Kids Marketing Consulting

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Part 1.
Attractiveness of the market research industry in Ukraine based on Porter’s Five Sources (from CMO point of view). Industry Competitors (Segment Rivalry):
Also there is competition, the market research industry in Ukraine does not have numerous, strong, or aggressive competitors in the kids, tweens and teens niche. Actually, KMC could be considered a pioneer in this niche and as all pioneers company had enjoyed solid growth and profitability and developed a strong customer base. However due to rising competition, company has to shift towards protecting its niche.

Competition does not seem to have high stakes in staying in the segment (major leaders are large international company’s belonging to global ESOMAR community). While they could be called strategic group with many niche players within, none of the firms operating in Ukraine are solely dedicated to market research focusing on children.

As a CMO I must “dig deeper” and consider competitive set as “limiting of competitors only to those that offer the same quality product or have the same standards”. Than I might consider only industry leaders or those firms who, for example, belong to Ukrainian Marketing Association (UMA), legally registered and operated (white in Ukraine), I will call them Group A. Group A firms are considered to have a higher industry standards and reputation. Customer, if unfamiliar, would be educated as to value and quality of product they are receiving.

I would also think that perhaps this high standards have more value and affordability in the “larger” client segment, where medium to smaller clients competitors circle would be different. Medium clients would probably use “white and gray” research firms (Group B). Smaller clients with limited resources would probably considering not registered/black market offerings (Group C), since this group usually has the lowest rates.

Exit barriers (industry’s main asset are know - how professionals and a built network/resources) are low and fixed costs are quite low as well - there is no factory to open, equipment to maintain (except computer related) and products to store.

Overall, market research industry in Ukraine is not considered stable or declining, it is actually somewhere in the developmental cycle, making it still an attractive segment to consider. Potential Entrants (Threat of mobility):

The most attractive segment is one in which entry barriers are high and exit barriers are low. (Few new firms can enter the industry, and poorly performing firms can easily exit).

There are no high entry barriers and new competitors easily entering the market, such as:

Many advertising agencies use to contract market research work to a separate firm, but shifted towards conducting their own. They are easily entering and/or moving in market research direction (different business model, same solution/product offered). •Other competition in the market research industry exists besides the large firms, such as independent consultants.

I would also think that one of the main entry barriers (not in the case) would be lack of local connections needed to open and operate a business in Ukraine. Substitutes (Threat of substitutes):
A segment becomes less attractive when there are actual or potential substitutes for the product/service. There is almost no business or product that does not have a substitute. Substitute could also be a product that fulfills the same need “by a different means.”  What is there that could substitute for the product? •market research firm focusing on adult consumers – could work as a substitute in some cases. Also they focus on different segment, one could argue that kids/tweens/teens segment directly relies on their parent as a source of income. For example, higher household income families might have allocated for higher spending/allowances for their children. •One stop marketing and advertising leaders in the industry that are known and...
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