Chapter 1: INTRODUCTION TO MARKETING RESEARCH I (a) Basic or Pure Research: The research which is done for knowledge enhancement, the research which does not have immediate commercial potential, the research which is done for human welfare, animal welfare and plant kingdom welfare is the basic or pure research.
Government of India, through Census, does research on population count to identify total population of India, no. of male, female, no. of families, no. of voters, etc. One of the major findings of census is, some rural areas, proportion of female is 10% less as compared to male. In some metros and mini metros, female count is marginally less than male. This situation might create problems in future. Govt. responded quickly to this trend and have implemented ad-campaign having punch line ‘a world without women’.
Discovery TV channel highlights the basic research done by Australia and US Governments towards animal welfare and plant kingdom welfare. Some of the documentaries on animal rescue operations are quite remarkable.
Sometimes social research may have commercial intention.
Example: Jaago Re Campaign
Objective- one billion voters by 2015.
Intention was to get 4 million youth registered across 35 cities before general elections in May 13, 2009 &one billion by next elections in 2015.
The young coordinator of the campaign Mr Jasmine Shah,along with 11 people approach voters at crowded places&appeals to get registered as voter&also says to use helpline
www.jaagore.com for any assistance.Tata Tea has sponsored some part of this campaign.
This is a successful campaign because by first week April, i.e. within 17 weeks of its launch, the website has managed to register 5.66 million youngsters.
(b) Applied Research: The research which has immediate commercial potential is called applied research. Applied research can further be classified as problem oriented and problem solving research.
Problem Oriented Research – This type of research is done by Industry Apex Body for sorting out problems faced by all the companies. For example NASSCOM regularly conducts problem oriented research for the benefit of all software companies. Similarly CII does the research for all types of companies. At global level, WTO does problem oriented research for developing countries. In India, APEDA (Agriculture and Processed Food Export Development Authority) conducts regular research for the benefit of agro industry.
Problem solving Research – This type of research is done by an individual company for the problem faced by it. For example if Videocon International conducts research to study customer satisfaction level, it will be problem solving research. The findings of problem solving research are unique and only true for that company which does the research and cannot be generalized. Whereas findings of the problem oriented research could be generalized.
Market Research and Marketing Research are the applied research.
II NATURE OF MARKETING RESEARCH The nature of marketing research is very much linked with marketing as such. It deals with each and every decision which marketing also deals with. In nut and shell marketing research involves research related to nature and range of products, demand for the products, pricing, distribution and promotion, etc.; virtually every aspect of serving customer or clients right from idea generation till delivery, recovery of payment, installation and training. III OBJECTIVES OF MARKETING RESEARCH
To generate, refine, and evaluate marketing plan.e.g bottled water.
CURRENT MARKETING SITUATION (Bislerry) (i) Market Size : Rs. 1700 Cr (2007) (ii) Growth Rate : 17-20% P.A. (iii) Target Market : Health conscious consumers (iv) Product Situation : Current and projected profits loss statement 0-7-8 08-09 (a) Industry Sales 1700 Cr 2000 Cr (b) Parle’s market share 25% 425 Cr (c) Average Price per Unit MRP / Stokists / Retailer
1000 ml 10 7 8
500 ml 6 4.50 5 (d) Average cost per unit
1000 ml 5.60
500 ml 3.60 (e) Gross contribution (c-d) 1.4/0.90
% 20% (f) Sales volume in units : 56.6 Cr 500 ml
60% 500 ml + 40% 1000 ml 24.2 Cr 1000 ml (g) Total Gross Margin 20% 85 Cr (h) Depreciation, Interest & Tax
50% of GM 42.5 Cr (i) Net profit (g-h) 42.5 Cr (10%) (j) Advertising & Promotion cost 3% of sales 10.5 Cr (k) Sales Force management & Distribution cost 6% 21 Cr (l) Marketing Research expenses 0.1% 3.15 Cr (m) Net operating profit (i-j-k-l) Amount 7.85 Cr % 1.84%
Monitor marketing performance to improve impact of marketing programme.
(A)(Example of launching marketing/promotion of Hum Tum movie)
(B)Launching of Rub Ne Bana Di Jodi by Yashraj Banner
* Out of total consultantants, 68%are women&32%aremen.
[Case study of Reliance Petroleum for identifying market potential for petrol (8 million ton) diesel (40 million ton) and launching of value added petrol pumps]
NOKIA in India & Globe
Nokia`s performance in India
Year Sales in Rs Cr
Market Share:- 65%
Last year(2008) it sold 80 mn handsets.Its Chennai plant makes 200 mn handsets & exports to more than 50 countries.
Indian Mobile Handset Market Size
Year ValueRs cr Volume mn cost of HS
2007 26000 90 Rs 2900each
2008 26500 108 Rs 2400
2009 27000 120 Rs 2200
Global Mobile Handset Market Size Year ValueRscr Volume mn Nokia`s ms
2008 6,50,000 330 38.6%Rs 245000 cr d)Stress on innovation for market growth&profitability.
The most innovative firms define “innovation” broadly. They believe that innovation is not just about developing new products and services but, more fundamentally, about discovering new ways to create value. At Marico, for example, innovation is referred to as “uncommon sense”. According to Marico’, “Uncommon sense is a mindset that seeks to create and unlock new value by challenging prevailing rules of the market. According to ICIC: Innovation is the ability to identify opportunity and seek new growth horizons continually using people, processes and delivery mechanisms as the platform. A broad definition of innovation helps companies to think beyond R & D and to move to the next level of innovation: creating new processes, new distribution channels, new business models and new ventures.
THE MARICO WAY A FOUR-PRONGED STRATEGY FOR GROWTH
Strengthen existing brands like Parachute and Saffola by adding new brand extension, adding value by adopting a health positioning, and launching more variations. Example: Saffola atta mixes,Saffola Weight Management Rice and Parachute gels
Expand the international consumer business with key acquisitions in geographies like South Africa and Egypt. Also eying the booming African markets and strengthening its position in Bangladesh and West Asia.
A focus on health and wellness, with close to 65 Kaya Clinics. Kaya has got into the weight-loss space with kaya Life Clincs
Develop new products by prototyping them in small markets
MARICO – Successful FMCG Company Fast Mover The growth just keeps coming.
During the year, Kaya clocked revenues of RS. 100 crore. But more than its increasing contribution to group revenues, Kaya holds the promise of boosting the company’s bottom lines, thanks to its distinct service model. Typically, kick-starting a Kaya a clinic takes Rs. 1-1.3 corre (including technology investments and interiors) in a metro city. The clinic breaks even in about nine months in ametro and takes a little bit longer in smaller cities. To boost its product revenue stream, Kaya began prototyping its “shop-in-shop” model through kiosks at malls. “We are now present in about 36 locations like Shoppers’ Stop, Hypercity and Lifestyle.
Hair Apparent Parachute is a leader, and Marico is sitting pretty in the branded coconut oil segment
IV IMPORTANCE OF MARKETING RESEARCH Marketing Research helps the marketer in following decision areas:
MR for designing strategies to face recession.
Research indicated shortage of 25 million dwelling units across middle&low income families.Real Estate companies like DLF, Kumar Properties, etc could not market even Rs 10lacs worth properties in sufficient nos during last 12 months.Tata housing,after Nano success to group company, decided to target low& middle income families through SHUBH GRIHA PROJECT at BHOISAR near Mumbai,in which each flat is priced between RS 3.9lakh&Rs 6.7lakh.The project of 1000 flats is huge success because it recorded 75% booking within one month launch of project. Now Tata Housing wants to take same model all over India.
2) Bajaj Auto:- Two wheeler automobile markets are passing through rough path. Demand for 100cc bike is steady. But 125cc, 150cc, 180cc, 200cc are in bad shape. To meet consumer expectations on power&Price, Bajaj is launching 125cc motorcycle at price Rs20, 000-24,000(made in china), which is Rs8000 less than cheapest available bike CDDAWN.
3) Aviation Industry:-
During 2008-09,Private airlines like Jet Konnect& Kingfisher suffered 14% drop in passengers carried.As such it were compelled to launch low price offerings.
World`s third largest PC brand,Acer,already revised price of entry level desktopEL-1600, to RS 9999from Rs 12000,to meet affordability in recession of corporate&household customers.
5) PETER England Fashion& Retail:-
India’s branded apparel retail market size is Rs 26000cr.Madura Garments is Rs 1000cr worth company& Peter England is Rs 270cr worth brand. Peter England shirt prices are Rs 400 onwards. The company is planning to launch new MASS brands like Spinoff,Elysee,Byford&People at a price Rs 249-549.These shirts will be retailed through 100 different stores.
6) Cadbury India:-
Indian confectionery market is Rs 3500cr& Cadbury commands 72% market share. During early 2009 ,it launched CDM-Shots at price Rs2.Earlier Cadbury did have low price chocolate at Rs 2, like small pack of Perk & chocolate paste-Chocki.But it did not market aggressively. Now Cadbury is serious about all low price chocolates, since it occupies 10% of its revenue.
7) Titan Watches:- India’s watch market was flat last year(44 million units).Sonata brand is the leader& cash cow for Titan. The price range of sonata is Rs 400 onwards. To face recession successfully in 2009, Titan came up with sub brand of sonata--- SONATA-SUPER- FIBRE,in price range of Rs 275- 550.Recession research indicated that 25% of market exist below Rs 500/
Titan’s move, therefore was timely& yielded much needed growth push to umbrella brand.
To understand taste, preferences and choices of consumers, to understand market size, to measure market potential, to interpret consumer behavior, to study influence of life style on target market behavior.
Products / Services
To identify customer satisfaction, to identify customer service levels, to study and to augment product features, attributes as well as to identify service gaps
To study price affordability of target market, to study competitive pricing structure, etc.
To identify prevailing channels of distribution, emerging channels, channels of distribution by competitors and modification to be done in channels structures as per market requirement. (P&G introduce master wholesaler between stockiest and retailer to augment service level)
To design promotion mix, to identify promotion mix of competitors, to study emerging promo tools (road shows, pops and kiosks)
V BENEFITS OF MARKETING RESEARCH
Conducting Marketing Management to identify strength and weaknesses of the marketer as well as the competitors.Also to research market shares.Example of HUL.
HUL as Winner in the Market? Category: Fabric Wash