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Market research industry in Ukraine

Published in Marketing Newspaper (UMA electronic edition)

Market transformations in Ukraine that began in the 90's have led to the following: Ukrainian entrepreneurs have heard word marketing for the first time, they have started to make attempts to conduct market economy, some foreign products and products of joint ventures have appeared in the market. At the same time, in the beginning of the 90's first research companies appeared the main clients of which were foreign enterprises or some joint ventures. Being directed towards the main client these research companies preferred to use English words in their names, even though some of them were integrated branch agencies. At first the biggest on the Ukrainian market, of course, were the branch agencies. Among the first to enter the Ukrainian market were such research companies as GfK, ACNielsen, Synovate, and SOCIS Gallup. Each of them conducted different policy of moving up the research market, that is why today their size and also the market segment they posses differ a lot. Today more than 14 branch agencies operate in Ukraine , including the Russian ones. At the same time some Ukrainian research companies are being created, where marketing and sociological research are both being conducted by the same personnel. By the way, at first this was typical for all research companies operating in the market in some or the other way. Nowadays among the biggest research companies is a considerable amount of Ukrainian ones. Oftentimes the company's staff included not more than 4 or 5 persons. For example, these are such companies as Ukrainian Marketing Group. Today those are the big companies, practically holdings that also unite several firms specializing on different markets, which also use different methods in their work.

According to UMA information, the marketing research market in 2003 made up the total of $14 600 000. Prognosis for the year 2004 was more than $17 500 000. Thus, the prognosed growth rates of the market of marketing services were rather high and they make up more than 20% a year. According to the preliminary estimation of UMA in the year 2004 these growth rates of the market took place. Marketing research has been conducted even during the Orange Revolution, although, of course, the volumes of these researches were not comparable to the sociological ones.

According to the latest estimates the volume of marketing research market in 2004 was made up of approximately $19.5 mln, thus in comparison with the previous year it has grown almost 34%. $18.2 mln. had been made up by the 38 marketing agencies UMA members, and their market share has grown up to 93%. The last circumstance has to with the outstripping growth of large companies in general, as with the new members that are significant market participants joining UMA. In particular, in the year 2004 the last few marketing agenciesESOMAR members became the members of UMA as well.

An optimistic view on the market development in 2005 prevails among the leaders of marketing agencies UMA members. The prognosis for growth in the current year is 25%, or nearly $24.4 mln. These are more moderate rates of development than those reached in 2004, but they are still bigger in terms of last year's expectancies.

Viewing the part of the Ukrainian market of marketing research, it takes up less than 0.001% of the world market. According to the ESOMAR data the volume of the marketing research market in 2003 made more than 18 bln. Euro. The main operators of the market of marketing research have already been defined in Ukraine . But structuring of the market is still being conducted as according to the specialization of agencies on servicing defined industrial or other markets, as well as according to the methods they use, regions in which research is being conducted. And thus branch agencies may be distinguished, as well as the all-Ukrainian and small regional agencies. 14 network agencies are represented on the market. The total amount of agencies operating on the market is 100.

Among the largest marketing research agencies the following may be named:

GfK Ukrainian surveys and research of the market (GfK- USM) (200 staff members and more than 500 interviewers)

ACNielsen Ukraine (247 persons of personnel and more than 209 interviewers)

TNS Ukraine (staff of 60 people and 800 interviewers)

Ukrainian Marketing Group (50 members of staff and more than 900 interviewers)

Kiev International Institute of Sociology (37 people in the staff and more than 500 interviewers).

Company MASMI-Rating (47 staff members and more than 500 interviewers);

InMind (20 staff members and more than 400 interviewers).

Monitoring of Mass Media of Ukraine are rather active on the market too (85 people of personnel), SC DOM (staff 16, interviewers 200), Statinformconsulting (staff 12, interviewers 996), Ukrainian Marketing Project (staff 10, interviewers 400), Synovate (15 staff members and 400 interviewers).

It is necessary to mention that the changes in the market occur due to the big foreign companies' entering Ukrainian market. Today the marketing research market becomes more and more attractive for such companies. During the year 2004 three new large market operators have joined the market, each of them using unique methods. Such companies as A/R/M/I Marketing is among them.

A supposition may be made that after the Orange Revolution this process will become more active.

As for the field specialization, there still are some empty places as for this day. It is easier to describe those markets, where specializing agencies have already shown themselves to advantage. For example, the pharmaceutical market is being explored by Comcon-Ukraine Ltd and Medical Data Management; the information about the agricultural market is being accumulated by the Market research center Ukragroconsult; industrial market is being managed by the companies PrivatInform (Krivoj Roh), Ukrpromzovnishekspertuza (Kiev); beverages Ukrainian Marketing Project (Kiev); construction market SPD Kyshnir Nataljai Victorovna (Kiev) and Knauf Marketing (Kiev); baby products market agency Kids Marketing Consulting or Kidnapping etc.

The companies may be distinguished by their methods and also by the range of problems which they are able to solve using their methods. For studying consumer needs and preferences we recommend to turn to company TNS, for studying the brand power to the company A/R/M/I Marketing, for studying the TV channels to the GfK USM, for acquiring information for the right decision making of how to conduct the advertising campaign on the billboards to UMM, for studying the radio stations TNS and Syrex Marketing, published advertisements Mass Media Monitoring, Internet research The Independent Marketing Group. Full information about all these agencies may be acquired on the web-page of UMA http://uam.iatp.org.ua or you may turn to the Ukrainian Marketing Association and get YEARBOOK UMA, which contains information about firms-members of UMA and is distributed free of charge. The information is given both in Ukrainian and English.

There is a need to say a word about informational sources. The State statistics may be acquired in the companies, which have an official license of the State Statistics Committee for distributing such information. In Ukraine Statinformconsulting has such a license, there you may obtain statistical data or order analytical research concerning a particular matter, a market or field review.

Rather accurate information about the market may be obtained with the help of regular panel research. In Ukraine two companies conduct panel research: GfK USM (consumer panel) and ACNielsen (panel of commercial spots or retailing). Consumer panel provides the information about how many goods of some group of goods have been bought (who, where, what the price was and how much of the good have been sold), and retail panel how much has been sold (what the price was, in what amount and where exactly).

Panel data enables to define the volume of a specific market, the main players and their share of the market, price positioning and competitiveness of prices, the face of buyer (consumer panel), the state of distribution (retail panel), the most popular places of purchasing, tendencies of segments developing etc.

More often marketing research is ordered by the companies that work in the FMG markets, which is actually characteristically for all countries. Besides that, also the research of mass media charts. As well as in other countries a tender is carried out for conducting the research of TV channels. The tender is being carried out by the Industrial Television Committee and in 2002 it has been won by GfK USM. Large industrial enterprises are the ones that order the research, as a market's answer there research companies specializing in particular markets (pharmaceutical companies, construction, metal etc.) But what is more important there is a tendency of change in the portrait of the customer. Today all large companies operating within FMG market, no matter what they are Ukrainian or foreign, are the ones to order market research. Besides, medium business has started to use market research more actively. This has introduced certain peculiarities into the work of agencies. Ukrainian medium business oftentimes does not have enough financial means to pay for the services of large agencies, in most of the cases enterprises only understand that the research is needed but is not ready yet to pay a big sum of money for the research, often prefers to deal with Ukrainian Research Company.

Our Ukrainian Marketing Association has carried out a survey of directors of research companies as for how they think the Orange revolution may influence the development of our country's marketing. Majority of directors hope for the growth of research needed, they also mention that in the short-term perspective a decline in conducting research is possible, but in the long-term perspective there will be a process of raising the level of competitiveness of their own business and so this is supposed to lead to a larger demand for research.

Besides that, the exit-polls results' falsification, intrigue with the election polls has caused, as the UMA research show, antitrust of people to those interviewers who conduct marketing research. Respondents act inadequately when asked to answer some questions. Practically this temporarily becomes an obstacle in conducting research as confidentially, using interview methods, as well as conducting apartment survey, -- summarizes Irina Lylyk, Director General of the Ukrainian Marketing Association.

International cooperation of UMA

UMA is the member of ESOMAR

An official translation of Codes & Guidelines ESOMAR into Ukrainian has been done in 2003 (with the financial support of the embassy of the Netherlands in Ukraine ) and these Codes are also placed within free access on the UMA web-page

UMA is the member of EMC.

Collaboration of Ukraine and the UK in forming the market of marketing research.

For the marketing research market of all countries effective relations between the client and the performer are extremely important. The problem of maintenance the rights of respondents is a very significant. This has led the industry to realizing the necessity of forming the rules of work in the field. Course towards implementing the standardization of research procedures was taken in the UK in the middle of the 70's when Marketing Research Society introduced a program Interviewer Card Scheme, later I.Q.C.S- the Interviewer Quality Control Scheme, MRQSA, EMRQS (the EFAMRO Market Research Quality Standards).

In 2001 the Ukrainian Marketing Association has turned with a request to prof. Bryan A. Bates Director General, EFAMRO (European Federation of Market Research Organizations) asking him to promote further the implementation of Quality Standards of Market Research to the Ukrainian research companies. Prof. Bryan A. Bates' article QUALITY STANDARDS IN MARKET RESEARCH, published in the magazine of UMA Marketing in Ukraine has become very important for popularization of English programs in this sphere and has also explained to the young Ukrainian researchers the philosophy of standards and the history of their appearance. EFAMRO has also granted the Ukrainian Marketing Association the text of their EMRQS Standards, which later have become a base of Quality standards of marketing research of UMA. This document is obligatory for 48 agencies- members of UMA and is registered in the State Agency of Standardization of Ukraine .

In 2004 on the conference Marketing in Ukraine the report of prof. Philip Dover, Dean of the Business School , The University of Buckingham, has caused a great discussion. Its theme was From Product and Services to Solutions: a new Challenge for Marketing.

Written by Irina Lylyk


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