Grey China Advertising agency gathers a wealth of information about attitudes and buying patterns of the Chinese in its Grey China Base Annual Consumer Study

Question

Recent findings point to growing concerns about the future, Westernization of grocery purchases, growing market saturation, increasingly discerning customers and a rise in consumer willingness to try new products. These data can be very inconsistent since conflicting findings were reported by different agencies. For example, data gathered by Euromonitor International estimates soft-drink consumption at 23 billion liters in China, while Coca-Cola's in-house marketing research team places the figure at 39 billion liters. Similar differences were noted in other data published by different agencies. What is the best approach in such situations so that finite decisions can be made? What are the differences between latent and incipient markets?

Answer 1

These types of discrepancies are expected due to the research methodology, design, analyses, and scores of other factors. In such situations, and in countries where such data are not available, researchers must first estimate the market size, the level of demand, or the rate of product purchase or consumption. A second research objective in existing markets may be assessment of the company's overall competitiveness in terms of product appeal, price, distribution, and promotional coverage and effectiveness. Researchers may be able to find out special aspects or weaknesses in competitors' way of doing business. Unserved market segments may also be discovered. In some instances, there is no existing market to research. Such potential markets can be further subdivided into latent and incipient markets. A latent market is, in essence, an undiscovered market segment. It is a market in which demand would materialize if an appropriate product or service were made available. In a latent market, demand is zero before the product is offered. An incipient market is a market that will emerge if a particular economic, demographic, political, or socio-cultural trend continues. A company is not likely to achieve satisfactory results if it offers a product in an incipient market before the trends have taken roots. After the trends have had a chance to unfold, the incipient market will become latent and, later, an existing market.