3.2.2. Conducting an End Market Analysis

How to Conduct End-Market Analysis

A thorough market analysis for a value chain can take up to three months of dedicated effort, but a high-level understanding of how global markets for a product or service operate and where attractive customers may be located can be reached in a matter of weeks. In line with common practices in market research, end-market analysis can be divided into two broad categories — Phase 1 and Phase 2.

Phase 1 and Phase 2

Phase 1 is comprised mainly of reviews of relatively low-cost and accessible secondary market research with the goal of identifying target customer segments where value chain clients should focus their sales and marketing efforts. A key step in Phase 1 is to strategically frame choices about where the value chain could compete and the challenges and opportunities of each option.

If the engagement is part of a larger value chain development project, Phase 1 end-market research can be conducted during the Value Chain Selection stage to give the practitioner an idea of whether or not a viable market exists for a variety of value chains. If this market exists, the Phase 1 end-market research can also indicate where the most attractive markets can be found for the products and services of the value chain.

The value chain project cycle consists of five phases: value chain selection, value chain analysis, competitiveness strategy, design and implementation, and monitoring and evaluation.
The Value Chain project cycle consists of five phases: value chain selection, value chain analysis, competitiveness strategy, design and implementation, and monitoring and evaluation.

Phase 2 is dominated by higher-cost, but absolutely critical primary market research that invests in understanding the needs of these customers and how to serve their needs better than competitors. The output of Phase 2 is normally a segment activation strategy that lays out a roadmap for systematically targeting and winning new clients in the chosen segment. Two concepts are critical in Phase 2 for designing and implementing EMR; 1) the backward market research process, and 2) the end-market research mix.

Once the most attractive markets have been identified, the full range of Phase 2 primary market research tools (surveys, in-depth interviews, focus groups & observation) should be used to define the needs of particular customer segments that the value chain would like to target. The Phase 2 research should be used as a foundation for the Competitiveness Strategy to upgrade the value chain to build products and services for which clearly defined customer segments will pay premium prices.

In the case where end-market research is done as a standalone engagement for a particular value chain, the two phases should be sequential. Phase 1 should serve as a generally low cost and relatively easy way to gather readily available data on the value chain. This data serves as a foundation for developing a full research plan and the specific tools required by Phase 2.

The 6 Cs of End-Market Research: Context, Channels, Customers, Competitors, Choices, Communications

The goal of end-market research is to allow value chain stakeholders to make decisions based on data and informed analysis. To facilitate this choice-making (the first C), we recommend focusing research and debate on the following four Cs: context, channels, customers and competitors. Constant communication (the sixth C) with value chain stakeholders during the research, design and research implementation is critical to achieving buy-in to the strategy and driving action.

  • Context: practitioners must have a basic understanding of challenges facing the domestic value chain.
  • Channels: members of the distribution channels or intermediaries are a critical component of the end market to understand. Although they are not the end consumer of products or services sold by the value chain, they are the group with which value chain actors in developing countries most often interact.
  • Customers: as noted above, local stakeholders rarely interact directly with the end consumers of their products. However, it is often useful to understand the needs of this segment to design “pull” strategies[1] or to predict important product attributes for the channel partners.
  • Competitors: once the selected customer segments have been analyzed, it becomes important to understand the firms and countries with which the value chain is competing for market share. Competitor understanding is important for two reasons: 1) to benchmark performance and 2) to predict the competitors’ response to strategic moves into the markets they serve.
  • Choices: strategy is often defined as deciding what NOT to do—it is the decision to focus both risk and effort in the hope of greater reward. The overarching goal of looking at the four Cs above should be to gather the minimum amount of information required to make informed choices about which markets or segments to serve. Market researchers love data and will often gather as much of it as possible with no regards for its ultimate utility as an input into the strategy formulation process. As strategists, value chain practitioners need to identify the burden of proof for making a decision and then decide how to get that information.
  • Communication: good strategy has two components: informed choice and timely actions. The informed choice comes from the five Cs above. A critical driver of timely action in the form of new investments and/or behavior on the part of value chain stakeholders is the ability of a facilitator to effectively communicate with and involve these stakeholders in the design and sometimes implementation of the research process. Activities in this category can range from testing survey questions with key partners to structuring trade fair attendance to learn about potential competitors and customers through one-on-one contact with the market. Effective industry facilitation and participation ensure that market research is appropriate and that the research is not left “gathering dust on a shelf” after it is completed.

Tools for End-Market Analysis

The following tools can be used or adapted to analyze end markets:

Tools for End-Market Analysis
Phase 1 Tools Phase 2 Tools









End-Market Buyers

End-market buyers play an integral role in the value chain not just as purchasers of products and services, but also as a vital source of information. Many are willing to volunteer advice, but most buyers have limited time and resources – and are under pressure to earn a profit. Thus the key to sustained engagement is presenting a winning proposition: distinctive product, reliable quality, attractive prices, easy transactions, and dependable delivery. For practitioners, facilitating value chain development that leads to greater industry competitiveness is a challenge that should thus begin, and end, with the successful engagement of end-market buyers.

Who is an End-Market Buyer?

There may be a series of buyers within a value chain, from local traders and processors to retailers and final consumers. International transactions may also involve exporters, importers and distributors. The end-market buyer is the entity that sells a product or service in the end market. Thus while a trader might move goods from producer to exporter with limited knowledge about the final destination, an importer would move those goods from the exporter to end-market customers with a greater understanding of that final destination. There are exceptions, but for the purpose of value chain development the key attribute of end-market buyers is familiarity with an end market gained through direct experience.

When conducting research or facilitating market linkages, a number of individuals are identified as end-market buyers, including importers, wholesale distributors, retailers and service providers. And while not buyers themselves, sales agents and industry consultants can often be exceptional sources of information. Each individual has familiarity with an end market gained through direct experience, and each offers advantages and limitations for value chain development. An importer/distributor may have broad knowledge of a market gained through a large and geographically dispersed customer base, whereas retailers tend to have greater familiarity with consumer behavior and more immediate knowledge of emerging trends.

A comprehensive end-market study should seek to tap the input of a variety of end-market buyers, sales agents and other industry experts. Identifying the key strengths, weaknesses, opportunities and threats of a particular value chain is often a matter of perspective and opinion based on individual experience. It is also very dependent on how current one’s information is. Building a consensus across a diverse group of end-market informants is a necessary and critical step in facilitating value chain development.

What is the Role of End-Market Buyers in Value Chain Development?

End-market buyers are an integral part of a value chain not just as purchasers of products and services, but also as a vital source of information. Industry reports, market studies and trade data tend to offer general information about a marketplace. This is important for understanding the bigger picture – a macro perspective. End-market buyers are more likely to provide the micro perspective – context and nuances for a particular market segment. By simply placing an order, canceling a product line, or showing interest in a new concept, they are providing valuable feedback to a value chain and thus influencing its development.

Experienced end-market buyers can recognize a value chain’s weaknesses and potential competitive advantages in multiple channels and niches, and can help identify and prioritize the constraints and necessary upgrades to leverage those advantages. Their perspective often differs from that of supply-side actors who may be less aware of emerging opportunities and shifts in the competitive landscape. From selecting value chains with growth potential to conducting a value chain analysis, benchmarking competitors, developing an industry strategy, designing interventions to meet market demands, and assessing impact and sustainability, the input of end-market buyers is not only helpful, but vital. In implementation, developing and maintaining engagement with end-market, buyers despite setbacks, can greatly elevate the credibility of practitioners seeking to foster buy-in from local stakeholders.

While purchasing and providing information is the most common role end-market buyers play in value chain development, their participation ideally extends to investment and various forms of embedded services. If, for example, a producer exhibits a unique skill but lacks proper equipment, an end-market buyer can supply the equipment under specified terms. If it lacks the capital to purchase raw materials, pre-financing can be arranged as part of the transaction. And if a skill needs  upgrading, an end-market buyer can arrange for expert training. Embedded services can include, but are not limited to:

  • Information: providing information about trends, opportunities, threats, feedback, etc.
  • Design: providing designs or guidance on product development
  • Financing: providing raw materials, down payment, a low interest loan, etc.
  • Skills upgrade: providing training/demonstrations to improve a product or service
  • Linkages: facilitating a useful connection between a seller and another entity, such as a financial institution, supplier, subcontractor, service provider, potential client, etc.
  • Logistics: arranging for internal shipping as well as international freight forwarding
  • Services: providing assistance beyond the business relationship, such as health care, education, community support, etc.

Ideally, end-market buyers work in partnership with suppliers to their mutual benefit. While not always the case and often challenging for projects to facilitate, the principle of win-win relationships should be the basis for seeking to expand the role end-market buyers can play in value chain development. This is often best accomplished by demonstrating a clear direct or indirect link to financial gain as one likely benefit from their investment and/or increased risk.

Examples of End-Market Analysis

  • In Haiti, USAID conducted a global end-market analysis for the handicraft value chain followed by a stakeholder workshop in Port au Prince. The "Global Market Assessment for Handicrafts" identifies constraints and opportunities to expand the sector and proposes strategies to facilitate a more viable and competitive industry. The interviews with global buyers were filmed ("Handmade in Haiti: The Perspective of Global Buyers") and presented at the workshop to bring the voice of end markets directly to the industry stakeholders.
  • In Tanzania, USAID funded an end market analysis for exports of high-value vegetables. "Export Markets for High-Value Vegetables from Tanzania" discusses the strengths and weaknesses of the Tanzanian horticulture value chain, as perceived by the leading importers in key markets, and provides strategic options for increased market penetration.
  • In Indonesia, USAID sponsored an analysis of end markets for home accessories. "End-Market Study for Indonesian Home Accessories" provides an overview and analysis of the global market for handcrafted home accessories and the key trends that affect producers in Indonesia.


  1. A "pull" selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product. If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers.