Market research in the Middle East – thoughts of a research analyst
Most companies I know have given up on systematic market analysis in the Middle East. Even at best, the scope of research is not as deep as it usually is in other markets. In the absence of sufficient or reliable sources, market intelligence functions of companies tend to rely on the knowledge of local sales people and the few research papers that are available within their relevant business area. Sounds familiar? In this series of blog posts, you will be consulted on some of the most typical issues in this field and provided with ways to work around them.
M-Brain’s research process has three distinct phases for market research, each of them building upon the previous. The approach enables intelligent adjustment of scope and very high levels of detail – also in challenging markets such as the Middle East.
1. Market attractiveness – understand the big picture
The overall market attractiveness of a region is something that needs to be understood right from the start. Various sources are available for this purpose; country analysis databases and customs data will help you with initial data needs. It is key also to understand relevant trade agreements, duties and embargos.
As a solution, I like to check the CIA World Factbook, UN COMTRADE and the World Bank’s Ease of Doing Business rankings, along with any industry-specific reports and news signals. However, with any source strong caution is required. The presentation of local figures to the UN, for example, may not be as precise as it should be.
2. Competitive environment – market size and the value chain
This phase requires profound knowledge of local information sources, language and business culture. In terms of online sources, lists of companies are nowadays available in global databases for most Middle Eastern countries. However, local chambers of commerce are still a very valid source for up-to-date data. On top of this, in-person discussions are needed to cover the vast information gaps from desk research. In addition, I like to turn to the corresponding industry’s best analysts to cross-check and discuss my data.
3. Growth strategies – market size and the value chain
Successful growth in the region requires a profound understanding of each relevant stakeholder. After these players have been identified, I usually propose to go deeper and 1) make competitor deep dives to understand their strengths and weaknesses, 2) profile potential partners against numerous soft and hard factors and 3) provide long lists of sales leads and customer profiles. Again, in-depth discussions are usually needed to verify data and cover the topics that are not available in any written source.
The common challenge in the Middle East is that Western market entry and research approaches – such as the ones described above – do not always work exactly the way as they do in many other regions. In the following, we will discuss the problems (and quick fixes) of market research that are characteristic for the Middle East in particular: Limited market intelligence infrastructure, the role of traditional retail channels, challenges in forecasting as well as the cultural and language diversity.