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Russian market research: A piece of cake? How to determine if your brand will be a hot new topic in the Russian market.
The key to the success of your Company is not only a great product, but also professional advance-preparations.
If you haven`t done the market research
The most common mistake is the absence of market research (failure to take competitors into consideration, incorrect estimates of consumer demand etc. will cause you to fail when trying to conquer the market).
Mars Inc. faced this situation in the 90s when attempting to enter the post-Soviet market. The company did not research the realities of life in Russia and proposed chocolate bars as a substitute for lunch.
Consumers could not accept the fact that a chocolate bar could substitute _ soup and a main course; chocolate bars were considered as sweets to drink tea with. Company was incurring losses, because the strategy that had been developed out to be ineffective.
However, consumer audience research turned the situation around. Snickers was then instead marketed as a chocolate bar for energetic teenagers who hate soup and like sweets.
The new positioning not only helped to boost sales but also allowed the company to make its way to top of the market. In 2009, research conducted by «Profi Online Research» showed that one in five young people aged 14-24 buys chocolate bars daily. And 7 out of 10 of those are Snickers.
So if have decided to try to repeat the success of Snickers, you definitely need simple methods to evaluate demand in the Russian market. Let`s get straight to them.
How can a market be evaluated?
If you want to enter the market prepared, you need to conduct research as follows:
Study the competitors
Studying the competitors illustrates competitive ability, and helps in the development of strategies, which will increase marketability. If you ignore or disregard the competition, the future of your business is questionable. Let`s see how to study the competitors.
First, find out who the key stakeholders are. This is the simplest question to answer since you just need to enter the search request in Google or Yandex and get the Top-10.
Remember that you will have a group of search requests, so you need to analyze the results according to which is most important for your business. This means doing more specific and related searches, and noting the differences (i.e. a search for ‘green tea’ will garner different results than a search for ‘black tea’).
Thus you can figure out the list of your direct (7 to 10 would be enough) and indirect (5 to 7) competitors. This list would be enough to formulate a strategy.
But information about competitors is not all you need if you plan a serious approach, and intend to be a market leader.
Search requests: determine demands
When you start researching the Russian market (demand in particular), you cannot go far without search systems. The most popular search system in Russia is Yandex, so we will use it for a market assessment.
The first thing you should do is enter the key word into the search bar.
For example, you are producing home appliances, washing machines in particular. In this case you need to check the most common request «washing machine».
Study the websites from the search results. For the washing machine request we only get online shops.
If we look at Google search results we find out that the situation is almost the same, most of them are online shops, but also there are websites of home appliance manufacturers.
But there are more specific requests that also need to be evaluated.
In one of our previous articles we have already described the selection of words service wordstat.yandex.ru. As Google does not have this kind of statistics yet, we use Yandex again.
So we repeat the «washing machine» request
This service not only provides information about your main request, but also about more specific and related requests.
You do not need to conduct complex research of the target market on your own.
In many cases you can purchase the finished research including competitor analysis, demand analysis, target audience demands and priority distribution channels analysis.
This allows you to save some time and, of course, start developing a Russian market entry campaign after analyzing the provided information.
The price of complex analysis, including different online and offline methods, varies in relation to the market’s peculiarities. In general, prices vary from 1000 to 10000 USD. You can also purchase this research from our company.
Other research methods
A good way to study your target audience and thus estimate the potential demand for your products is monitoring potential consumers.
They definitely have their ‘stamping grounds’, they mostly use specific social networks, theme-based forums and other internet resources.
For example, if you are computer equipment manufacturer, you need to visit a popular resource called habrahabr.ru that hosts an audience with an insatiable appetite for technological novelties.
Search systems can also help you find these information resources, for example if we focus on the names of computer equipment manufacturers in a «computer forum» request.
We should not forget that market analyzing is a continuous process, not only the launching pad for another development cycle. Well-timed information will allow you to maintain market leadership in the future.
For example, there is an interesting experience of the American company Xerox.
This company has an internal hotline concerning competition and business issues.
The company`s employees provide information about the market situation. For example, the sales department is a source of information about the competitors` current situation: what fields they come from, what their demands and requests are about equipment, and why they buy from competitors.
On one occasion the company management received a message from the service department saying that competitors were about to offer maintenance of Xerox products. This allowed the company to develop a strategy and take measures just when the competitor was about to offer the new service, which could have negatively impacted on Xerox’s market position.
Case: entering the tea manufacturing market in Russia
First let`s see in practice how to proceed with a simple and fast market research if you are tea manufacturer and want to enter the Russian market.
In this case you have 2 different options: create your own website to sell the tea, or collaborate with existing sellers, for example, online shops.
So who are your competitors?
Let`s enter the «buy tea» request into the search bar to get the merchant readout.
These are the Top-5 results in Yandex. Note these results and keep on researching.
Enter another request we also need to research as manufacturers. Let it be «buy Chinese tea».
What did we get?
Let`s compare the results presenting them in a table:
Search engine advertising
Since we are formulating a strategy for entering the Russian market, we have segmented our competitors by specific requests. The more general request gave us direct and indirect competitors – we see them in the first column, direct competitors are in the second column. Remember that earlier we stated that we need to determine 7-10 direct and 5-7 indirect competitors.
We can create a more accurate list if we continue this analysis. For example, not all the shops in the second column sell Puer tea, which means the competitor list on this request will be different. The intersection of all the specific requests will give you a full understanding of the competitive environment.
In this case we stop at the preliminary stage to analyze the data. What do we have now? We can pinpoint 3 competitors both in search engine advertising, and search readout areas.
That means our goal is to put competitive pressure directly on them. We need to study what they offer and maybe make an order to estimate their service from the inside.
If you decide to collaborate with online shops (which means they are your customers), you need to get familiar with the different kinds of tea they are already selling.
According to the earlier research we know that 3 shops are selling tea
Therefore, you can offer your tea to other shops from the list as long as they are not yet selling the tea you have. You can also study the choice range of 1coffee.ru, tea-river.ru and chadomic.ru, maybe you can make a more unique or more advantageous offer (it will be decided during communications with the owner or any other person making decisions regarding collaboration).
What else should you know about the market you want to enter?
Of course you need to know everything about your ultimate consumers. If you enter the Russian market as a wholesale supplier, you can estimate the approximate size of shipments according to the ultimate suppliers` needed quantity. You can also use the data from business proposals developed for online shops. If you are estimating the viability of your tea selling shop you will need this data for a volume of sales estimation.
Using the «buy tea» request we already understand the fact that this product is in demand. Just Yandex shows us 55,990 results a month for this request and 7 million replies.
Afterwards we enter the same request in the selection of words service…
…and see more detailed statistics on the matter.
According to this data we can make the conclusion that tea is in demand in Russian market. If we total all the requests related to this topic we get a massive number.
Where shall we look for the target audience?
The next question is – where can I find potential customers?
Of course, forums and social networks.
Only forums related to tea are numerous. Sometimes they are dedicated tea web-portals, sometimes they are separate topics on forums unrelated to tea.
And of course, never forget social networks. Let`s see how many tea lovers in general and Chinese tea lovers in particular there are at vk.com, the most popular social network in Russia:
This audience is your potential customers (or they are customers of online shops that will be selling your tea). Our previous article about SMM marketing told you how to deal with them. If you are manufacturing tea, it is high time for you to enter the Russian market!
Now let`s summarize.
For an initial estimation, three steps will be enough:
As you see, it is a piece of cake! Everything is much simpler that you think.
Of course these are the simplest methods of Russian market research. You can make the right decision using them together with your intuition, but this is just an approximate estimation, it does not guarantee any concrete results.
If you need more accurate data and professional conclusions explaining one or other phenomena of the Russian market, you need to use the services of a professional marketing agency. RMAA Group marketing research department can offer you help. Get explicit research and enter the Russian market with no fear!
About the Author
Ksenia Kuznetsova is the Editor of the Blog about Successful Marketing Strategies in Russia. She has been working at RMAA Group as a Assistent of Client Service Director since 2015. Ksenia has experience in planning and carrying out of advertising campaigns for foreign companies in Russia.