Integration of Market Research with sourcing ensures a well-informed procurement strategy. For example, Market trends can guide sourcing decisions, or competitive analysis may identify cost-saving opportunities in supplier markets.
Market research and sourcing are key components of business strategy, particularly for procurement, sales, or new market entry. Here’s an overview:
Market Research:
Market research involves gathering and analyzing data to understand a target market or industry. Its main purposes include identifying customer needs, understanding market trends, and evaluating competition.
Key Steps:
- Define Objectives: Understand why you’re conducting the research.
- Identify Your Target Audience: Specify demographics, psychographics, and behaviors.
- Choose Research Methods:
- Primary Research: Surveys, interviews, focus groups.
- Secondary Research: Analysis of industry reports, online databases, and competitors.
- Collect Data: Use both quantitative (numerical) and qualitative (insights) approaches.
- Analyze Findings: Look for patterns, opportunities, or threats.
- Create a Report: Summarize insights into actionable recommendations.
Sourcing:
Sourcing focuses on finding and acquiring resources or suppliers for goods and services. It includes supplier selection, negotiation, and contract management.
Key Steps:
- Define Requirements: List specifications for quality, cost, quantity, and delivery timelines.
- Market Analysis: Research potential suppliers and industry capabilities.
- Request for Proposal (RFP)/Quotation (RFQ): Solicit bids from suppliers.
- Evaluate Suppliers: Assess based on cost, reliability, capacity, and reputation.
- Negotiate Terms: Work on pricing, lead times, and service agreements.
- Finalize Contracts: Secure long-term agreements or spot purchases.
- Ongoing Management: Maintain relationships, monitor performance, and optimize costs.