Market Profile

Credentials

2010

1

Content MissionServicesExperience in marketing sphereFocus room facilitiesOur team Sample prices for market researchOur contactsAppendix: Report examples

3451819242829

2

Market Profile Mission

Market Profile is an international company with head office in the Russian Federation and representative office in The Netherlands.

We are targeted at providing high quality market research and business tour services to companies at the Russian market.

Besides Russia, we can cover the following countries with the help of partner companies: Azerbaijan Belarus Ukraine

3

Market Profile Services Market Research:

Types of research projects: B2B and B2C

Desk research Off line qualitative:

Focus groups In-depth interviews Expert interviews In-home visits Accompanied visits to shops/ supermarkets Mystery shopping

Off line quantitative On line qualitative and quantitative:

Bulletin board Quantitative research

Ethnography

Business tour services: Working out schedule of company business tour to Russia, arranging

meetings with potential partners/ clients, accompanying clients during business tour to Russia.

4

Experience in Marketing Sphere:Types of Business Objectives

We have provided information and recommendations for clients to meet the following business objectives they had: Estimating potential of the Russian market and specific regions of Russia:

Specific category/ brand penetration; Competitive environment (key players in the product category under

discussion); Consumer behavior (habits, preferences etc.).

Positive and negative factors relevant for business set-up, for example: Infrastructure development and office rent possibilities; Labor market and average salary of employees the client is interested in; Potential business partners.

Working out the best communication strategy: Studying perception of the category and brand by the audience; Generating insights; Testing communication concepts and working out recommendations for

further development. New product launch:

Testing the product concept: studying perception of the product idea by the audience (consumer AND sales agent who will sell the product);

Working out recommendations for further development of the product. 5

Experience in Marketing Sphere:Spheres of Business

We have co-operated with companies involved in the following spheres: Automotive Construction materials Finance and banking Flowers and home plants Durables (household equipment) FMCG (cosmetics, food and drinks) Industry

Real estate Retail

Jewelry Household chemicals Mass media (TV, printed media, Internet) Pharmaceuticals

Membership in Professional Organizations

6

Experience in Marketing Sphere:Our Clients

Our team members have provided marketing services for the following clients:

7

We have co-operated with companies representing the following countries:

(NTV-PLUS)

Automotive Research: B2C

At the point of preparing proposals for car clinic research we have come across issues relevant for automotive projects in Russia:

Cars for rent: It is difficult, sometimes impossible to find the relevant cars at rent-a-car

agencies (the range of cars offered there is rather limited). Way out: find owners of relevant cars (by model, colour etc.) and rent the

cars from them: Costs – depending on the car model/ class (less expensive vs. more

expensive) the incentive to car owner for 3 days can be: 1700 to 5500 Euro (incl. property insurance for a car while it stays at the exhibition hall).

Exhibition halls options: Sokolniki (located in the suburbs of Moscow) – most expensive and most

customer-friendly (experience of conducting 10 car clinics). Expo Center – exhibition hall in the downtown of Moscow (experience of

conducting a few car clinics), Crocus Expo – the most modern exhibition hall located almost outside

Moscow (on the External circle road – MKAD) – experience of conducting a few car clinics. 8

Durables Research: B2C

Recruitment and interviewing users of various durables.

The interviews/ focus groups can be accompanied by different exercises with ethnographic elements – for example:

At the recruitment stage respondents are asked to fill in a diary and add their photos to it: Diary can describe the routine of cooking or washing clothes + add relevant

photos. Summary of diary + photos can be sent to the Client at the point of

recruitment, so that the Client has a chance to select respondents on the basis of this information.

During interviews (in-home visits) respondents can show the whole cycle of using household equipment (E.g. they can be asked to show the washing process, so that the Clients can see how consumers are using washing machine, how various washing machine programs are selected etc.).

9

Finance and Banking: B2C and B2B

B2C: Successful recruitment and interviewing of hard-to-reach audience:

High income people (monthly income per family member – 2500 – 6000 USD); Users of categories with low penetration (E.g. co-branded credit cards,

individual complex service agreements); Consumers which use finance products with specific frequency and purpose

(E.g. specific number of monthly transactions via credit card, NOT only cash withdrawal).

B2B: Moderating mini groups with professionals:

Consultants selling insurance products.

10

FMCG Research: B2C and B2B

B2C: Successful recruitment and interviewing of users of categories with rather low

penetration (E.g. users of Japanese cosmetics): Qualitative (in-home visits, focus groups); Quantitative.

B2B: B2B interviews with professionals:

E.g. retailers (pharmacies) selling cosmetics products (topic for discussion: current trends in cosmetics market).

Cosmetologists working both for beauty salons and as self-employed professionals.

11

FMCG Research: cigarette and OTP categories

B2C: Brand audit Concept, product, advertisement test Lifestyle research (consumer profile, needs and values) Shopper behaviour

B2B: Relationship between retailer and supplier (distribution, ways to improve supply

chain).

Experience in conducting: Standard focus groups and in-depth interviews; Creative groups; Brain-storming sessions; Accompanied visits to shops; Research in consumer “habitat” – E.g. HoReCa etc.

12

Industry: B2B Research

We experience in recruiting and organizing interviews with different segments of respondents for b2b research – for example:

Potential customers for b2b products (construction materials): architectural/ design bureaus, representatives of companies responsible for construction/ repair works: In the context of company representatives specific quotas were followed:

head of administrative divisions of big companies (E.g. Nestle), general directors/ owners of small companies.

Potential partners of Client (b2b products): distributors (wholesalers), representatives of retail shops.

13

Pharma Research: B2B and B2C

Recruitment and interviewing of the following categories of respondents:

Doctors of various specializations: GPs, Rheumatologists, Infectious disease doctors, Gastroenterologists,

Oncologists, Psychiatrists etc.; Representing in-patient clinics and outpatient policlinics; Experienced in working with specific segments of patients and/ or

pharmaceutical products.

Pharmacists: Representing different pharmacy chains/ independent pharmacies.

Representatives of state and municipal authorities responsible for healthcare.

Patients/ consumers of different pharmaceutical products.

14

Experience in Marketing Sphere:Reference Letter (1)

Albina Galeeva, Marketing Research and Analytics Manager, Citibank Russia,“In 2008 and at the beginning of 2009 Market Profile conducted a series of qualitative

market research projects for Citibank Russia.The above mentioned projects consisted of the following stages: Recruitment of respondents representing target audience:

- It should be noted that recruitment covered representatives of hard-to-reach audience (people with above average income and users of categories with low penetration).

Discussion guide work out and focus groups moderation:- We had a chance to watch focus groups at a special focus room equipped with one way mirror.

Analysis of research results and report preparation:- Report contained both research findings and recommendations worked out by Market Profile.

The above-mentioned projects covered not only Moscow but other Russian cities as well.

Services provided by Market Profile met our needs and standards. We are planning to further develop co-operation with Market Profile”.

15

Experience in Marketing Sphere:Reference Letter (2)

Ikuo Hiraishi, Founder and CEO, DreamVision Inc., Japan,“In 2008 and 2009 I co-operated with Market Profile company both as a representative of my partner company and as a founder and CEO of Dream Vision company.The scope of our co-operation covered the following aspects:

- Understanding the Russian market and Russian consumer:- Market Profile provided us with answers to our questions related to way of life in Russia and consumer behavior related to specific product categories.- Organization of market research in Moscow (in-home visits to

representatives of the target audience and interviews with the target audience): - It should be noted that during the stage of preparation Market Profile submitted to us status reports on the project.

- Organization of logistics and other issues related to our stay in Moscow: - Providing transfer in minivan, sightseeing, consecutive interpretation (from Russian to Japanese).

- Visiting points of sale (supermarkets of different price segments): - Market Profile provided us with brief information on each retail/ supermarket chain and accompanied us during these visits to give comments where relevant.

- Organization of de-brief: oral analysis of the tendencies we observed during market research and answers to the questions we had got after market research.

- Organization of meetings with our potential business partners at the Russian market. The services provided to us by Market Profile met our needs and standards. We are planning to continue our co-operation with Market Profile”. 16

Experience in Marketing Sphere:Reference Letter (3)

Takao Hattori, Chemical and Plastics Dept, Itochu Corporation, Moscow office,“In March 2010 Market Profile conducted the market research and business tour related to construction materials which ITOCHU intended to introduce to Russia.According to Market Profile recommendation and proposal the following services and reports were provided:

- Desk research that covered current situation at the Russian market of construction materials.

- Series of expert and b2b interviews with architects/ designers and final b2b customers of construction materials.

- Series of meetings with potential partners (distributors of construction materials in Russia).

- Analysis of the project results: desk research report, report on the series of interviews and meetings.

We are satisfied with its professional arrangement of the meeting with potential end customers, interior designers and distributors.

On top of that Market Profile provided its own analysis of the market segment we were interested in.

Their final report will help us to encourage the Japanese manufacturer for developing his business to promising market”.

17

Focus Room Facilities

18

Market Profile rents focus room facilities. Our favorite focus room is located in the downtown of Moscow, at Tveskaya street:

Both focus room and client’s room are spacious: each of them can host up to 12 people.

There is equipment for simultaneous translation.

Market Profile office is located at Kaluzhskaya square, 1.

Our Team: Qualitative Research (1)

19

Maria Agafonova – Project leader, moderator Psychologist – consultant Worked for MASMI Research group. Research experience in the following spheres: finance and banking: Alfa -

Bank, Citibank; FMCG: BAT, Danone, Nestle; IT and household equipment: Samsung, Oracle Added Value; automotive: Peugeot.

Wide experience in different types of projects: Concept Lab, Concept test, U&A, Brand audit. Experienced in conducting creative focus-groups, lifestyle / trends projects, ethnographical studies. Repeatedly worked on international projects.

Ethnographic experience related to the following spheres: lifestyle, FMCG. Igor Slyshkin – Project leader, moderator Economist. Worked for COMCON, Delta Automotive. Research experience in the following spheres: automotive: BP, Renault,

Izh, Finwhale; FMCG: Kraft Foods, Ost-Alko, Vena, Ochakovo, Procter&Gamble, Brown-Forman, Miller, Beck's, Bumizdelia; finance and banking: ROSNO; pharmaceuticlas: Novartis; household equipment/ durables: Samsung.

Types of projects: Consumer needs and motivations research; Market segmentation research; Brand audit; Product, advertising, package, naming test.

Our Team: Qualitative Research (2)

20

Mikhail Mosunov – Project leader, moderator Psychologist Worked for Comcon RI, IMCA, All Organic. . Research experience in the following spheres: finance and banking:

Sberbank, Home Credit and Finance Bank; FMCG: SUN InBev, Heineken, Bacardi-Martini, Russky Alkogol, Nestle, Sara Lee, Ferrero; Loewe, Oriflame: IT and household equipment: Nokia, AMD, Indesit; telecom: Megafon, MTS Acado, Effortel; automotive: Rolf, Lukoil, BP; airlines: S7 Airlines; publishing sphere: GE Fabbri, DeAgostini .

Wide experience in different types of projects: Concept test, U&A, Brand audit. Experienced in conducting creative focus-groups and product concept development, lifestyle / trends projects, ethnographical studies, mystery shopping and B2B studies. Repeatedly worked on international projects.

Ethnographic experience related to the following spheres: lifestyle, FMCG. Kristina Polikarpova – Project leader, moderator

Advertising specialist. Worked for COMCON. Research experience in the following spheres: media: STS-Media, RMG,

Conde Nast; FMCG: Hochland, Unilever, Nutricia, Purina, Schwarzkopf, Diageo; B2B: Megafon, RNT.

Our Team: Quantitative Research

21

Eugenia Kogan – Project leader: PhD in sociology. At the moment collaborates with Market Profile. Before that worked

for О.К.N.А. Marketing, Analitika. Besides quantitative research, has got vast experience in desk

research in the following spheres: oil and gas, real estate, audit services, construction materials, finance and banking.

Anastasiya Demikhovskaya – Project leader: Sociologist. Before worked at GIM Russia, Alfa-Bank, ACNielsen, Insight-M. Conducted research in the following business sectors: health &

beauty, banking, tobacco, IT & telecommunication, food & beverages, luxury products, baby care, etc. Has gained experience as both client and supplier of market research.

Our Team: Fieldwork Department

22

Anna Pichughina: Head of fieldwork department Experience in recruiting consumers (for b2c research) and experts

(for b2b research) in the following spheres: Finance and banking; Household equipment and IT; Automotive; Pharmaceuticals; FMCG.

Successful recruitment of hard-to-reach audience: consumers with above average income, users of categories/ brands with low penetration.

Our Team

23

Marina Ponedelkova – Founder and CEO of Market Profile: PhD in sociology, founder of Market Profile company Russia. Before

that worked for MASMI Research group, ACNielsen and AVM Synergy. Research experience in the following spheres: finance and

banking: Citibank, ING, VTB24, The Boston Consulting Group, April Strategy, Barclays; FMCG: Yves Rocher, Kimberly Clark, Nestle, Wrigley; household equipment: Samsung, InfoBridge (Japan); pharmaceuticals: GSK, The Marketing Directors, GIM; IT and Telecommunications: AMD, Megafon; lifestyle, ethnographical: Kimberly Clark, BAT, The Marketing Directors; automotive: research of car spare parts; mass media: HFS.

International research experience: France: b2b lifestyle research; Great Britain: b2c research of educational services.

Victor Shpakovsky Finance

director

Kevin Smits Representativ

e The Netherlands

Alexander Vakatov Legal adviser

Sample Prices for Market Research (1)(prices are given in Euro, VAT should NOT be paid)

24

DESK RESEARCH

Activity Costs

Brief overview of open sources of information (secondary sources of information).

Standard in terms of challenge. Example: information on current situation at the cosmetics market: tendencies, forecasts, expert opinion (as presented in the open sources of information).

700 - 2000*

Overview of open sources of information (secondary sources of information) + expert interviews (primary source of information).

NB! Judging from our experience, expert interviews are a valuable source of information and compliment information from open sources in an efficient way.

2000 – 4000*

Detailed analysis of open sources of information (including purchasing of existing syndicated reports, conducting expert interviews) – when detailed analysis of a few market segments is needed.

Example: IT systems for banks, detailed analysis of Russian wine market, a few segments of the apparel, shoes market in Russia, detailed analysis of Russian monotowns.

More than 4000*

* NB! At the point of proposal preparation we normally conduct a small preliminary research (at our expenses) in order to understand how difficult. So the Client will get certain information for free anyway. VAT should not be paid but the costs do NOT include fees taken by Client’s bank for money transfer.

• VAT is NOT paid in accordance with clause 2 article 346.11 of the Tax Code of the Russian Federation – taxes of companies with simplified tax system.

Sample Prices for Market Research (2)(prices are given in Euro, VAT should NOT be paid)

25

QUALITATIVE RESEARCH

Presumably – for example, 10 interviewsNB! Normally in order to optimize research costs during report preparation moderator normally uses audio/ video recorded files and NOT transcripts. However, transcripts (incl. transcripts in English can be also prepared if needed)

Fieldwork costs(recruitment,

incentives, focus room rent,

moderation)

Costs for analytical work

(work out of recruitment

questionnaire, guide, full report

preparation in English)

Transcript of 1 in-depth interview in

English (if required by the

Client)

In-depth interviews – 1.5 H in a focus room NB! Please note that there is a possibility of on-line transmission of focus groups(no less than 6 interviews per day) - one-way mirror, food and drinks for clients, audio and video recording (DVD)

250 – per IDI(Example: 2500 per

10 interviews)

Simultaneous translation – 70 Euro per hour

1700 320 – per transcript

In-depth interview at a place convenient for respondent and a at time convenient for respondent (E.g. in the office without one-way mirror), audio recording

180 – per IDI 1700 320 – per transcript

In-home visit – 1,5 H – interview at respondent’s place of living – audio recording, photos

200 – per In-home visit

Simultaneous translation – 70 Euro

per hourVideo recording – 50 Euro per hour

1700 320 – per transcript

Sample Prices for Market Research (3)(prices are given in Euro, VAT should NOT be paid)

26

QUALITATIVE RESEARCH

Presumably – example, 4 focus groupsNB! Normally in order to optimize research costs during report preparation moderator normally uses audio/ video recorded files and NOT transcripts. However, transcripts (incl. transcripts in English can be also prepared if needed)

Fieldwork costs(recruitment,

incentives, focus room rent,

moderation)

Costs for analytical work

(work out of recruitment

questionnaire, guide, full report

preparation in English)

Transcript of 1 in-depth interview in

English (if required by the

Client)

Focus group – 8 participants of discussion - 2 H in a focus room(no less than 2 focus groups per day) - one-way mirror, food and drinks for clients, audio and video recording (DVD)

1300 – 1500 per focus group

1800 350

Sample Prices for Market Research (4)(prices are given in Euro, VAT should NOT be paid)

27

QUANTITATIVE RESEARCH

Presumably – example, 200 respondents Fieldwork costs (recruitment, incentive, rent

of facility for hall test, interviewing, project co-

ordination)

Costs for analytical work (work out of questionnaire, data entry and processing,

full report in guide, full report preparation in

English)

Blind in-home test – for example 200 respondents(example, respondent uses the tested product for 5 calendar days and fills in 10-15 min questionnaire every day, at the end of the test respondent fills in sum up questionnaire for 30 min)

22400 for 200 respondents 2800

Hall test – for example 200 respondents(assumed duration of test is 40 min)As normally there are quotas on age, gender of respondent, usage of certain brands we suggest pre-recruiting respondents

10000 for 200 respondents 2400

Our Contacts

28

Head office Russia:

119049 Moscow, Kaluzhskaya square 1

Tel: +7 495 926 72 00 Marina Ponedelkovamarina.ponedelkova@marketprofile.r

u

Representative office The Netherlands:

Burchtstraat 63, 6511 RC, NijmegenTel: +31 642117214 Kevin Smitskevin.smits@marketprofile.ru

Appendix: Report Examples*

In ALL examples names of brands, cities, categories, products, findings and

recommendations of significant importance have been deleted in order to keep the

confidentiality agreement

29* PLEASE NOTE that in many cases we had to modify the findings, recommendations in such a way that they became UNclear since ALL reports were prepared within the past 2 years and we cannot reveal more specific research findings at this point for confidentiality reasons.

Example 1:Main research objectives are studying of consumer habits and

preferences in the context of specific category, generation of insights for new positioning strategy of Client’s brand

30

Example 1XXX Category:

Target Audience Needs* that Drive XXX Product Acquisition

31

Physiological: hunger, thirst

Safety: feeling of protection

Self- realization

Social group, recognition

Comfort, pleasure: in everyday life (E. g. household facilities, comfort

while traveling)

Aesthetic needs (beauty, harmony)

Do NOT directly drive XXX acquisition since these needs of the target audience are satisfied.

Can hardly drive XXX acquisition BUT XXX can be relevant to satisfy these needs at the point of XXX usage.

Leading needs in terms of XXX acquisition .

* Based on Maslow’s “pyramid of needs”.

Example 1:Applying for XXX: Triggers

32

Emotional:

Safety: Point 1.

Indulgence, pleasure: Point 2.

Freedom/ independence related to XXX.

Functional:

Convenience: Point 1. Point 2.

Social:

Relevance of credit card for a social group consumer is involved in (circle of friends, colleagues).

Recognition: Some time ago

XXX was a attribute of a higher social class.

At the moment XXX has become a more wide-spread phenomenon, typical for not ONLY higher social class.

Example 2:Main research objective is analysis of current social and economic situation in a few regions of Russia in order to

select regions with the biggest prospects for regional development of Client’s business

33

Example 2: Economic Situation in the Studied Regions

Economic situation in the studied regions is similar to general tendency typical for the whole Russia.

The biggest influence of crisis can be observed in the cities economy of which to a large extent depends on big industrial enterprises, namely: City 1, 2, 3.

At the moment there are no positive changes in the studied cities.

One of the main factors that helps economy of the regions and slows down crisis development is state support:

Big industrial enterprises still get state-guaranteed orders.

The impact of crisis on the South of Russia is less significant than on the Ural and Volga region.

One of the reasons for better situation in the South of Russia as compared to other regions is the fact that XXXX.

34

Example 2: Risks Related to Economic Crisis

35

Region

Decline of industrial

production Jun-Nov 2008 to Jun-Nov. 2007

Budget risks Unemployment risks

Share of taxes paid

by industrial enterprises

in the regional

budget , % 2008

Share of employees involved in industrial

enterprises, %

Number of regional cities

which fully depend on one enterprise/

part of urban population %

Small business

employment, %

City 1 -8 32 31 17/38 15

City 2 -7,0 23 27 6\24 12

City 3 9 24 20 7/19 29

City 4 -12,0 34 31 5\24 14

City 5 4,9 98% 12,3 n\a / 53,5 31

City 6 -1,2 50 19 n\a/75,4 25

City 7 8,0 23 14,4 n\a/68 30

- In our opinion, cities with biggest prospects in terms of economy development are as follows: City 1, 3 and 5.

Sources: FSGS, Independent Institute of Social Policy

Example 2: Cities Recommended for Regional Expansion (1)

City 3

It is located in an economically developed region.

High living standards of the population in the region is explained by the fact that many people work for large industrial oil-processing enterprises.

The majority of these enterprises have received state support and are characterized as “strategically important enterprises”. It could guarantee their stability.

Many consumers in City 3 are willing to use XXX services and the penetration of insurance XXX in the city is high. It could be an indicator of good prospects for business development even during crisis .

36

Example 2: Cities Recommended for Regional Expansion (2)

City 6 We assume it is not worthwhile to start regional expansion with City 6 since at the

moment Tyumen is a city with less potential than City 1, 3, 5. The main reasons for the current position of the city are as follows:

Tyumen economy to a large extent depends on gas export: At the moment almost 50% of XXX region GRP is provided by extraction

and export of natural gas. Competition at the regional XXX market might be rather intense: XXX services to

employees of big industrial enterprises (BP, Schlumberger) are provided by international financial partners of these enterprises.

In order to persuade consumers to switch from current providers of XXX products to XXX it will be necessary to spend significant budget on advertising campaign and to offer attractive conditions of XXX products.

Despite the fact that on the whole XXX region is a developed one, level of business infrastructure development is still rather low. Under conditions of recession the situation is unlikely to change.

37

Example 3:Main research objectives are studying behaviour patterns of

end clients in the category of construction materials, perception of specific category of construction materials;

new material test

38

Example 3General Tendencies:

Carrying out Design Project – Model 1 Overall, there are following two models related to carrying out design project:

Model 1: KEY ROLE OF DESIGNER

39

Getting task from the Client

Working out and approving design

project

Bringing design project to life

Profile of Client

Designer gets only general guidelines from the Client:

- Most often these guidelines are related to budget and purpose of using rooms/ building.

Designer is free to offer the Client any design options, types and brands of construction materials which meet the budget.

Design project is approved by the Client.

After the project is confirmed designer is involved in the project as a supervisor (designer supervision*).

Role of designer in selecting construction / finishing materials and brands remains important.

Most often - small or medium sized company.

Less often - big company.

Budget of design/ construction project can be different (from small to big).

* Designer supervision is a service which is provided by designer when design project is being brought to life. It is paid separately from design project work out. Very often Clients order designer supervision services from the same designer who has worked out the design project.

Example 3General Tendencies:

Perception of XXX – Controversial Issues

40

APPLICATIONPositive perception Negative perception Conclusions and

recommendations

Segment 1 - Typical for part of XXXX.- Point 1.

- Typical for part of XXX.- Point 1.

- Point 1- Point 2

Segment 2 In general perception of possibilities of using XXXX is positive: - Point 1.- Point 2.

- Point 1- Point 2

Segment 3 Overall perception is positive. Segment 3 XXX are open for

further discussion of possibilities of co-operation.

- It is worthwhile to XXXX.

Example 4:Main research objectives are studying behaviour patterns of customers related to getting financial products; new product

concept test

41

Example 4Applying for Services

42

Stage 1: Studying proposals

of different banks OR ХХХХ

Stage 2: Visiting bank

branch to get more detailed information and apply for a service

Applying for a service by Internet (bank web site)

Stage 3: Signing agreement

at the bank branch

Calling bank employee to one’s place of work or home

Example 4Variants of Names of the New Service (as proposed by TA)

43

EMOTIONAL/ METAPHORIC FUNCTIONAL

POSITIVE CONNOTATIONS

- Variant 1 - Variant 1

NEGATIVE CONNOTATIONS

- Variant 1 - Variant 1

NB! Overall, many representatives of the target audience believe that the name of the tested service could be (name variant)

44