Jason Zhang was a little surprised when the five shirts his friend had bought for him arrived in the mail; he had been expecting to receive long-sleeved shirts and yet found his new garments had short sleeves. Although he thought he had been clear in his request, Jason discovered to his detriment that effective communication is not always as easy as you think…

Last summer, during my visit to Tianjin, I bought a couple of long-sleeved shirts in a department store. These shirts fit me very well and I really love this particular brand. Unfortunately, they’re not available in Beijing, where I live.

A week ago, I rang my friend who lives in Tianjin and asked her to buy five shirts on my behalf. During our conversation, I briefed her in detail on the particular brand name, the size, my favored style and color, and certainly what was an affordable price for me. I thought that was all the information she needed to make the purchase. However, I was wrong as I didn’t communicate to her one of the key pieces of information – long sleeves! In the meantime, she didn’t check this information with me either as she took for granted that short sleeves would fine with me. This is understandable, as Beijing is pretty hot in summer – with daytime temperatures as high as 38 degrees centigrade. Most people on the street have short-sleeved shirts, but my preference is long sleeves.

This is a real example to illustrate the importance of effective communication in our life and our workplace. Basically, in the workplace, at any given time, we all have to communicate in some way with our internal or external clients. As an effective communicator, you can bring real concrete benefits to your work and your organization. At the very least, you avoid having to do things twice, as you get it right in the first instance.  

In our capacity as professional consultants, perfect communication – both internal and external – is a crucial factor in building our sustainable competitive strengths, like efficiency, productivity, and a comfortable working environment.

As a business-to-business market research agency, our typical clients are marketing and business development professionals from national and international organizations. They come to us for help in making difficult and expensive decisions. At every point in the process, these clients’ expectations for effective communications from their suppliers are very high.

You would agree with me that the foundation to effective communications is precise information via an appropriate medium at the right time. At each contact point with clients in our work, effective communications are vitally important, from taking enquires, RFQ/RFP (request for quote/proposal), briefing, commissioning meeting, project design, through to the final reporting. It is our company’s normal practice to deliver an interim presentation, to ensure all the parties involved in the project have the same level of understanding of the exact project deliverables. 

Within the marketing research and consulting business sector, to ensure client liaison in an effective and efficient way, your essentials skills are listening, plus market insight, to understand a client’s particular business and needs.

In any communication, trying to use easy-to-understand expressions rather than special terminology or abbreviations, is a good idea. Let me give you an example. Last year, we conducted a market assessment study for a leading American industrial valve maker, to help them penetrate Asia’s pharmaceutical markets. For this market entry study, we used PEST (Political, Economic, Social and Technological) analysis to review the attractiveness of the opportunity and the barriers to entry to each individual market in Asia. When our project team leader and myself co-delivered the final presentation to the Client, we kept talking about PEST and IPR (Intelligence Property Right) issues in China. When we approached the end of presentation in the Q&A session, one of the audience asked the question, “What do you mean by PEST and IPR?” I then realized we should have clarified the abbreviations we had used.

It is quite normal in all walks of life and in all ways of communication to expect the audience to have the same level knowledge as we do. However, on many occasions, this is not the case. This is the reason why our project team always has detailed briefings, commissioning meetings and interim presentations with our Client. With these efforts, we can ensure both sides have the same level of knowledge and expectation from the marketing research and consulting project.

The other day, I got an email enquiry forwarded by our New York office. There were merely two sentences in the email: “We’re from Brazil looking to acquire a Chinese company. What is the cost and time frame for you to research this target company?”

How do you find the communication of this email enquiry? If you were sending out an enquiry for this sort of buying and acquisition study, what information do you think you need to provide to your agency?

As almost anyone with a penchant for mutton and beer will tell you one of the best things about living in Beijing, providing you don’t live right next to a stall, are chuanr or kebabs. Mutton, chicken hearts, tendons, washed down with a bottle or two of Yanjing beer are, for me at least, pretty much indispensable to life in Beijing. But what can this tell us about the business environment? It must be one of the toughest markets to be in, and in may ways is fairly representative of the competitive environment in China.

Take for example, a quick look at Porter’s Five Forces applied to this business.

The threat of new entrants: obviously barriers to entry a low and switching chuanr vendors is fairly easy.

Supplier power: the raw material, mutton and other assorted parts, forms the substantial part of costs relative to total purchases, and there are almost no substitute inputs. To make matters worse, these raw material costs have a huge impact on total cost.

Threat of substitutes: again a problem, as it’s not difficult for the customer to switch to ma la tang or rou jiamo.

Customer Power. Price sensitivity of customers is pretty much a given of many markets in China, and chuanr are no exception. Buyer information in this case buyers know the going rate as it is the same everywhere, leaving little room for incremental increases.

Backward integration, on the face of it this is less of an issue as most of us will be pretty unwilling to invest in our own barbecuing equipment. Where there is a problem here, is when selling through a small restaurant, as there is little to prevent the “partner” setting up there own stall.

Rivalry or competitive intensity. Here we have a very fragmented market, almost sole composed of sole traders. Fixed costs are low, having a limited impact here on rivalry in some respects as they do not have a great role in the unit cost of chuanr, however this does mean that entry barriers are low. The nature of the raw material, mutton, has an impact here, as these perishable products must be sold immediately. Fortunately, exit costs are low, as equipment is not highly specialised and no one is “forced” to stay in the market. This is also not a market that lends itself to product differentiation or branding, thus almost commoditising the market.

So what does this tell us? Many of the markets we look at in China, exhibit some of these characteristics, particularly in the areas of new entrants, substitutes and low levels of differentiation. There are, though, examples of companies growing or moving out of unattractive markets and differentiating themselves from the competition in a seemingly commoditised market. Equally, there are some examples of differentiated product and service and expansion in the chuanr business, but that’s for another time. After the next fix.

B2B International, specialist business-to-business market research agency, is 10 years old.

Founder Nick Hague has found it an exciting decade. “Planned and sustainable growth has been key to our success. It’s interesting to look back at some highlights - becoming a global agency with the opening of an office in Beijing in 2007 and one in New York this month; managing over 1,000 market research projects per and recently welcoming our 1000th employee!”

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