A rough guide to... research in Macedonia
GfK recently bought 100% of its Macedonian subsidiary GfK Skopje, which works with companies such as Coca-Cola, Heineken and Nestle. The agency’s managing director Vesna Kuzmanovic provides a general overview of this market of two million people, and the MR industry’s place in it.
What are the origins of the market research industry in Macedonia?
Market research is a new and emerging industry in the Republic of Macedonia. Twenty years ago, when Macedonia was a part of Yugoslavia and the economic system was planned socialism rather than a market-oriented economy, market research was treated as just a collection of basic parameters. But in starting the process of privatisation the need for market research as a useful tool for strategic planning emerged.
At first marketing agencies played the role of market research providers. Their approach wasn’t scientifically based but it is necessary to stress their role as pioneers. The most used types of ‘research’ at that time were store checks and polls. As the market has developed, marketing and advertising have evolved into specific and different industries and this differentiation has had a positive effect on the development of market research.
Foreign direct investment has also had a positive effect on market research, specifically the investment of Heineken in Pivara Skopje, a brewery, and Deutche Telecom in Makedonski Telekomunikacii, as well as the United States Agency for International Development’s activities and its projects in different industries. Management teams in these companies introduced the western spirit of marketing, management etc, which is directly based on market research.
How big is the industry’s revenue?
We have no official data for the industry, because there is no professional association in Macedonia. We can project sales according to taxes paid, which gives us a figure of more than €1.6m. Ten years ago the estimated MR spend in Macedonia was approximately €800,000 – so we’re looking at about 100% growth in 10 years, which is pretty low.
We are still waiting for the boom in the economy and the business climate.
Are there any particular client sectors that are more active in buying research than others?
Telecommunications clients account for 40% of industry turnover. The FMCG industry, despite being competitive, is not very active in research because of the size of the market – although last year was a busy one for FMCG companies in the region, especially Serbian ones, which started to conquer markets in the Adriatic and Balkan regions.
The retail sector is also not active in terms of research. In the last few years purchasing habits have changed in Macedonia, with supermarkets taking a bigger market share (up from 25% to 40%), but still competition is not very strong because there is only one Greek retailer present, Veropoulos, and other chains are Tinex and Skopski Pazar, which are Macedonian companies.
The banking sector is still under-developed and there are no major international banks in the Macedonian market. Banks from Balkan countries are present here but they offer the same products under the same conditions, so the perception is that as there is no real competition there is no need for segmentation or other sorts of activity.
The most serious research customers are those companies where some of the shareholders are foreigners – although analysis shows that foreign direct investments are very low in Macedonia, as is the potential for it.
What’s the split of domestic versus international revenue?
International clients are heavy users of research services. Macedonian companies are struggling with numerous barriers and have no financial power at the moment to invest in growth. A few Macedonian companies in the FMCG sector are trying to conquer neighbouring markets – the ex-Yugoslav ones – and consequently they are more active in research and marketing generally.
Where does the Macedonian research industry fit in the wider European context?
Macedonia is part of Europe and has tight relations with European markets. Still, because of the size of the country, low purchasing power and extremely low foreign direct investment, the research industry is not growing as expected. Research spending per capita in Macedonia is approximately €0.8; in Serbia it is €1.25, in Austria it is more than €12 and in Germany it is €23. This is a sign of high growth potential for the MR industry in Macedonia.
As to quality of service and the use of new and developed methodologies, Macedonia is not much different from other European countries but their applications are directly connected with clients’ needs. Dynamic and innovative industries such as telecoms are highly motivating for researchers in Macedonia and provide an excellent field for application of the most innovative tools.