A European producer of high-tech film coatings decided to enter the Russian market. A service centre with five working installations was brought into operation in Elektrostal, Moscow oblast. However, the enterprise is only working at 20% of capacity, with no apparent prospects of growth.
There are three fields of application for these film coatings: cutting tools, the coating of finished motor vehicle components, and press moulds for the manufacture of motor vehicle components. And there are two possible models for entering the market: either selling the coating application equipment itself, or opening a full-scale service centre under the company’s brand to provide the relevant services. The company chose the second route.
Realising their failure, the manufacturers turned to our company for help. Market research was conducted, and it became clear that an extremely unsuitable place for opening a service centre had been selected – one where quality service could not be provided even for existing clients. The target market segment was also selected incorrectly.
Market research indicated that the best prospect would be a centre for pressing moulds for motor vehicle components, and this would require installing other models of coating chamber, which they had not thought of. And the ideal place for such a centre would be one of the Russian motor vehicle clusters or the Urals, and certainly not Moscow oblast, where the target industry segments are represented poorly or not at all. The project was corrected and the business became successful.
Marketing strategy should on no account be based on intuitive suppositions. It requires proper scientific analysis of the situation in the segment of interest to you, the results of which may turn out to be the direct opposite of a strategy in which your confidence was based only on your own experience and the impressions of Russia you had gained.
A British industrial enterprise with its own office in Moscow noted with alarm a fall in its Russian sales. Measures proposed by British marketing consultants had not helped. They decided to turn to a Russian consultancy company.
We proposed solving the problem in two stages: firstly, conducting strategic marketing studies of volume, competitors and trends; and secondly, producing recommendations for becoming active in the Russian and CIS markets. The project was focused on increasing sales and on more vigorous promotion in the new markets.
To implement the project, a matrix approach was taken to segmenting the market so that the most problematical segments could be discovered. It turned out that to achieve its aims, the company should not only change its market promotion strategy, but also reform its procurement system in various segments, and optimise the scheme for organising sales in the Russian market, replacing product specialisation in its sales departments by industry specialisation. Thanks to these recommendations, the company managed to increase sales several-fold and also to increase its share of the Russian market.
Marketing schemes need updating. What worked yesterday may not work today. Marketing strategy and the scheme of organising business processes should constantly be subjected to critical analysis, and twice as intensively when the first alarming symptoms occur.
Marketing schemes need updating. What worked yesterday may not work today.
An international company operating in the FMCG sector decided to start manufacturing in Russia, to save on logistics. It turned to Russian specialists to prepare the project.
A thorough analysis was made of logistics costs and the potential cost of opening the new production facility. Research showed that the entry of Russia into the WTO had had a considerable effect on the possible costs, so that it would be unprofitable to set up manufacturing in Russia. This took the company managers completely by surprise.
Furthermore, a whole series of questions arose about the present distribution model. Was an importer necessary? How should the procedure of passing through customs be arranged? How could the logistics model be optimised? The analysis led to the realisation that far-reaching changes in the distribution model were needed.
Many factors pulling in different directions operate in the market. This requires a comprehensive and dynamic analysis, covering all market parameters, not just as they are now but also as they will be in the future.
Many factors pulling in different directions operate in the market. This requires a comprehensive and dynamic analysis.
An international organisation applied to us to audit a Russian competitor with whom an M&A deal was planned. An analysis of the customs base revealed serious discrepancies in the sales department data.
Analysing the customs base is a unique opportunity to study the Russian market which is not available in many other countries. But how relevant is this information?
We compared the customs base data with those of the client’s sales department, which operates with total transparency in the Russian market. There was a vast difference. This meant that the competitors must be in the same situation.
And so the problem was solved, but this episode clearly shows the high degree of competence required in analysing the customs base in relation to complex and non-transparent technical markets. An ordinary research company, dealing in ready-made reports, is simply unable to carry out such work at the required level.