This week, we’re trying something different. David Kippen, the genius behind Evviva Brands is going to take us on a tour of Market Research. David is a powerful advocate for the idea that you have to learn about the markets you serve. So, one step at a time, we’ll go through the basics of doing your own work to get a ‘dirt under the fingernails’ look at the market. – John Sumser
Dr. Kippen is CEO and Chief Strategist of Evviva Brands. With a background spanning advertising and communications and a client base spanning the globe, Dr. Kippen is recognized as among the top thought leaders in brand strategy. David has held leadership roles in several top associations that support the HR and communications professions. He is currently a member of SHRM’s Performance Management Task Force and an active member of the Council of Communication Management. Full Bio »
DIY Market Research 4/5 Private Investment
by David Kippen
This is tricky. Not only is most of what you see private investment, but it’s hard to see. For example, is the shiny new building you’re looking at is brand new or just a re-skinned brick building that’s about to fall down? But there are a few key elements of private investment I’ve learned to look for. In order of development, these are bike shops, 5&10 stores, and billboards.
More bike shops (places that repair motorcycles and mopeds) mean there are a high number of people getting around on two wheels. So lots of bike shops tend to be inversely correlated with high development. Similarly, they’ll range from street-corner operations through tented areas to real mini-garages. Each tells you something important about the degree of local development. And they’re ubiquitous enough (because bikes break down often) to be impossible to miss if your eyes are open.
5&10s, the mom-and-pop shops, that carry everything from chicken wire and tin to dental floss and plungers, are all displaced quickly when bigger more efficient stores come to town. But as long as the general income level is low, volume wholesalers can’t generate the revenue they need to offset their fixed operating and inventory costs. So if you see frequent small five and dime stores, you’re looking at a market on the lower side of the development curve.
Billboards may sound like a no-brainer: they’re everywhere, right? Yes, and no. Remember, billboards are constrained by the same market dynamics as wholesalers: they need a mass market ready and able to spend discretionary income on mass-produced product. So question one is “how many do you see?” Question two should be “what are they selling?” Billboards seem to climb a predictable ladder from beverages (Coke, for example, and local beers) to consumer electronics, then phone minutes/plans, then cosmetics, then lifestyle products, then designer brands. What you see will tell you a lot about where the local market is.