HSE-Perm Launched a New Project in Cooperation with the Retail Food Chain “SemYa”

On February 1, 2013, the HSE-Perm and the retail food chain “SemYa” executed a cooperation agreement. The agreement provides for joint research in demand estimation.

Dmitriy Potapov, Deputy Director of the HSE – Perm and Olga Ganchenko, Director of the retail food chain “SemYa” answered the questions regarding the project.

– Dmitriy, could you please describe the essence of the project?

– First of all, let me give you a little background. In May, 2012, the HSE-Perm opened a Laboratory for empirical industrial organization analysis. Its members under the guidance of Grigory Kosenok, their academic advisor, Full Professor of the New Economic School, PhD in Economics, have been developing theoretical models of the functioning of various markets and also doing empirical assessment of those models. SemYa and we are planning to build and test models of demand for some product categories and brands, which would allow us to forecast the company’s future sales and assess the efficiency of marketing instruments used by the company. 

– What is the project duration?

– We expect to get our first results by late 2013 whereas the final model with our conclusions and recommendations will be available by mid 2014 that is the project is to run for a year and a half.

– Why will it take that long?

– We expect two types of output from the project: academic and practical. For us, academic output means number of articles published in international peer-reviewed journals. Practical output is a programmed model and our recommendations on its application that would meet our partner’s requirements. Both these goals require considerable efforts. Preparation of a high-quality preprint in English alone, from formulation of a research question to processing of all the results, usually minimum takes about a year.

– Will the project be implemented by the Laboratory only?

– Although the key tools used are related to empirical industrial organization analysis, the project is interdisciplinary. We are going to get faculty members and Master’s program “Marketing” students involved to address a number of subtasks. In case the project has a sociological part, which is quite likely, we will get Olga Mayorova, PhD in Sociology, involved. Grigory Kosenok will be our academic advisor.

– Why did you choose SemYa as a partner? What is their contribution to the project?

– The retail chain SemYa is one of the largest retail food chains in Permskiy Krai. They are very professional. They introduce state-of-the-art technology and are ready to cooperate, which is really important. Within the framework of the project, our partners provide us with the resources vital for conducting the empirical research: data as well as time and knowledge of the company subject matter specialists. Data is required for econometric estimation of the parameters of the models we are going to develop and subsequent validation of those models. The latter is required to investigate the phenomena specific to the retail as a whole as well as demand for certain products, in particular.

The specific characteristic of the Laboratory is that it is oriented on applied value of research. In other words, we do not do research for the sake of research. We develop new methods allowing us to address pressing issues either in corporate or public sectors.

 – Olga, what practical effect do you expect from the project?

– The result of our joint efforts should be a mathematical model which can be used by our chain marketing department. The model should allow us to forecast the impact of different marketing activity instruments on consumer demand. Today our marketing specialists are armed with methods for forecasting demand but we need a new instrument for more in-depth and precise demand estimation.

– Why did you agree to cooperate with the Higher School of Economics?
– HSE faculty members and research fellows are high level specialists possessing advanced research experience. The HSE-Perm is a university showing openness to innovation in science. They are ready to address applied issues for business.

– Usually, business needs issues to be resolved yesterday. Are you ok with the duration of the project?

– I believe that exchange of information and knowledge will take place all throughout the project and we will benefit from our cooperation already at the early stage of the project.