COO perception and Consumer ethnocentrism in ex-Yu Rok Sunko 29.10. 2008

Valicon Group timeline 2007 the year of

PGM – Product Group Manager Product Group Manager (PGM) is a syndicated marketing tool for brand and category management, including a broad insight in consumer profiles. Single-source data on: brand and category strength (inside various consumer segments) consumer habits The basis of PGM is a continuous syndicated marketing research field research n=2000 / country – national representative Fully automatised software application Consumer Marketing strategy Asortima n Execution

Product Group Manager (PGM) is a syndicated marketing tool for brand and category management, including a broad insight in consumer profiles.

Single-source data on:

brand and category strength (inside various consumer segments)

consumer habits

The basis of PGM is a continuous syndicated marketing research

field research

n=2000 / country – national representative

Fully automatised software application

Model used in PG M Usage Recognition Quantity Loyalty Price + How to rise profit? Consideration Experience How to achieve usage?

Population & consumer profiles Socio-demography Sex Age Status Education Income Values&lifestyles Free time Activities Frequency Consumer habits Shopping habits General FMCG consumption Expenditures Consumer indicators Retail chain loyalty Eating habits Eating habits indicators Consumer Ethnocentrism Country of origin

Socio-demography

Sex

Age

Status

Education

Income

Values&lifestyles

Free time

Activities

Frequency

Consumer habits

Shopping habits

General FMCG consumption

Expenditures

Consumer indicators

Retail chain loyalty

Eating habits

Eating habits indicators

Consumer Ethnocentrism

Country of origin

The perception of ex-Yu brands within the region n=8.000, SLO, CRO, BiH and SR together. + - ...in CRO ...in BiH, SER

The perception of Euroregional brands in ex-Yu ...in RS (&Republika Srpska) n=8.000, SLO, CRO, BiH and SR together. +

The perception of ex-Yu brands within Slovenia n=2.000, Slovenia

Slovenians highly value quality of domestic brands n=2.000, Slovenia

So what ? Slovene and Croatian brands have positive perception in the ex-Yu region Croatia has a relatively uniform perception Croatian brands also relatively equally successful function in all ex-Yu countries Slovenia has very positive perception in quality (!) and being worth the money, but is perceived expensive (not as “out-of-the ex-Yu” region) Slovenia has a very negative perception in CRO BiH has no COO image, there hardly are domestic BiH brands Serbia is perceived as low quality but worth the price. Republika Srpska (northern part of BiH) is very similar to Serbia The perception of Italian brands is biased in the direction of Prestigious, Attractive, Expensive (but not as expensive as Austrian) and quality Austria is being perceived as high quality, but extremely expensive

Slovene and Croatian brands have positive perception in the ex-Yu region

Croatia has a relatively uniform perception Croatian brands also relatively equally successful function in all ex-Yu countries

Slovenia has very positive perception in quality (!) and being worth the money, but is perceived expensive (not as “out-of-the ex-Yu” region)

Slovenia has a very negative perception in CRO

BiH has no COO image, there hardly are domestic BiH brands

Serbia is perceived as low quality but worth the price. Republika Srpska (northern part of BiH) is very similar to Serbia

The perception of Italian brands is biased in the direction of Prestigious, Attractive, Expensive (but not as expensive as Austrian) and quality

Austria is being perceived as high quality, but extremely expensive

Consumer ethnocentrism in the ex-Yu region C. Ethnocentric Not C. Ethnocentric

Does consumer ethnocentrism perception translates also in consumer behavior? 1. 2. 3. Milka (chocolate) Barcaffe (clasic coffee) Orbit (chewing gum) Not-Ethnocentric consumers 1. 2. 3. Barcaffe (clasic coffee) Milka (chocolate) Orbit (chewing gum) Ethnocentric consumers 4. 5. 6. 10. 7. 8. 9. Barilla (pasta) Laško (beer) Alpsko mleko (milk) Prill Aquafresh CocaCola 4. 5. 6. 7. 8. 9. 10. Alpsko mleko (milk) Laško (beer) Paloma (toilet papers) Aquafresh Barilla (pasta) 1001 cvet (tea) Paloma (tissues) Gillette (razors) 10 strongest FMCG brands in Slovenia in 2007 (n=2000) on: Consumer characteristics connected with Ethnoc. Age Education Tradiotionailty Income

Consumer characteristics connected with Ethnoc.

Age

Education

Tradiotionailty

Income

But is the connection the same for all brands? High Premium product (perception of the Ethnocentric consumer) Mainstream product (perception of the Ethnocentric consumer) Not-Ethnocentric Consumer Ethnocentric Consumer Not-Ethnocentric Consumer Ethnocentric Consumer

Brands that generate added value are less affected by Consumer Ethnocentrism Barilla pasta Premium Perception of the position of some brands in Slovenia in 2007 (n=2000): Mainstream Budget High market share Low market share Illy coffee Jacobs coffee EGO yoghurt Becel Vitalinea yoghurt Mercator edible oil High impact of Ethno centrism Mercator kitchen towels Low impact of Ethno centrism

Is all this relevant ? ? Kosovo

Ex-Yugoslav region is ’’on the radarscope’’ but countries do differ BiH Very low consolidation of retail sector Very important role of distributors Abrupt end of domestic expansion, no real COO Croatia Moderate consolidation / fast development of the retail sector Very successful transfer of experiences from other countries Slovenia Very high consolidation of the retail sector Process of category ’’cleaning’’ Macedonia Extreme fragmentation of retail, high importance of foregin players High instability Serbia Big potential of SR retailers Focus on ‘’domestic’’ expansion Big appetites for regional expansion/cooperation's “ Jumping” development phases

Very low consolidation of retail sector

Very important role of distributors

Abrupt end of domestic expansion, no real COO

Moderate consolidation / fast development of the retail sector

Very successful transfer of experiences from other countries

Very high consolidation of the retail sector

Process of category ’’cleaning’’

Extreme fragmentation of retail, high importance of foregin players

High instability

Big potential of SR retailers

Focus on ‘’domestic’’ expansion

Big appetites for regional expansion/cooperation's

“ Jumping” development phases

BIH CROATIA SERBIA SLOVENIA 0 3 1 3* No. of domestic brands within ex-Yu region TOP 100 0 17 19 9 MK 0 0 Internatio. 13 55 TOP 20

Slovenia in the broader context of former Yugoslavia BiH 4 mio people but in three different entities Average gross income 554€ Absence of domestic competition Hrvaška 4,5 mio people Average gross income 998€ Very nationalistic attitude to domestic brands , which are succesfull overall the region Slovenia 2 mio people Average gross income 1370€ Strong domestic competition with high qualitative standards Srbija 7,5 mio people / but Serbian market starts in RS Average gross income 560€ Comon... Fragmented market where strong distribution is very important Growth potential, but...

4 mio people but in three different entities

Average gross income 554€

Absence of domestic competition

4,5 mio people

Average gross income 998€

Very nationalistic attitude to domestic brands , which are succesfull overall the region

2 mio people

Average gross income 1370€

Strong domestic competition with high qualitative standards

7,5 mio people / but Serbian market starts in RS

Average gross income 560€

Fragmented market where strong distribution is very important

Growth potential, but...

Conclusions... .... Austria Slovenia multinationals Croatia Italy Serbia BIH Bulgaria attractive prestigious Macedonia expensive advertised quality poor execution worth their money rather don't buy them

....

attractive

prestigious

expensive

advertised

quality

poor execution

worth their money

rather don't buy them

Rok Sunko [email_address]