The Pitfalls of Brand Share Studies of Construction Products

A successful year for your company may mean a couple percentage points gain in market share against your competitors. But how do you know your competitive position with any certainty? Are sudden changes in sales affecting only your company, or is the entire market or product category up or down for some reason? Since most companies' product category sales and production figures aren’t made public, companies often resort to conducting their own brand share study to answer these and other questions.

While brand share studies are challenging for any product category, they are even more complicated for construction products. Here’s why:

Large Sample Sizes, Low Purchase Incidence

Large sample sizes are typically needed for brand share studies—the typical 1,000-response survey generally gives you a three-or-so percentage point margin of error, but is that precise enough? Getting 1,000 responses to a survey of builders is a major endeavor. And as for tracking consumer purchases, while (nearly) everyone lives in a house, not everyone undertakes remodeling each year. A typical home gets new roofing only once in 20 years, which translates into needing 20,000 responses to get 1,000 consumers who could report their past year’s roofing purchases.

Purchase Frequency and Volume

Further complicating things, purchase volumes vary by incredibly wide margins. The study and analysis method needs to reconcile the difference between a homeowner who buys 12 plywood panels for a backyard shed and a builder who buys enough plywood for 1,000 houses a year (for those of you who were wondering, that’s more than 250,000 sheets). Luxury homes can use 10 times the structural materials as a multifamily unit.

The complexities of construction product brand usage studies can be enormous once you start peeling back the layers—geographic and demographic representation of the survey sample are additional considerations. While many of you are capable of fathoming this task, the overwhelming time commitment it requires keeps many from undertaking it. And then there’s the risk of not getting it right or others lacking confidence in the findings.

Fortunately, you don’t need to devote a big chunk of your life to brand share tracking to get reliable data. Home Innovation Research Labs, a veteran of product usage and brand share research, recently announced a broad expansion of its Builder and Consumer Practices Reports to include brand share of 35 building material categories. This Brand Usage Study builds upon its time-tested methodology of generating purchase volume data. Here is an example from last year’s study:

OSB Subflooring Volume in New U.S. Homes, 2012

Source: Annual Builder Practices Survey, Home Innovation Research Labs

This study should not be confused with the many brand preference studies of building products—this is much more. The output is reported in volume of building product purchased, by brand, purchased for new homes and remodeling.

Home Innovation's survey has already received over 1,000 home builder responses and 55,000 consumer responses, with more flowing in. We’re looking forward to providing the findings to the public in early summer. If you'd like to be among the first to see them or if you'd simply like to learn more, feel free to contact me.

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