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Chapter Two: Introduction

Overview

This study analyzes the infrared thermometer and thermal imager market worldwide. Flow Research and Ducker Worldwide conducted the study. This study includes a technology and product analysis, market share and market size data, and also provides in-depth segmentation of the market by various product and geographic categories. It also includes detailed market growth projections through 2005 for both infrared thermometers and thermal imagers. Detailed market strategies are provided for suppliers.

The methodology for this study consists of a "bottom-up" approach. Flow-Ducker Research obtained detailed information about the sales volume of infrared suppliers. This information was then compiled into a picture of the total market. Most of the information for this study was obtained through interviews with infrared thermometer and thermal imager suppliers.

Another part of this study is devoted to an OEM and end-user analysis of infrared thermometer and thermal imager users. Goals of the survey are to get an understanding of installed base, to find out user purchasing plans, and to determine what problems users are having with their infrared products. Another important goal is to provide confirming evidence for the supplier data.

Study Objectives

This study analyzes the infrared market worldwide. The objectives of the study are as follows:

Methodology

This study is unique in that both extensive supplier analysis and end-user analysis was conducted. This proved very useful, as the end-user analysis provided confirmation for the supplier data. The end-user analysis also proved very useful in doing market forecasts. The four most important components of the methodology are as follows:

 

These four components are discussed in the following sections.

Supplier Input. At the beginning of the study, many infrared suppliers were contacted to find out what information they would like to see in this study. Flow Research prepared an Input Questionnaire that asked companies what information they would like to see in the study. Companies were asked to rank the information in importance on a scale from 1 to 5. These results were tabulated, and used as a guide in conducting the study. The Input Questionnaire is reprinted in Appendix A.

Both market size and market shares were ranked high in importance by infrared suppliers. For this reason, Flow-Ducker Research devoted a great deal of effort to obtaining accurate market size and market share figures. Another area ranked very high by suppliers is the technology and product analysis. In response to this, Flow-Ducker Research included an entire chapter on this subject, chapter three.

Suppliers were asked in the Input Questionnaire to rank in importance questions that would be asked in the end-user survey. They were also asked to specify any questions or subjects they would like to have included in the end-user survey. Flow Research conducted some follow-up interviews with suppliers to obtain some additional input for the survey. This entire process was very fruitful, and many suggestions from suppliers were incorporated directly into the end-user survey.

Supplier Analysis. Market size and market shares were determined through a variety of methods. The primary method of determining market size was through interviews conducted with infrared suppliers. Most companies were quite forthcoming about revenue figures. Revenue numbers provided by companies were also cross-checked with other sources, including business directories, interviews with other knowledgeable persons, and other publicly available data sources, including Dun & Bradstreet reports. In many cases, Flow-Ducker Research conducted multiple interviews to get the most accurate understanding of each company. Every effort was made to obtain the most accurate information possible about each company.

Most interviews were conducted by telephone. However, some onsite visits were conducted. In addition, Flow-Ducker Research visited the International Society for Control and Instrumentation (ISA) in New Orleans, Louisiana in August 2000, where many temperature and infrared suppliers were represented. Many temperature products were on display at this show.

In those few cases where companies chose not to participate in the study, Flow-Ducker Research used alternative sources of information. These include business directories, interviews with other knowledgeable persons, and other publicly available information sources. Product information was requested from every company, and the Internet was also used as a source of information, along with Dun & Bradstreet reports.

Total market size for infrared products was determined by aggregating the total sales numbers for individual companies into a total market size. Most sales information from individual companies was in dollars rather than units, although some companies also provided unit numbers. Average selling price was used as a means for calculating unit numbers for infrared products. Some allowance was made in determining market size for "other" companies that were not interviewed.

In most cases, the persons interviewed for this study are either the product manager or marketing manager for infrared products. In some cases, other persons were interviewed, including company presidents or CEOs. In larger companies, application engineers were interviewed first to get a better understanding of company products before marketing and product managers were interviewed. Flow-Ducker Research wishes to thank the many companies who were so diligent in providing information to make this study both comprehensive and complete.

OEM and End-User Analysis. Flow-Ducker Research conducted 100 interviews with OEMs and end-users of infrared products in compiling the user survey. One important purpose of the survey was to provide data for determining the installed base of infrared products by type. Other questions dealt with applications, projected spending patterns, and levels of satisfaction with infrared products. Flow-Ducker Research tried to determine the reasons behind spending plans, whenever possible. The end-user survey is discussed in more detail in Chapter six.

Besides presenting the results of the OEM and end-user survey, Flow-Ducker Research compared the results of the user survey with the supplier data. The end-user survey data provides supporting evidence for the supplier data. This greatly strengthens the supplier data, and provides an additional base of support that is lacking in most studies of this type. By integrating the supplier and end-user data, Flow-Ducker Research is able to present a balanced picture of the market that is supported from several independent perspectives. This greatly enhances the value of the data presented.

Forecasts. A number of factors were taken into account in generating forecasts. Supplier of infrared products were asked individually how fast their companies are growing. Suppliers were also asked to project future sales for their products and for the industry as a whole. OEM and end-user survey data was used, especially data relating to future spending plans by users. Industry growth for the 19 industries covered in this study was considered. Other factors include economic growth in various geographic regions, the recovering Asian economies, and past growth by temperature sensors and transmitters. All forecasts are in real, not current, dollars, meaning that the effects of inflation are disregarded.

Definitions

This study includes the following product categories:

Infrared thermocouples are included under infrared thermometers. Thermal imagers for firefighting cameras are also called firefighting cameras.

In some cases, such as in the title of this study, it is necessary to find a concise way of referring to all these products at once. In these cases, linescanners are included in the category of infrared thermometers, and thermal imagers for firefighting applications are included with thermal imagers. These four product types are discussed in more detail in chapter three.

Geographic Regions

This study includes the following geographic regions:

End-User Industries

This study includes the process industries, which are as follows:

 

It also includes the following non-process industries:

 

Infrared Industry Structure

Infrared suppliers use a variety of methods to get their products to end-users. Many of the larger companies have direct sales forces. Others use independent representatives who only represent one company for each type of product line. Distributors are another sales channel. One disadvantage of using distributors, however, is that manufacturers have less control over purchase price. They also have less control over how their products are portrayed and sold when distributors are used.

Team History and Experience

The Market for Infrared Thermometers and Thermal Imagers Worldwide is the result of a partnership between Flow Research of Wakefield, Massachusetts and Ducker Research Company, Inc. of Bloomfield Hills, Michigan. The lead analyst in the project is Jesse Yoder of Flow Research. Flow Research specializes in market research on instrumentation and process control subjects. Dr. Yoder did the supplier interviews, data analysis, forecasting, and writing of the study.

Ducker Research carried out the end-user survey, under the leadership of Scott Shober, assisted by Josiah Waxman. Nick Limb of Ducker Research served as project manager.

Flow Research

Flow Research is the only market research company whose primary mission is to research temperature and flowmeter markets. The lead analyst for this study, Jesse Yoder of Flow Research, has over 14 years experience writing about and analyzing process control and instrumentation markets. He has written over 25 market research studies.

Ducker Research

Ducker Research has 35 years of experience in researching industrial and business markets. This experience gives Ducker Research access to a wide array of industry knowledge, technology awareness and current market trends.

Today, the firm has a staff of 65 in its Bloomfield Hills, Michigan offices. This staff includes 30 professionals in engineering and scientific disciplines. In addition, the company has a dedicated, full-time staff of 35 experienced interviewers and support staff. Ducker maintains the capabilities to conduct all phases of a research project, without outside support, in its offices.

Ducker Worldwide services a worldwide clientele through its Michigan-based staff and through its offices and partner firms throughout the world. In addition to Ducker’s international offices and capabilities, on staff in Detroit are several individuals with multi-lingual capabilities. Several staff members (analysts and project managers) are fluent in French, Spanish, Italian, German and Japanese. With this capability, coupled with offices overseas and many long-standing relationships with partner firms, Ducker has successfully studied world markets for over three decades.

Flow Research and Ducker Worldwide maintain an ongoing interest in the temperature industry. We are prepared to do further research that builds on the comprehensive research that is detailed in this study. Companies that would like further detailed research are invited to call Flow Research or Ducker Worldwide for more information or to discuss specific research needs.

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