1. Working with the Clients. Finding Insights. What is “Added value” in Marketing Research. prepared by Mila Bogomolova

2. 2 MR: Make clear decision with real information  Global Market Research turnover was US $ 26 billion in 2007.  Over 68% of the global Market Research turnover is generated in top five markets: USA, UK, France, Germany and Japan.  China recorded net growth of almost 25% and will be pushing for a top 5 ranking to six years.  Research market in Russia is steadily growing after the crisis in 1998 when it fell down significantly. In the year 2007 the market volume was equal to ~$270 mln.  Yearly market growth for last 5-6 years may be estimated at the level of 30-35%. The extensive growth of the market size is accompanied with the growth of professional level, both on agency and client’s side.

3. 3 MR: Make clear decision with real information  Most market volume is provided by big international FMCG companies but the share of Russian clients is steadily growing and they are starting to pay more and more important part in the turnover of research organisations.  The professional level and the level of demands of Russian clients is growing though the qualification of international clients is much higher.  Most clients and suppliers are located in Moscow (85 – 90 % of total market volume) but the importance of clients from other Russian regions is growing.  The competition in the industry is quite strong.  As the market research industry is quite new in Russia (about 15 years old) the research market is still not segmented by business area, almost all agencies do not have a specialization.

4. 4 What is significant for the research industry in the Russia?  Increase of budgets and qualification of domestic clients.  Increase of ratio of studies outside FMCG (e.g., financial services, insurance, retail, automotive, real estate) as a result of economy growth and active development of these sectors.  More international research networks will enter the market through starting new companies or acquiring existing ones.  The fieldwork will become more and more hard to organized. This is connected with decrease of response rates and increasing problems with hiring good interviewers.  Small and medium sized agencies will try to find areas of specialization (by business sector, methodology or deeper understanding of problems of their clients) while big FMCG budgets will concentrate among the leading agencies.

5. 5 All Research Methods  Telephone Surveys: The best method for collecting reliable statistical data. We use our own CATI system (a call center) with 54 stations. This allows for maximum efficiency in telephone surveys across Russia.  Hall Tests: Testing variants (products, design, concept, etc.). We constantly use this method because our clients’ business requires constant testing of new developments.  Home Surveys: An expensive method, but, oftentimes, the volume and specifics of the research goals requires it to be used. We do home surveys across Russia and CIS, but, when possible, recommend cheaper and more effective methods to our clients (telephone surveys, hall tests)  Street Surveys: We usually do not recommend this method, despite its cheapness. However, there are situations when a street survey is the most adequate for your task (for example, when a rough estimate is needed ASAP, on a low budget)  Mystery Shopping. Helps evaluate the level of service provided to the consumer, and, when regularly used, can be a good instrument for further motivation for a retailer’s sales staff  Standard Qualitative Methods: Focus groups (simple, mini, creative, “conflict”, etc.), diads, depth interviews. The best method for receiving in-depth information and developing hypotheses for a company’s marketing goals. These methods are quite effective, with a good balance of term, budget, and volume of information received.  Special “Ethnographic” Qualitative Methods (observation, immersion, home visits, etc.): A good method for immersion into the consumer’s real life, which allows us to receive and visualize valid information on the role of products and brands in the lives of consumers, as well as to check and develop insights.

6. The study of Discovery Channel audience in Russia Market research proposal

7. 7 Background  Discovery Communications is the number-one non fiction media company reaching more than 1.5 billion cumulative subscribers in over 170 countries  Discovery Channel, Animal Planet, Discovery Civilisation, Discovery Science and Travel and Living are available to 10.5 million cumulative households in Russia through NCN, UCN, NTV Plus and other smaller operators  Discovery Channel alone reaches over 4m subs in Russia. It has around 1m subs in St. Petersburg and is currently extending its distribution to social tier cable subscribers in Moscow, which will increase our audience in this city from 0.5m to 1.5m subs by 2008  DC has plans to launch a separate channel feed for Russia and introduce advertising sales by the end of 2007, moving away from an affiliate-based business model  The market research is required to help optimise and localise the DC schedule in line with the viewing habits and preferences of the Russian audience, increase local feel and personality of the channel and programme branding and maximise the effectiveness of marketing campaigns Background and objectives

8. 8 Main Objectives  To gain a thorough understanding of current and potential audiences of DC in Russia and how the media generally, as well as factual television and DC programmes fit around their daily routines  To explore associations of current and potential viewers with the DC brand as well as with other media brands. Specific objectives  Daily habits - when, where, how and why different media content is used at different times  Drivers/deterrents to watch non fictional television - types of programmes, presenters, elements and tone they would like to see  Usage of multichannel TV – what are the reasons for subscribing to pay-TV platforms and what are the barriers for taking up pay-TV  DC brand associations – perceptions of DC and of our key content types (popular science, history, engineering, etc.) and flagship programmes  Suitability of translation/language and voices used to present DC in Russian, compared to other local and international channels – strengths of dubbing versus subtitling  What media brands are part of their lives and what do they stand for – differentiation of DC from competitors and key characteristics of the media environment we can offer to prospective advertisers Background and objectives

9. 9 General research design EXPLORATION STAGE Objectives: - Consumers’ motivations - DC brand perceptions - Hypotheses for quantitative stage Method: - Focus groups preceded by diaries EVALUATION STAGE Objectives: - Media behaviour of consumers - Image of DC and competitor brands - Verification of hypotheses from exploration stage Method: - Face-to-face in-home interviews

10. 10 Method  Focus groups  6-8 participants  2-2.5 hours length  Each participant fills media usage diary during a week prior to attending a group Geographical coverage  Moscow and St Petersburg Target group  Males and females aged 20 – 39  White collars/ students  Within top 30% by income  Regularly watch factual TV programs  Pay TV subscribers  Know Discovery Channel  Actual and potential DC audience  Loyal DC audience – watch DC at least twice a week  Potential DC audience – did not watch DC within last month Exploration stage, methodology

11. 11 NUMBER AND STRUCTURE OF GROUPS The following group structure is suggested: In total 10 FGD will be carried out (5 FGDs per city) Exploration stage, Research composition # of groupLocationGenderAgeConsumer behaviour 1MoscowMale25-32Loyal DC audience 2MoscowMale33-39Loyal DC audience 3St PetersburgMale25-32Loyal DC audience 4St PetersburgMale33-39Loyal DC audience 5MoscowMale25-32Potential DC audience 6St PetersburgMale33-39Potential DC audience 7MoscowFemale25-39Loyal DC audience 8St PetersburgFemale25-39Potential DC audience 9MoscowMixed20-24Potential DC audience 10St PetersburgMixed20-24Loyal DC audience

12. 12 Method  Face-to-face in-home interviews  Walk random sample  Paper&pencil approach  Interview length is 30 minutes  Nearest birthday method to select respondents within households Geographical coverage  Moscow Target group and sample size The sample will include two subsample:  Main sample (500 interviews):  Males and females aged 20 – 54  Boost sample (100 interviews):  Males aged 25-39, white collars, top 30% of population by income  Total sample size will be 600 interviews Evaluation stage, Methodology and research composition

13. 13 Timing  Total project timing is 10 weeks Weeks12345678910 Project set-up Recruitment for FGDs Fieldwork (FGDs) Report (FGDs) Questionnaire (survey) Fieldwork (survey) Data entry and data processing (survey) Final delivery of results

14. 14 Reporting and budget DELIVERIES  Detailed analytical report (for FGDs)  DVD tapes of FGDs (in Russian and with simultaneous translation into English)  Data file in SPSS with English labels (for survey)  Crosstables in Excel (for survey) BUDGET PAYMENT TERMS  Budget is shown in USD  In case of payment in Russia 18% VAT will be added to the price and fixed exchange rate of 27 RUR / USD will be applied  50% prepayment within 2 weeks upon project confirmation is required with remaining 50% to be paid within 2 weeks upon project completion Costs, USD Exploration stage (10 FGDs with diaries)21000 Simultaneous translation of FGDs2000 Evaluation stage (600 f2f interviews in Moscow)14400