containing 28 countries ranking the most promising one at the top and the less promising one at the bottom of the list. Assignment 2

42. MARKET INGELLIGENCE: Trends

43. In order to find answers to questions such as… Do my products fit the taste of the Europeans? Which styles, materials, colours sell in Europe? Which trends are expected to take off? What are EU buyers looking for? …the best starting point is CBI’s Trends and Fashion forecast

44. Latest trends in HD and HT

45. Search for identity Global trends – Need for individuality emergence of self-expression and self-development people want to distinguish themselves from others Market trends Personalisation options in design Companies create an emotional connection by story telling Consumer trends – New luxury products ‘new luxury’ is all about unique experiences, acquiring new skills, possessing eco-credentials and showing generosity or connectivity two trends: consumers derive status and pleasure from mastering cooking skills, redecorating the living room or enjoying a Spa at home. products that increase knowledge, add meaning and significance to their experiences and contribute to the development of their inner search for identity.

46. Rebalancing global economy Global trends – Rise of emerging markets Significant population growth in emerging markets (e.g. China or India) Developed economies face an ageing and shrinking population Relocation to urban areas Market trends Emerging markets as destinations China as a producing and destination market Consumer trends – Function and feeling Changing households (single sex and multi generation) Products not only functional but express feeling to match identity

47. Sustainability Global trends – Growing importance of sustainability Market trends - Sustainable business Transparency and accountability Lower transport emissions (innovative packing and packaging) Growing certification schemes and Fair Trade initiatives Consumer trends – Inspiring, pleasing and a better world Consumers buy products to support local communities Growing recycling Consumers want to contribute to a better world (fair trade)

48. Trends: Sources CBI’s Trends Offers insights on European trends for your sector while the Fashion forecast gives you insights in upcoming trends (styles, colours, fabrics, design) in the apparel sector. CBI Trendmapping: Insights and foresights on key European market dynamics, short- and long-term CBI Fashion Forecast : Upcoming fashion trends and developments (styles, colours, fabrics, design)

49. Trends: (Non-EU) Sources Trendwatching.com http://trendwatching.com/freepublications/http://trendwatching.com/freepublications/ Trade fairs: Which are the biggest ones in your sector? Check out their websites and programmes! Sector organizations / e-newsletters etc.

50. Trends: other sources Trend information is all around us: Magazines Newspapers Film Shops Art Galleries Websites of forecasting agencies Design Blogs Trade Fairs Trade Fair Websites

51. Which European trends affect your sector/products and how? Analyse and describe them by looking into the STEEP factors: Social Technological Economic Environmental Political (input: CBI MI platform) Important: only describe what is relevant in the light of your products and markets, the PMCs! (no general info). And also: The EU is not 1 market, therefore do not only look into general aspects but also take differences on country-level into account. Assignment 1 Find out if your products fit the current and future trends? These trends can be described by looking at Social, Technological, Economic, Environmental and Political (in short: STEEP) factors. USE CBI TRENDMAPPING, PRODUCT FACTSHEETS AND THE OTHER SOURCES Mark these trends with O or T: O = Opportunity; makes the market more attractive T = Threat; makes the market less attractive

52. Which countries seem to offer the best opportunities, based on trends and developments in your sector? Finally, integrate the two lists and produce a top-3 EU-country list. Assignment 2 Produce a second list containing 28 countries ranking the most promising one in top and the less promising one at the bottom of the list.

53. MARKET INGELLIGENCE: Buyer requirements

54. In order to find answers to questions such as… Are my products allowed on the EU market? What are the requirements? What’s the EU legislation for my product? Do I have to be certified? Are there any standards I need to meet? …the best starting point is CBI’s Buyer Requirements (legal and non-legal), the EU Export Helpdesk (legal) and ITC’s StandardsMap (private standards)

55. EU non-food legislation: How it works 1. Framework agreement: ‘All products must be safe’ Material 2. Material: Make sure you don’t use engangered species as your material Hazardous substances 3. Restricted hazardous substances: Make sure they don’t end up in your product Uses 4. Uses: Stricter restrictions for contact with skin or food, and childcare articles CE marking 5. CE marking: If applicable, a must to show safety

56. EU food legislation: How it works 1. Framework agreement: ‘Food must be safe’; applies to all foodstuffs Hygiene (incl. HACCP) Contaminants MRLs Additives & flavourings Etc. 2. Horizontal, thematic, legislation; applicable to all foodstuff though not always relevant Requirements for cocoa & chocolate Requirements for animal products Requirements for fruit juices Requirements for sugar 3. Vertical, product-specific legislation; defines to which foodstuffs applicable

57. Private standards: How they work Private standards are used by companies, often to show sustainability performance. They cover issues not covered by legal requirement, such as labour conditions, or go further in their requirements than legislation, e.g. stricter environmental requirements.

58. Buyer requirements: Sources. CBI Buyer Requirements: Up to par with the EU market CBI’s Buyer Requirements Allows you to understand all requirements set for your sector (musts = legal, common and niche), which you can further analyze for your product.

59. Buyer requirements: Sources To look up EU legal requirements for your product (also used by CBI) see the EU Export Helpdesk: http://exporthelp.europa.euhttp://exporthelp.europa.eu Exporters search by HS-code Also see statistics

60. Buyer requirements: Non-EU Sources EU Market Access Database http://madb.europa.eu/http://madb.europa.eu/ US Food and Drug Administration http://www.fda.gov/http://www.fda.gov/ Japan External Trade Organization www.jetro.go.jp/en/reports/regulations/ www.jetro.go.jp/en/reports/regulations/

61. Buyer requirements: Sources To look up private sector standards for your product see the ITC Standards Map, www.standardsmap.org:www.standardsmap.org

62. Go to CBI’s Market Intelligence platform at www.cbi.eu/marketintel Read through the information and: 1.write down which buyer requirements apply to your product 2.Find out if your country has special trade agreements with EU countries and find out which (non-) tariffs barriers apply to your products when exporting to Europe. Choose “Buyer Requirements” Assignment 1 Choose your sector

63. What are opportunities and threats based on your BR’s? Assignment discussion example Home Decoration:

64. Take another look at the identified Buyer Requirements: If not, which action can you undertake = Action plan Assignment 2 Can you meet these requirements? How?

65. MARKET INGELLIGENCE: Channels and Segments

66. In order to find answers to questions such as… Who are the players between me and the end consumer? Where do I need to sell my products? Who is the buyer in the chain that leads me to my target group? How can I best reach my target group? Where does my target group shop? How is the retail market structured? Who are the players between me and the end consumer? In which market segment do my products fit? …the best starting point is CBI’s Channels and Segments

67. Channels and segments: Sources CBI’s Channels and segments Gives you an overview of the route your products will travel to reach your end consumer. CBI Market Channels & Segments: Your trade route on the European market

68. Trends in the market channel & segments Chain store retailers control the entire chain from production to outlet…… and large retailers start importing themselves…… ……both stimulating direct trade Middle market is divided: trends towards low or high-end E-commerce is growing in both B-2-B and B-2-C markets

69. Trends in the market channel & segments HD or HT 1.Clear concept is key (HD) 2.EU retailers / buyers consider buying closer to home (HD) 3.Specialisation brings new opportunities for exporters (HT) 4.Present yourself as a backup supplier (HT)

70. Go to CBI’s Market Intelligence platform at www.cbi.eu/marketintel Read through the information and identify your segment and channels. Which channel is the most relevant for you? Be prepared to share your results. Choose “Channels and segments” Assignment Choose your sector

71. (example: Home Decoration) Assignment discussion

72. MARKET INGELLIGENCE: Buyers

73. In order to find answers to questions such as… Where can I find a buyer? How can I approach a buyer? What is a buyer looking for? How can I get a buyer to understand how great my product is? How do I do business in my buyer’s culture? …the best starting point is CBI’s Buyers’ Black Box

74. How do you get inside a buyer’s brain? The idea: Before you meet your buyer, find out what how s/he thinks and what s/he is looking for

75. Market brain Legislation Trends  buyers also follow what’s going on in the market  the market brain deals with issues the buyer cannot influence

76. Channel brain The whole supply chain Reason(s) for switching suppliers?  The channel brain is influenced by company decisions and strategies

77. Money brain Financial decisions  The money brain is influenced by company decisions and strategies

78. Communication brain People business!  In the end, there are people behind all relationships

79. Discussion Do you recognize the way a buyer thinks? Do you have examples that you could share?

80. Trade fairs: Maison & Objet and Ambiente CBI at the Maison et Objet Kabul Unique Design at the Maison et Objet 2013 Vietnam at the Ambiente

81. Rethinking the sourcing strategy of the buyer Number of visitors of European and American trade fairs declined since the recession of 2001 Number of exhibitors dropped out of European exhibitors (especially on German trade shows) The structure of European trade fairs and the marketing strategies of European enterprises changed –Customer retention intensified –Budget for trade fairs reduced. The economic centre of gravity is shifting to the East: –Growing middle-class is hungry to consume beyond their basic needs. –Geographic shift for the exhibition industry and a focus on these new markets for HDHT manufacturers worldwide.

82. Rethinking the sourcing strategy of the buyer In the digital era of communication trade fairs compete with other instruments of the marketing mix. –Social media and digital trade shows still play a role in sourcing –Trade shows, personnel selling, private events, congresses emphasise face-to-face communication (confidence + emotional experiences) Digital media have influenced the way buyers use trade shows nowadays: –to network, –observe the market and the latest developments in the industry, –but not so much to place orders. Exhibitors need to adjust the objective of their participation (private shows or personal selling are an option)

83. Why do buyers visit a trade fair?

84. Channels used for sourcing

85. Trade shows in Europe

86. What are the pros and cons of each of the possible promotional opportunities? Assignment In relation to your S and W identified in previous workshops, which of the different promotional opportunities are most suitable for your business at the moment?

87. MARKET INGELLIGENCE: Competition

88. In order to find answers to questions such as… Does the competition offer the same product, or a substitute one? Where do my competitors come from? …the best starting point is CBI’s Competition Who are my competitors? How’s my position towards the buyer: Strong or weak? How can I deal with the competition? How strong am I compared to the competition? Do my competitors have the same trade agreements?

89. Competition and driving forces Porter’s five forces: Buyer power New entrants Rivalry Substitutes Supplier power Porter’s model

90. Competition: Sources CBI’s Competition Describes the competition you face in the EU market. CBI Market Competitiveness: The competitive forces that shape your market

91. Tariffs & trade agreements Do competitors trade under the same conditions? The EU (and other regions) has preferential trade agreements with several developing countries Are your competitors subject to the same tariffs as you?

92. Trade agreements and tariffs: Sources To look up trade agreements and tariffs for your product see the EU Export Helpdesk: http://exporthelp.europa.euhttp://exporthelp.europa.eu Exporters search by HS-code Also see statistics

93. Trade agreements and tariffs: Sources To look up trade agreements and tariffs and analyze these compared to your competitors, use ITC’s Market Access Map: http://macmap.org/ http://macmap.org/ Use Market Access Map to: Find and compare the customs tariffs applied to your product in different markets; Analyse non-tariff measures affecting exporters and/or importers; Compare scenarios of changes to applied or bound tariffs; Download large datasets; Analyse market access trends; Customize product groups and geographic aggregations.

94. Find out tariffs relevant for you and your main competing countries, using ITC’s Market Access Map Assignment 3 1.Go to http://macmap.org/ and sign in/ sign uphttp://macmap.org/ 2.Choose ‘Advanced analysis’ / ‘Tariff analysis’ and ‘Create a new query’ 3.Work with default options & your own product(s) & competitors. 4.Do you face the same tariffs as your competitors? See applied tariffs instruction video: https://www.youtube.com/watch?v=nx9j3lCgrls&list=PLTZPF2lAdflNU5Vbhk2Af2vL2ZUZEzQlx

95. Describe the nature of competition within your sector (5 forces): Buyers Suppliers Rivals (main competitors, visual information, how to research this) New entrants* Substitute products Assignment 4 …and determine whether these elements are an Opportunity (O) or a Threat (T) O = Opportunity / enlarges your competitive power T = Threat / decreases your competitive power

96. MARKET INGELLIGENCE: Product – Market specific

97. In order to find answers to questions such as… Is there specific information for my product? Is there specifc country information for my target market? …the best starting point is to check out CBI’s Product factsheets

98. Specific product-market information: Sources CBI’s Product factsheets Have been developed to answer all your questions for a specific product-market combination. CBI Product Factsheet: Practical market insights on your product as seen on European markets

99. Specific product-market information: Sources cont. ITC publications may cover what you are looking for http://www.intracen.org/itc/publications/publications-catalogue/ http://www.intracen.org/itc/publications/publications-catalogue/ choose ‘publications’

100. MARKET INGELLIGENCE: Completing your SWOT analysis

101. Market research & EMP:

102. Now that you have completed the EU Market Analysis for your selected 1st priority country (EMP – step 2), you can translate your findings into a list of opportunities & threats that you will encounter in that market. Assignment 1 You should also have a good impression now if this specific country within the EU indeed offers you the best opportunities for selling your products.

103. Formulate the Critical Success Factors (CSF) in the selected market. Rate your company on the CSF. Now determine the power of your competitors: Identify competitors: If you already know who your toughest competitors are, call them by name in your benchmark (3b) ; if you do not have that knowledge and insight yet, then answer the questions under 3b ‘in general (’the competition in the EU’). Assignment 2 Benchmarking: answer the following questions: On what CSF do you beat your competitors? These are your Unique Selling Points !!! On what CSF do you score low, especially compared to competitors? These are your relative weaknesses, that you will need to improve.

104. Based on the market intelligence collected, summarize Opportunities and Threats (part of your SWOT analysis) Assignment 3 How can you take advantages of the opportunities that exist? Strengths - Weaknesses - Opportunities - Threats - How can you protect yourself from the threats that exist?

105. Assignment discussion: What have you discovered? Strengths - Weaknesses - Opportunities - Threats -

106. What have you discovered? Assignment discussion Strengths - Weaknesses - Opportunities - Threats -

107. Assignment 4 Compile all Opportunities & Threats from the previous paragraphs, that refer to the selected EU market that you have analyzed: Opportunities Threats Based on the previous analysis you can now draw conclusions on: Market Attractiveness Competitive power of your company, compared to other players in the market Based on all the market research you have done for this 1st priority market, taking the market attractiveness AND your competitive power there into account, you now have to take a final go or no-go decision to enter this market or not.

108. Assignment 5 If it is a go decision you can enter step 3 of the EMP builder: linking your external market findings (opportunities and threats) to the identified internal company findings (strengths and weaknesses) and extract conclusions as input for your export strategy. If it is a no-go decision, go back to your top 3 priority countries, take country no.2 and execute paragraph 6.3 until 7.3 again. country. This process can be repeated until there is a go decision for a certain

109. What did you find out? Assignment discussion

110. Assignment 5 Define your PMCs Which product(s) will you sell to which markets & segments? Product 1Product 2Product 3Product 4Product 5 Market 1 - Segment 1 - Segment 2 Market 2 - Segment 1

111. Assignment 6 Example Which product(s) will you sell to which markets & segments? LampsCandlesChristmas lights Wall decoration Chandeliers The Netherlands - Hotels - Hospitals - DIY stores… Germany - Hotels …

112. CBI Centre for the Promotion of Imports from developing countries Understanding tomorrow’s markets Contact CBI Market Intelligence www.cbi.eu/marketintel_platform marketinfo@cbi.eu