Kmc Case Study

KMC Case Study

Part-1

Threat of New Entrants:

KMC biggest advantage is that it’s serving a very niche segment, which requires an expertise to serve this segment. As it requires child psychologists and some expertise in understanding  the kids behavior, which requires consistent effort and cost to serve this niche. The segment itself poses high barrier of entries to the new entrants. Due to complexity involved in serving the niche segment, the threat of new entrants is low.  (Considering the white market only)

Buyer Power :

None of the other market research firms in Ukraine are focused on Kids & Children niche. This provides an absolute advantage for KMC to control this niche market. KMC’s customers included both Ukrainian and international firms seeking to better target kids, tweens and teens. International market research firms couldn’t offer the same level of expertise in this segment for the Ukrainian business environment. Lack of suppliers in the kids, tweens and teens segments results in a low buyer power. But Ukraine being the developing country, and 40% of the market is still yet to be regulated to make it a white market, there is still a chance of medium buying power that consumers can hold. But for the business which need a qualitative market research study on Kids segment, the buying power is low.

Supplier Power :

Ukraine market has 30 market research companies. None of the firms focused solely on the market research of  kids, tweens and teens. The black and grey market, Individual consultants and advertising agencies started performing market research to serve the market research at lower costs. Hence, there was low bargaining power among the sellers due to low differentiation. Even though switching costs depends on terms & conditions, I believe it’s fairly easy and there would be very minimal costs / No costs.  Ukraine being the developing country, and the government bodies regulating the market can result in increase of the supplier power.

Competitive Rivalry:

There were several sources of competition in market research. Traditionally, advertising agencies contracted market research work to a separate firm, but they had begun conducting their own market research in response to their customers’ demands. There was increasingly less and less differentiation between advertising, branding and marketing agencies, as they each worked to satisfy all of their clients’ needs. There were approximately 30 market

research companies operating in Ukraine. The major firms included Gfk-USM, AC Nielson Ukraine LLC, IPSOS S.A., Consumer Insights Ukraine (CIU) and Comcon Ukraine. The largest firms were all part of the prestigious European Society for Opinion and Marketing Research (ESOMAR), a global community of market research professionals. While there were many niche players, none of the firms operating in Ukraine was solely dedicated to market research focusing on Kids, tweens and teens market segment. But if there is significant change in the demographics shifts, all big research can enter this niche, but it requires lot of effort and expertise to gain the advantage in this particular segment Hence, competitive rivalry at this point is minimal.