MARKET RESEARCH IN THE CHEMICAL INDUSTRY

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  • CHEMtCAlANDENGiNfERING

    NEWS JUNE 1 0 , 1 9 5 7 , -yypl. 3 5 , N O . 23

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    MARKET RESEARCH IN THE CHEMICAL INDUSTRY The Lab Researcher and the Market Researcher Make An Essential Team in an Era of Keen Competition

    SEVENTEEN YEARS AGO, 15 intrepid chemical market researchers gathered for a luncheon in Philadelphia to discuss common interests. We say "intrepid" because at the time management in some chemical companies looked askance at such meetings. Some thought the gathering of those looking for new markets for old chemicals, and, more particularly, markets for new chemicals, could be construed by the Department of Justice Antitrust Division as conniving at price fixing and even allocation of markets. These hardy pioneers of 1940 had no such intentions; they were merely eager to exchange experience on accurately finding the selling potentials of various chemicals.

    This luncheon was not, of course, the first time chemical market researchers had met to talk about marketing ideas and how best to bring a product from the test tube to the tank car stage. Sporadic attempts were made in the early twenties and since, at least in informal meetings.

    Out of the Philadelphia meeting came the Chemical Market Research Association. Today its membership is over 500. At its 17th meeting in New York last week, registration was 410.

    The theme of the CMRA meeting in New York was Basic Forces for Change in the Chemical Industry. The quality of the papers presented was the best sign of the great advance that's been made in market research, commercial chemical development, and long-range planning by most chemical companies.

    For instance, the talk by C. A. Setterstrom of Pfizer on Food, Drugs, and the Chemical Industry, dramatically showed the really scientific approach the companies take today in developing new markets and estimating future ones. Managing a chemical enterprise is today highly complex, because of (1) the size of the markets involved, (2) the wide diversity of uses of chemical products, and (3) intense competition in nearly every part of the industry. Further, there are the spiraling costs of research and of packaging and marketing chemicals in forms acceptable to consuming industries or the general public.

    Setterstrom's forecast for the domestic pharmaceutical industry is encouraging. He expects a sales gain of 50% by 1962. About 2 5 % of itabout $675 million in saleswill result from new product development and increases for all classes of drug products to supply new population demands.

    Michael F. X. Gigliotti of Monsanto, another speaker, predicted that value of finished plastic products in building would rise to $2 billion by 1966. That would be four times the estimated 1956 value and roughly equivalent to the present annual sales of raw materials by the entire plastics industry.

    Scientific research and market research must go hand in hand. An article in American Cyanamid's magazine featuring the company's 50th anniversary states: "American Cyanamid Co. has been built, literally, on scientific research. Last year about half of the company's sales were in new products introduced during the past decade. . . ."

    The lab researcher must be productive, and indeed, has been. In most companies there are many products technically feasible to produce economically, for which markets must be found. This is the job of the chemical market researcher. No wonder CMRA, Commercial Chemical Development Association, and the ACS Chemical Marketing and Economics Division attract large audiences.

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    MARKET RESEARCH IN THE CHEMICAL INDUSTRY