Sinogie Consulting Limited - Case study

Our client, a European manufacturer of dry wall systems and other advanced construction materials, was considering restructuring its operations in China, and required in-depth information on the market potential for its products in China. Specific issues which concerned our client included:

-	What is the current size of the market for dry wall systems in China?
-	Is there a move away from bricks and other traditional materials towards dry wall systems and other advanced materials?
-	What are the key markets for dry wall systems: residential buildings, commercial buildings, government-owned buildings or industrial buildings?
-	What are the major uses for dry wall systems and related materials: external walls, internal walls, or ceilings? Are they used for new buildings of for renovation?
-	What other materials are used for each application?
-	Are there regional variations in demand for specific types of building material?
-	What are the requirements of architects, builders, property owners and developers in choosing building materials?
-	Who are the key decision-makers in choosing construction materials?
-	What are the most popular sales and distribution channels?
-	What is the market share of each type of dry wall system and each alternative type of construction material, both nationally and in each of our local target markets?
-	What is the current state of local regulation on construction materials concerning safety, fire resistance, weight, and other issues?
-	Are new local or national regulations likely to be introduced soon? How will they affect the construction materials market?
-	Who are our client’s biggest competitors? What are their market shares in specific markets, and what shape are they in financially?
-	What are the opinions of our respondents on our client’s materials? What do they think of its price, quality, weight, versatility, and suitability for specific applications? What are their opinions of rival manufacturers’ dry wall systems and alternative construction materials?
-	What are current price points for specific types and brands of construction material?

Together with our client, Sinogie put together a series of questionnaires for particular groups of people involved in the construction materials industry, including architects, property developers, contractors, and retailers and distributors of construction materials. We carried out several hundred interviews – both face-to-face and by telephone – with representatives of each of these sectors in 10 target cities across China. These interviews covered all of the issues set out above, with a focus on preferences for particular materials, market shares of different materials, and respondents’ opinions of specific brands of material.

We also conducted lengthy in-depth interviews with senior local and national government officials and with heads of construction and architecture industry associations, in order to find in-depth information on current and future government policy, and conducted extensive research through local and national construction industry regulations. For example, an upcoming ban on the use of bricks in some provinces presented an excellent market opportunity for our client.

In the course of our research, we identified our client’s twenty biggest competitors. We then conducted investigations of these companies, with particular reference to their market share, sales trends, range of materials, sales and marketing techniques, ownership and financial situation.

Our final report used this data to present a full range of information to the client. The client used this information to decide whether to retain a presence in China; how to alter its current product mix, sales and distribution techniques, geographical focus and other strategies; and whether to attempt to acquire its rivals.

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