«Proriv» Company:
Methodology

"PRORIV" Company is the "Full Service" agency and is able to solve all the major tasks in the sphere of marketing researches which might be necessary for an enterprise. These are as follows:

• To define the market capacity and the capacity of the separate segments of the market;
• To analyze the competitive environment; to evaluate the volume and the structure of offer in different segments of the market;
• To define vacant market niches and the ones filled to the lesser extent;
• To evaluate the prospects and the probable volume of sales of new products;
• To test the product's elements (marketing-mix): tasting qualities, general appearance, design, type and volume of package, pricing;
• To study the preferences and motivation of choosing the products by the consumer. To make the "portrait" of target consumers by the complex of parameters: socio-demographic, behavioral, motivating.
• To define the factors of attractiveness of the product for the consumers and the strategy of positioning;
• To develop the strategy of promoting products;
• To develop the marketing strategy of the enterprise;
• To test the elements of the promoting strategy, including the advertising materials;
• To evaluate the effectiveness of advertising campaigns;
• To develop trademarks which are attractive for the target group of consumers;
• To explore the causes of non-sufficient success of the marketing strategy of the enterprise and existing strategies of promoting separate products.

The geography of research:

• Moscow;
• Moscow region;
• European part of Russia;
• Russia and the countries-members of CIS.

The competitive advantage of "PRORIV" Company is the unique methodology of organizing market researches. This methodology allows to choose an individual prospect to analyze the market and opens quite new, unexpected resources even on hyper-competitive markets (e.g. the analysis of the market of ice-cream).

The main characteristic feature of the Russian market is that the methods of marketing research which are customary and effective in Europe and the USA may not prove effective in this country. This is why all the long-term experience of western countries, in fact, needs very individual and specific interpretation.

The major problem with the main link of any method of marketing analysis, the method of segmentation, and then, naturally, with all the rest stages of analysis.

Just to go in some details, the most popular methods in the western countries by socio-economical standards, are mostly inefficient when analyzing the market in Russia, which has weak structure as yet. In the USA a consumer having the profit of $15 to $20 thousand a month goes shopping only in specific stores, buys only specially positioned products, visits strictly defined clubs and arranges his leisure strictly corresponding his social status, and generally has his own mode of behavior, which depends on his income. At the same time in Russia a well-off consumer does not necessarily buy only "prestigious" makes of foodstuffs, he or she might not make purchases in prestigious supermarkets and his behavior seems to be determined by socio-demographic factors to a very small extent.

Let us analyze the market of confectionery as an example. The elite, prestigious (and, naturally, the most expensive) makes of confectionery are considered to be the foreign makes (and this tendency can be seen quite clearly). But quite a large part of consumers with substantial income prefers to buy relatively inexpensive Russian trademarks (without any claims to be elite and prestigious), giving the reason that exported products have more preservatives, aromatic and other chemical additives.

This is the reason why the specialists of "PRORIV" Company have developed special methods of consumers' segmentation by psychological attributes.

Using these state-of-the-art methods allows to conduct market researches which enable to see the market from the emergent point of view, completely unknown before, with new, unseen possibilities.

Among the most frequently used methods of segmentation are:

• segmentation of consumers by the sought consuming value;
• by the major motive of choosing the product/ trademark;
• by the situation of consumption and the addressee of the purchase.

Different methods of market segmentation provide different opportunities. But many markets of consumer goods have become quite saturated, competitive and even hyper-competitive. In this situation the segmentation of the market by traditional socio-demographic and even psychological signs do not have the possibility to discover any new potential because all the segments, defined in this way, appear to be filled with different products, orientating to all possible consumer groups without exception.

This is the pre-condition of principally new methods of the market analysis, that is the methods of market segmentation, which allow to see the market possibilities, hidden in other prospects of market analysis.

The effective segmentation of the market demands to find answers to five questions:

1. How to arrange the segmentation of the market? What are the reasons for making the segmentation in this way?
2. Which kind of research are necessary to arrange the segmentation of the market by the chosen criteria?
3. Which segments should be chosen as target ones?
4. Which kind of product will satisfy the demands of the consumers of the target segments of the market?
5. How to actualize the positioning strategy, based on the real potential?

The first of the questions above presupposes, first of all, choosing the segment variable: by which of the possible reasons the consumers can be divided to reach the difference of the groups by consumers' behavior.

As a rule, for this purpose we may use socio-economical and socio-demographic variables: age, sex, education, income, occupation, belonging to a social or ethnic group. The foundation to single out the segmentation parameter size in this case are the facts of differentiating consumers' behavior depending on the size of the segmenting parameters. To single out the segment groups in this way of segmentation the method of cluster analysis is used.

The main advantage of this way of segmenting is that the description and differentiation of the segments are performed by the parameters quite easy to evaluate and which have, as a rule, quantitative expression and unidimensional scaling.

But there is a problem in cases when the choice of the segment variable does not reach sufficient consumers' differentiation.

For example, it is common knowledge that together with growing of competitiveness on the mass consumption market and increasing of the incomes of the population more and more consumers can afford (judging by the level of their income) the products of similar kind.

Thus, people with various incomes purchase milk produce "Domik v derevne" ("A country-house"), and it seems an impossible task to single out the segment of the people adherent to this trademark judging by socio-demographic parameters.

At the same time, as this trademark has the well-defined positioning, one cannot say that in this case the "Wim-Bill-Dun" company (the producer of the milk products under this trademark) realizes the strategy of non-differentiated marketing. The foundation of the positioning of this make trademark is a certain consumer's value - the naturalness of the milk produce, and, consequently, the main motivation to buy the products of his make is willing to but hr "real", "village-made" milk, and not some "chemicals" made of "milk-powder".

One may ask if there are any consumers who have the same socio-demographic characteristics as the ones who purchase "Domik v derevne", but insensitive to its idea of positioning? Of course, there are such people. What makes them different from the ones purchasing the make in the example? First of all, it is the fact that they do not feel the value of the product's "naturalness". It does not make any difference to them which kind of milk to buy - the "natural" one (which parameter they, considering "Domik v derevne", are rightfully inclined not to trust) or "powder milk" (anyway, as they think, both are produced of one and the same powder). In this case the consumers of this kind will be ready to buy any milk, satisfying necessary functional qualities (for example, to take to the summer cottage: storage conditions, quite long shelf life after opening the package). Considering these facts they will be inclined to purchase the product which costs less. In the basis of choosing a product is the motive of rationality. This motive is used in positioning by, for example, "Dosia" trademark: "If you do not see the difference why should you pay more?". It does not mean that the consumers of "Dosia" do not have enough money to buy "Tide". It just means that the idea of positioning of "Dosia" trademark effects the customers who are rationalistic in their behavior and are inclined not to waste money.

Which is the way that we can create the segmental model of the market based on our ideas about the motives for choosing of the goods by the consumers?

For this purpose let us consider the model of decision-making by E. Rogers, given below.

As we can see, two major factors influence the process of making the decision about the purchase: the characteristics of the object taking the decisions and the perceived characteristics of the product. The object taking the decision perceives the characteristics of the product through the prism of his or her financial position ("can I afford this?"), individual qualities ("I do not believe in anything new, all the new things are worse than the old ones"), previous experience ("I have always bought this product and I will be buying it, because I am used to it"), and the norms of the social system (including the norms of behavior of the socio-demographic groups to which the consumer is inclined to include him/herself): "well, I'm no longer a young girl, I cannot wear it".

The motives, each of which has its own value, either the behavioral stereotype or the rational understandable necessity. Only one of these motives of purchase - the financial - is rigid, the rest are facultative, and the consumers having enough financial abilities can be oriented to any of them. In the process of choosing the products several motives may compete, but anyway one of the motives will prevail and the consumer will buy the product guided by this motive.

How is it possible to built the system model of segmenting the market based on the great number of the motives?

First of all it is necessary to find out which motives in general induce the consumers on this market to buy this or that product. How is it possible to do it? There is only one way - to ask the consumer…

At the same time the direct questions about the motives of choosing will take the consumer aback. This is why to see the full picture of the motives which are the effective powers of the consumer's behavior special procedures are necessary, which presuppose a prolonged communication of the interviewee with the respondent: group focused or non-standardized (deep-laid) interview. If the interviewees have access to a wide number and variety of the respondents we can obtain a wide spectrum of consumers' motives, which define the consumers' behavior.

The following step will be to evaluate the force of the impact of the discovered motives on the consumers and to define the consumers' groups by the key motives of choosing. For these purposes it is necessary to perform a block of the quantitative researches (by the method of standardized interview by the representative sampling, preferably consisting of no more than 1000 respondents), where the respondents will be asked to evaluate by the 5- or 7- point verbalized scale (or by Osgud scale) the degree to which they take into consideration the given aspects when choosing the product.

As the result of this research we will obtain a significant number of small groups of the consumers, many of which cannot be evaluated even quantitatively, and it will be evident that several groups of people have chosen as the leading motive for choosing the motives that probably have general motivating reasons. It is understandable that having such a number of either too closely connected or, on the contrary, too different pieces we are not able to form the complete picture of the market. Evidently, it is essential to explore deeper reasons arousing and defining such variety of motives.

The procedure to perform this is through the factor analysis (exploring the respondents' answers by evaluating the force of the motives' influence on the choice of the product on a definite market, obtained as a result of the standardized interview).As the result several factors will be defined which determine the consumers' behavior on this market, which can be matched with the groups of the consumers by the leading motives of their choice. After uniting these groups we can create the segmental model of the market, in the basis of which is the division of the consumers in their choice of a product by the leading role of one of the factors from these factors which define the consumers behavior on this market.

What will we obtain by segmenting the market in such a way? Knowledge about the leading factor of choosing the product by a certain group of the consumers we can uncover the segment which either has more rare competitive medium, or has sufficient unsatisfied demand (we could get the information about this unsatisfied demand during the previous stage of research), or pre-supposes the best starting opportunities compared with other segments.

After having made the choice of the target segment based on its leading factor we can formulate the idea of positioning, which most exactly reflects the consumer's motivation and is oriented on the demands of the consumers of this segment.

In case the positioning idea was chosen correctly the product developed and presented in the communications in a corresponding way, according to this idea, has the best opportunity to be accepted by the consumers of the given target segment. It is necessary to note that the strategy for promoting the product or the trademark as a whole should have a single stem - the leading factor, majorily defining the behavior of the consumers of this segment and the idea of positioning based on it.