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
Gross selection
Do not speak English etc
No phone number
Do not buy steel or metal
The company closed down
Duplicate
Vacation/business trip
Net selection
Not reached
Refused interview
Interviews
Response rate
Total
272
38
58
13
7
4
8
144
19
13
111
77,62%
Swe.
24
0
0
0
3
0
0
21
3
3
15
71,42%
Nor.
14
0
0
1
1
0
1
11
0
1
10
90,90%
Den.
15
0
0
1
0
0
1
13
1
2
10
76,92%
Fin.
21
0
0
0
0
0
0
21
6
0
15
71,42%
Ger.
42
14
5
2
0
1
1
19
3
1
15
78,94%
Eng.
18
0
0
1
2
1
1
13
1
2
10
76,92%
Swi.
22
3
3
4
0
1
0
11
0
1
10
90,90%
Hol.
16
0
0
2
0
0
0
14
3
0
11
78,60%
Spa.
Ita.
33
67
0
21
17
33
2
0
1
0
0
1
1
3
12
9
2
1
2
1
8
7
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
50
At home
Do not use the Internet
44
45
44
41
40
35
30
33
31
29
24
% 25
20
20
16
15
10
6
5
7
4
0
30 -
30-45 years
45 +
HOW OFTEN DO TRADERS USE THE
INTERNET?
Seldom
Several times per week
50
Once a day
Several times per day
46
45
42
39
38
40
34
35
34
30
% 25
20
17
15
17
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
57
60
% 50
48
30
20
10
333333
30
2525
12
25
23
15 15
11
7
0
0
Total
44
43
38
21
14
8
56
50
46
36 36
40 34
Sweden
67
00
00
0
00
00
Norway. Denmark Finland England Germany Switzerland Holland Spain
00
Italy
BUSINESS CONNECTIONS TODAY
Telephone
Fax
E-mail
Internet
Post
Personal meeting
100
100
90
80
93
80
80
80
50
% 50
20
10
67
64
50
47
40
30
75
60
60
23
30
27
20
19
7
4 4
7777
0 0
0
Total
1010
Sweden
20
10
77 7
Norway Denmark Finland
50
30
20
20
00
25
20
77
0 0
999
00 0
71
71
62
45
13
000 0
86
82
70
70
100
93
93
90
79
77
Other
0
England Germany Switzerland Holland
12
0 0
Spain
000 0
Italy
BUSINESS ACTORS ONE TRADES WITH
Wholesale dealers
Producers
Service Centers
A combination
Traders/Agents
Other
100
100
93
93
90
80
80
70
67
70
70
50
50
47
45
40
40
30
25
13
7
2 4
7
0
29
27
20
20
10
75
60
% 50
30
100
91
87
90
60
100
10
0 00 00 00 0
1313
0
13
10
0 0
20
20
0
0
12
0
00 0 000 0
1414
0 00 0
0
Total
Sweden
Norway Denmark Finland England Germany Switzerland Holland Spain
Italy
0
ADVANTAGES OF E-COMMERCE
Š
Š
Š
Š
It is fast. 40%
Easy to find information. 32%
Lower cost. 18%
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
100
100
Decrease
Do not know
100
93
91
87
90 87
80
80
88
80
80
71
70
60
% 50
40
29
30
20
20
10
20
12
10 10
7
01
00
000
000
00
0
13
12
9
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%
80%
27
46
50
38
50
60
70%
36
40
67
60%
%
86
50%
90
40%
30%
20%
73
64
60
54
50
40
62
50
33
10%
14
0%
Total Sweden Norway Denmark Finland England Germany Switzerland Holland
Spain
Italy
WHY?
48
50
45
40
40
40
33
35
30
% 25
20
15
10
5
0
It is fast
Easy to find
information
Price
Other
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.”
WHY NOT?
100
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
43
Stainless steel in several forms
40
Hot rolled plate
37
Cold rolled plate
33
Pipes
23
Rods/bar
18
Pipe sections
17
Sections
13
Aluminium in several forms
Hot rolled coil
12
Cold rolled coil
12
7
Rebar
45
Other
0
5
10
15
20
25
%
30
35
40
45
50
DOES THE IDENTITY OF THE
SUPPLIER MATTER?
Yes
100%
No
Do not know
2
9
90%
80%
29
33
32
50
70%
80
60%
%
64
100
50%
40%
30%
100
100
100
71
67
67
100
50
20%
20
10%
27
0%
Total
Sweden
Norway Denmark Finland
England Germany Switzerland Holland
Spain
Italy
SHOULD STEELSCREEN BE INDEPENDENT?
Yes
No
Do not know
100%
90%
20
17
18
17
33
80%
70%
20
17
20
14
20
40
17
20
18
20
29
60%
% 50%
83
40%
30%
100
20
63
67
67
60
80
64
60
57
40
20%
10%
0%
Total
Sweden
Norway Denmark
Finland
England Germany Switzerland Holland Spain
Italy
ADDITIONAL LINES OF BUSINESS
Average
Technical
product information
Raw material information
-15
Logistics
-17
Welding consumables
4,06
77
3,90
-50
2,28
21
1,97
10
-70
-75
2,41
30
-55
Industrial grease
2,78
35
-52
Industrial gases
3,00
44
-45
Financial services
3,63
61
-38
Cutting tools
-100
79
-10
-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.
Š Do not want to be left behind.
Not good enough!
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.