1, Could you please give me an overview of market research industry in Cambodia recently? How did they do market research before establishing businesses?
The concept of marketing research is still fairly new to the Cambodia market, and I think there are not many professional market research companies in Cambodia as well so far. However, I noticed that the number of companies now starting to adapt their marketing plans to include market research so it means that they are now becoming aware of the value of market research to help them in making any decision.
Previously, many local businesses would rely on their own opinions and knowledge of what was happening in the market to establish their businesses. This would come from either the views of the CEO himself, or perhaps from an internal survey conducted by CEO himself or the sales teams. This is mostly due to the fact that there were not so many changes in consumer patterns previously.
But now consumers are changing, and new products and services are entering the market, and there are many more competitors. For a business to continue using their own sales teams to give feedback on the market might not be the best way forward anymore, since this feedback is based on the data gathered from retailers and a few consumers – it does not provide a proper survey among a representative sample of the consumer population.
2, Based on a regional research institution found that Cambodian businesses are not used to buying information to make decisions, they tend to rely too much on informal information or assumptions.
So could you please tell me more detail why don’t they do market research before operating businesses and how many percent of all Cambodian businesses are operating without doing market research?
I would say that most local Cambodian businessmen do not use professional marketing research to make informed decisions or before establishing businesses. The reason is probably due to the fact that the market was previously small and that the income levels were lower among consumers, so they thought that if they just go with their gut instincts, then this would be sufficient but now that the income levels and standard of living are rising in Cambodia, there is competition coming from overseas products and services, and the consumer is being offered greater choice in how to spend their money. The strategies that used to be very success in the paste are not really guaranteed to be success again this time.
I don’t know how many percent exactly the business starting without doing proper market research but I think there are a lot especially amongst the small business. But as you may know in Cambodia, it is very easy to start the small business but it is hard to keep it survived if they don’t really know the market situation including the consumers and competitors. Proper research would help them understand all these challenge and find ways to overcome.
3, What are the challenges or results for businesses when they are operating without doing market research?
In my opinion, the challenge is quite a simple one – they could be facing a risk to a failure or will be losing a lot of share in the future to businesses who regularly conduct market research. We can already see very good examples of overseas businesses that have suddenly come into the market and gained massive share within a short period of time – all through the use of good market research.
In addition, the Cambodia consumer is now starting to change their consumption habits, and with more new products entering the market, the consumer now has more choice and an opportunity to behave differently. If businesses keep to the same formula as in the past, and do not innovate or do not provide products and services which fit the needs of the “new” consumer, then in the future local business is likely to suffer.
Cambodia businesses also have the opportunity to learn from other markets around the world, and to learn how they have successfully used marketing research to increase their sales and to strengthen their position in the marketplace. It is so important for a business to understand its different stakeholder groups, especially customers. It is a well known fact that the cost to try and win back a lost customer is almost 10 times the cost of gaining a new customer, and so customer retention is very much key to maintaining a strong position in the market.
4, What should Cambodia do to improve market research for businesses?
Firstly, the quality of work and QC standards need to be in place. Business needs to be able to trust any research results that they get, and to be sure that the results are a fair representation of the market placed that is being analyzed. The data collection from interviews with consumers must be checked for quality all of the time, and clients should be encouraged to send representatives to check on this process so they can have confidence in results.
Secondly, businesses need to be able to choose a market research agency that understands their business challenges and can design proper research, asking the right questions in the right way, and knowing how to analyze and interpret the data into action oriented.
Thirdly, educational institutions should include research course in their curriculum and able to cover both practical and theory so that students can use it to apply to their job and business.
By Mr. Phoung Vuthy, Managing Director & Trainer of MRTS Consulting Ltd
For more information, please contact: vuthy@mrtsconsulting.com or call 012 610 677