Market Research

Testing the Steelscreen Concept

KUNDSKAPARNA
 THE ANALYSIS PROJECT

The subject of the analysis was to determine the

demand for a web based marketplace for steel
and metals among the traders in Europe; and
also how they believe such a marketplace ought
to function.
 AREAS OF INQUIRY
• How do traders use the Internet today, at home and at work?
• What advantages and disadvantages do they see in web based trading?
• How do they picture the development of trading on the Internet; in
general and metal trading in particular?
• Is there an interest in buying steel and metal on the Internet?
• Does the Internet solve any particular problem?
• What kinds of steel and metal products are best suited for trading on
the Internet?
• Does the identity of the supplier have any significance when trading
steel or metal?
• Ought the marketplace be independent of suppliers?
• Are there any other fields of business that ought to be connected to
Steelscreen (logistics, welding consumables etc) ?
• How do traders like to get more information about Steelscreen? (web
site, e-mail, personal meeting etc)
• Background facts (turnover, age, gender etc.)
 INTERVIEW WORK REPORT

Total Swe. Nor. Den. Fin. Ger. Eng. Swi. Hol. Spa. Ita.
Gross selection 272 24 14 15 21 42 18 22 16 33 67
Do not speak English etc 38 0 0 0 0 14 0 3 0 0 21
No phone number 58 0 0 0 0 5 0 3 0 17 33
Do not buy steel or metal 13 0 1 1 0 2 1 4 2 2 0
The company closed down 7 3 1 0 0 0 2 0 0 1 0
Duplicate 4 0 0 0 0 1 1 1 0 0 1
Vacation/business trip 8 0 1 1 0 1 1 0 0 1 3
Net selection 144 21 11 13 21 19 13 11 14 12 9
Not reached 19 3 0 1 6 3 1 0 3 2 1
Refused interview 13 3 1 2 0 1 2 1 0 2 1
Interviews 111 15 10 10 15 15 10 10 11 8 7
Response rate 77,62% 71,42% 90,90% 76,92% 71,42% 78,94% 76,92% 90,90% 78,60% 66,66% 77,77%
 BACKGROUND FACTS

Š Average age: 43 years

Š 93% men, 7% women
Š Position: Senior buyer, buying engineer, production
manager.
Š Turnover: 90% over 20 Million SKr per year
Š Volume: 76% buy more than 200 tons per year
WHERE DO TRADERS USE THE
INTERNET?
At work At work and at home At home Do not use the Internet

50
44 44
45 41
40
35 33
31
29
30
24
% 25
20
20 16
15
10 6 7
4
5
0
30 - 30-45 years 45 +
HOW OFTEN DO TRADERS USE THE
INTERNET?
Seldom Several times per week Once a day Several times per day

50 46
45 42
38 39
40
34 34
35

30

% 25

20 17 17
15 14
15

10

5 3
0
0
30 - 30-45 years 45 +
 INTERNET CONNECTION
Modem ISDN Broadband Do not know
100 100
100

90

80 75
70
70 67

60 57 56
48 50
% 50 46 44
43
36 36 38
40 34 333333
30
30 2525 23 25
21
20 14 15 15
12 11
8 7
10
0 00 00 0 00 00 00
0
Total Sweden Norway. Denmark Finland England Germany Switzerland Holland Spain Italy
 BUSINESS CONNECTIONS TODAY
Telephone Fax E-mail Internet Post Personal meeting Other
100 100
100 93 93
93
90
90 86
80
80 80 82
79
77
80 75
70 71 71
67
70 64 62
60
60
50 50 50
47 45
% 50
40
30 30
27 25
30 23
19 20 20 20
20 20
20 13 12
1010 10 999
7 7777 77 7 77
10 4 4
0 0 000 0 00 0 0 00 0 0 0 0 000 0
0
Total Sweden Norway Denmark Finland England Germany Switzerland Holland Spain Italy
BUSINESS ACTORS ONE TRADES WITH
Wholesale dealers Service Centers Traders/Agents
Producers A combination Other
100 100 100
100 93 93
90 91
90 87
80
80 75
70 70
70 67
60
60
50 50
% 50 47 45
40
40
30 29
30 25 27
20 20 20
20 13 1313 13 1414
10 10 12
10 7 7
2 4 0 0 00 00 00 0 0 0 0 0 0 0 00 0 000 0 0 00 0 0
0
Total Sweden Norway Denmark Finland England Germany Switzerland Holland Spain Italy
ADVANTAGES OF E-COMMERCE

Š It is fast. 40%
Š Easy to find information. 32%
Š Lower cost. 18%
Š No advantages. 17%

Š Other answers:
• “Status of stock can be seen.”
• “Gives a better general view of the market.”
• “Cuts out paperwork.”
DISADVANTAGES OF E-COMMERCE

Š Security. 34%
Š Unreliable deliveries. 14%
Š No disadvantages. 13%

Š Other answers:
• “The personal contact is lost.”
• “There is more risk of mistakes when you do not talk to
someone.”
• “Unreliable quality.”
 WILL E-COMMERCE WITH METALS...
Increase Not change Decrease Do not know

100 100
100
93 91
88
90 87 87
80 80 80
80
71
70

60

% 50

40
29
30
20 20
20 13
12 10 10 12
7 9
10
01 00 000 000 00 0 00 00 00 00 00
0
Total Sweden Norway Denmark Finland England Germany Switzerland Holland Spain Italy
 WOULD YOU CONSIDER TRADING AT A
SITE LIKE STEELSCREEN?
Yes No

100%
10
90%
27
36 38
80% 40
46
50 50
70% 60
67
60%
86
% 50%
90
40%
73
64 62
30% 60
54 50 50
20% 40
33
10%
14
0%
Total Sweden Norway Denmark Finland England Germany Switzerland Holland Spain Italy
 WHY?
50 48

45
40 40
40

35 33

30

% 25

20

15

10

0
It is fast Easy to find Price Other
information

Š Other answers:
• “You come into contact with companies you did not know about.”
• “Simplifies the routines.”
• “I’m open to anyone as long as the e-commerce works safely.”
• “I want to test it and see how it works.”
 100
WHY NOT?
90
90

80

70

60

% 50

40

30

20 16
10
10

0
Security Unreliable deliveries Other

Š Other answers:
• “Since transportation is the big expense I don’t think this will be
more effective. There’s also a greater risk of getting bad quality steel.
• “I’d rather have the personal contact.”
• “Today we have so many technical discussions before we reach a
decision, so at the moment it’s not an issue. We have to develop
more.”
 PRODUCTS
Stainless steel in several forms 43

Hot rolled plate 40

Cold rolled plate 37

Pipes 33

Rods/bar 23

Pipe sections 18

Sections 17

Aluminium in several forms 13

Hot rolled coil 12

Cold rolled coil 12

Rebar 7

Other 45

0 5 10 15 20 25 30 35 40 45 50
%
 DOES THE IDENTITY OF THE
SUPPLIER MATTER?
Yes No Do not know
2
100%
9
90%
33 29
32
80%
50
70%

60% 80 64

% 50% 100 100 100 100 100

40%
67 71
67
30%
50
20%
27
10% 20

0%
Total Sweden Norway Denmark Finland England Germany Switzerland Holland Spain Italy
SHOULD STEELSCREEN BE INDEPENDENT?
Yes No Do not know

100%

17 18 17 14
90% 20 20 20 20
33
80% 40
17 18
70% 17 20 20 29

60%

% 50% 20 100

40% 83 80
67 67 64
30% 63 60 60 57

20% 40

10%

0%
Total Sweden Norway Denmark Finland England Germany Switzerland Holland Spain Italy
ADDITIONAL LINES OF BUSINESS
Average

Technical
-10 79 4,06
product information

Raw material information -15 77 3,90

Logistics 61 3,63
-17

3,00
Welding consumables -38 44

Cutting tools -45 2,78

35

2,41
Financial services -52 30

2,28
Industrial gases -55 21

1,97
Industrial grease -70 10

-100 -75 -50 -25 0 25 50 75 100

%
Rather or totally unimportant Rather or very important
 CONCLUSIONS AND
RECOMMENDATIONS
Š Most people think that metal trading on the Internet will
increase. However, few see any immediate advantages in the
new technology. The traders are satisfied with today’s buying
process, and ascribe the expected increase in e-commerce to IT
development in general.
Š Steelscreen’s task will be to add customer values in this new
channel.
Š Why should you buy metal on the Internet?
Š It is the future
Š Easy to find information. Not good enough!
Š Do not want to be left behind.
 CONCLUSIONS AND
RECOMMENDATIONS
Š Steelscreen has to prove to future customers that e-commerce
saves time and money.
Š A great barrier against e-trading metals is that buyers are afraid
to abandon the personal contact with suppliers. To make traders
use Steelscreen it has to have a vivid brand with a “face” and
stand for certain values. Buyers have to trust Steelscreen
concerning:

Š Reliable deliveries
Š Best price
Š Quality
Š Able to solve complex problems
 CONCLUSIONS AND
RECOMMENDATIONS

Š Steelscreen must not forget brand building within traditional

channels: a strong trademark there is essential for future buyers
to find the web site. Steelscreen must own the concept of “metal
trading on the Internet”.

Š Our view is that the web site should be constructed so that a

personal relationship between the buyer and Steelscreen is
created. One way to do this would be to have a virtual person
hosting the site, such as Hera Qraft or Miss Boo.