Transcript Estimating Global B2B Market Potential

Estimating Global B2B Market Potential
a method for sizing markets by country
January 2011
http://theglobal5000.com/
Why This Report?
• B2B companies continually look for consistent sources of data in
order to size markets on a country basis and estimate potential
around the globe
• Rather than simply using generic market or economic data, there
are some simple tools companies can use to customize the data for
their specific industry focus using data from The Global 5000
• This report provides an example of how to create a market index
with current data
January 2011
http://theglobal5000.com/
Key Elements of a Model
• Typically a model or index uses 3 key elements to create values
a population metric for the segment you are trying to reach. This is true for
consumer or B2B markets. There has to be a market large enough to focus on.
a wealth or income metric. The target market has to have enough funds to buy
your product or service.
a product or service metric providing influence related to those who have an
interest in your product or service.
January 2011
http://theglobal5000.com/
Publicly Available Data
• There are a number of publicly available sources for economic and
demographic data. Most are well suited for consumer related
offerings but can be adopted for the B2B environment if they also
contain some specific industry metrics.
• Key elements in this mix include (among others) population, GDP,
literacy rates, employment levels and internet use.
• Resources are available from various organizations including UN,
IMF, World Bank, CIA, and OECD.
January 2011
http://theglobal5000.com/
Population Data
(our example)
• For the demographic data we are using 2 measures here for our
example – the total population of the country and a measure of key
employees.
• For key employees, we used the labor force estimates and
eliminated the agricultural employees and adjusted for the
unemployment rate.
• There are 154 countries with at least 1 million in population in our
base. Each of the countries was given a score between 1 and 154
for both of these elements depending on their ranking for each.
• In both of these measures, China, India and US are ranked 1-2-3
January 2011
http://theglobal5000.com/
Wealth Data
•
(our example)
For the wealth or income data we are using a number of measures
including:
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GDP per key employed population
Estimated spending for mobile phone service
Estimated spending for internet use
Spending on education per student
•
All of these are intended to provide measures of resources and abilities to
spend money across the country so that the model is not dependent on
populations that may be large but not able to purchase goods and services.
•
We used a similar scoring method for each of these 154 countries where
was given a score between 1 and 154 for the elements noted above.
•
Given these ratings, most of the industrialized countries scored high values
in our model.
January 2011
http://theglobal5000.com/
Product Data
(our example)
•
For the product specific data, the goal is to use actual consumption data of
a product consumption. In our example, we are working with the chemical
industry.
•
Data we have available for the chemical industry comes from The Global
5000 companies. There are a total of 152 companies in the chemical
industry that are large enough to be included in The Global 5000.
•
Using the total revenue for these companies and aggregating that revenue
by country, we developed a ranking of the countries based on their
chemical revenue.
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Similar to our other values, we used the same scoring method for each of
the countries that have companies with chemical company revenue.
January 2011
http://theglobal5000.com/
Bringing it all together
(our example)
•
At this point, all the countries have 3 sets of values – population data,
wealth data and industry data.
•
We have simply added those values to create a score for each country and
now we rank them based on that total value.
•
The actual score or value has no specific meaning. It is not a sales or
revenue number – rather it is a ranking or relationship of the countries.
•
There are 2 key applications for this type of model – one for sales territory
sizing and the other in estimating the size of various markets and market
opportunities. A country ranked in the top 5 will likely be a better
opportunity than countries in the bottom half.
January 2011
http://theglobal5000.com/
The Results of Our Example
•
Once all the data is tallied in our example, the top 10 countries are:
United States
Germany
Japan
United Kingdom
France
Russia
Canada
South Korea
Brazil
Netherlands
January 2011
http://theglobal5000.com/
Summary
•
In the B2B marketplaces, there are usually fewer tools and less data
available than we find in the consumer markets. The need to look at market
opportunities by geography and by industry still exists.
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Across a variety of sources, there are data points available that can be used
to develop market estimates and provide some detail for planning purposes.
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Using a resource like The Global 5000 provides a critical element to
enhance the generic demographic data with specifics for your target
market.
January 2011
http://theglobal5000.com/