Day 2 of ESOMAR’s Central and Eastern Europe Research Forum was kicked off by session chair Malgorzata Blachowska of Nestle Polska introducing Jeff Hunter.
What Markets to Enter when Informing a Global Market Strategy?
Jeffrey Hunter, Independent Consultant, USA
For many companies it is not easy to enter into emerging markets – there have been failures, even with the most successful companies. When looking at these markets, it is key to explore growth strategies and developing markets for comparison.
Trying to grow a business is harder than most imagine … companies look at growth in revenue terms. In developed countries, people are looking outside their respective countries for new growth. As it stands, 95% of population growth will occur in developing markets, 60% of GDP and 77% of packaged food growth as well.
As we know, resources are constrained for large global organisations … so a major factor in the planning process from the executive wings and operating business units, will be to focus on any projected growth.
However entering these markets does not mean immediate success. For example, in 2007 Campbells Soup entered Russia and China. They were not successful in Russia and had minor success in China. Even with lots of money, corporate intelligence, an adapted product, advertising and ethnographic research they failed. Lesson to learn – not all markets are right for a product, even if they are seen as the place to be.
Often at the board level, people say what is your Brazil strategy or what is your China strategy. According to Hunter, this is not a good approach for strategy. He suggest using cluster analysis as a first step and then identifying drivers in growth (macro-economic variables – rural vs. city). It is critical to identify the temporal drivers of growth i.e. population, GDP, etc…There is usually good data available on these so be sure to investigate and see how these variables will vary over time – which can guide you on where and when to enter a market.
Look at the cultural characteristics of that country along with economic variables – with clutter analysis this can give you a good idea of links between clusters and behaviour.. the drivers for your business. Remember, it may not just be about ROI but possibly about break-even analysis – how many years does it take to get back your investment. This too can help you achieve success…cluster analysis can help you to determine this for timeframes for long-term strategies.
Be sure to look at longterm potential vs. short term – a country may be ready now for entering that market, but is now the time? Remember, ready now might not pay off in the long term. There should be holistic and strategic planning for any global market and regional market entry.
Insight into Poverty
How to approach consumers in crisis
Katarzyna Gawlik, TNS, Poland
Beata Gers, British American Tobacco, Poland
The low price segment represents 60% of market in the cigarette market in Poland. Even in a crisis these numbers stay fairly stable. For most countries and products the percentage of poor consumers will stay close to this.… so remember where your business is (when in crisis or not)
In CEE people often treat their lives in comparison to that of their friends as the benchmark of success. Crisis makes people look at their budgets more carefully in this regard.
Poverty is closer to us than it seems – just past our comfort zone or offices. For many people the affordable brands discussed yesterday are not affordable after all – they are aspirational. To stand out to this group, a brand must be mainstream, recognisable and not niche. Poorer consumers need to trust in a brand to spend their money on it.
People often choose brands by price, particularly poorer consumers. But remember, that while you can give a cheap brand, both affluent and poorer shoppers want to feel that they are making a good decision. So if your brand is strong, then you can offer a cheaper price without making the consumer feel they are being offered less. A new market for maybe for established brands? Think of designers selling at low-cost stores now – Versace at H&M or Mizrahi at Target in the US.
In the end poorer consumers want the same as affluent consumers. Don’t treat them as less. If you offer good quality for a reasonable price and with a good shopping experience, you will keep a presence amongst this consumer base.
A Fresh Round of Drinks
Innovating beyond beer in Eastern Europe
Jonathan Gable, BrainJuicer, Germany
Yvan Goupil, SAB Miller, Switzerland
The beer market up to 2008 in CEE had grown to point of saturation (no pun intended!). However, after 2008, brewers increased pricing to keep profit margins, but this resulted in a loss of approximately 15 million glasses a day!
Some of the drivers of this phenomena were the economic chill, reduced disposable income, reduced out of home spending, the rise of new tastes (wines and spirits and adult soft drinks) as well as health concerns – more demand for non-alcoholic drinks for the health conscious.
SABMiller found that a reliance on good advertising and distribution was not working, so they needed to acknowledge the shift in cultural preferences. They found themselves at a cross roads and needed to sort out changing consumer trends, usage and attitudes in beer. They found that stepping past beer was crucial.
At this juncture Brainjuicer stepped in, using a usage and awareness study, predictive markets and diagnostic tools, they subsequently identified the best new ideas to progress predictive markets highlighted commonalities and differences across markets and to new products were developed – Black Jacks and Fusions. Each market responded to what worked best for them and underscored the idea that promising ideas in Western Europe may not necessarily mean potential success in Eastern Europe.
Multi-platform Internet Measurement – The Indispensable Ignition
Latest trends in online research employed by the regional innovator. A glance at the internet industry in CEE, most rapidly developing region in Europe.
Marta Klepka, International Marketing Director, Gemius, Poland
Exploring online and multi-platform internet measurement, guest speaker, Marta Klepka led the delegates through the CEE internet market, it’s key industry trends and measurement of multi-platform measurement.
In the CEE region there are 136 million internet users, with 40% of the online population out of the top 15 countries being in Russia. The leaders for internet growth are Russia, Poland, Turkey, Ukraine, Czech Republic and Belarus. Internet penetration however is highest in Estonia, Lithuania, Latvia – i.e the smallest markets, mostly due to the infrastructure and size.
CEE it seems is a special region due to its energy and innovation. In online ad spend, in the Czech Republic, Poland and Estonia, the average of online ad spend is higher than the Western European average. Overall, Russians, Poles and Czechs spend the most on internet advertising. Slovakia leads in the smaller markets. Turkey also presents huge growth potential here as well – as their users are the most engaged out of all of CEE. In fact, Turkey has more Facebook users in all of Europe at 31.5 m.
In terms of video (YouTube) Hungary leads at 75% and Poland is next with 70%. Russia is also a leader with almost 22 m real users in December 2011. For click through rates, in-stream advertising is most effective, however overall video ads do not constitute even 20% of budget in CEE.
It is key to have an understanding of local needs by the domestic players in order to make your foreign social media work abroad. Some key domestic players include www.Nk.pl, www.Vk.ru and www.Draugiem.lv. Interestingly, although Nk.pl lost out to Facebook in the social media sphere, they restructured themselves into an online panel provider which has brought them great success. Could this be the future of MR?
Mobile offers very unique opportunities as well as. Mobile internet traffic is increasing significantly and mobile ad spend is being explored more and more. 10% of internet traffic (websites only and not apps) in CEE is from mobiles. In terms of brands Apple (37.6%) is the dominator but also in the game are Samsung (21.2%), Nokia (17.2%) HTC (8.1%) and Sony Ericsson (5.5%).
When looking at multi-platform measurement – the Czech Republic is a leader in this. It is important to remember that users are multi-tasking, so there needs to be a measure of all aspects – websites. streamed content, on-site elements and ads. Also interactions and how they engage – views/clicks, do they share or embed the content. Since content can be viewed along many platforms, one must analyze all aspects of the usage.
FISHBOWL Online Research in CEE Region
Online allows for unique connections to consumers – for business and marketers. This can stimulate innovation and allows consumers to immerse themselves in a product and it’s development. For many online researchers “Co” is key. Collaboration, co-creation and co-researchers. Crowd interpretation may be an answer as well. It has been found to generate 20-40% new insights from online data! So what does this mean for CEE?
This interactive session discussed 5 key questions regarding online in the CEE region. See key highlights of the delegate discussions below:
Is online research the solution to make research more fun and engaging?
- Social media and social media research allows a more natural way for respondents to express their opinions. They can see a direct link between contribution and outcome gets them more engaged. This is true for CEE as well. Is this only for online research though?
- Gamificiation is suitable for certain groups (older respondents may not be as comfortable with it). However not everyone agrees on how it should be employed. Some think gamification should always be fun, others believe it is better to be more realistic and reflect the real situation. However, all believed there is a future for it, especially if people are put into the context of a situation.
Does online qualitative research reach the same level of depth as offline qualitative research?
- Is this a problem? Is it not reflective to how life really is for those who are online? In the end we should really evaluate what we are trying to achieve to choose the right method – online or offline.
- What do we mean by online qual? If only looking at chat based then it is limited. But it also includes ethnography which gives benefits of offline, but allows for more multi-media usage (recordings, projective techniques, etc…)
- Once again, look at who you are interviewing. Age or experience in online can really impact your research.
- Some think we will be forced to move into this area. We are too global to not do so…and we shouldn’t under evaluate older generations when it comes to technology.
Doing research with out asking questions – is this the future?
- It can help to address a new kind of internal client, but can this be valid for brands? For the CEE? We must remember this is just one more source for measurement but not a panacea.
- Key is to let your clients know that this is not enough when it comes to getting good research results. It’s a good start.
Is mobile the new online? What does this mean for the industry and the future of online research
- Use of mobile is not the same for quantitative research as for qualitative. It is great for qualitative when it comes to monitor behaviors in home or in store, both globally and in CEE as it provides real insights.
- However we must always differentiate between potential and readiness in the region. There is a huge difference in the region as mobile internet access is not that widespread and is still a bit too expensive for many. It will likely be great for the future (close future) but not so much now for profiting from this method.
- In the region there are also business obstacles in terms of cultures, from management and so forth. Keep this in mind.
- It’s not about introducing mobile or not – it’s about reacting now, as this is here to stay.
- always remember, paticipant convenience is key.
Is the demand for online research in the CEE region increasing?
- Geographically it is increasing, but online can cost more. If you can get clients to try it at least once, then they are more likely to use it again. The barrier is the unknown. Remove it and you will have more success.
- People react more negatively to phone surveys now and in-home, so online will likely offer a more genuine reaction to survey questions.
- Quality of mobile research was better in the beginning, but nowadays the quality of answers is not better, since the instruments are not changing. Therefore things like ramification can help. Adapt or die.
Opinion – what is the future of online in the region?
- Online is moving slowly, but it is the future for CEE as CEE is not following Western Europe, but it is now setting trends of its own.
- Using best practice to move faster in the game…open to cooperation and learning in the region.
Global Research Transition
The future of insight development in the CEE region
Corrine Sandler, Fresh Intelligence, Canada
Jenna Alexandre, Fresh Intelligence, Canada
Would you give up sex or your mobile for a year … you may be surprised at the answers and why people answer the way they do.
In June 2011, internet access was determined to be human right by the UN. To do this best, requires a mobile phone. CEE has 287 million mobile subscribers. 60% of smartphone users use it to take photos in Russia. Over 30% of people in Russia and Poland use their mobile at least once a week. In Poland the top mobile activities are – 1) maps and directions 2) local transport and 3) is banking. The potential reach of mobile is limitless for shopper insights and beyond.
When exploring both online and mobile key learnings they found were that online can help identify rationale behind consumer purchases, the loyalty drivers, as well as highest value target segment.
However, with mobile research they discovered that this type of research generated insights regarding consumers innate and conscious needs and desires in various categories. Mobile brought new insights that online didn’t.
Mobile research gave better results for instore questioning, because the customers were in the actual environment. They discovered that shoppers want a product based on need-state solutions and not location-based solutions. They want things merchandised accordingly on the shelf and that make their lives easier.
Online data alone is not good enough. Mobile brings respondents into contextual situations at that live moment and in the end costs less than traditional qualitative research.
So, if you had to go with out one of the following for an entire year which would you go without? When asked who would go with out sex, few delegates stood up.. but is this really accurate. Mobile tends to lead to more truthful answers, so we may never know. However a survey in the US found that 80% said they would rather go without sex for over a year than their mobile!
Do you know what nomophobia means? It’s the fear of disconnection from your mobile. In CEE more than 70% of people never turn off their mobiles. It seems the future of research may indeed be via mobile.
Remember, those who live in the past will limit their future, so dare to move ahead and with the right tools.
Why Customers Are Loyal
A new approach towards customer satisfaction methodology
Dobromir Cias, Millward Brown, Poland
Katarzyna Polok, ING Bank Slaski, Poland
Tomasz Opalski, ING Bank Slaski, Poland
Companies spend millions of Euros to see if their clients are satisfied. ING and Millward Brown have been conducting satisfaction surveys since 2005 and shared their insights.
13% of the research market in Poland is dedicated to customer satisfaction studies. Customers tend to assess all aspects of their relationship with a brand or company without distinctions between atmosphere, service and setting.
To get a good indication of customer satisfaction you should remember that customers have a relatively short memory and thus it is best to reconstruct specific service situations within more recent timeframes to truly gauge their satisfaction. Distinguishing between image studies and customer satisfaction studies boils down to separating what people think of image and of real service, i.e data collected for service processes and for Customer’s representations.
Remember, angry customers don’t forget easily, while happy customers forget much more quickly. So it’s better to concentrate on bad experiences in the long term.
Also be careful of database cleaning effects which can occur if not reporting accurate churning. Be sure to conjointly analyze internal databases and satisfaction results. The more satisfied customer doesn’t always mean the best profit. It’s loyalty that drives volume and revenue while satisfied customers may not always bring in the money.
However there is a separation between loyalty and satisfaction. Holding three or more products minimizes the risk of churn, so get your client invested in your products or services.
Next Please – Online Game for Bank Tellers
Educate your business partner’s sales force through research-driven online game
Jan Lajka, STEM/MARK, Czech Republic
When approached by a bank in an effort to stimulate customers to take on new accounts and to encourage staff to promote new offerings, STEM/MARK decided to use gamification as a solution.
The bank in questions was dealing with customers who held archaic account types, due to not being flexible to switching to new accounts. Compounding the issue was a staff apathetic to promoting change.
By redesigning the accounts and tailoring the communications, STEM/MARK set out to get added value for the client. They explored online gaming to turn boring facts about bank accounts into something more interesting, while also helping people to learn by stimulating real situations. Using CAWI and conjoint analysis they found the ideal pricing, features, customer typology and communications hints, to guide them in their game design.
Taking inspiration from an old and very popular DOS-like video game that was easily manually navigated, they implemented their findings into a training programme for the bank staff on the offerings available. After several months, the client reported back that they had enthusiastic staff feedback after internalizing the games into training and that the staff often repeated the play and had integrated this into their daily business thereby impacting the customers.
A great example of gamification not only being for the consumer, but can be used well for internal training and motivation.