View/Open - ISM Science Box

Transcription

SELECTION OF POTENTIAL SHOPPING CENTERS IN LATVIA FOR FURTHER JSC
AUDIMAS EXPANSION
A Thesis
Presented to the Faculty
Of International Business and Communication programme at ISM University of Management
and Economics
in Partial fulfillment of the Requirements for the Degree of
Bachelor of International Business
by
Silvija Augustovska
Advised by
Exp. Cons. Benas Adomavičius
December 2013
Vilnius
SITE SELECTION FOR JSC AUDIMAS EXPANSION
2
Abstract
Augustovska S., Selection of potential shopping centers in Latvia for further JSC Audimas
expansion. [manuscript]: Final Bachelor Thesis. International Business and Communication.
Vilnius, ISM University of Management and Economics, 2013.
This Bachelor Thesis analyses Lithuanian based JSC Audimas which is currently considering the
idea about business expansion to foreign markets.
Objective. To identify 4 potential shopping centers in Latvia for further JSC Audimas expansion.
Research method. The empirical research was accomplished using a quantitative research
method. The purpose of the research is to compare selected shopping malls visitors profile with
investigated Company target market. Instrument used during quantitative research – a
questionnaire based on consumer profiling method, which was divided into three parts:
respondents’ motives of shopping mall selection, attitude towards athletic clothing and
demographic characteristics. A survey was conducted in 6 investigated shopping centers in Riga
city. In order to evaluate the results of the research, descriptive statistics were accomplished.
Results. The results of the conducted empirical research permitted to know and understand
shoppers in Riga and to measure the level of fitness with JSC Audimas target audience. Findings
of the research were fundamental support while selecting 4 potential shopping centers in Riga for
JSC Audimas development in Latvia. The results revealed an incredible similarity and favorable
segmental division, but at the same time pointed out citizens’ infrequent purchasing habits and
low expenditure level on not first necessity goods such as athletic clothing.
Keywords: site selection, sportswear industry, customer profiling, shopping malls
3
TABLE OF CONTENTS
Abstract ................................................................................................................................ 2
TABLE OF CONTENTS ..................................................................................................... 3
LIST OF FIGURES .............................................................................................................. 5
LIST OF TABLES ............................................................................................................... 5
INTRODUCTION ................................................................................................................ 6
1.
ANALYSIS OF THE SITUATION ........................................................................... 9
1.1
Internal analysis ...................................................................................................... 9
1.1.1. Organizational structure ................................................................................ 11
1.1.2. Performance analysis ..................................................................................... 12
1.2.
Audimas future projections ............................................................................... 13
1.3.
External Analysis .............................................................................................. 13
1.3.1. Market segmentation ..................................................................................... 13
1.4.
Market selection model ..................................................................................... 16
1.4.1. Macro location evaluation ................................................................................ 17
1.4.2. Retail sector in Latvia ...................................................................................... 20
1.5. Micro location evaluation........................................................................................ 21
1.5.1. Regional overview............................................................................................ 21
1.5.2. Region selection ............................................................................................... 26
1.6. Introduction to shopping and entertainment centers in Riga city............................ 29
1.7. SWOT analysis ........................................................................................................ 33
2.
EMPIRICAL RESEARCH ...................................................................................... 36
2.1. Aim and objectives of the research ......................................................................... 36
2.2. Research and data collection methods .................................................................... 36
4
2.2.1 Research method ............................................................................................... 36
2.2.2. Data collection.................................................................................................. 38
2.3. Research samples .................................................................................................... 38
2.4. Sampling limitations ........................................................................................... 39
2.5. Data analysis methods ......................................................................................... 40
2.6 Research results .................................................................................................... 40
2.7 Conclusion of the empirical research ................................................................... 54
3.
MANAGERIAL SOLUTIONS ................................................................................ 55
3.1. Retail place selection ............................................................................................... 55
3.2. Shopping mall assessment criteria .......................................................................... 56
3.2. Shopping centers assessment process ..................................................................... 59
3.3. Selection of 4 potential shopping and entertainment centers .................................. 63
3.4. Suggestion of strategic expansion for JSC Audimas .............................................. 64
CONCLUSIONS ................................................................................................................ 66
References .......................................................................................................................... 68
ANNEXES ......................................................................................................................... 72
LIST OF ANNEXES .......................................................................................................... 73
5
LIST OF FIGURES
Figure 1. Organizational structure ...................................................................................... 11
Figure 2. Site selection model ............................................................................................ 17
Figure 3. Proportional division by segments in Alfa shopping center ............................... 44
Figure 4. Proportional division by segments in Riga Plaza shopping center ..................... 46
Figure 5. Proportional division by segments in Domina shopping center ......................... 48
Figure 6. Proportional division by segments in Mols shopping center .............................. 50
Figure 7. Proportional division by segments in Spice shopping center ............................. 51
Figure 8. Proportional division by segments in Origo shopping center ............................ 53
Figure 9. JSC Audimas expansion to Latvian market scenario ......................................... 65
LIST OF TABLES
Table 1. Performance results. ............................................................................................ 12
Table 2. Market segmentation ........................................................................................... 15
Table 3. PESTEL............................................................................................................... 17
Table 4. Expenditure on clothing and footwear by region and year ................................. 19
Table 5. Regional overview of Latvia ............................................................................... 28
Table 6. Territorial division and shopping centers distribution in Riga city..................... 29
Table 7. Overview of shopping and entertainment centers in Riga .................................. 30
Table 8. SWOT analysis.................................................................................................... 33
Table 9. Demographic characteristics by segment in Alfa shopping center ..................... 43
Table 10. Demographic characteristics by segment in Riga Plaza shopping center ......... 46
Table 11. Demographic characteristics by segment in Domina shopping center ............. 47
Table 12. Demographic characteristics by segment in Mols shopping center .................. 49
Table 13. Demographic characteristics by segment in Spice shopping center ................. 51
Table 14. Demographic characteristics by segment in Origo shopping center ................. 52
Table 15. Shopping malls assesment criteria .................................................................... 57
Table 16. Shopping malls evaluation ............................................................................... 59
6
INTRODUCTION
Relevance of the topic. In business environment prevails a cliché claiming that all
companies must grow (Andrew Inkpen, Kannan Ramaswamy, 2006, p. 23). The majority of
companies possess a similar desirable future vision – to be a worldwide known company, to be
the best in a particular region or to be a leading company in a certain industry. The desire to grow
and expand is inevitable and there exists an abundance of reasons why companies should develop
its business. Predominantly, strategic decisions to cross homeland borders are based on chance to
gain worldwide recognition, to get an advantage of extensive knowledge and experience or to
increase the annual revenue rate. Competition is another indicator forcing companies to spread in
order to reach a wider range of customers. However, deciding where to continue developing
company’s activities is a sweaty work. Thus, site selection is considered to be a crucial decision
to be made by a retailer, which in the long run may become a success or possible failure.
Lithuanian based joint - stock company Audimas is a company successfully operating in
sportswear industry. The Company is deeply entrenched in the local market and at the moment
sees a potential to widen its athletic clothing business in foreign counties. The projected future
market Audimas is planning to enter is Latvia. The Company has already decided the exact
number of stores to be opened in Latvia – projections are being made for 4 “Audimas” retail
stores. However, specific shopping centers have not yet been determined. Therefore, this final
Bachelor Thesis will be based on the market selection model, which would help to identifying
right places for JSC Audimas expansion.
Consequently, the research problem of the paper is the following: Which 4 shopping
malls in Latvia best meet Audimas company’s requirements to enter the market with new
“Audimas” retail stores?
7
The aim of the thesis is to identify 4 most suitable shopping centers for JSC Audimas
expansion.
In order to reach the aim the following objectives of the thesis have been raised:
1. To analyze the internal and external situation of JSC Audimas;
2. To analyze the macro environment of Latvia and provide detailed regional overview;
3. To select a potential city and analyze the existing shopping centers in it;
4. To accomplish the quantitative empirical research in order to identify 4 shopping malls
where JSC Audimas should open its stores;
5. To provide managerial solutions which shopping centers should be chosen as the best
places for new “Audimas” stores.
Research methods: secondary data and interpretations, analysis and interpretation of
academic literature, quantitative research through questionnaire, primary data analysis and
interpretation.
Practical value of the thesis. Thesis can be considered as a valuable paper for further
JSC Audimas development and prosperity as the results disclosed during the research might be
helpful and probably used by a Company in real practice.
Logical sequence of the thesis. Thesis is structured in the following way:

Introduction which raises the problem and the objectives of the paper;

Situational analysis which describes the general information about the Company
and presents internal and external environments;

Empirical research with the aim to find out whether the profile of customers in
particular shopping malls corresponds with investigated Company’s target market;

Managerial solutions presents the solutions to the raised problem and includes the
selection of 4 potential shopping centers in Latvia;

8
Overall conclusions.
9
1. ANALYSIS OF THE SITUATION
1.1 Internal analysis
JSC Audimas is a company of Lithuanian origin founded in 1931 and currently located in
Kaunas city. At the beginning the Company was state – owned property focusing on a sewing
business. Later, in 1991 the Company has been under reconstruction and became a privatized
joint – stock company and in 1997 experienced the revival when the first retail store named
‘Audimas’ was opened in Lithuania.
Audimas mainly concentrates designing and manufacturing of sports and leisure apparel.
The corporation possesses two different operation or business areas – supplier area and regional
brand operation area. Supplier area is oriented to the mass – produced items which Company
mainly exports to the EU markets. Meanwhile brand operation area is concentrated on the
development of personalized brand-named products in the personalized Audimas retail stores.
Such a composition ensures right and effective activity concentration, divided responsibility and
overall stability.
Audimas is recognized as the major sports and leisure apparel manufacturer in horizon of
Lithuania and the Baltic States. At the moment Audimas controls three manufacturing plants two in Lithuania and one in Belarus and counts with 12 brand shops and 8 by franchise in the
territory of Lithuania (Panevėžys, two in Šiauliai, Alytus, Kėdainiai, Utena, Tauragė and
Marijampolė). However, the Company does not limit itself by these territories and is planning to
expand its business activities mostly in the Eastern Europe. Furthermore, the Company tries to be
available for its customers at any time and administers an online shop through which the
purchase of “Audimas” items is possible (www.e-audimas.lt).
10
JSC Audimas garments are designed for both men and women, for professionals and for
active life fans. The target market of the Company is pretty clear – people of middle - high
income who love an active lifestyle or do sports. The Company offers a wide range of products
suitable for different kind of sports such as jogging, skiing, other outdoor or indoor activities.
Moreover, the Company provides accessories and supplements in parallel with clothing
collections such as caps or bags. Every new collection released by Audimas is based on
customers’ expectations and needs. Each year Audimas, as many other players in the clothing
industry, offers four seasonal sports wearing collections for its customers: spring, summer,
autumn and winter. The Company’s products are highly valued because of the quality and
functionality. Quality is the essence of Audimas business. The Company is working hard in order
to maintain this image. Therefore, Audimas is considered to be an innovative company using the
highest technology and the excellent materials in the production processes.
In addition, the Company has implemented quality policy by adopting a new management
system that corresponds with ISO 9001 (International Standard Organization). The mentioned
policy has several aims: analyze and follow the customer needs and satisfy them; provide a
continuous development and improvement among the employees in the way that each employee
will have an opportunity to speak, act and seek personal perfection; develop business honestly;
treat others (customers, clients, business partners, shareholders, employees) with respect, fully
including them to the Company’s activities.
Company’s mission: help people to experience delight of active life by providing them
stylish and comfortable products at the best price.
Company’s vision: be a leading apparel company in the Europe producing innovative and
comfortable products which bring joy to an active and healthy lifestyle.
11
Company propagates the following values: respect, honesty, responsibility, openness to
innovations and sociality.
1.1.1. Organizational structure
The company has a hierarchical structure of organization, meaning that each employee is
involved in a particular group and this group is dependent on a certain department. The overall
control of the Company belongs to Jurgita Būdienė who is the current CEO (Chief Executive
Officer) of Audimas. Under CEO control there are several departments with outstanding leaders
responsible for his/her area.
JSC Audimas is a company consisting of two separated pieces – production area and
retailing/brand awareness area. Please note that the following paper is based and written about
Audimas brand awareness and retailing area (wholesaling, retailing, marketing, creation/design
and logistics), which is controlled by the executive director Arvydas Šapola (See Figure 1).
CEO
Jurgita
Būdienė
Executive
Director
(Arvydas
Šapola)
Wholesal
e
Retail
trade
Marketin
g
Productio
n
Creation/D
esign
Finance
IT
HR
Logistics
Figure 1. Organizational structure
Over many years Audimas has built a strong team full of skilled and qualified people
willing to conduct the Company to their desirable future – to be the leading clothing company in
Administr
ative
12
Europe. At the moment overall number of people working inside the corporation exceeds 500
employees from who 442 are skilled specialists.
1.1.2. Performance analysis
JSC Audimas is considered to be a constantly growing and developing company. In
Lithuania the Company has more than 30% of market share; it is a leading brand in active and
leisure sports apparel sector with an average 35% income growth. In 2012 the Company
recorded annual turnover of around 86million Litas, which was 30% higher than in 2011.
Moreover, in the future Audimas is expecting to follow the upward trend since the expansion of
activity and new retail stores opening are projected. The Company estimates turnover of 2013 of
more than 25 million of Euros.
Table 1.
Performance results
2010
2011
2012
Annual Turnover in Lt
49.5 million
66.1 million
86 million
1
14 336 191
19 143 883
24 907 322
Annual turnover in €
Note: Personal Elaboration based on internal Company’s data
Company’s turnover is composed by two parts as well. Producer – supplier part
contributes with a 60% to the final annual turnover number, while 40% of the overall turnover is
accomplished by branding and retailing. The brand area also includes the exports of Audimas
branded items to countries such as Poland, Russia, Germany, Estonia, Finland, Latvia and United
Arab Emirates; however, exports make only 10%. Therefore, the Company expansion to Latvia is
seen as encouragement and development of branded Audimas goods beyond the home market
territory.
1
2013
Equivalent in Euros were calculated according to the data provided by “Lietuvos Bankas” on December 20,
13
1.2. Audimas future projections
JSC Audimas is successfully developing business in Lithuania. Currently the Company
tries to lose the image of manufacturer (production and supply area) and spread the idea of
Audimas as a sportswear retailer (brand area) across the customers. Moreover, the Company has
decided to change the conception of the trading points by making stores more modern and
consisting with latter - day fashion. Over the last decade the Company has been establishing its
retailer’s position in Lithuanian market by opening a considerable number of “Audimas” stores.
Recently the Company has opened a few more stores of new conception in the home market and
counts with 22 operating stores. The aim of the Company has been reached and the idea has
spread across the country smoothly. Therefore, the success in local market has encouraged
company to cross home marker boarders and expand. Thus, according to one of the Company’s
stakeholder Rimvydas Povilaitis, Latvia has been chosen as the first foreign market due to its
physical distance where new conception “Audimas” stores will be implemented in the near
future. Moreover, it is the second time Audimas is crossing Latvia’s boarders. Before global
financial crisis Audimas has opened the first retail point there, but due to the poor economic
condition the Company has decided to optimize the expenditures and temporally suspend the
process. (Sergijenko, 2013).
1.3. External Analysis
1.3.1. Market segmentation
Demographic segmentation pursued by Audimas Company basically divides customers
into few groups depending on the gender and income level. Generally in Lithuania Company
designs its products for average or high income class customers (according to the Statistics
Lithuania, in 2012 the average gross monthly income in Lithuania is 2232 Litas) who are willing
14
to pay for the quality they receive. The same targeting strategy will remain in Latvia (according
to Central Statistical Bureau of Latvia the average gross montly income here is 481LVL per
month).
The Company selects urban areas versus rural zones. This choice is mainly driven by the
fact of denser population and superior standard of living. As a result, such a positioning assures
higher accesibility and a greater daily number of visitors in the personalized retail stores.
Gender segmentation is needful to be able to separate between different attitudes the
women and men have towards the product. The age limit is unset. Thus, the interval is extremely
broad. Audimas does not include children or elderly collections, but teenagers starting from about
thirteen years or adults over fifty, both men and women, can easily find items designed for them.
Moreover, Audimas treats all customers equally; family status is not an indicator for the
Company.
In addition, Audimas famous slogan “motional freedom” invites effervescent and
positively thinking people since sports activities tend to liberate negative minds and absorb the
affirmative ideas. Further, courage, resolution and the sense of freedom should be familiar for
such an individual as the sport is usually challenging activity constantly provoking the fight
between “I am” and “I could be/I could arrive” and inspiring the perfection.
The behavioral characteristics are closely related with the psychographic characteristics
since personality profile usually describes the expected behavior of the customer. Thus, Audimas
is segmenting its customers depending on the need scope the customer possesses and according
to the emotions provoked by sport. Overall exist 6 segments:
1) Excitement – describes spontaneous, optimistic and playful customers;
2) Potency – represents independent, brave and dynamic clients;
15
3) Dominance – illustrates decisive, ambitious and strong – willed people;
4) Competence – is about expedient, intelligent and rational individuals;
5) Connection – defines simple, well – wishing and mindful customers;
6) Togetherness – characterizes friendly, warm and sincere persons.
More detailed information about segments is provided in the Table 2.
Table 2.
Market Segmentation
Segment
Customers’ profile
Excitement
Spontaneous, optimistic and playful customers; Prevail females,
practicing jogging or aerobic .The age limit is between 31 and 50.
Monthly earnings exceed 300LVL. People belonging to this segment
tend to be popular and original and are highly interested in brand of
the product.
Independent, brave and dynamic; More oriented to males of 24 – 40
years old. The preferred ways of practicing are basketball and
cycling. Potency segment counts with people admiring innovations in
technology and clothing as well. However, this kind of people tends
to buy innovative but already tasted products by other segments.
Decisive, ambitious and strong personalities; well-liked by young men
(under 24 years old); working, but with not so high monthly income
(to 300LVL). However, despite the low income, these individuals
want to be fashionable and authentic. Thus, they spend a higher
amount of money on clothing. Favorite activities are tennis, skiing,
swimming and yoga.
Intelligent and rational individuals; includes both men and women of
31 – 40 years old, without children; These persons admire the
international brands of high quality and exclusivity. On the other
hand, they purchase athletic clothing more for they leisure time rather
than for sport (usually wear at home)
Simple, well – wishing and mindful customers. Segment chosen by
men between 31 – 40 years old, earnings over 300LVL monthly;
People belonging to this segment care about price and quality
relation and are interested in simple and casual clothing, since the
use of purchased garments is nothing special - simple gymnastic
exercises.
Friendly, warm and sincere persons; prevail women / mother of 31 –
40 years old; Usually such women think ahead about the purchasing
product and consider the reliability, functionality and period the
product will serve them. Therefore, prefer traditional clothes (no
exclusive features, no latest fashion aspects) and are addicted to
indoor training.
Potency
Dominance
Competence
Connection
Togetherness
Note. Personal elaboration based on the internal Company’s data.
From the segmental description it is possible to assume, that predominant age range of
customers in sportswear industry is from 30 to 40 years old. Also, exists a stereotyped
16
distribution between genders, claiming that athletic apparel is more wearing by men rather than
women.
The previous research accomplished for JSC Audimas at the end of 2010, revealed the
fact that the Company best fulfills benefits sought by Togetherness and Connection segments.
These two segments count with practical persons, setting a high value on product internal
characteristics (durability, comfort, quality, structure, etc.) rather than on external features
(colors, design, exclusive details).
1.4. Market selection model
A lot of methods used in literature share the common features of search, evaluate and
select a new location to develop a business. Differences emerge in the nature and complexity of
these three stages (Bhatia, 2008, p. 188). Thus, a lot of authors (Ball & McCulloch 1982;
Douglas, Le Maire & Wind 1972; Douglas, Craig & Keegan 1982; Liander et al. 1967; Root
1987; Russow 1989; Cavusgil, 1985) propose market selection process consisting of three stages:
screening, identification and selection (Koch, 2001, p. 66).
Audimas situation slightly differs from the traditional market selection process. The main
difference lies in the fact, that the Company has already established future market and there is no
need of countries filtration process. Considering JSC Audimas situation, Bowbly, Breheny and
Foot model of three stages with slight modification and adjustment to the Company situation will
be used (see Figure 2).
17
Macro - location
evaluation
Micro location
evaluation
Site selection
Figure 2. Site selection model
Source. Created by the author based on theory of Bowbly, Breheny and Foot site selection
model
Macro location evaluation process is related with the overall screening of selected
country. Thus, in this section Latvia’s country profile according to macro environment (political,
economic, social, technological, environmental and legal) factors will be carried out. After, the
retail sector will be briefly overviewed. The aim of this stage is to identify strong and weak sides
of selected country. Secondly, regional overview will be performed and one region with its
outstanding city will be selected. Finally, site selection stage will analyze shopping malls
suitability. After the assessment, the applicants (shopping malls) should come to light.
1.4.1. Macro location evaluation
In this section a brief overview of Latvia will be presented according to the PESTEL
analysis model.
Table 3.
18
PESTEL

Political
Economic
Social
Technological
Environmental
Legal
Democratic country, member of EU, NATO and World Trade Organization – free and open
trade;

Since 2008 Latvia is reducing government expenses and changing their role in the business
environment - become a true partner for the investors (investment protection and equal
treatment of both external and internal investors);

Euro currency introduction is projected in 2014;

Taxation policy is friendly and favorable for new investors

Budget cutting strategies helped to retain GDP growth in hard period and Latvia’s economy
has been recognized as the fastest growing economy in 2012;

GDP rose by 5.6% in the year of 2012 and in 2013 it is expected a light downfall to 4%. The
rise of GDP is mainly driven by to components: exports growth and increment of private
consumption.

Unemployment rate is decreasing gradually (in March 2013 was recorded unemployment
rate of 12.5%, while in 2012 it was of 15%);

Parallel with entire economy growth, household disposable income is also increasing average personal money income in 2012 was 343LVL per month.

Population of 2,023,825 (CSBL), however population is decreasing;

Migration rate is high – in 2011 30,380 people have left the country (Central Statistical
Bureau of Latvia, 2013);

Consumption is notably oriented to the cost of living coverage; The majority of the income
people spend on food (28%), transport (14.1%), housing expenses like electricity, water,
gas (16.8%); Latvia compared to EU-27 states has a marked contraction in education
(current spending 1.6%), clothing and footwear (5.1%) and health (5.9%);

Exist huge inequalities between major cities and surrounding areas.

Various activities related with R&D are developing in the country together with governmental
and EU contribution;

Latvia has reached to be a country highly oriented to the telecommunication, IT,
biomedicine, electronics and engineering;

Status of innovative and intelligent country.

Environmental friendly country

Approved Environmental Protection Law which is common in whole EU area with the
purpose to encourage the sustainable development, protect and meliorate the quality of the
environment.

Liberal economy policies in the business environment;

Entrepreneurs are constantly under control by public organs;

Competition Law allows free and fair competition in the market and prohibits the action of
unfair competition;

Employment law: 40 hours weekly ensuring welfare and security for employees, minimum
wage since is 200LVL, minimum hourly wage is 1.189LVL/hour, paid annual holidays of 28
calendar days;

Labor Law covers the rule of equal treatment, gender equality and non-discrimination
procedures.
Common history of Lithuania and Latvia has shaped the current similarity of both
countries. Moreover, both countries belong to the Baltic States and are the most proximate
neighbors. Thus, the level of uncertainty is pretty low because all factors of external environment
can be easily comparable to the home market.
19
On the other hand, political, economic and social factors have the highest influence on
apparel market, particularly on the sports wearing sector. Overall picture of Latvia’s macro
environmental situation is truly inviting. According to the Bank of Latvia, the entire economy is
expected to accelerate, though small decline of GDP this year, but rise in 2014. Private
consumption today is considered to be a key player of GDP in Latvia and in the future it will
remain this ascendant trend, as the purchasing power of households will be growing due to the
improved situation in labor market and relatively low inflation.
Over the last few years The Global Financial Crisis has changed and adjusted household
consumption. Especially a considerable contraction is observable in education, clothing and
footwear (see Table 4) and health (Christine Gerstberger, Daniela Yaneva, 2013). However, in
the future these numbers might change since the purchasing power will rise and it is likely that
Latvians will spend more money on the not first necessity products such as sport and leisure
clothing (Bank of Latvia, 2013).
Table 4.
Expenditure on clothing and footwear by region and year, expressed in LVL
Riga
Pieriga
Vidzeme
Kurzeme
Ziemgale
Latgale
2008
22.06
18.01
14.43
14.55
13.08
18.58
2009
12.86
8.26
7.3
8.13
8.71
13.21
2010
15.55
9.1
6.29
6.6
5.39
10.73
2011
14.03
7.72
7.9
7.81
9.58
9.76
2012
12.48
9.64
7.82
9.56
7.59
10.2
Source. From Central Statistical Bureau of Latvia (CSBL)
20
1.4.2. Retail sector in Latvia
In general, grocery retailers are the pacemakers in retail sector. Non – grocery retailers
highly suffered during economic crisis, because consumers broke off the purchase of optional
items such as electronics, garments or footwear. However, the retail trade has started to progress
respectively to Latvian economy’s recovery. People begin to invest more money into the
appearance, causing the boost in sales of non-grocery retailers. According to CSBL, the number
of enterprises selling clothing in specialized stores decrease by 67 (from 1068 in 2010 to 1001 in
2011), in contrast the turnover has increased from 186 758 Euros to 198 369. Naturally, it is
expected that retail trade will remain upward trend in the future, following the overall positive
economic environment in Latvia.
In addition, Latvia attempts to create a convenient environment for retail trade prosperity
by the constant development of shopping centers in the country. Latvia counts with 19 large
shopping centers, from which 14 are located in the capital Riga. Moreover, in the near future
there are foreseeable two grand projects – Riga Retail Park and Akropolis, with the aim to attract
people from three Baltic States and offer an abundant assortment of stores. Consequently, the
competition among the shopping malls exists; therefore new projects encourage the existing
shopping malls to renew by enlarging its territorial size or by enriching its shopping network.
Latvia’s business profile seems to be well – balanced and attractive enough. The country
is concerned about market players and encourages business activities in all possible ways. Retail
sector is expected to remain stable uptrend in the future due customers’ willingness to purchase
more discretionary products. Therefore, JSC Audimas has a perfect chance to profit from existing
favorable macro situation in Latvia.
21
1.5. Micro location evaluation
1.5.1. Regional overview
The republic of Latvia is divided into six administrative regions – Latgale, Zemgale,
Kurzeme, Vidzeme, Pieriga and Riga. In this section more detailed information about each region
will be presented in order to identify which region is correspondent with Audimas Company
criteria. The essential criteria for the Company deciding in which region locate “Audimas” stores
are:
1) Market size (measured by the number of population);
2) General economic region development;
3) Household expenditure on clothing.
Latvia for many years has been dealing with the regional disparity problem; naturally
observable phenomenon inside the country. Non – homogenous regional development sorely
affects the overall wealth of the country, making advanced regions responsible for drowning
country zones. In addition, Latvia is driven by several biggest cities - other innate trend
discouraging overall country’s performance, meaning that one or two cities with a highest
number of inhabitants in a region are better developed than the suburbs around this zone. Hence,
it is crucial to overview the current existing situation of Latvia’s regions and decide which region
and which city should be selected as the focus market for JSC Audimas.
Latgale
Region is located in the East of Latvia with a population of 304 032 habitants. The area of
the region is 14 550km2, bordering Russia, Lithuania and Belorussia. The major city is
Daugavpils with 93 312 inhabitants. The history has determined the fact that today Latgale region
counts with a high concentration of Russians, Belorussian and Polish people, who compose the
22
majority of the population of Latvia, especially in Daugavpils where 50 013 Russians live and
only 18 447 of Latvians. Latgale region is recognized as being the poorest one not only in Latvia,
but also among the entire European Union. Despite the fact that in Latgale lives around 16% of
total population and that territory occupies almost 23% territory of Latvia, the contribution made
by this area to the whole Latvia’s GDP is only about 7.8%. The unemployment level here is the
highest (20.7%). Moreover, incomes and salaries are the lowest (334LVL) in the country. Latgale
region in its area contains two major shopping centers; both are situated in Daugavpils city – Solo
and Ditton Nams. Ditton Nams is the largest shopping and entertainment center in Southern
Latvia. The building area is 42 000 m2 and the annual number of visitors reaches 5 million.
Meanwhile, Solo shopping mall is smaller; the range of the stores is insufficient to attract people.
Thus, annual number of visitors in Solo shopping mall reaches around three million.
Consequently, Latgale region mainly survives because of Daugavpils city, where the activity
level is higher. However, considering the fact about present Latgale region’s economic situation
and slow development tendency, it is absolutely possible to reject an offer to enter into this
region with new business. Although Daugavpils distinguishes itself from the rest of the area, the
overall picture of Latgale region is pretty disheartening; market is too small and simply lacks
basic development and higher activeness levels.
Zemgale
Region is situated in the center of Latvia; it has a population of 254 461 people, and
covers about 10 733 km2 of Latvian territory (16.6% of total country territory). Jelgava city is the
biggest one in the area, it has a population of 59 511 inhabitants and the majority of them are
Latvians (53.7%). Jelgava city is considered to be an industrial, cultural and educational center in
Zemgale territory. Wood, mineral products and articles of stone, plastic, ceramic are highly
23
developed in Zemgale area. Notwithstanding the fact that here lives only 14% of total population,
8% of national GDP is created by Zemgale region. However, the region has a different economic
structure and distinguishes itself by agriculture activities. The retail sector is not as deeply
developed as it could be. Only Jelgava city is worth considerations. Jelgava owns only one
shopping center “Pilsētas Pasāža”. Despite the fact that it is a single shopping mall of this type in
the area, it is relatively small –places about 58 stores, of which only 5 shops offer apparel and 1
store offers sportswear clothes. Probably Zemgale region has a favorable living environment, but
it is not designed for new sport wearing shop entrance. Essentially, the region may not need to be
well developed in retail sector as the capital Riga, which is the cradle of retailing and is situated
only 42km away from Jelgava.
Kurzeme
Kurzeme is a region of the longest coast with Baltic Sea in Latvia. In the territory there
are two important cities – ports– Ventspils and Liepaja, which ensures the accessibility of foreign
countries. Region is rich with forests and waters; therefore, forestry, fishery and agriculture are
recognized as expanded activities in the area. Kurzeme territory occupies 13 597 km2 and
accommodates 270 498 dwellers, of whom 74.1% are Latvians and 15.3% are Russians. Liepaja
city is the third biggest city in the country and Venstpils is the sixth. The proportion of GDP
created in Kurzeme region corresponds to the proportion of the people living in area. In 2012
Kurzeme has added 10.3% to total Latvian GDP. However, the biggest part is created in the city
of Liepaja and Ventspils, while districts around these cities remain in stagnation. On the other
hand, Liepaja and Ventspils are able to maintain whole region in the positive trend.
Unemployment level here is low comparing to the country rate – 13%, the average wage is about
414 LVL and economic activity in both cities is relatively high. However, territories around,
especially rural areas, are undeveloped. The retail sector is the secondary activity in the region.
24
Wholesalers and retailers of Kurzeme region estimate the turnover of 459 069 thousands of Lats
being made in 2011 (Central Statistical Bureau of Latvia, 2013). Both Liepaja and Venspils
counts with one bigger shopping centre. In Liepaja is located “Kurzeme” shopping mall, with 9
401m2 of building area. The largest tenants of the center are grocery retailer Maxima, footwear
retailer NS King and sportswear retailer Sportland. Meanwhile, a spacious shopping centre
“Liiba” belongs to Ventspils city. This shopping mall is more oriented to the service sector rather
than clothing.
Vidzeme
Region of the most beautiful landscape of Latvia, frequently called “Latvian
Switzerland”. The land covers 24% of Latvia territory and is situated in the north of the country.
The population reaches 211 309 of inhabitants. Vidzeme does not have big developed cities; the
most economically active cities in area are Cesis, Valmiera and Valka. Compared to the rest of
the region, Vidzeme has an easy and fast access to Riga, where the internal market potential is
concentrated. Valmiera is the only city in Latvia where more than a half of population lives in
rural area. Hence, this region has the smallest density of population. However, Vidzeme is
characterized by the highest proportion of Latvians living in it and by the little proportion made
by Russians. Overall economic development situation in the region is not balanced. Vidzeme
region contributes by only 6.9% to the national GDP rate and the majority of contribution is
made in Valmiera and Cesis. Hence, foreign investors do not consider this area as an attractive
place.
Pieriga
Region surrounding capital of the country. In this area lives 371 431 citizens, of whom 50
840 are accommodated in Jurmala – the largest city in the area. The territory is big enough, the
25
land of Pieriga covers 10 133 km2. Region seems to be economically well developed, because of
proximity to the capital. Strong dependence on Riga city has made Pieriga region vital and
brought it back to life. Therefore, Pieriga has the lowest unemployment level in the country,
13.7% GDP is being operated in this area; the disposable income per capita is above the average.
This phenomenon exists because majority of Pieriga residents are working in Riga. Hence, the
statistics and data about Pieriga region unroll its potential and positiveness. However, fact that
region is completely dependent on the capital changes the situation and discourages to set
business here. Pieriga area would be a possible solution in case of factory building rather than
new store opening due to its proximity to the capital.
Riga
The area around Riga is a life – force of the whole Latvian economy. Also it is one of the
most important and the biggest cities of the Baltic Region. Riga’s location is strategically
convenient place to develop business. Riga is located in the middle of free Baltic States –
Lithuania, Latvia and Estonia. Moreover, capital has a direct access to the Baltic Sea and Riga’s
city area is divided in to two pieces due to the flowing river Dauguva. Whole territory of the
capital is 304 km2. Population of Riga occupies almost one third of the total Latvia’s population.
At the beginning of the year of 2012 Riga counted with 649,853 inhabitants (286,420 males and
363,433 females) (Central Statistical Bureau of Latvia, 2013). Riga is the only predominant city
in Latvia; more than a half of total GDP is produced here (53.2%). Riga region differently from
other possesses a wide range of enterprises in every business sector and each year Riga’s
contribution to the overall welfare of the country is increasing, while contribution of other
regions has a downward trend. Moreover, Riga counts with 14 shopping centers and two big
26
projects are forecasted in the near future – Riga Retail Park and Akropolis. This city is
completely urbanized and developed and could be equate to other European cities.
1.5.2. Region selection
Each region has its advantages and weaknesses influencing Audimas company’s
decisions. As it was mentioned before in the paper, the Company prefers select region with high
population hoping to attain a greater number of potential customers. Therefore, regions which do
not seek 300 000 of population could be simply dismissed from further analysis. These regions
are Ziemgale, Kurzeme and Vidzeme. Moreover, an average spending on clothing in these areas
was also one of the lowest in the country – 9.54LVL, 7.81 LVL, 7.90 LVL respectively.
Pieriga has a right number of inhabitants; the region is the second best developed region
in Latvia. All the economic indicators (contribution to GDP, unemployment rate, average
monthly salary, etc.) are of the positive trend. However, Pieriga region lacks one prominent city,
because Jurmala is too small (only 50 840 dwellers) and there is no potential shopping centers. In
addition, Pieriga is the region spending the minimal amount of money on apparel - the average
monthly expenditure on clothing is extraordinally low – only 7.72LVL per household member.
Hence, this region does not satify minimum requirements raised by Audimas and is considered to
be innaproppriate for Company expansion.
Latgale could be a possible option – the population is relatively high and Daugavpils is
the second largest city in the country. Moreover, there are two shopping centers located in
Daugavpils and one of them - “Ditton Nams” could be an alternative. However, Latgale region is
poor in economic, business activity is low enough and discouraging. Consequently, for this
moment Latgale region choice is discarded.
27
Riga district with the capital Riga is a life cradle of the entire Latvia. The city highly
focuses on the transportation, transit hub, financial, industrial production, wholesale and retail
trade and tourism development. There exists a significant gap compared to other cities; the capital
has significant population and the economic conditions overstep the supposed requirements.
Furthermore, currently there are at least 14 shopping places located in Riga with predictable
growth. Thus, Riga has more to offer than any other place in Latvia. In addition to this, estimated
market size (product expressed by two indicators – population size and money spent on clothing)
has emphasized a significant Riga’s breakaway (See Table 5).
As a result, Riga region with Riga city is selected as potential future market for further
JSC Audimas development in Latvian market.
28
Table 5.
Regional overview of Latvia
Region
2
Area (km )
Population
Latgale
14 550
304 032
Ziemgale
10 733
254 461
Vidzeme
15 246
Kurzeme
Pieriga
Riga
Major cities
(population)
GDP
contribution
% (2010)
Unemployment
(2012)
Average
wage in LVL
(2012)
Monthly
disposable
income per
household
member in
LVL, 2011
Market size
expressed
2
in LVL
161.75
Average
monthly
expenditure
on clothing
per
household
member in
LVL, 2011
9.76
Daugavpils (93
312), Rezekne
(32 328)
Jelgava
(59 511)
7.8%
18.7
334
8.1%
17.3
402
188.6
9.54
2 427 558
211 309
Valmiera (25
130)
6.7%
15.8
371
175.46
7.90
1 669 341
13 597
270 498
10 133
371 431
Liepaja (76
731), Ventspils
(38 750)
Jūrmala
(50 840)
10.3%
13.0
420
208.81
7.81
2 112 589
13.7%
12.1
456
233.31
7.72
2 867 447
304
658 640
Riga
(658 640)
53.2%
13.9
547
251.37
14.03
9 240 719
Note. Personal elaboration based on the Central Statistical Bureau of Latvia data
2
Obtained by multiplying population size by average monthly expenditure on clothing per household member
2 967 353
1.6. Introduction to shopping and entertainment centers in Riga city
Before empirical research implementation the introduction to the existing shopping and
entertainment centers in Riga city is needed. Riga in the same way as Latvia is divided into six
territorial units (center of the city, Kurzeme and Northern districts, Latgale, Vidzeme and Zemgale
suburbs) where the main shopping malls are located (see table 6).
Table 6.
Territorial division and shopping centers dislocation in Riga city
2
District/Suburb
Area (km )
Population
Shopping malls
Central
3
26 466
Kurzeme
79
134 817
Galleria Riga, Origo,Galerija
Centrs
Olimpia
Latgale
50
197 166
Mols,Dole, Galeria Azur
Northern
77
81 972
No shopping center in this zone
Vidzeme
57
173 124
Alfa, Domina
Zemgale
41
106 068
Spice , Riga plaza
Source: From CSBL and Municipal portal of Riga
29
30
Table 7.
Overview of shopping and entertainment centers in Riga
Mols





Alfa
The first shopping mall
in Riga. Now is one of
the main players.
2
Total area 33 000m .
130 tenants offering
wide range of goods
(Vero Moda, Esprit,
Lee Cooper, Olsen,
Mexx, Bata, Reserved,
Milano, etc.); also exist
the area of restaurants
and cafes;
Annual number of
visitors is around
4million;
Customer profile –
people with dynamic
lifestyle; fashion
devotees with medium
-high income class,
highly oriented to the
customers with own
cars (90% of visitors
are coming with proper
transport);
Existing sportswear
retailers: Sportland and
Puma outlet.
Domina






Big in Riga located in
Vidzeme district;
Easy public access;
Center possesses a
wide range of apparel,
accessories and
household items
stores;
Annual number of
visitors approximately
reaches 5million;
Profile – single,
couple, families with
different income class.
People who are
interested not only in
shopping, but in
entertainment as well
(Restaurants zone and
Cinamon Cinema);
Existing sportswear
retailers: Sportland,
Gandrs, Puma.







Spice
The largest shopping
centers in Riga;
Located in the east of
river Dauguva , near the
city center (10min by
car or public service); in
one most dense area of
the city;
Annual number of
visitors is around 5
million;
Total retail area 50
2
000m ;
Capable to lease space
for 170 retailers;
Customer profile –
men/women, 25-50
years old with average,
average – high income;
families with/without
children; life style of
customers – individual
style, interested in
culture and
technologies, possess
different hobbies, value
sense of freedom and
creativity in their lifes;
Existing sportswear
retailers: Puma,
ReSport, Sportland.






Origo
One of the most popular
shopping centers in Riga;
Total area 77 600m²;
1291 open-air parking
spaces, 700 parking
spaces in garage;
Annual rate of customers
– 5 million;
162 retail outlets;
Profile – ‘world for
families’ with special
areas for kids;
Existing sportswear
retailers: City Sports
(Nike), Sportland, Elkor
Sport, Puma.









Modern architecture
shopping center located
near the central railway
and bus station.
Center perfectly matches
free dimensions:
shopping areas,
entertaining areas and
catering zones;
Convenient location
assures the permanent
flow of visitors;
Daily number of visitors
sometimes reach 150
000, per year the number
exceeds 50million (due to
its location)
2
Total area is 35 000 m ;
Shopping mall is easily
accessible with public
transport, but parking
zone is also available
(164 cars);
In three flour building
there are 220 stores;
Focusing on middle
income class people;
Existing sportswear
retailers:Sportland,
Sportland outlet, Sports
outlet.
31
Table 7.
Overview of shopping and entertainment centers in Riga (cont.)
Riga Plaza






Modern fashion
center in Riga
located on the west
side of river
Dauguva in Zemgale
district;
Spacious (49
2
000m ) and up-todate shopping and
entertainment place,
suitable for all type
of customers;
Has a special
entertainment zone
for adults and
children;
More than 1500
parking places;
Annual number of
visitors – 4 - 5million;
Existing sportswear
retailers: Sportland
Galleria Riga







Shopping center of
the superior style;
Located in city
center;
Annual number of
visitors is similar to
the biggest shopping
centers due to the
high flow of tourists
(around 5 million);
120 parking spaces;
Seven storey
shopping center with
220 boutiques and
stores;
Has a very specific
stores assortment,
suitable for high
income class people;
Existing sportswear
retailers: Skibox Lux.
Atrium Azur (Galerija Azur)








Located in Latgale
district, accessible
from all courners of
the city;
Total retail area 20
2
006 m ;
74 retail units;
Annual number of
visitors is between 23 million;
960 places for cars.
The assortment of
shops differs from
the usually found
stores in the biggest
and main shopping
centers;
Profile – perfectly
suits for housewife
since a lot of stores
located in Atrium
Azur offers
household items or
services retailed to
housekeeping
(furniture, health,
gifts);
No sportswear
stores.
Galerija centrs






Located in the Old
town of Riga;
Considered to be a
modern and elegant
gallery of fashion
goods;
Annual number of
visitors is about 8
million, due to the
intensive flow of
tourist;
Five flours
contemporary
shopping center
2
occupies 30 000 m
and places 140
stores;
No parking facility;
The majority of
shops are of high –
fashion.
Galerija centrs






Located in the Old
town of Riga;
Considered to be a
modern and elegant
gallery of fashion
goods;
Annual number of
visitors is about 8
million, due to the
intensive flow of
tourist;
Five flours
contemporary
shopping center
2
occupies 30 000 m
and places 140
stores;
No parking facility;
The majority of
shops are of high –
fashion.
32
Table 7.
Overview of shopping and entertainment centers in Riga (cont.)
Dole




Olimpia
Located 8km from city
center, about 85% of
visitors are citizens of the
surrounding areas. Thus,
annual number of visitors is
relatively low;
Places 142 cars at one
moment;
61 operating tenants
inside;
“Dole” concentrates its
activity on the supply of
daily use products and
services.





The only bigger shopping
center located in the
Kurzeme district;
The center fulfills the basic
needs of the district
dwellers such us bank
services, cleaning,
hairdressing,etc.;
Annual number of visitors
approximately reach
3million, since generally
the shoppers are the
residents of the Kurzeme
district;
Overall there are around
70 stores and 7 cafes;
Existing sportswear
retailers: Sport 2000.
Note. Information retrieved from personal websites of each shopping center: www.mols.lv,
www.alfa.lv, www.domina.lv, www.spice.lv, www.olimpia.lv, www.galleriariga.lv, www.dole.lv,
www.origo.lv, www.atrium-azur.lv, www.galerijacentrs.lv, www.rigaplaza.lv
After deeper overview of major shopping malls in Riga, 6 potential shopping centers have been
selected for the further investigation. These 6 shopping and entertainment centers have been selected
based on the information and knowledge of JSC Audimas positioning strategies in home market. As it
was mentioned before in the situational analysis, the Company usually targets biggest cities and the
leading shopping malls in the selected city. For example, in Vilnius (Lithuania) “Audimas” stores are
found in 4 top shopping malls: Panorama, Akropolis, Ozas and Europa (also there is one outlet). This
means that JSC Audimas is oriented to the biggest not only by square meters shopping malls, but also
is interested in the most visited and extremely popular places among the locals. Therefore, Dole,
Olimpia, Atrium Azur shopping centers have been rejected due to the local orientation and completely
different choice of stores more suitable for housekeeping. Galleria Riga, Galerija Centrs are also
33
bypassed because of the specific customers profiling; these two shopping centers are oriented to high
class customers (many times these customers are tourists) and since JSC Audimas is not a luxury
brand, these two shopping malls are not considered as an alternative.
Alfa, Mols, Origo, Domina, Spice and Riga Plaza are the most suitable options for further
investigation. In order to justify this selection, short interview with Riga’s citizen A.A. was conducted
on the 17th of October, 2013. The interviewee gave his/her opinion about existing shopping malls and
excluded the following: Origo, Alfa, Spice, Mols, Domina. Also, A.A. confirmed that all before
mentioned shopping centers are located in the different zones of Riga, but they are all pretty attractive
and worth entering since the flow of the shoppers is elevated and the choice of stores is wide enough.
1.7. SWOT analysis
This section includes SWOT (Strengths, Weaknesses, Opportunities, and Threats) of Audimas
Company. SWOT analysis describes generic Audimas Company aspects.
Table 8.
SWOT Analysis
Strengths







Strongly
developed local
brand;
Owned retail
points -good
positioning in
home market;
Experience;
Skilled and
qualified
personnel;
Potential
technology –
quality guarantee
Owned factories;
Loyal customers
Weaknesses





Weak brand image
overseas;
Excess of
“Lithuanian” taste;
Quality perception
Factory vs. brand
image;
Lack of product
innovation;
Not ‘catching’ the
display of retail
points.
Opportunities




Become a fashion
brand;
Use more
intensive
expansion
abroad;
New retail points
design;
Enhancement of e
– business.
Threats



Worldwide
known global
competitors;
Unpredictable
economic
development of
home and foreign
markets
(especially Baltic
States);
Consumer
preferences and
tastes.
34
The major strength of JSC Audimas is the present position in the home market. Over many
years of business development Audimas brand has gained recognition among the local customers and
determined position in the competitive clothing industry. The Company counts with 22 personalized
Audimas retail stores across the country and possesses a great number of experienced employees who
are Company’s valuable asset. Today JSC Audimas is a sponsorship and designer of National Olympic
team collections. Moreover, innovative technology used by the Company in garment production is one
of the key advantages assuring the highest quality of the products. Owned factories (2 in Lithuania and
1 in Belarus) is another solid argument describing Audimas strong side, permitting Company to be
independent, reactive and flexible to the changes. All before mentioned strengths generates one more –
loyal customer who is the stimulus for company to exist.
In contrast, Company lacks global brand image and the offered production is too much of
“Lithuanian” taste (jumpers, t – shirts with homeland symbols, colors).Thus, in foreign country
Audimas will have to avoid this national conception and create something more neutral. Moreover, the
design of the products does not represent the highest technology used in production and simply does
not match with the modern-day fashion trends. Despite the available technological resource, Audimas
creates “all-time” traditional garments. Also, the interior of the personalized Audimas stores is
inconspicuous enough to be overlooked by the customers. Thankfully, this might be changed soon and
converted to one of the strengths of the Company, because currently JSC Audimas is collaborating with
concept design professionals (LIN DIU and Tribeka Studio companies) who are helping to develop and
implement the strategy of new conception retail points.
Notwithstanding possessed weaknesses, the Company also has some visible opportunities in the
industry. Probably the most important opportunity which is worth company’s consideration is more
accelerated expansion to foreign markets. Up to now, Audimas has been protracting this process, but it
35
is likely that after first retail point opening in Latvia, the expansion will proceed smoothly. In addition
to this, Audimas could consider the fact of collaboration with other retailers and start selling
“Audimas” branded items in other mix-branded retail stores. In this way, the Company could firstly
spread the idea about Audimas, gain some trust and recognition and after open the personalized retail
store, eliminating the initial risks of new brand appreciation.
On the other hand, each Company activity is accompanied by the possible threats. One of the
biggest dangers for Audimas is the intensive competition full of worldwide known and recognized
brands in the athletic wearing sector. Despite the local brand development, overseas the Company faces
with the risk to be attacked by global players. Furthermore, Audimas has projected to step over foreign
territories which are close to the home market. However, neither home market, nor neighboring market
has a strong and stable economic background, which raises doubts about future due to direct economic
situation influence on customers’ purchasing preferences and habits (Mohatam, 2013).
2.
36
EMPIRICAL RESEARCH
This part of the thesis will permit to observe and deeper understand the profile of shopping
malls visitors in Riga city. The quantitative research method is used in order to identify how well
shoppers’ profile corresponds with JSC Audimas target market. The following research is divided into
three parts: aim and objectives of research; research method and data collection method (process and
results); conclusion of the research.
2.1. Aim and objectives of the research
The main purpose of this empirical research is to identify 4 most suitable shopping centers for
JSC Audimas expansion. Few objectives have been set in order to achieve the aim:
1. To select a research method;
2. To design a questionnaire;
3. To conduct the research in Riga city in selected potential shopping and entertainment centres;
4. To analyse data collected during a period of questioning and present conclusions of the
research.
2.2. Research and data collection methods
2.2.1 Research method
In this paper the quantitative research method will be used due to its objective and result –
oriented nature (Ghauri, Pervez N., Kjell Grønhaug, 2002, p. 110). The main reason why this method
has been selected is because it allows to examine considerably huge population size, since the
investigative object is Riga city (which counts with 658 640 of inhabitants). Moreover, quantitative
research method permits to treat data statistically, while qualitative research method is more oriented to
the information meaning (Taylor, 2000, p. 223).
37
A structured questionnaire has been developed as an instrument to accomplish the following
research. Questionnaires are the most usable tool in quantitative research (Muijs, 2011), which because
of its flexibility at the same time collects data from different people and different places. Thus,
selected study instrument will allow to capture all the necessary information and to fulfill the raised
objectives.
The survey has been designed using theoretical background of customers profiling, since the
main aim of the research is to screen shoppers and evaluate whether they fit with investigated company
target market. The 4W model of customer profiling was used while elaborating the questionnaire. 4W
model consist of four Ws – who, what, where and when (Collica, 2007, p. 5). To translate this 4W
model to the real situation, the widespread technique of customer profiling by demographic
classification, followed by psychographic characteristics expressed by personal motivators, lifestyle
choices or behavioral manners (Morato, 2013) was used. Therefore, ‘best customer’ profiling survey
comprises from three following parts:

Part I tries to reveal the motives of the particular shopping mall selection;

Part II measures the attitude respondents have towards athletic clothing and determines
the importance of activeness in their lives;

Part III collects demographic data about respondents such as gender, age, income,
occupation, etc.
The questionnaire was self - elaborated and consisted of 23 questions (see Annex 2) related to
the customer profiling techniques and based on the previous investigations made by JSC Audimas.
Surveys were implemented by using paper questionnaires in both English and Russian languages.
38
2.2.2. Data collection
The survey took place in Riga city (Latvia) on Sunday, 27 of October of 2013. There have been
selected 6 study shopping and entertainment centers located in different parts and districts of the city.
To obtain as objective data as possible the research procedure was guided by 5 research assistants and
was implemented in six different places in a one day course.
2.3. Research samples
In order to obtain the desirable results, the non – probability sampling method was used. Each
citizen of Riga is considered to be a potential customer, because Company’s target market is a
comprehensive list of different age, gender, incomes and lifestyles people. Therefore the population of
research (N) is equal to 658 640, which is the total number of inhabitants of Riga. Needed sample size
was determined by a formula when the population size is known; margin error is equal to 5% and the
confidence level - 95%. The obtained sample size (n) result was – 384.
The used type of non – probability sampling methods is quota sampling. Quota sampling refers
to the advanced information gathering and respondents classification after the conducted survey
(Fairfax County, 2012). Moreover, this technique is useful if population is not framed (Black, 2012, p.
232). In this case the exploratory object is people. At the beginning, the research will be conducted in
general form in order to gather information about the respondents. Later, during information processing
stage the correspondents will be classified into groups based on the sportswear industry segmentation
criteria. The information gathering process will take place in 6 distinct shopping centers. However,
each shopping center is differently perceived by visitors: some of them are well-liked and more often
attended, while other distinguishes itself by loyal, but lower number of annual shoppers. Therefore, in
order to be objective, sample size 384 will be divided proportionally into 6 parts considering few
things: size of the shopping center (measured by space and tenants number) and population living in the
39
area the shopping mall is located. Thus, Alfa (200 tenants) and Domina(170 stores) shopping centers
are the biggest and have relatively high catchment area around, Spice (162 stores) and Riga Plaza(140)
are located in a less settled zone, but are big enough. Mols (130 stores) is located in Latgale, where
population is high, but its size is the smallest from the applicants list. Origo(220 tenants) shopping
center is an exceptional case – despite the highest number of stores and registered tremendous number
of annual visitors, this shopping mall has not its true identity. The area around (city center) is poorly
settled, thus here the majority of shoppers are only accidental bypassers. Hence, sample size will be
divided in the following way: Alfa -75, Domina – 75, Spice – 65, Riga Plaza – 65, Origo – 55, Mols –
50.
2.4. Sampling limitations
Unfortunately, the research expectations were heavily achievable. The elaboration of 384
surveys from 6 different shopping centers was limited by several factors such as time pressure, the
display of shopping malls across Riga, shoppers passiveness to participate in the research and
miscalculation related to the time dedicated for one respondent. For these reasons the required sample
size has not been achieved. Thus, theoretically, obtained information should be treated as non –
representative. On the other hand, the obtained data could be considered as a useful source for the
research objectives implementation, since it is possible to get the idea what kind of people visit
shopping centers in Riga and compare their profiles with the seeking target.
The total obtained respondents number in this empirical research is 309. Thus, the recalculation
of sampling representativeness was provided in order to find out the new value of sampling error.
e √
e – Sampling error;
(
(
))
; Me= e x 100
40
zα/2 – Statistical significance level (alfa level with 95% of confidence);
p – Variable proportion in the population (in this case as there is no a prior set proportion,
p=0.5)
n’ – the number of respondents (in this case the obtained number is 231);
N – Total population number;
Me – marginal error.
√
(
(
))
= 0.0557
Me = 0.057 x 100 = 5.57 ≈5.6
Consequently, the sample size of the following empirical research after re – count reflects the
population of shopping centers visitors with 95% of guarantee and ± 5.6 marginal error.
2.5. Data analysis methods
Data collected in the questionnaire forms during the interviews will be analyzed through
statistic software package program - SPSS. This program will be useful in order to make further
descriptive analysis.
2.6 Research results
According to the fundamental goal of this empirical research, the results analysis will be
presented in the descriptive style. Firstly, a generic visitor’s profile presentation will be provided,
considering the jointly obtained information from all shopping and entertainment centers in Riga city.
Hereafter, the detailed profile description of each shopping mall will be discussed emphasizing market
segmentation results.
41
2.6.1. General picture of the shopping centers visitors in Riga
It is important to identify the reasons of shopping place selection in order to understand what
brings customers to a particular place to shop. Moreover, from certain factors it is possible to indicate
whether the person is a permanent and loyal customer or whether he/she is a casual guest, who cannot
be assumed as the potential buyer in the future.
There are few questions in the first part of the survey related to the general information about
the shopping mall selection. Looking from the broad perspective it is possible to assume that Latvians
like to visit shopping centers. From 309 interviewed respondents 32.1% are visiting shopping and
entertainment centers once per month, while 30.4% are going to this place more than once per week.
The choice of shopping center unambiguously is influenced by two main factors – proximity and easy
access of the shopping center. Riga Plaza (43.2%) and Domina (40.1%) shopping centers often are
chosen due to its proximity. On the other hand Mols, Alfa and Origo shopping centers are considered to
be easily accessible places. Mols and Alfa are located in the different districts of Riga, basically on the
highway. Thus, on numerous occasions these two shopping centers become a target of incoming and
outgoing guests and residents of Riga. Meanwhile, Origo shopping center is “awarded” with an
excellent location – next to the bus and railway station, nearby the old town.
In addition to this, the majority of the respondents believe that location of the retail stores inside
the shopping center, quality of the service and prices are factors of high importance which greatly
influence shopping process. The atmosphere created by retailer and display of the products also is
important, but not as much as the first three factors. Talking about staff attention and staff knowledge,
the answers have distributed quiet differently: there is a part of people who claim that they do not need
to be attended, but they appreciate the knowledge of the employees working in a sector. While other
believes that both attention and knowledge are fairly important while creating the image of retail store.
42
The brief demographic overview of all respondents permits to observe the general picture of
Riga’s shopping centers visitors. The number of women (57.4%) exceeds the number of men (42.6%);
the predominant age of shoppers is between 25-30 years – 39.6%. The youngest up to 24 years old
shoppers take the second place and form 36.7% of all visitors. Elders do not visit shopping centers
oftentimes, therefore the number of interviewed respondents elder than 40 years is significantly lower –
only 24 respondents from 309. On the other hand, despite the pretty young shoppers’ population, the
number of working people is high - 76.4% of all respondents are employees and only 2.6% of shopping
centers visitors are unemployed. However, average personal income level is raising doubts. The most
frequent earnings are up to 200LVL or between 201 – 350LVL. This fact may claim about the
phenomenon of working student – young, but employed with subaverage monthly earnings.
Meanwhile, midlife shoppers from 30 to 40 years distinguish themselves by above the average monthly
income rate (according to the CSBL, the average monthly net income sum in Latvia is 343LVL). Most
of them are earning between 350 and 800LVL. However, a very little part gets above 950LVL – only
13.4% of the respondents spread between 25-30 and 31-40 age groups.
From general perspective, Riga’s citizens consider sport as an important part of their lives. The
obtained mean of “how important are the sport activities in your life” is 7.2; meaning that over 70% of
respondents confirm sport’s significance and only 19 respondents have denied the importance of it.
Moreover, 61.4% of the respondents think they are active life promoters and are practicing in distinct
forms: exercising, running, swimming, skiing, indoor training, dancing, football, cycling, basketball,
yoga or fitness.
There were introduced two questions in the survey “I think I am” and “How would you describe
yourself?” with the aim to identify whether the self-evaluation is directly related with a particular
feature of the character. After cross- tabling analyses where above mentioned questions were crossed
43
the obtained number of Chi-Square test was χ2 7.319 with p 0.198 (p ≥ α), confirming the initial
hypothesis about relation among two variables non – existence (See Annex 4). In consequence, it
would be wrong to claim that respondent’s character determines the lifestyle choice (not necessarily an
optimistic person has to be more than sincere individual inclined to an active way of living).
Hence it is possible to conclude that overall profile of Riga’s shopping malls visitors is fairly
corresponding with the athletic apparel industry customer profile. Further the analysis of conducted
empirical research will extend to the detailed description of people met in each shopping center in order
to investigate which shopping malls contain quest interest segment.
2.6.2 Shopping and entertainment center Alfa
Alfa shopping mall is especially popular among young people under 24 years old without
children. Females (58%) visit more often than males (42%). The majority are currently employed
people earning up to 200LVL (31%) or between 351 – 500LVL (27%). 49% of the respondents are
coming to Alfa once per month or few times per week (32.6%) because of habit (31.2%), proximity
(25.4%) and accessibility (32.6%).
The respondents questioned in Alfa usually buy athletic clothing in the shopping center (86%)
once per year (54%) or once per three months (39%). The yearly amount of money spent on sporting
goods differs from 20 to 500 Lats; the most common sum is 150 Lats. It is possible to assume, that
visitors of Alfa would favorably rate new sporting goods retailer, since the majority of respondents are
“not addicted” to any sportswear brand and normally pay attention to the product they buy rather than
the brand. The most valuable features of buyable product are comfort, design, functionality, quality and
prices. Meanwhile exclusive features, brand, assortment and color are of the secondary importance.
Table 9.
Demographic characteristics by segments in Alfa shopping center
Excitement
Competence
Dominance
Male
13.2%
3.8%
3.8%
3.8%
7.6%
3.8%
Gender
Female
19.1%
1.9%
1.9%
7.6%
7.6%
25.9%
Age
Up to 24
24 – 30
31 – 40
12.6%
14.9%
-
7.40%
3.7%
-
7.4%
3.7%
-
9.8%
3.7%
-
9.8%
9.8%
9.8%
7.4%
12.6%
25%
5.8%
2.9%
5.8%
2.9%
5.8%
2.9%
5.8%
18.9%
-
-
-
-
2.9%
5.8%
10.9%
2.4%
-
-
2.4%
14.1%
Do not have
23%
2.4%
2.4%
10.9%
10.9%
18.2%
Up to
200LVL
201-350LVL
351-500LVL
501-650LVL
651-800LVL
>950LV
7.2%
-
-
2.8%
11.4%
11.4%
2.8%
2.8%
15.8%
2.8%
2.8%
5.6%
2.8%
-
2.8%
-
2.8%
2.8%
-
2.8%
2.8%
17.8%
-
Occupation
41- 50
Student
Employee
Unemployed
Under age
family
members
Monthly
income
Have
Potency
44
Connection
Togetherness
The distribution of the segments in Alfa shopping center is the following:
Togetherness;
32.90%
Excitement;
35.80%
Connection;
13.70%
Competence;
Dominance; 3.90%
Potency; 3.10%
10.60%
Figure 3. Proportional division by segments in Alfa shopping center
There are found two outstanding groups of people in Alfa shopping center – optimistic, young,
working fashion peacemakers belonging to excitement segment and simple, slightly elder and
appreciating product’s functionality rather than fashion (togetherness segment). In both groups women
compose the highest percentage of visitors in this shopping center. Moreover, it would be possible to
45
estimate that first group (excitement) distinguishes by higher monthly earnings. However, despite the
fact of different demand, both groups are especially important since one is an industry leader and
dictator and other is a segment sought by investigated Company.
2.6.3. Shopping and entertainment center Riga Plaza
Riga Plaza is well – liked shopping center by both men (47.3%) and women (52.7%). The
majority of visitors are up to 30 years old; meanwhile people from 31 to 50 compose 25.6% and
generally have one or two under-age family members. 78.4% are working visitors coming to this
shopping center once per month (25.7%), once per week (31%) or more often (27%). Monthly gainings
distributes unequally, but generally the economic situation of Riga Plaza shoppers is satisfactory –
47.2% earn from 200 to 500 Lats, 24.3% gain from 500 to 950Lats and 10.8% monthly earn more than
950Lats. The majority of shoppers are residents of the central Riga’s city zone. Residents of Zemgale
and Vidzeme can be found here as well. The main reason for choosing this shopping mall is proximity
(43.2%).
Shoppers of Riga Plaza usually purchase athletic clothes in the shopping center (78.3%) once
per year or once per three months since majority of them consider sport to be an important part of their
lives. The amount of money spent yearly on sportswear differs from 20 to 600 Lats (8.2% spend over
500Lats, 23% up to 100, 37.8% from 100 to 300Lats). Almost 60% of interviewed are active life
promoters and more than a half of the respondents are wearing sportswear clothes while doing sport.
Other simply wears sporting clothes at home or outdoor. The predominant products features which
determine purchasing decision are color, comfort, design, functionality, price and comfort. 25% of
buyers care about the brand name and 76.4% of them claim to be “addicted” to one or another
sportswear brand such as Nike, Adidas, Puma or Vans. The revealed reasons of addiction are quality
and the world wide known name.
46
Table 10.
Demographic characteristics by segments in Riga Plaza shopping center
Competence
Dominance
Male
Excitement
20.3%
Potency
2.7%
12.1%
2.7%
Connection
8.1%
Togetherness
1.4%
Female
16.2%
5.4%
6.8%
8.1%
6.8%
9.4%
Up to 24
24 – 30
31 – 40
10.8%
12%
10.8%
2.7%
4%
1.4%
2.7%
10.8%
2.7%
6.8%
2.7%
-
8.1%
5.4%
1.4%
6.8%
2.7%
41- 50
>50
Student
2.7%
6.7%
1.4%
2.7%
2.7%
1.4%
4%
4%
1.4%
1.4%
Employee
29.8%
6.7%
14.9%
6.7%
10.8%
9.5%
-
-
1.4%
-
-
-
Have
25.7%
2.7%
9.5%
4%
2.7%
6.8%
Do not have
10.8%
5.4%
9.5%
6.8%
12.1%
4%
Up to
200LVL
201-350LVL
351-500LVL
501-650LVL
651-800LVL
801-950LVL
>950LV
6.8%
2.7%
1.4%
1.4%
4%
1.4%
12.2%
2.7%
4%
1.4%
1.4%
8.1%
2.7%
1.4%
1.4%
-
2.7%
4%
4%
4%
2.7%
1.4%
2.7%
4%
1.4%
-
4%
4%
2.7%
-
5.4%
4%
-
Gender
Age
Occupation
Unemployed
Under age
family
members
Monthly
income
Riga Plaza divides the customers into sportswear industry segments in the following proportion:
Togetherness
11%
Connection
15%
Excitement
36%
Dominance
11%
Competence
19%
Potency
8%
Figure 4. Proportional division by segments in Riga Plaza shopping center
47
Excluding Excitement segment, which in all cases will be the leading one, Riga Plaza has fairly
equal segmental distribution. Such a distribution points to a visitor’s diversity and possible mobility,
which could be considered as an entrance obstacle for investigated Company.
2.6.4. Shopping and entertainment center Domina
Generally people visit Domina shopping center once per month or once per week due to its
proximity (41%) and by visitors’ habit (32%).Usually shoppers are arriving from central Riga’s part,
Vidzeme and Latgale suburbs. This shopping mall has enviable equal gender distribution of visitor:
51% of males and 49% of females. Age range extends from the youngest ones (up to 24) to the elder
people up to 50 years old. The vast majority of visitors are employees. 24% of visitors do not feel the
connection with the sport and 36% of the respondents describe themselves as quiet lifestyle supporters,
while 27% give a high importance for it and 66% believe to be active life promoters. Normally,
shoppers are buying athletic clothes in the shopping centers once per year or once per three months.
The average monthly amount spent on sporting clothes is around 220Lats. Comfort, functionality, price
and design have most influence on product purchasing decision. Domina shopping center visitors are
looking for the product which would be suitable to wear at home, outside and while doing sports.
Table 11.
Demographic characteristics by segments in Domina shopping center
Excitement
Gender
Age
Occupation
Competence
Dominance
Male
12.8%
4.3%
4.3%
10.6%
10.6%
12.8%
Female
12.8%
3.2%
6.4%
3.1%
8.5%
10.6%
Up to 24
24 – 30
31 – 40
10.4%
8.2%
6.2%
4.3%
2.1%
2.1%
2.1%
4.3%
2.1%
2.1%
2.1%
6.1%
2.1%
12.5%
2.1%
10.4%
4.3%
8.2%
41- 50
Student
7.6%
2.1%
2.1%
-
2.1%
-
2.1%
2.1%
2.1%
7.6%
Employee
17.2%
8.5%
6.3%
13.6%
17.2%
13.6%
-
2.1%
-
-
2.1%
Unemployed
-
Potency
Connection
Togetherness
48
Table 12.
Demographic characteristics by segments in Domina shopping center (cont.)
Under age
family
members
Monthly
income
Have
Do not have
12.3%
11.7%
3.2%
6.1%
6.1%
4.4%
8.7%
4.4%
10.9%
8.7%
17.4%
6.1%
Up to
200LVL
201-350LVL
351-500LVL
501-650LVL
651-800LVL
801-950LVL
>950LV
1.9%
-
1.9%
1.9%
1.9%
7.6%
9.7%
1.9%
5.9%
6.4%
1.9%
1.9%
3.1%
1.9%
-
1.9%
3.1%
1.9%
1.9%
4.1%
1.9%
4.1%
4.1%
1.9%
4.1%
6.4%
1.9%
1.9%
7.2%
1.9%
1.9%
6 segments of sportswear sector are distributed in Domina shopping center in the following
way:
Togetherness
23%
Connection
20%
Excitiment
24%
Potency
9%
Dominance
Competence 10%
14%
Figure 5. Proportional division by segments in Domina shopping center
Domina shopping mall counts with diverse customers as well as Riga Plaza. However, this
diversity is easier to distinguish and permits Company to concentrate on the searchable group of
customer, because JSC Audimas target audience (Togetherness and Connection segments) in this
shopping center is found in respectable position.
2.6.5. Shopping and entertainment center Mols
Shopping center Mols is popular among men of various ages from who 28% are students and
72% are currently working people. However, the majority of Mols visitors are earning up to less than
the determined average, therefore yearly medium sum spent on athletic clothing is not so high – around
49
120LVL per purchaser. Sport is considered to be an integral life part for 11.4%; at once other 10.7% of
respondents do not attach any significance for it. Therefore, majority buy sport apparel only once per
year in the shopping center (78%) or via Internet (22%). In the usual way, Mols visitors highly
appreciate functionality, comfort and design of the garment, which they usually wear in the gym, at
home or outside. There have been found 5 segments in Mols shopping center.
Table 13.
Demographic characteristics by segments in Mols shopping center
Excitement
Potency
Competence
Connection
Togetherness
Male
10.4%
6.2%
7.8%
11.9%
13.2%
Female
3.6%
3.6%
6.2%
15.8%
21.3%
Up to 24
24 – 30
31 – 40
12.2%
-
6.9%
4.6%
-
3.4%
6.9%
-
6.9%
14.8%
7.7%
18.6%
6.9%
7.7%
41- 50
Student
7.4%
3.4%
3.4%
3.4%
9.6%
9.6%
Occupation
Employee
6.9%
6.9%
10.7%
18.2%
24.4%
Under age
family
members
Have
6.7%
3.4%
6.7%
6.7%
14.9%
Do not have
6.7%
7.4%
6.7%
20.9%
19.90%
Up to 200LVL
201-350LVL
351-500LVL
501-650LVL
651-800LVL
801-950LVL
>950LV
6.7%
3.4%
3.4%
-
3.4%
3.4%
3.4%
-
6.7%
3.4%
3.4%
9.8%
3.4%
4.85%
3.4%
3.4%
3.4%
12.4%
6.7%
4.85%
10.6%
-
Gender
Age
Monthly
income
Mols shopping center‘s visitors are grouped into 5 segments in the following size:
50
Excitement
14%
Togetherness
34%
Potency
12%
Competence
14%
Connection
26%
Figure 6. Proportional division by segments in Mols shopping center
Mols shopping center is unique by its selection and choices. Conversely to other investigated
shopping centers, Mols visitors are not so highly concerned about fashion of athletic clothes. Therefore,
leading segments here are Togetherness and Connection with mature shoppers in front who care more
about internal product features (comfort, durability, etc.) rather than external appearance.
2.6.6. Shopping and entertainment center Spice
Likewise men (53%) and women (47%) visit Spice shopping and entertainment center rarely
(23%), once per month (27%) or more than once per week (32%). The majority of the visitors are
coming from Vidzeme and Central territory because of the proximity. Major part of representatives is
young and elder families with few under age household members. 82% of visitors are working people
with stable monthly income (23% gain more than 950LVL, 34% from 350 to 500LVL and 19% up to
200LVL monthly). Half of the respondents believe to be active lifestyle fans, while another half
remains on the passive side. Thus, the importance of the sport lies in the middle of the measurement
scale. Moreover, 37% of the shoppers pay a lot of attention on the brand and claim to be “addicted’’ to
a certain sportswear brand. For Spice shoppers practically all product features are meaningful and
determinative, except simplicity and exclusive features. Hence, it is possible to assume, that Spice
visitors admire fashion with one condition - not too simple, but not too provocative at the same breath.
51
The average yearly sum Spice visitors are willing to spend on athletic clothing exceeds 150LVL.
Usually, shoppers wear sportswear, which they purchase in the shopping center (85%), at home or
while practicing.
Table 14.
Demographic characteristics by segments in Spice shopping center
Excitement
Gender
Age
Potency
Competence
Dominance
Connection
Togetherness
Male
17.2%
5.2%
5.2%
4.6%
5%
9.8%
Female
21.4%
4.6%
5%
2.2
5.2%
14.6%
Up to 24
24 – 30
31 – 40
14.6%
12.4%
5.2%
9.8%
5.2%
4.6%
-
4.6%
2.2%
5.2%
4.6%
-
9.8%
9.8%
-
9.4%
2.2%
2.2%
5.2%
-
4.6%
4.6%
5.2%
2.2%
41- 50
Student
Occupation
Employee
30%
9.4%
4.6%
5.2%
5.2%
21.4%
Under age
family
members
Have
14.6%
5.2%
12.2%
2.2%
5.2%
9.8%
Do not have
24.2%
-
5.2%
4.6%
2.2%
14.6%
Up to 200LVL
201-350LVL
351-500LVL
501-650LVL
651-800LVL
>950LV
7.4%
5.2%
12.2%
9.8%
-
4.6%
4.6%
4.6%
4.6%
5.2%
-
2.2%
4.6%
4.6%
2.2%
4.6%
-
4.6%
4.6%
4.6%
9.8%
Monthly
income
Togetherness
23%
Connection
11%
Excitement
37%
Potency
11%
Competence
12%
Dominance
6%
Figure 7. Proportional division by segments in Spice shopping center
52
The major part of the customers in Spice is composed by families of different age groups with
or without children. This shopping mall also characterizes by a higher income class shoppers who are
interested in fashion and the brand of the product. Thus, Excitement segment is frequently met here.
However, brand is not the unique characteristics Spice shoppers desire to get. These customers also
care about the quality and functionality of the product, which is broadly searchable by Togetherness
segment.
2.6.7. Shopping and entertainment center Origo
Origo shopping center is attended by various visitors due to its location. 33% of visitors are
men and 67% - women. The age limit is dispersed as well, there are found that much young customers
as purchasers in years. 36.3% of visitors are students and the rest are currently employed individuals,
coming to this shopping center once per month or few times per week. Sport for such visitors is not
considered to be an activity of high importance; even 51.6% are against the idea of active lifestyle. At
the moment of purchase Origo visitors firstly look at the product and the essential features of it such as
comfort, design, color, simplicity, quality and price. Yearly these customers spend up to 100LVL on
athletic goods, which they buy once per year (67.4%) in the shopping center (65.2%) or by Internet
(23.7%). More than a half of Origo customers wear athletic clothes at home.
Table 15.
Demographic characteristics by segments in Origo shopping center
Excitement
Gender
Age
Potency
Competence
Dominance
Connection
Togetherness
Male
5.9%
-
2.9%
2.9%
17.6%
11.8%
Female
20.7%
2.9%
5.9%
2.9%
11.8%
14.7%
Up to 24
24 – 30
31 – 40
14.7%
8.8%
-
2.9%
-
5.9%
2.9%
2.9%
11.9%
14.7%
2.9%
11.9%
8.8%
2.9%
41- 50
5.9%
-
-
-
-
2.9%
53
Table 16.
Demographic characteristics by segments in Origo shopping center (cont.)
Occupation
Under age
family
members
Monthly
income
Student
Employee
Have
Do not have
11.8%
17.6%
14.7%
14.7%
2.9%
2.9%
8.8%
2.9%
5.9%
2.9%
2.9%
-
14.7%
14.7%
11.9%
17.6%
11.8%
14.7%
20.6%
5.9%
Up to
200LVL
201-350LVL
351-500LVL
501-650LVL
>950LV
5.9%
-
-
-
11.8%
2.9%
8.9%
11.8%
2.9%
-
2.9%
-
5.9%
2.9%
-
2.9%
-
2.9%
8.9%
2.9%
2.9%
8.9%
5.9%
5.9%
2.9%
Togetherness
25%
Connection
28%
Excitement
29%
Potency
4%
Competence
Dominance 10%
4%
Figure 8. Proportional division by segments in Origo shopping center
Segmental distribution in Origo shopping center is favorable for investigated Company;
however visitors of this shopping mall do not consider themselves as a sport or active life enthusiasts.
Moreover, costumers here are notably young and the mall is well liked among teenagers due to its
convenient and attractive location. Elder people rarely chooses this shopping center as a place to do
shopping since the parking is small and traffic flow around the territory is elevated. Therefore, it is
difficult to find out who is the real and true customer of this shopping center.
54
2.7 Conclusion of the empirical research
Empirical research has been conducted with the aim to compare the profile of shopping and
entertainment centers visitors in Riga city with JSC Audimas target market. The outcomes permitted to
do such a comparison and in general provided useful information about Riga’s citizens, their preferable
lifestyles and some shopping habits. Obtained general conclusions are the following:

Majority of visitors are young working people with less than the average personal
monthly income;

In general, residents of Riga like sport and give a high importance to it. Activeness level
is higher than passiveness;

There are two clearly observable groups of customers common basically in all 6
investigated shopping centers - one group preferring traditional clothing represented by
elder people and another guided by young generations and highlighting the importance
of fashion;

However, when it comes at the moment of purchase, majority of customers does not
care about the brand name; product itself with its basic characteristics (quality, design,
color, comfort, etc.) is more appreciable. Thus, new retailer may have chances and
success to be pleasantly accepted;

Sportswear purchasing process in not highly frequent phenomenon among Riga’s
citizenry and the amount spent on this type of clothing is relatively low due to the low –
budget setting;

The favorable aspect for a new retailer is shopper’s habit to buy athletic clothes in the
shopping center, because a large half of visitors advocates this purchasing method.
3.
55
MANAGERIAL SOLUTIONS
This part of the paper will suggest four shopping and entertainment centers in Riga city as
potential and convenient places to open “Audimas” mono – brand retail stores. Main issues found
during the empirical research process:

All six investigated shopping malls possess a number of similar characteristics since all
analyzed shopping centers are the major and leading players in the city;

Prevails a curious phenomenon – despite the fact of frequent shopping centers
attendance, purchase process is a rare occurrence;

Riga’s citizens in general do not spend a lot of money on the secondary, optional goods.
3.1. Retail place selection
Retail place selection is a systematic process which at first broadly analyze geographical
location and after moves to a specific site characteristic evaluation (Joachim Zentes, Dirk Morschett,
Hanna Schramm - Klein, 2011). Site selection decision is one of the essential long - term concerns the
retailer has to take (James E. Finch, Stephen C. Brokaw, 1994), determining the further existence of a
particular sale point. Moreover, location is one of the four marketing mix elements better known as
place. An ingrained definition about place in a broad sense suggests for a company or a retailer to be at
the right place at the right time. Therefore, an error committed during a location selection process
results in a reduction of business efficiency (Savas, 1978) and prevent a retailer from profit
maximization. Plus, location is fixed nature attribute which generally is hard to be transformed or
modified, thus all alternatives about retail place have to be reconsidered in details.
In this paper used market selection model has narrowed the analysis from macro perspective to
the essential point – choice of shopping malls. Thus, in this section once again all six applicants will be
overviewed according to the raised criteria and obtained results from the empirical research and after,
56
according to the obtained assessment, 4 most suitable shopping centers will be selected as potential
sites for investigated Company’s further development in foreign market.
3.2. Shopping mall assessment criteria
There are several factors affecting site selection decision. Four fundamental determinants are
economic conditions, operating and maintenance costs, competition and strategic company’s
conformity with target audience ( McGraw - Hill Company, 2008). In this particular case economic
condition has been screened in Situational analysis and the choice has been made – Riga city has been
selected as a city with more-or-less stable and promising economy.
Unfortunately, one key component – cost (rent payment and maintenance costs) - is excluded
from the list due to the lack of information (administration of shopping centers refused to provide such
information). Even so, according to the DTZ Research in Riga’s shopping centers rental fees for major
than 100m2 area ranges between 15-25 €/m2 per month. In consideration of home market possessed
locations and internal Company information, “Audimas” retail points usually occupies up to 200m2.
Therefore, approximate lease prices in Riga’s shopping centers monthly fluctuate from 3000€ up to
5000€.3 Notwithstanding the lack of exact rental prices, the criteria will be established based on the
available data (see table 15).
3
The minimum rental price was measured by multiplying 200m2 * 15€/m2 = 3000€. The maximum rental price
was measured by multiplying 200m2 * 25€/m2 = 5000€.
57
Table 17.
Shopping malls assessment criteria
Criteria
General
characteristics of
shopping mall:
location,
accessibility, size,
etc.
Alfa
Definitely the most
popular shopping
center in Riga;
containing 177
stores and 20
2
cafes. 47 300 m
of rental space,
including
entertainment
zone with cinema.
Riga Plaza
Considered to be
a modern fashion
center in Riga
city; located on
the west bank on
Dauguva river,
but easily
accessible from
city center; Has
2
49 000m of
shopping and
entertainment
space and more
than 1500 parking
place.
Origo
Main advantage is
the location (close
to city center,
where the high
movement and
great people flow
is an everyday
occurrence); 240
stores dislocated
through 3
buildings, which
are connected
with railway
station.
117 million of €
Domina
Close to the
center, located in
a dense territory;
huge and
spacious. Over
170 fashion
stores places in
more than 42 000
2
m sales area.
There is a multistorey parking
with 2000 parking
places. Have the
widest range of
footwear and
children stores.
Provides leisure
activities.
55 million of €
42 million of €
65 million of €
Mols
One of the first
such type
shopping places
in Riga, therefore
has an advantage
of loyal customers
base; Despite the
fact that there is
2
24 000m of retail
space (120
tenants), center
has over 900
parking places;
Moreover, this
center has
become a
business meeting
place.
43.4 million of €
Annual
turnover(2012)
Annual visitors
number(2012)
Catchment area
Shopping mall’s
orientation
Over 9 million
5 million
≈5 million
32 million
≈ 4 million
About 85 500
Pretending to
please all visitors
with a wide range
of famous and well
– liked brands.
About 190 000
People interested
in culture,
innovation,
technologies with
different hobbies
and valuing sense
of freedom and
creativity in life.
About 100 000
Riga Plaza is
considered to be
a modern
entertainment and
fashion center in
Riga, therefore
visitors’ profile
matches with
created shopping
mall image.
About 97 000
Origo orientation
is excessively
wide and not
concrete. Offered
variety of style
and fashion and
democratic prices
permits to find out
diverse groups of
customers of
different age and
lifestyles.
However, the
major part of
customers is
simple bypassers.
About 150 000
People with
personal vehicles,
with busy and
dynamic lifestyle.
Spice
Claims to be the
biggest shopping
mall in Riga
2
(almost 42 000 m
of retail space
and 147 tenants,
1950 parking
places); Main
advantage over
other players –
location (only 5
minutes from
airport, thus it’s a
stamping-ground
of tourists).
95 million €
(2011)
8 million
About 45 000
A world for
families with the
best stores and
recreation zones
designed
particularly for
families.
58
Table 18.
Shopping malls assessment criteria (cont.)
Customer profile
Presents pretty
young profile of
shoppers with
promising future
perspective (rise in
household
members, increase
in income due to
career
opportunities).
Families from 25 to
50 years old,
practicing and
considering the
activeness as
important
component of daily
life.
Elder generations
with higher income,
independent and
partial to active
lifestyle.
Customers’
athletic clothes
purchasing habits
Once or three
times per year and
on the average
spend around
150LVL per year
on sportswear.
Purchase once per
year and spend
around 210LVL on
the average.
Mostly spend
about 200 LVL on
athletic clothes
which buy
once/three times
per year
Competition
Sportland, Puma,
Gandrs
Sportland,
Puma, REsport
Sportland, Nike
Segmental
division
The major part
belongs to
sportswear
industry
pacemaker excitement
segment, which
followed by two
segments
togetherness and
connection.
There are detected
all sportswear
industry segments,
however
Excitement,
Togetherness and
Connection are in
the leading
positions.
Segmental division
corresponds with
Riga Plaza
customers profile,
thus the main
shoppers here are
people belonging
to Excitement,
Competence and
Dominance
segments.
There found
various age groups
people, center is
being visited by
both males and
females. However,
majority of Origo
shoppers do not
consider sport as
an important part
of their lives.
Yearly spend up to
100LVL on athletic
clothes, which
usually wear at
home.
Sport outlet,
Sportland,
Sportland outlet
Three most
observable
segments are:
Excitement,
Togetherness and
Connection.
Bigger proportion
of males; business
people and families
with kids as well.
Families with
children or young
folk (under 24),
interested in
fashion and
brands.
Average amount
spent on athletic
clothes purchase 0
120 LVL and
usually this kind of
clothes are
purchased once
per year.
Sportland, Puma
outlet
Majority buys
sportswear once
per year and on
the average
spends more than
150LVL.
Prevail
Togetherness and
Connection
segments.
Dominance is not
found and the rest
are slightly visible.
Prevails
excitement
segment,
Togetherness is
also widely enough
found; the rest of
the segments
spread equally and
are less noticeable.
Sportland, Elkor
Sport, Puma, Nike
Note: Information about annual turnover is retrieved from real estate development companies websites: Linstow (Alfa, Origo, Mols) http://www.linstow.lv, E.L.L. (Spice) - http://www.ell-realestate.com, Baltic Red (Domina) - http://www.balticred.lv/, Plazacenters
(Riga Plaza) - http://www.plazacenters.com. Information about catchment area is based on the City Development Department
information retrieved from http://www.apkaimes.lv
59
3.2. Shopping centers assessment process
In order to assess all 6 candidates, clear evaluation scheme is designed, where the maximum
point to get is 5 and the lowest assessment is 1. In evaluation process each criterion will be evaluated
separately and after all points will be summed. Overall there are 9 criteria categories, so the maximum
sum to get is 45 (9 categories multiplied by the maximum point 5). The results are presented in the
table below (see Table 16).
Table 19.
Shopping malls evaluation
Criteria
Alfa
Domina
General
characteristics of
shopping mall
Annual
turnover(2012)
Annual visitors
number(2012)
Catchment area
5
5
Riga
Plaza
5
Origo
Mols
Spice
3
3
5
5
4
3
4
3
5
5
4
4
5
3
5
4
5
4
4
5
3
Shopping mall’s
orientation
Customer profile
5
5
3
2
4
5
5
5
4
3
4
5
Customers’
athletic clothes
purchasing habits
5
5
5
3
4
5
Competition
5
5
5
5
5
5
Segmental
division
Total score:
4
4
3
4
5
3
43
42
36
33
36
41
General characteristics include location, stores assortment, parking, accessibility of the
shopping mall. As it was mentioned before in this paper, all investigated shopping malls are located in
different Riga city zones, where the vehicular traffic is extremely high. Such shopping centers
dispersion is a correct infrastructure decision permitting to distribute customers through all centers and
control visitors’ flow. Moreover, all 6 centers are characterized by easy and simple access with both
public and private transport. Only Mols shopping center does not correspond with this criterion
60
suggesting to use own vehicle in order to reach shopping mall. Origo is quickly reachable; however
parking conditions are limited and not as expanded as in other malls. Stores assortment could be
assumed as traditional one in Baltic States (one big grocery retailer, Apranga group and Baltic group
apparel industry retailers), especially in Alfa, Domina, Spice and Riga Plaza shopping malls. On the
other hand, Origo and Mols possess quiet different stores supply: Mols does not count neither with
Apranga group nor with Baltic group fashion retailers, there are only Scandinavian players such as
H&M, Lindex or Seppala. At once, Origo includes more local brands and there are only few
international and well – known brands retailers.
There has been compared an annual turnover of the year of 2012. Unquestionably, the highest
turnover was reached in Alfa shopping center, proving the status of “the most popular shopping center
in Riga”. Origo has a peak of visitors, however, it is difficult to estimate how much of those 32 million
of people were real purchasers. Thus, an annual turnover of Origo does not directly represent such a
dense flow of customers. The rest of the shopping centers remained adequate that much in money as in
visitors’ number.
Catchment area around the shopping centers was measured according to City Development
Department and shopping centers press releases. Domina shopping center is located in the densest Riga
zone and has a highest primary catchment area. Mols, located in Latgale district, also possesses a huge
number of surrounding inhabitants. Moreover, Latgale is generally the most settled territory in Riga
and Mols is large, unique and contemporary shopping mall here. On the other hand, Spice is not located
in the dense area, but is built in the crossroad between airport of Riga and central city part. Moreover,
its “family world” label always attracts visitors living in other parts of Riga. In opposition, Riga Plaza,
that is also located on the same river side as Spice counts with major number of surrounding
population, but with the lowest annual visitors’ number. Therefore, it would be possible to state, that
61
there are a number of people who are choosing a particular shopping center by proximity and exist
another group of customers who prefer one shopping center to another notwithstanding its location
place.
Shopping mall orientation together with generic customers profile permits superficially screen
visitors and identify what kind of people visit selected places. Deeper analysis of shopping centers
revealed few details emphasizing fundamental differences between six applicants. Alfa appeared as a
center trying to satisfy different customers’ different needs by offering an extremely broad choice of
retail stores. Domina is considered to be a hub of interesting independent personalities, enjoying and
respecting their lives. This kind of individuals who devote their time and money to hobbies and a sense
of wellbeing, thus sport in general is highly appreciable by Domina shopping center’s visitors. Spice, as
it has been mentioned earlier, has a family shopping center status. Thus, the focal attention of shopping
mall administration is given for family and child facilities. Riga Plaza is considered to be a modern
entertainment and fashion center in Riga, therefore visitors’ profile matches with created shopping mall
image and respectively represents materially stable people. Mols has unique orientation comparing to
the rest five investigated shopping centers. It clearly is targeting men, business people and infrequently
families. The only one Origo shopping mall lacks of clear and oneness orientation and customers
profiling strategy, which could be define as a place for those who are in the rush and on the way.
Further criterion is a highly relevant question for investigated Company – the average amount
of money spent on sportswear clothing. The conducted empirical research has pointed out the fact
about small expenditure of Riga’s citizens on athletic clothing. Moreover, more than a half of
respondents confirmed about infrequent purchase of athletic garments. Therefore, in this category Alfa,
Domina, Riga Plaza and Spice, where the average sum spent on sportswear clothes exceeds 150LVL
per year, were assessed at the maximum rate. Meanwhile, respondents interviewed in Origo shopping
62
mall pointed out the irrelevancy of activeness, hence, their rarely purchase such kind of garments and
their expenditure on sportswear is low– less than 100LVL per year.
Competition – another important factor influencing Company’s decision where to enter.
However, enclosed shopping center usually rent space for several same industry representatives,
suggesting wider assortment for customers, but guaranteeing more intensive level of competition for
retailers. In Latvia, same as in Lithuania, the leading player in sportswear sector is general sporting
goods retailer - Sportland Group. Besides Sportland retailer, there are few local retailers such as Gandrs
in Alfa shopping center or Elkor sport in Spice shopping mall. There is no established limit how many
same industry retail points should be in one enclosed shopping center. But, taking example of the
biggest Vilnius shopping centers, where “Audimas” stores are located, the standard distribution is 3 - 5
stores. All 6 investigated shopping centers satisfy such a requirement.
The last criteria category is segmental division, which should conclusively determine shopping
malls selection decision. So, almost in all, except Mols, shopping centers the leading segment is
Excitement. According to the research conducted in Lithuania for JSC Audimas in 2010, this outcome
is a typical phenomenon. Currently, sportswear industry is guided and ruled by Excitement segment;
therefore it is widely observable in both local and foreign markets. However, investigated Company is
not so highly interested in this segment, because “Audimas” branded products better suit and cover the
benefits sought by Togetherness and Connection segments. Thereby, the empirical research was
consciously designed in order to extract information about segmental distribution in the shopping
centers. Quest segments are extensively visible in Riga’s shopping centers - the situation which is
slightly different in home market. The ideal for JSC Audimas segmental distribution is found in Mols
shopping center, where Togetherness and Connection segments are the topping one. Alfa, Origo, and
Domina demonstrate slightly unusual situation – at the same time there are extensively found two
63
completely different and opposite groups of shoppers represented by Excitement and Connection or
Togetherness segments. Meanwhile, Spice and Riga Plaza demonstrate segmental division similar to
home market situation, where “traditional” JSC Audimas targeted segments are blanket out by the
contemporary fashion lovers.
3.3. Selection of 4 potential shopping and entertainment centers
This part is the final step of site selection model which has helped to identify 4 potential
shopping centers for JSC Audimas expansion into Latvian market. In a broad sense, decision will be
based on the evaluation process and the obtained final scores. Knowing Company’s intention to enter
gradually to a new market, a scenario of expansion has been created. JSC Audimas does not disclose
the Company’s forward planning how long the Company will last till all projected 4 stores in Latvia
will be opened, but obviously the projections are made for at least two or more years.
There have been selected four shopping centers as potential and most suitable sites to open
“Audimas” mono brand stores – Alfa, Domina, Spice and Mols.
Alfa shopping and entertainment center has obtained the highest scoring and comparing to other
shopping centers in Riga seems to be a leading player since it is extremely well-liked and frequently
selected as a place to shop among the local people. Moreover, Alfa is considered to be an initial magnet
for retailers, ensuring the constant flow of customers and natural way of brand recognition, because
each store found in Alfa shopping center is perceived positively and recommendable for other shopping
centers in Riga.
Another place to open “Audimas” mono brand retail store would be Domina shopping center.
There has been detected a customer distinguishing itself by intelligence, rationality and creativity. Two
principal values of Domina shoppers are the sense of freedom and active lifestyle, which perfectly fit
with JSC Audimas slogan “motional freedom”. Moreover, the results of empirical research and overall
64
customers’ observation during the interview period have indicated that Domina shoppers will notice
not only the elementary retailing activity of JSC Audimas, but also will appreciate internal Company’s
efforts such as innovations in technology or concern about the quality of the garments.
Mols and Riga Plaza obtained the equal total score, meaning that both places are worth
considering as an option. However, Riga Plaza has been rejected because of the following: despite the
fact of being modern fashion center in Riga, the number of people coming to this shopping center and
obtained annual turnover do not promise a secure and stable retail store presence. On the other hand,
Mols could be an option due to its masculine orientation. Through human existence history, men have
been seen to be more inclined to sport activities permitting to highlight men’s power, speed or
competitive capabilities (Robert O. Deaner, Elizabeth Fles, David C. Geary, David A. Puts, Sandra A.
Ham, Judy Kruger, Bo Winegard,Terry Grandis, 2012). Therefore, JSC Audimas positioning in Mols
shopping center would be a strategic correct decision since it is easier to convince menfolk to purchase
athletic clothes because of higher interest possessed towards sport and active lifestyle.
The fourth elected alternative - Spice shopping center. This mall has a unique and exceptional
orientation – families. Such a status points out about clientele diverse by age, but similar by purchasing
habits. Usually elder generations decide where to buy and what to choose and this by degrees shapes
juvenile attitude towards certain brand or product. Thus, this could be assumed as an advantage for the
Company – if JSC Audimas will entrench among adults today, in the future the Company will include a
loyal customer base.
3.4. Suggestion of strategic expansion for JSC Audimas
One possible strategic expansion scenario to Latvian market for JSC Audimas is designed
knowing already four shopping and entertainment centers and taking into consideration two years as a
period of expansion strategy implementation.
Alfa 2014
Domina 2014
Mols 2015
65
Spice 2015
Figure 9. JSC Audimas expansion to Latvian market scenario
The projected scenario suggests open 2 “Audimas” mono brand stores per year. The first store
should be opened in the first part of the year of 2014 in Alfa shopping mall, which has been recognized
as the best place to start business in Riga city. After, the second “Audimas” store should be opened in
Domina shopping center, which has emphasized a different, intellectual customer’s profile. Expecting
that Audimas will be recognized and successfully purchasable by Latvians, there should two more
retail stores opened in the year of 2015. While interviewing Company’s executive director the idea
about one outlet as an option has been mentioned, however, the final decision has not yet been made
(A.Šapola, personal communication, November 12, 2013). Therefore, Mols shopping center could be a
perfect place for “Audimas outlet” opening. The average amount spent on sportswear here is lower than
in other 3 shopping malls and stores assortment differs from frequent biggest shopping centers tenants,
thus in order to sustain its otherness, Mols could be a place for outlet store. The forth retail store
“Audimas” should be opened at the end of 2015 and the selected place is Spice with the purpose to
compel few generations at one time with “Audimas” branded products.
Expansion strategy requires a great number of initial Company’s investments. Creation of new
conception stores, lease of the location, location maintenance expenses and required workforce will
demand a lot of money and it is presumptive, that return on the investment will not be achieved during
the period of two years. On the other hand, Situational analysis of Latvia and conducted empirical
research has emphasized existing opportunities and in the long run the success in this market might be
expected.
66
CONCLUSIONS
1. The first part of the paper – Situational Analysis – was divided into two parts. Internal
Analysis revealed JSC Audimas potential to expand to foreign markets. The external
analysis was conducted according to the Bowbly, Breheny and Foot three stages site
selection model. The analysis was narrowed to one country investigation (Latvia) due to
advanced Company’s decision to enter precisely to this market. Deeper regional Latvia
overview emphasized the strongest (Latvia is a fast growing country with a promising
future) and the weakness (existence of inequalities among regions) sides of Latvia and
permitted to identify the best region with prevailing city in it for further Company’s
development – Riga region, Riga city. After city determination, the overview of existing
shopping centers was presented. The comprehensive list of shopping centers was reduced to
6 most suitable applicants where the empirical research took place.
2. The Empirical Research part was performed with the aim to investigate the profile of the
selected shopping malls visitors and evaluate the level of suitability and conformity with
investigated Company’s target market. The research has pointed out especially favorable
segmental division for JSC Audimas enhancing Company’s opportunities to be positively
accepted by the locals. In addition to this, the involvement in sport activities and sportswear
purchasing habits of Riga’s citizens were measured in order to find out the level of
activeness of shoppers and the tendency to be interested in athletic garments. Obtained
results emphasized Latvians interest in activeness and confirmed the importance of sport in
their lives. However, currently purchasing habits are highly dependent on economic
situation; therefore, total expenditure on clothing or secondary necessity goods is shrunken,
hoping that future perspective will bring changes.
67
3. The third part of the paper – Managerial Solutions – is the final stage of used site selection
model, which identifies places where the Company should open “Audimas” mono brand
retail store. Hence, here once again six investigated applicants were reconsidered according
to the raised evaluation criteria and obtained scoring allowed identification of 4 shopping
and entertainment centers in Riga – Alfa, Domina, Spice, Mols –as potential sites for further
JSC Audimas expansion. Afterwards the strategic expansion scenario was designed
considering two years as a period required for strategy implementation into Latvian market.
Notwithstanding currently designed scenario, it is advisable in 2015 to reinvestigate few
shopping centers due to the projected development of Latvia retail sector. There is predicted
start of two big projects: Akropolis Riga and Riga Retail Park, which could be included into
the list of potential candidates for “Audimas” retail stores.
68
References
Andrew Inkpen, Kannan Ramaswamy. (2006). Global Strategy: Creating and
Sustaining Advantages across Borders (Strategic Management). New York: Oxford University
Press.
Baltic RED. (2013). Domina Shopping Centre. Riga: Baltic RED.
Bank of Latvia. (2013). Macroeconomic Developments Report. Riga: Bank of Latvia.
Bhatia, S. C. (2008). Retail Management. New Delhi: Atlantic Books.
Black, K. (2012). Business statistics : for contemporary decision making (7th ed.).
United States of America: Wiley.
Central Statistical Bureau of Latvia. (2013). Retrieved from Central Statistical Bureau
of Latvia Web site: http://www.csb.gov.lv/
Christine Gerstberger, Daniela Yaneva. (2013, 2). Household consumption expenditure national accounts. Retrieved 12 18, 2013, from Eurostat: http://epp.eurostat.ec.europa.eu/
City Development Department . (2013). Apkaimes. Retrieved 12 09, 2013, from
http://www.apkaimes.lv/: http://www.apkaimes.lv/
Collica, R. S. (2007). CRM Segmentation and Clustering Using SAS Enterprise Miner.
North Carolina: SAS Institute Inc.
Dabija Dan Cristian and Babut Raluca. (2012). Empirical research on the impact of
location and service on the retail brand image. Annals of the University of Oradea, Econimic
science series, p.813-819.
DTZ Baltics. (2013). Baltic Retails H2 2012. New projects in the pipeline. Baltic States:
DTZ.
69
Fairfax County. (2012, April). Fairfax County Department of Nieghborhood and
Community Services. Retrieved from Fairfax County:
http://www.fairfaxcounty.gov/government/about/data/
Ghauri, Pervez N., Kjell Grønhaug. (2002). Research methods in business studies: A
practical guide (3rd ed.). Harlow, England: Financial Times Prentice Hall.
James E. Finch, Stephen C. Brokaw. (1994). The trade area profiling system: a
methodology for macro - level retail site evaluation . The journal of Marketing Management,
49-58.
Joachim Zentes, Dirk Morschett, Hanna Schramm - Klein. (2011). Strategic Retail
Management: Text and International Cases. Netherlands: Gabler Verlag.
Koch, A. J. (2001). Selecting overseas markets and entry modes: two decision processes
or no? Marketing Intelligence & Planning, 65-75.
Linstow. (2013). Linstow Center Management. Retrieved 12 09, 2013, from Linstow
Center Management: http://www.linstow.lv/
McGraw - Hill Company. (2008). Retailing management. McGraw Hill
Mohatam, N. (2013). Latvia plans to be ready to introduce Euro in 2014. UK: Experian
Ltd.
Morato, E. A. (2013). A Trilogy on Entrepreneurship– Preparing for Entrepreneurship.
EBookIt.com.
Muijs, D. (2011). Doing quantitative research in education with SPSS. Los Angeles:
Sage Publications.
Plaza Centers. (2013). Plaza Centers Annual Report 2012. Retrieved 12 09, 2013, from
Plaza Centers: http://www.plazacenters.com/
70
Robert O. Deaner, Elizabeth Fles, David C. Geary, David A. Puts, Sandra A. Ham, Judy
Kruger, Bo Winegard,Terry Grandis. (2012). A Sex Difference in the Predisposition for
Physical Competition: Males Play Sports Much More than Females Even in the Contemporary
U.S. PlosOne 7(11), doi:10.1371/journal.pone.0049168.
Savas, E. S. (1978). On equity in providing public services. Management Science, p.800
- 808.
Sergijenko, D. (2013, 10 08). „Audimas“ veržiasi į užsienį. Retrieved 12 02, 2013, from
www.vz.lt: http://vz.lt/?PublicationId=16ba013f-ad3b-44eb-91ed-614cf836471e
Shopping and entertainment center Alfa. (2011). Retrieved from Alfa:
http://www.alfaparks.lv/
Shopping and entertainment center Domina . (2013). Retrieved from Domina shopping:
http://www.domina-shopping.lv/
Shopping and entertainment center Mols. (2013). Retrieved from Mols:
http://www.mols.lv/lv
Shopping and entertainment center Origo. (2010). Retrieved from Origo:
http://www.origo.lv/lv
Shopping and entertainment center Riga Plaza. (2011). Retrieved from Riga Plaza:
http://www.rigaplaza.lv/ru/
Shopping and entertainment center Spice. (2013). Retrieved from Spice:
http://www.spice.lv/
Swedbank. (2013). Regional differences in Latvian housohold incomes - widening or
narrowing?[image]. Stockholm : Magnus Alvesson.
71
Taylor, G. R. (2000). Integrating quantitative and qualitative methods in research (2nd
ed.). Lanham, Maryland: University Press of America.
TNS. (2010). Kokia rekuomenduojama Audimo kryptis? Retrieved from JSC Audimas
data base.
ANNEXES
72
73
LIST OF ANNEXES
Annex 1. Overview of Latvia ..................................................................................................... 74
Annex 2. Questionnaire in English ............................................................................................. 75
Annex 3. Questionnaire in Russian ............................................................................................. 76
Annex 4. Chi – Square test.......................................................................................................... 78
74
Annex 1. Overview of Latvia
2
Area
64 559 km
Population
Official Language
Capital
2.02 million
Latvian
Riga
Other major cities
Daugavpils, Liepaja,
Ventspils
Andris Berzinis
President
Currency
GDP growth (2012)
Time Zone
Jelgava,
Jūrmala,
Latvian Lats (LVL)
1LVL = 1.423€ (pegged since 2005))
1LVL= 4.91 LTL
5.6%
Eastern European
2
Region
Area (km )
Population
City
Population
Riga
304
658 640
Riga
658 640
Pieriga
10 133
371 431
Daugavpils
93 312
Vidzeme
15 246
211 309
Liepaja
76 731
Latgale
14 550
304 032
Jelgava
59 511
Jurmala
50 840
Kurzeme
13 597
270 498
Venstpils
38 750
Zemgale
10 733
254 461
Rezekne
32 328
Source: Swedbank Analysis, 2013
75
Annex 2. Questionnaire in English
Dear respondents,
th
I am the 4 year student at ISM University of
Management and Economics in Vilnius, Lithuania.
At the moment I am writing my bachelor thesis and
4. How often do you buy sport clothing?
a) Never
b) Once per year
c) Once per three months
d) Once per month
e) Once per week
conducting this research in order to find out the
profile of shopping center visitors. The following
survey will take 7-10min. The questionnaire is
anonymous; the collected data will be used only for
5. Are you “addicted” to one sportswear
brand?
Yes
No
(If your answer was Yes – go to the sixth
question, if No – to an eight)
the thesis purposes. Thank you for your time and
collaboration!
1. How often do you visit this shopping mall?
a) First time here
b) Rarely
c) Once per month
d) Once per week
e) More often
2. What is the reason of this shopping center
selection?
a) Price
b) Proximity
c) By habit
d) Accessibility
3. How important is for you the following
characteristics of retail store you buy in (1 –
no important at all; 10 –of high
importance)?
Convenient
store
location
Quality of
Service
Store
atmosphere
Display of
products
Staff
attention
Staff
knowledge
Prices
1
2 3 4 5 6 7 8 9 10
1
2 3 4 5 6 7 8 9 10
1
2 3 4 5 6 7 8 9 10
1
2 3 4 5 6 7 8 9 10
1
2 3 4 5 6 7 8 9 10
1
2 3 4 5 6 7 8 9 10
1
2 3 4 5 6 7 8 9 10
6. To which athletic goods brand do you feel
yourself dependent on?
……………….……………………………
7. What is the reason of your
“addiction”/dependence to a particular
brand?
…………………………………………….
8. Where do you usually buy sportswear?
a) In the shopping center
b) By Internet
c) In the supermarket
d) In the market
9.
How much do you normally spend per one
purchase?
………….………………………..
10. Where do you usually wear athletic
clothing?
a) At home
b) Outdoor
c) Doing some sports
d) At work
11. How much do you spend yearly on athletic
clothing?
……………………………………..
12. What do you look first when you are buying
sporting good?
a) Brand
b) Product
13. How important are the sport activities in
your life (1 – no important at all; 10 –of high
importance)?
1
2
3
4
5
6
7
8
9
10
14. When I buy athletic clothing I consider (1 –
no important at all; 10 – of high
importance):
Brand
Assortment
Color
Comfort
Design
Exclusive
features
Simplicity
Functionality
Price
Quality
1
1
1
1
1
1
2
2
2
2
2
2
3
3
3
3
3
3
4
4
4
4
4
4
5
5
5
5
5
5
6
6
6
6
6
6
7
7
7
7
7
7
8
8
8
8
8
8
9
9
9
9
9
9
10
10
10
10
10
10
1
1
1
1
2
2
2
2
3
3
3
3
4
4
4
4
5
5
5
5
6
6
6
6
7
7
7
7
8
8
8
8
9
9
9
9
10
10
10
10
76
18. Gender:
Male/Female
19. Age:
a)
b)
c)
d)
e)
Up to 24
25 – 30
31 – 40
41 – 50
More than 50
20. The number of children under the age of 18
in your household …………………………………….
21. Occupation:
student/employee/unemployed/retired
15. I think I am…. (choose only one answer)
a) Optimistic and playful
b) Independent and brave
c) Intelligent and rational
d) Decisive and ambitious
e) Simple and well – wishing
f) Friendly and sincere
22. Average personal monthly income:
a) Up to 200LVL
b) 201 – 350LVL
c) 351- 500 LVL
d) 501 – 650LVL
e) 651 – 800 LVL
f) 801 – 950LVL
g) More than 950 LVL
16. What is your favorite way of practicing?
a) Exercising
b) Running
c) Swimming
d) Skiing
e) Indoor training (gym)
f) Other …………………..
23. Place of residence(district of Riga):
a) Center
b) Northern
c) Kurzeme
d) Vidzeme
e) Latgale
f) Zemgale
17. How would you describe yourself?
a) As an active lifestyle promoter
b) As a quiet life supporter
Thank you for your sincere answers!
Annex 3. Questionnaire in Russian
Уважаемые респонденты,
Я студентка 4-ого курса университета ISM
анализа. Благодарю за Ваше время и
сотрудничество!
управления и экономики в Вильнюсе (Литва). В
данный момент пишу дипломную работу и
провожу исследование с целью выяснить
профиль посетителей торговыx центрoв.
Следующее обследование займет 7-10 мин.
Вопросник является анонимным; полученные
результаты будут использоваться только в целях
1. Как часто Вы посещаете этот торговой
центр?
a) первый раз здесь
b) редко
c) один раз в месяц
d) один раз в неделю
e) чаще всего
Фирма
1 2 3
4 5 6 7 8
Цвет
1 2 3
4 5 6 7 8
выбор
1 2 3
4 5 6 7 8
комфорт
1 2 3
4 5 6 7 8
дизайн
1 2 3
4 5 6 7 8
Эксклюзивные
1 2 3
4 5 6 7 8
особенности
простота
1 2 3
4 5 6 7 8
функциональнос 1 2 3
4 5 6 7 8
ть
цена
1 2 3
4 5 6 7 8
качество
1 2 3
4 5 6 7 8
2. Что является причиной выбора этого
торгового центра?
a) Цена
b) близость
c) по привычке
d) доступность
9
9
9
9
9
9
9 10
9 10
9 10
9 10
3. Насколько важные вам следующие
характеристики магазина (1 – совсем
неважно; 10 – имеют большое
значение)?
Удобное
расположен
ие магазина
Качество
обслуживан
ия
Атмосфера
магазина
Показ
продуктов
Внимание
сотруднико
в
Знания
сотруднико
в
Цены
1
2 3 4 5 6 7 8 9 10
1
2 3 4 5 6 7 8 9 10
1
2 3 4 5 6 7 8 9 10
1
2 3 4 5 6 7 8 9 10
1
2 3 4 5 6 7 8 9 10
1
2 3 4 5 6 7 8 9 10
1
2 3 4 5 6 7 8 9 10
4. Как часто Вы покупаете спортивную
одежду?
a) никогда
b) один раз в год
c) один раз в три месяца
d) один раз в месяц
e) один раз в неделю
10
10
10
10
10
10
77
5. Вы «зависимы» от одной спортивной
марки?
Да
Нет
(если Ваш ответ "да" – переходите к
шестому вопросу, если "нет" – к
восьмому)
6. Какую марку / бренд спортивной одежды
Вы предпочитаете?
……………………………………………
7. Причина вашего «зависимости» к марке?
……………………………………………
8.
a)
b)
c)
d)
9.
10.
a)
b)
c)
d)
Где Вы обычно покупаете спортивную
одежду?
в торговом центре
по Интернету
в супермаркете
на рынке
Сколько Вы обычно тратите на одну
покупку?
……………………………………………….
Где Вы обычно носите спортивную
одежду?
дома
На улице
в тренажерном зале
На работе
11. Сколько Вы тратите ежегодно на
спортивную одежду?
…..………………………………….
12. На что Вы первоначально обращаете
внимание при покупке спортивной
одежды?
a) Фирма
b) Продукт
13. Насколько важны спортивные
мероприятия в Вашей жизни (1 – совсем
неважно; 10 – имеют большое
значение)?
1
2 3 4 5 6 7 8 9 10
14. Когда я покупаю спортивную одежду, я
считаю (1 – совсем неважно; 10 –очень
важно):
15.
a)
b)
c)
d)
e)
f)
Я думаю, что я...( выберите один ответ):
Оптимист
Независимый и храбрый
умный и рациональный
решительный и амбициозный
простой и хороший
дружелюбный и искренний
16.
a)
b)
c)
d)
e)
f)
Ваш любимый вид спорта?
Зарядка
Бег
Плавание
Лыжи
тренажерный зал
другoе.................................
78
c) 31 – 40
d) 41 – 50
e) более чем 50
20. Количество детей в возрасте до 18 лет в
вашей семье ……………………………..…..
21. Статус:
Студент/сотрудник/безработный/пенсион
ер
22. Средний личный ежемесячный доход:
17. Как Вы себя характеризуете?
a) как пропагандист активного образа жизни
b) как сторонник спокойной жизни
18. Пол: м / ж
19. Возраст:
a)
b)
c)
d)
e)
f)
g)
до 200LVL
201-350LVL
351 - 500 LVL
501-650LVL
651-800LVL
801-950LVL
более чем 950 LVL
23.
a)
b)
c)
d)
e)
f)
Место жительства (район Риги):
Center
Northern
Kurzeme
Vidzeme
Latgale
Zemgale
a) до 24
b) 25 – 30
Спасибо за ответы!
Annex 4. Chi – Square test
H0: The character of the person does not depend on the lifestyle choice.
H1: The character of the person is determined by the lifestyle choice.
Condition: if p ≥ α - confirmation of initial hypothesis; if p ≤ α - rejection of initial hypothesis.
Chi – Square Tests
Pearson Chi –
Square
Value
df
Asymp. Sig.
(2-sided)
7.319
5
0.198

View/Open - ISM Science Box

Transcription

Similar documents

Infographie EN

Ordering ISPLS Apparel through Lands` End Business Outfitters

[email protected]

HAIRHOUSE WAREHOUSE

North Broadway Crossing welcomes three new tenants

Unique shopping mall with a complex range of home

Konsument Europa - Konsumentverket

Klahanie Shopping Center

PROJECT FEATURES TRAFFIC COUNTS DEMOGRAPHICS*

qdoba mexican grill - LMS Commercial Real Estate