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Reaching potential customers

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Research background
LabWorks, a technology company, has created a new product to be used in a specific type of laboratory: its product will be marketed and sold to laboratories that perform “cell culture” work, the biotechnological process of growing cells outside of living organisms.

To revise its business and marketing plan to incorporate this new product. LabWorks is looking for information on this relatively small niche within the pharmaceutical industry.

The marketing manager already knows that a limited number of cell culture laboratories exist in the United States and that numerous vendors sell other products to this market.

He wants a researcher to determine
(1) approximate potential market size,
(2) current key suppliers to this market,
(3) how these laboratories purchase these products, and
(4) any trends that are being discussed in the industry.

Research budget
The marketing manager does not have access to any fee-based databases and does not want to take the time to perform his own Internet research.

He is willing to hire an independent researcher to spend ten to fifteen hours researching and writing up the findings, as well as to pay for database fees ranging from $150 to $175.

Research strategy employed
The researcher knows that cell culture work takes place primarily within the pharmaceutical (drug) industry, and that it also exists within other biotechnology areas such as genetic and chemical engineering.

To expand his limited understanding of the industry, he first conducts a simple Internet search using the phrase cell culture in Google (http://www.google.com).

This allows him to identify pertinent industries, basic information on the potential market size, and a selection of companies that are already selling to this market.

Additional searches take place using the search phrase cell culture combined with other search terms such as suppliers, buyers guides, vendors, market size, pharmaceutical industry, and drug industry.

The Web sites of the vendors are reviewed for information on how their marketing and sales operations are set up as well as for hints on any strategic company news that might help to identify trends.

The researcher uses a “reverse look-up” of suppliers’ Web sites to identify potential strategic partners as well as to find additional resources and buyers’ guides where LabWorks might advertise.

There are a number of way to do this, but the easiest is to use the following search term in a search engine: Link:www.companyname.com (with “companyname” referring to the company’s Web site address). This search retrieves a list of Web sites that link to the Web site entered in the search.

For instance, to search for companies that link to Invitrogen’s Web site, simply enter the search term link:www.invitrogen.com. The results include a listing described as “Laboratory Suppliers,” an example of a buyers’ guide.

A subsequent search to find out more about marketing to this niche industry is then performed using a combination of terms, such as marketing OR advertising AND “life scientists.”

This latter term was chosen after reviewing various Web sites of companies who sell to cell culture laboratories and determining that a major group of customers are academic researchers who are often referred to as “life scientists.”

In addition to searching the Internet via a search engine, the researcher reviews another site, MarketResearch.com, to see if any market research studies on the cell culture industry are available for a fee.

Although the budget doesn’t allow for the purchase of market research reports, reviewing what is available can often provide an idea of just how much study there has been in a particular area or industry.

It is often possible review the table of contents of such reports and possibly purchase small sections “by the slice.”

To determine what is being reported about the industry as a whole, the researcher then conducts an article search of newspapers, magazines, and trade journals.

He chooses this strategy rather than turning to an industry search in an online database because he knows that cell culture is a small niche within a larger industry, and that this subject would be too small for most commercial databases that provide information by industry topic.

Such predefined industry searches typically focus on larger industries such as “pharmaceuticals” or “engineering.”

The search for articles takes place within the two subscription databases of Dow Jones Interactive and Hoover’s.

In Dow Jones, the researcher turns to the Publications Library, where he conducts keyword searches including the aforementioned terms, along with the addition of the keyword trends.

In Hoover’s, it is first necessary to search by company name for each of the identified suppliers.

If articles are available for the company selected, they can then be found under the section “Current Stories Mentioning Company X” within the News & Commentary section.

Research results
The searches described above are useful for identifying potential LabWorks customers (cell culture laboratories), vendors who sell to these laboratories, and examples of how these vendors market and sell their products.

It has also provided some background information on potential market size and trends. The results are summarized below:

• Names of Others Suppliers. The initial Internet search and review of buyers’ guides provides names of major suppliers to the cell culture market: Invitrogen, Irvine Scientific, Hyclone, Bio Whittaker, and Cambrex.

This is not an exhaustive list of suppliers, but from reviewing the resources, the researcher concludes that it includes the key players.

The reverse look-up of links in the suppliers’ Web sites provides additional examples of buyers’ guides.

• Selling and Marketing. The annual reports and Web sites of these identified suppliers provide information on their customer base, typically both academic and private laboratories, and further review finds information on specific methods used for selling and marketing their products and services.

The search using “life scientists” AND marketing immediately provides information on a company called BioInformatics, a company that describes itself as “an innovative market research and consulting firm supporting marketing and sales executives in the life science, medical device and pharmaceutical industries” (http://www.gene2drug.com).

The BioInformatics Web site provides executive summaries of surveys, such as “Marketing to Life Scientists: Keys to Success,” “Marketing to Life Scientists: A Comparison of the Industrial and Academic Segments,”

“Advertising to Life Scientists,” and “Support and Service for Life Science Products: Creating Loyal Customers.”

Other surveys listed on the Web site reveal additional information. The search in Dow Jones also provides a citation for a 2002 article in a journal called Chemical Week: “Suppliers to the Drug Industry Are Trying to Stay Ahead of Competitors, Customers, and Technologies.”

This article provides additional general information on the suppliers, their concerns, and their methods of marketing.

• Trends. The Dow Jones and Hoover’s article searches provide a number of citations for review.

Two articles from the journal Genetic Engineering News are highlighted t report on. One is titled “Current Trends and Innovations in Cell Culture,” and the other is “Survey of Market Trends for Cell Culture Media.” Both are written in 2001 and outline a number of trends and events in the cell culture industry.

• Market size. Initial searches discovered a 1997 study from PhorTech International, a company that conducts marketing research and technology assessment for life science research companies.

The data are probably not current enough, and subsequent searches do not produce newer statistics on the same subject.

Nevertheless, the PhorTech Web site also provides a more recent 2002 study on “Global Laboratory Product Usage,” which includes some useful information that, combined with the older data, satisfies LabWork’s need for information about the potential market size.

Summary of solution
The researcher reviews the Web sites, and in some cases the annual reports, of the suppliers he has identified, looking for specific information on marketing, selling, and advertising methods.

The review shows that a combination of direct mail, trade show attendance, articles, and print advertising in trade journals and Web sites are some of the key methods used by suppliers to reach this specific market.

The BioInformatics reports include a wealth of information on the purchasing preferences on scientists, including information about how they learn about vendors, products, and services and make purchasing decisions.

The reports also show that good customer service is critical in scientists’ choice of suppliers.

Much more information along these same lines is available from the executive summaries of the studies, and the researcher does not suggest that LabWorks purchase the full studies.

The potential market size (number of cell culture laboratories) does not seem t be readily available, but the 1997 study by PhorTech cites that “Over 60,000 U.S. life science researchers are currently involved with cell tissue culture, spending approximately $100 million annually on instrumentation and media.”

Providing a more global context, the Global Laboratory Product Usage study says that “the estimation of total population of life scientists is 356,600 worldwide, of whom 281,250 are working in the laboratory.”

Additional data in this study report that “61.14% of these life scientists are involved in cell culture.”

These numbers are provided to the client, and LabWorks determines that the numbers will suffice for current planning.

Useful tips
• Reviewing what is available from large market research/survey companies is a good first step to determine the potential availability of information.

• Online buying guides are often a good place to find an initial list of competitors.

• The reverse look-up on a company Web site (link:www.companyname.com) helps to find strategic partnerships and potential advertising/marketing vehicles.

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