Assessing markets for business development services : what have we learned so far

SEED Working Paper No. 28 - Series on Innovation and Sustainability in Business Support Services (FIT)

Based on data from 13 assessments of business development services (BDS) markets. Explores the stage of development of various BDS markets and examines how organizations can assess the potential for their development. Discusses common preconceptions about BDS markets and identifies similarities and differences across services and countries.

This Paper reviews common assumptions about service markets in developing countries, in the light of the findings of the market research already carried out. For example, it is commonly assumed that all BDS markets in developing countries are weak. Yet the wide range of levels of market development in the studies indicates that not all markets are weak. Similarly, there does appear to be unmet demand in many BDS markets, particularly for advertising, information and technical training.

While rural service markets were generally weaker, the data indicate that there are exceptions, such as the markets for communications centres and package/parcel delivery in Indonesia.

The studies show that awareness of BDS varies widely among countries. In some countries such as Thailand and Indonesia, awareness is generally high. In other countries, such as Ghana and Cambodia, awareness is low for many services.

Based on the SEs own assessment of service quality, many BDS markets offer reasonable quality services. However, the data available is biased towards those services that SEs use more. Additional research is needed to assess the quality of services in weaker markets.

SEs most often cited that a service is not needed or not relevant to their businesses as the reason for not using services. Other factors are expense, time and lack of information. The studies show that price is rarely a key criterion in SEs’ choice of service provider. Rather, the factors driving BDS markets tend to be quality characteristics such as providers’ reputation, recommendations from others and the types of services available.