Many companies in Zambia often miss the opportunities that market research gives. Some even convince themselves that it’s either unnecessary or too expensive to undertake. They would rather take their chances in the market. However, those that do make the decision to actually use market research will find themselves only tapping into a fraction of what it offers. This is easily deduced by the strategies of how some companies enter the Zambian market.
According to Werner Reinartz’s 2012 article in the Harvard Business Review (HBR) market research or specifically customer intelligence is largely used to improve customer relationships. However, he argued that it actually offers more than just marketing effectiveness.Furthermore, he believes it is a powerful tool for identifying innovations,especially with the opportunities for data gathering afforded by smart technologies and social media.
The fast food businesses in Zambia are clear examples of where this applies. When looking at the fried chicken battle between Hungry lion and KFC it is clear that one of these players has been winning the hearts of many. But let’s first look at location. Hungry Lion positions itself in high density locations which would make one believe they want to be closer to their target customer. This approach tastes likes a product positioning for mass market. KFC on the other hand have placed themselves in premium locations.Makes you wonder who their target market is. Therefore, they would be placed in a mixed product positioning of premium and mass.
When further diagnosing location, in Lusaka the Lion has been seen to position itself at the point of no return for the hungry customer.Take for example NAPSA’s Levy Junction. The Lion is positioned right at the entrance whilst their near rival is up top on level one. For customers entering the mall with minimal cash in their pocket, it’s easier to enter the Lion as opposed to enduring the walk of cashless shame passed the big brands and getting on the escalator just to get a bite of Colonel Sanders’ chicken. Therefore,we argue that the Lion got it dead right in terms of location (the same applies for their outlet at Intercity bus terminal). Furthermore, understanding the pocket power of the customer largely influences how companies should perceive consumer spending habits. Rational economics in the chicken game is real.
There are various techniques that companies can use to do market research. Astute management teams often prefer quantitative approaches as numbers tell no lies. However, Scott Anthony in his 2009 HBR article argues that numbers should be used with caution. Provided a company has the resources,he argues that it does make sense to use a quantitative approach. Conversely,he believes qualitative techniques become even more important when a company is hoping to grow an existing market or create a new one. With this in mind, a proposal is made that brings intuition into the equation for the resource poor entrepreneur. Sometimes, having a gut feel about a market can be the difference between being success and failing.