Market Assessment

MBRRR TrainingSession 3.2

Market Assessment: Overview

• Objectives of market assessments• CRS-recommended market assessment tools• Minimum requirements for market analysis (CaLP)• What do I do in an emergency?– Timing of assessments– Preparing for an assessment– Assessment methods

• Exercise and sample questions

Objectives of market assessment

• Assess the market’s capacity to meet demand before the emergency

• Explore the impact of the emergency on the market• Estimate the market system’s capacity to contribute

to emergency response • Identify new avenues to support existing market

structures

After we understand the overall needs…

Q: if we increase demand, can supply keep up without doing harm? (for cash/ voucher programs)

Objectives of market assessment

Objectives of market assessment

What if markets are not considered? Change in prices of goods

Change in demand for goods

Market distortions

The basics

Part of all needs assessmentsIterativeCoordinated with others

So…. market assessments should be…

Market assessment tools

Market assessment toolsCRS-recommended

CaLP Minimum Requirements for Market Analysis in Emergencies

MR 1: The scope and depth of the market assessment enable appropriate programme decisions and are based on identified information needs.

Key action point 1: Choose the relevant market system(s) you wish to assess and identify the programme-related decisions to be supported

Tip 1 When trying to identify relevant market systems, consider the markets that are central to households’ survival and/or livelihoods, those that provide households with the necessary goods and services to meet their essential needs, and those that are central to potential programme response options

Tip 2 Try to limit the number of market systems being assessed to no more a maximum of two in order to avoid being spread too thin.

Tip 3 Review existing secondary data and literature to help identify which key questions need priority attention and which ones may require further research.

Minimum RequirementsStructure

Minimum RequirementsMR 1: The scope and depth of the market assessment enable appropriate programme decisions and are based on identified information needs.

MR 2: Market analysis data answers key programme-related decisions and contributes to the selection of appropriate modalities to achieve programme objectives whilst doing no harm.

MR 3: Collection of data is undertaken by competent and knowledgeable teams.

MR 4: Data collection systems and information sources utilized in the market assessment are appropriate and of sufficient quality to allow for the capturing of the dynamic nature of markets.

MR 5: Monitoring activities provide a check against initial assessment findings and enable decision-making for potential adaptation of intervention.

Analytical Scope

Geographical Scope

Scope of the Assessment

Programme related decisions

Key guiding questions

Key market systemKey marketsLinkages and actorsAffected links and actors

Minimum RequirementsMR 1: The scope and depth of the market assessment enable appropriate programme decisions and are based on identified information needs.

MR 2: Market analysis data answers key programme-related decisions and contributes to the selection of appropriate modalities to achieve programme objectives whilst doing no harm.

MR 3: Collection of data is undertaken by competent and knowledgeable teams.

MR 4: Data collection systems and information sources utilized in the market assessment are appropriate and of sufficient quality to allow for the capturing of the dynamic nature of markets.

MR 5: Monitoring activities provide a check against initial assessment findings and enable decision-making for potential adaptation of intervention.

Minimum RequirementsMR 1: The scope and depth of the market assessment enable appropriate programme decisions and are based on identified information needs.

MR 2: Market analysis data answers key programme-related decisions and contributes to the selection of appropriate modalities to achieve programme objectives whilst doing no harm.

MR 3: Collection of data is undertaken by competent and knowledgeable teams.

MR 4: Data collection systems and information sources utilized in the market assessment are appropriate and of sufficient quality to allow for the capturing of the dynamic nature of markets.

MR 5: Monitoring activities provide a check against initial assessment findings and enable decision-making for potential adaptation of intervention.

Key questions

Determine whether….

To implement a cash, voucher, or in-kind intervention ?

To implement a labour based intervention (i.e. cash/food for work programme) ?

To procure goods locally ?

Market conditions are favourable for livelihood interventions being considered ?

• Where are the markets for the essential goods – food, non-food items

(nfI), shelter items?

• To what degree are vulnerable HHs connected to these markets?

What is the estimated change in demand generated by the proposed

intervention?

• Are there restrictions to the movement of goods?

• Are local traders able to meet such a change in demand within the

necessary deadline without significantly increasing prices?

• Are there specific traders that need to be targeted for support?

• How has the market infrastructure been affected by the crisis?

• How has the supply chain been affected by the crisis?

• How has the value chain been affected by the crisis?

• How have market service providers been affected by the crisis?

• Have the dynamics between market participants been altered as a

result of the crisis?

Scope: Program-related decisionsMinimum Requirements

Minimum RequirementsMR 1: The scope and depth of the market assessment enable appropriate programme decisions and are based on identified information needs.

MR 2: Market analysis data answers key programme-related decisions and contributes to the selection of appropriate modalities to achieve programme objectives whilst doing no harm.

MR 3: Collection of data is undertaken by competent and knowledgeable teams.

MR 4: Data collection systems and information sources utilized in the market assessment are appropriate and of sufficient quality to allow for the capturing of the dynamic nature of markets.

MR 5: Monitoring activities provide a check against initial assessment findings and enable decision-making for potential adaptation of intervention.

Analysis

• Defining programme risk• Key action points:

Analysis -> Conclusions -> Recommendations• What to avoid

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MR 2: Market analysis data answers key programme-related decisions and contributes to the selection of appropriate modalities to achieve programme objectives whilst doing no harm.

• Don’t focus solely on the size of your organisation’s planned response when determining

the relative scale of the humanitarian response but rather on the sum of all planned

interventions in the relevant area.

• Don’t rush the analysis. if you have time constraints ensure that you don’t

overemphasize the data collection and leave insufficient time for the analysis.

Δ Demand > 25% for urbanΔ Demand > 10% for rural

Data Collection

• Local knowledge, experience, economics

• Key market actors

• Coordination and division of responsibility

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MR 3: Collection of data is undertaken by competent and knowledgeable teams.

MR 4: Data collection systems and information sources utilised in the market assessment are appropriate and of sufficient quality to allow for the capturing of the dynamic nature of markets.

Monitoring and ensuring data validity

• Frequency is contingent on initial assessment, volatility & risk

• Focus on sensitive assumptions and outcomes

• Reassess assessment and response17

MR 5: Monitoring activities provide a check against initial assessment findings and enable decision-making for potential adaptation of intervention.

Response area

Monitoring area

Checklists

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CaLP Quiz1. Your program will reach 10,000 beneficiaries , and you want to know if this is a high-risk or low-risk program. 2. You are developing a market assessment and you need to decide who will be on your team.3. For a small program providing one food commodity in one geographic area, your PM submits a draft market assessment plan that will cover the whole country.4. As M&E manager, you are going to develop a price data and market monitoring system to make sure your data is updated.5. Your staff tells you that they are only able to interview a couple of the very large traders, and you’re not sure of the validity of this information.

What do I do in an emergency?

Timing of the assessment in emergency response

What do I do in an emergency?

• Initial rapid assessment (in the first days): sizing the emergency, drafting response options

• Initial assessment (1st weeks): understanding the emergency, its impact, evaluating response options (including markets)

• Detailed assessment (1st months)

What do I do in an emergency?Timing of the assessment in emergency response

• Determine 1-2 critical market systems to focus on– Central to households’ survival and/or livelihoods, – Provide households with the necessary goods and services to meet

their essential needs• Identify key markets and their linkages to broader markets

(other local or national markets)– May depend on what traders tell you

• Identify geographic scope– Immediate actors, and those critical for recovery

• Decide analytical scope– Ask about feasibility of potential response options– ID key program questions (“what has been the impact on the bean

trade?”)

Prep for an assessmentWhat do I do in an emergency?

• Secondary data (market profiles, prices)– historical price data; market baseline studies; food basket

consumption studies, livelihoods assessments • Observation– how many retailers/wholesalers, what is being sold,

availability of supplies, prices, roads/ access, how many transporters coming in and out

• Structured interviews with market actors and key informants

• Semi-structured interviews and/or focus group discussions with target households (separate men and women if possible)

MethodsWhat do I do in an emergency?

Tips for good trader interviews

• Interview traders individually and in private.• Arrange a time to meet outside of normal trading hours.• Traders are busy people. Explain clearly why you want the

information.• Avoid raising expectations.• Respect trader’s proprietary information. Explain that all

information is voluntary and will not be shared with competitors, customers.

• Try and keep interviews concise and informal.• Clarify inconsistencies in responses; don’t just write down

answers that don’t make sense.

What do I do in an emergency?

ExerciseYou are in charge of designing a food assistance program in northeast Nigeria. There has been significant conflict that seems to have affected the markets and production, but it’s uncertain.1. What stakeholders will you need to include in a

market assessment?2. What types of questions will you ask them?

Circulate the room and add questions for 3-5 minutes at each station; I’ll tell you when to move.

Key market assessment questions

• Food availability• Demand/access• Market integration/supply chains• Market competition• Marketing costs/constraints• Impact of the crisis

Are markets operating and accessible?Are the basic items that people need available in

sufficient quantities and at reasonable prices?Are there restrictions on the movement of goods? Is the market competitive?Are traders able and willing to respond to an

increase in demand?What are the risks that cash will cause inflation in

prices of key products?

Key market assessment questions (example for cash programs)

Key market assessment questions (example for food security)

What is the impact of the crisis? Pre- and post-crisis trends in….• Food availability – household and market

– Quantities / volumes• Demand/access – household and market

– Prices– Constraints (security, purchasing power)

• Market chain functioning– Actors, constraints in supply chain– Policies – Vendor capacity (speed, sources, stability, price)

• Market integration• Market competition - # and types of traders• Risks (inflation, price changes, security)

Key Messages

• Market assessment is vital to:– Assess the market’s capacity to meet demand

before an emergency– Explore the impact of the emergency on the

market– Estimate the market system’s capacity to

contribute to emergency response (e.g. cash-based responses)

– Identify market-support options.