Primary Demand

Date: 2015-10-07; view: 486.

Marketing Research

Chapter Two

In order to have an idea of the Ukrainian potential market for the Tod's products, it could be useful extrapolate the size of the maximum number of shoes, which can be sold in a year.

The total population of Ukraine is close to 44,3 mln of inhabitants (source: CIA Factbook). Hypothesizing 2-3 pairs of shoes purchased in a year, that means 110,75 mln of shoes. Due to the fact the Ukrainian GDP pre capita is close to 8.200 dollars (the equivalent in value of 20 pairs of shoes), it is considered correct consider, at a first sight, that the most sold products by Tod's should be the “entry level” shoes, that is the basic and less expensive model of pair of shoes, with a price of nearly 300 euro. According to those preliminary data, it is possible to state that the potential market of Ukraine is worthy 33,225 bln euro.

However, in order to eventually support and confirm those data, a more deep demand analysis should be effectuated.

For this reason, in order to understand if it is possible and convenient to introduce Tod's products in the country, with a positive and profitable results, it has been considered worthy to implement a research with the aim to analyse the shoes luxury market in Ukraine.

In the specific, the research objectives, the scope of the questions, and the methods of collecting information are represented in the following table, according to which, two different research approaches has been conducted:

- consumer survey;

- expert panel;

Those data have been integrated with information deriving from secondary research conducted on the basis of consulting company's reports, public information available on line, official organizations' web sites.

In particular, about the consumer survey, 25 Ukrainian people have been asked to answer to a 15 questions about luxury shoes. The complete questionnaire is presented in the following chapter.

In reference to the expert panel, 5 people considered expert has been interviewed: (i) the Chief Accounting Officer of an Italian shoes producer company, who had previous experience as Accounting Director in Loriblu S.p.A., and as senior controller in Tod's S.p.A.; (ii) a logistic employer in an Italian shoes and accessories producer firm, which operate in the east markets; (iii) a senior partner of a consulting firm that provide advices to the main companies in the most important Italian shoes district; (iv) a former Italian entrepreneurs in the shoes industry, who had also worked in the prototype office of Tod's S.p.A.; (v) a senior Ukrainian customer, who has been considered representative of the specific target of Tod's, according to her behaviours, her knowledge, and her approaches to the luxury shoes.

As a result of that questionnaire, it appears that:

- Ukrainian people prefer platform and wellingtons shoe models (more than 80% of interviewed);

- Ukrainian people consider shoes as a medium-high important element for their look (woman consider shoes more important compared with man);

- They buy shoes mainly in the retailer shops (nearly 90% of interviewed) and a little quote in mono-brand shops;

- They don't like and don't desire to buy shoes on the internet;

- They buy on the average 4,4 pairs of shoes in a year (men less than 3 pairs, women 5 pairs);

- They use a pair of shoes, in average, for not more than 1 year;

- They spend, in average, 80 euro for a pair of shoes (women between 80 and 100, men close to 50);

- They are available to spend, in average, not more than 140 euro for a pair of shoes (the mode and median is close to 100 euro, due to the presence of men);

- They have a low knowledge of Tod's brand, and in generally of the main international luxury brand;

- They consider the quality, the comfort and the design as the most important elements for the choice of shoes.

The results of the expert panel show, instead, that:

- Ukrainian people prefer platform and stiletto shoe models;

- Ukrainian people consider shoes as a high important element for their look;

- They buy shoes mainly in the retailer shops and in mono-brand shops;

- They don't like and don't desire to buy shoes on the internet;

- They are available to spend an important part of their salary on luxury product and luxury shoes;

- They have a low knowledge of Tod's brand, and a different perception for international luxury brand, due to the presence of fake products;

- They consider the brand, the country of origin and the design as the most important elements for the choice of shoes.

For a more deep and complete collection of information, useful to better understand the Ukrainian shoe market, it has been also planned to implement a more professional survey addressed to a more significant number of people. The scheduling should be the following:

- asking for an offer proposal and a quotation to the main consulting firms operating in Ukraine (two-three weeks);

- analysing the received offers and individuate a short list of the two or three more competitive ones (one week);

- organizing a meeting with the companies in the short list for a better understanding of the offer (less than one week);

- individuating the final choice and organizing the kick-off meeting (less than one week);

- receiving the first draft report about the results (two months);

- receiving the final report about the results (one months).

In consideration of the risk of fall out associated with the implementation of a bad strategy due to not properly correct collected data, the budget for the survey has been estimated in an amount of 50-100 thousand euro.