1. Audit of Objects* METHODOLOGY PRESENTATION BUILDING THE FUTURE TOGETHER ! BauMarketing ® possess the Copyright to this methodology (according to the law of Ukraine «About the copyright and neighbor rights»).

2. METHODOLOGY CREATION HISTORY The question of exact market volume evaluation is actual for many companies – building materials manufacturers, producers of fast installed buildings, roofs, facades, industrial floors, gyps materials etc. The existing system of state accounting (internal documentation, as well as international economic affairs, and construction volumes accounting) has the number of weak points, which does not allow to precisely define the market volume, namely: -the modern product types (such as sandwich-panels, liquid flooring, etc.) are not included into the local and international product coding; -state accounting data are not accurate; -the objects which already built or in the process of construction are not fully reflected in the construction statistics in the way necessary for the analysis (not only the actual availability in the database, but also missing of the characteristics – the floor area, building spot, the area of facades, etc.)

3. METHODOLOGY CREATION HISTORY The full disclose of the information about the big market operators’ volumes and sales structure could solve the question of the statistical data inaccuracy, but for today it’s this method is not applicable for several reasons: -The realized necessity in such information and – more important – the clear understanding how this information can be used in the operational and strategic activity of the company are absent; -Companies are not ready to share the internal information even for the common purpose – for the general market size and structure evaluation; -The planning system on the local companies is often absent.

4. METHODOLOGY CREATION HISTORY Having faced the above problems and the clients need to solve them in the year 2005, “KPD 100” company suggested to use the methodology of “objects audit” on the example of new industrial construction (demo version of the report with the methodology description you can find on the web-site www.kpd100.com.ua in the section “Research examples”). In the year 2006 BauMarketing ® used the similar methodology conducting the marketing research of commercial and industrial construction. Both projects where rather successful taking into account that they evaluated only one marketing segment – newly built commercial and industrial objects. There exist also many other segments – reconstruction market, administrative, residential high-rise buildings, private sector... For the purpose of the general market “full audit”, it was proposed to make the segmentation by the indexes “building function” and “type of building”, and to audit the existing objects.

5. BUILDING MARKET SEGMENTATON Residential buildings High-rise (multi-apartments) buildings Low-rise buildings (private houses) Industrial and commercial Warehouses Industrial buildings Administrative Offices Retail premises Hotels New construc tion Reconstruc tion Building market Municipal objects Other

6. METHODOLOGY AIMS AND TASKS “Objects Audit” methodology allows: 1.To define the construction market volume by absolute indexes: number of construction objects, areas of the objects (sell, roof, facades, floor, inner walls, windows, doors etc.) by regions and on total Ukraine with the split by different building types. 2.To define the market structure by regions and on total Ukraine level. 3.To split the market capacity by different object types. 4.To forecast the construction market volume by absolute indexes (number of objects and the areas of the examined parameters). 5.To answer other questions actual for the manufacturers (sellers), by combination of audit with other methods (interview, in-depth interview).

7. METHODOLOGY DESCRIPTION The methodology include: Data collection about the number and type of the built objects (according to the segmentation) from the construction companies. Creation of each individual object passport including: - Recording of its absolute characteristics (general building area (sq.m.), roof area (sq.m.), walls area (sq.m.), number of floors and height (m.) etc.); - Collecting data about the materials, used in the construction, according to the list of the analyzed products. Besides, on each audited object it’s fixed the dates of beginning and the end of the construction, its exact address, which allows to avoid double-counting (if the object is built by several sub-contractors), and also to define the year properly.

8. METHODOLOGY DESCRIPTION Information about the objects is collected from the construction companies rated by the turnover and chosen by the random selection method from the construction companies’ database. Two main selection conditions – random selection and the readiness of the construction company representative to cooperate in the project. The main obligation of the researcher allowing the companies to cooperate – the information confidentiality, and also the provision of the basic report on the conducted research to all participating companies. Thus, the given research is NOT USUAL QUESTIONING according to the method used. The research coverage – total Ukraine (provided by the random construction companies selection).

9. SAMPLE Variant 1. 200 construction companies (proposed number of objects – 1000), statistical error 7%. Variant 2. 400 construction companies (proposed number of objects – 2000), statistical error 5%.

10. FOR WHAT MARKETS EVALUATION THIS METHODOLOGY CAN BE APPLIED 1.Construction market (residential, industrial etc., according to segmentation) in general and by the construction technology – Fast Constructed Buildings from metal, concrete, capital construction; industrial construction. 2.Market of materials, used in the contemporary construction and re-construction (shell, wall and façade materials, roof, gyps materials, dry construction mixes (liquid floors, facade warming systems), glass, floor covers, windows, doors, warm-saving material etc.).

11. RESOURCES For the field work BauMarketing ® uses the field forces of KPD 100 company. KPD 100 field department – is a wide network of interviewers: 112 best regional research agencies and supervisors in all regions of Ukraine, having the big experience in field work, and about 900 employees – interviewers, auditors, specialists of in-depth interview, recruiters etc. ● 60% of interviewers have the higher education ● more then 80% of interviewers where engaged into KPD 100 and BauMarketing ® projects on the construction market several times and know its specific very well ● interviewers – mainly the specialists from the social and scientific areas (sociologists, teachers, scientsts etc.), which allows to establish the free communication with respondents ● working experience of KPD 100 interviewers is no less then 2 years ● all executors receive detailed instructions before the start of the work. Data processing and reports writing is made by the analytical department of BauMarketingTM, consisting of the qualified analysts having a big experience of construction market researches and obtaining a scientific degree.

12. CONTACTS To share your opinion about this methodology, and to send the request for the participation in the research, please contact us: Address: 7, Brullova street, 03049, Kyiv, Ukraine Tel.: + 38 044 248-91-45+ 38 044 520-18-58 + 38 044 244-05-91+ 38 044 332-48-44 + 38 044 561-42-31 + 38 067 401-42-31 Fax: + 38 044 248-91-45 General Project Manager – Victoria Pasechnik