This
site © Copyright Publicaciones Litos S.L., Spain
Design and development MPS
Digital Labs, India
Ask any company in the stone industry what are its different markets, in most cases the reply will be the names of the different provinces or countries to which it sells. Or, in the case of a company which sells only in its local market a typical reply may well be- about 40% of sales to the construction companies and the rest to the individual home owner. Ask a typical stone association the break-up of sales and the answer will almost always be a division into granite, marble and machinery sales mentioning the different customs classifications. But to what extent are these classifications useful to anyone ? Does the fact that under a certain custom classification, for example, exports from Italy to USA were X million dollars of granite in a year, necessarily mean that a Spanish granite company which sells nothing to USA is missing huge business opportunities ? Is there a different way of doing market segmentation more useful, more practical, and which provides better insight into where the business opportunities lie ? This article argues that there are other ways of segmenting and analysing markets even if they cannot be quantified, and a scheme of this kind can help to better focus one "s efforts and energies.
One way of improving one "s knowledge of business possibilities is to use COLOUR as the basis of segmentation. For example, the available statistics may say that 5000 tons of blocks of granite were exported from India to Spain last year. What no statistics will mention is what percentage of these blocks were of red colour. But would it not be more useful to be able to analyse on the basis of the following -
This is not to say that with some dedicated efforts these statistics can be found somewhere. But, simply by talking to knowledgeable people in the industry one can make an estimation about the approximate distribution of colours that are being imported; this table, without any doubt, will be of great use to any possible block exporter estimating his market potential. This segmentation by colours is also useful for any elaborating company. If market Z is importing multicolour slabs in a big way and the elaborating company does not work with multicolour materials, then its possibilities of entering market Z are small, even if its prices and quality are excellent.
The conclusion is simple - do not just look at the overall trade statistics regarding your product - try to segment by colour.
Everyone knows that the USA is a huge market of stone. But does that mean just about every one can sell there ? Would it not be interesting to estimate in what percentage of the sales made to the country the letter of credit was the payment method and what percentage of sales are made against consignment or cash against documents? An analysis of this kind may well reveal that the potential market for a company is much less than the total sales figure provided by the customs authority. If letter of credit is rarely used by wholesalers/ distributors in the United States, as seems to be the case, then a manufacturer of a stone product whose main clients are wholesalers may well decide that the high risk of being unpaid means, in effect, that the real market size is far smaller in size than he may have believed.. It may, therefore, be interesting to estimate the sales by the following categories -
Is the market still attractive enough for the would be seller given these conditions ? Once again there is probably no way to obtain these statistics but even an awareness of these factors can be useful in deciding whether to sell or to avoid a certain market if one is not willing to take any risks.
Customs duties, when finally available, tend to divide the figures into raw material and finished products. But what exactly constitute finished goods ? Slabs, tiles, cut to size projects, thickness materials, columns, chimneys, or monuments for the funerary industry ? As everyone knows in the industry knows, each of these constitute a speciality and several factories are geared towards one or some of the products, and very rarely can one factory manufacture all of them. Trying to determine what constitute the main products demanded in a particular market is a more useful piece of information than simply knowing that a certain market consumed US$ 50 million of finished stone, for example, in a particular year. A certain market may well be interesting for a chimney manufacturer but, because of the lack of culture of stone, may actually be a small market for stones tiles used in flooring.
A logical consequence of the existence of different finished products in the stone industry is the existence of different type of clients. The buyer of slabs will not usually be a buyer of funerary items, and a buyer of cut to size stone will not usually be a regular buyer of slabs. What kind of buyers exist in a particular market ? Do they tend to be wholesalers buying slabs and tiles, or are they sub-contractors buying cut to size stone ready for installation ? Or is the market for stone mainly limited to funerary items made of stone ?
A further segmentation may be necessary. Do companies sell to just any importer / wholesaler or, as seems to be the case in many countries, are they selling to warehouses belonging to relatives of the manufacturers, or even warehouses belonging to the manufacturing companies ? Since the risk level in these cases is normally considered to be lower, it may well be the reason why usually competitive companies sometimes fail to sell in some markets. In the stone industry the Italians have an almost mythical reputation of selling all over the planet to and through brothers, cousins and nephews who form part of the diaspora but this phenomenon is also applicable to the Greeks, Indians, Chinese and Turks who have large immigrant communities all over the world.
It is so easy to look at the trade flows in the stone industry and analyse market potential. But beyond the figures lie a different story and to have a true estimate of one "s possibilities one needs to look for something more, make a different kind of analysis based on sometimes subtle but important clues. Then and only then can one have a real idea of the possibilities in the world market bazaar
Articles
Photoreports
Trade fairs
Stockmarket
Dictionary
Moralemeter
Print Edition
Subscription
Contact Us
HOME PAGE
Last Updated: July 2008
|
This
site © Copyright Publicaciones Litos S.L., Spain |