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Marketing and Marketing Research in Advertising
Overall, if business has to diversify not only in terms of the market geographically, but also of products, market research has to be concerned with identifying cultural diversities in markets stretching across national boundaries and, in India, state boundaries, to be able to blend them together to identify a new product or service which would cut across the cultural diversities. It could also help give an acceptable identity to an existing product in a new market or even give a sense of a new benefit to the same product in an existing market. Such research takes into account local conditions and preferences or needs arising from them.
Where there is hard water, there would necessarily be greater demand for washing soap than in other areas. In West Bengal and the south, women generally prefer to wear their hair long. These regions would provide a bigger market for shampoos and hair oils. Eating habits determine the kind of edible oil that can be sold in a particular market, say south India or north India. Marketing of consumer products, consumer durables, and industrial products in rural markets would require different kinds of information. Hence, there would have to be' different types of research for different types of consumers.
Market research is a continuing process, not merely in the search for new products but also for the retention of existing consumers, particularly in a highly competitive market. For consumer goods, consumer panels are set up. These consist of housewives who submit regular reports about their purchases and test new products. Such panels are best handled by an independent agency, instead of the marketing organization or the advertising agency servicing it. Shop or store audit panels are set up to visit shops regularly to record stocks received, sold and unsold. This helps identify the pattern and quantum of sales of each and every brand in the shop. It also provides information about the share of a particular brand in the total sales of that product, or the market share. Periodic checks of the levels of consumer satisfaction have become essential. New organizations have come up for this purpose alone. The Indian Market Research Bureau has set up a department, Customer Satisfaction Management and Measurement. It is engaged only in research into customer satisfaction with different products and services. Market and Research Group is also setting up such a department.
Industrial marketing demands not only knowledge of the existing requirements of particular industries, but also of the manufacturing process itself so that new products or improved products can be identified. The benefit that the industrialist is looking for is very different from what the non-industrial consumer wants. The industrial consumer would be looking for, may be, cutting down of electricity costs; an improvement in the design of a particular machine to speed up production; reduction in wastage through the improvement of components which are inputs for the final product; cutting down production time by reducing breakdowns and maintenance lay-offs; lowering maintenance costs, and so on. The supplier of equipment or components could also provide consultancy as an added service. After sales service is a vital component of marketing industrial products. Such a service would not only aim at improving the life cycle of the machinery but also help in its up gradation. In industrial marketing, personal selling has a greater role to play than advertising. Demonstrations may be necessary. Large sums of money are involved and purchasing decisions are taken by a different set of people.
The needs of the rural market are also different. In this case we are dealing with consumer products and consumer durables as also with inputs for agricultural production. These would include capital goods or machinery. In a country such as India many consumer goods and durables, already established in the urban markets, would have to be introduced like new products in the rural market. It would involve changing concepts of lifestyle in a highly conservative society. For instance, a very well known doctor and social activist in Punjab told me of the difficulties he was facing in making the progressive Punjabi farmer accept the idea of using human excreta for manufacturing biogas, which would be used for cooking. In the case of agricultural machinery many of the strategies of industrial marketing would apply. The rural market demands a demonstration of the features of the product or the benefits they promise. Their buying habits are different from the urban consumers. Then is greater reliance on expert opinion or user experience. The purchasing decisions in our rural areas are not always individual decisions. Rural society in India is like an extended family and purchasing decisions are often made collectively as it was. It is such factors in marketing that call for marketing research, as distinct from market research. It is an extension of research into the area of marketing a product or service. The primary input of marketing research would necessarily be the data thrown up about the market itself by market research. It would involve analyzing the product or service in relation to the consumer to determine the most effective way to reach him or her. Marketing research would help to determine the most effective method or combination of methods of marketing a product or service. Would it be enough to stock the shops with the product and back it by advertising? Would it call for special sales promotion efforts, such as may be sampling or a tie-up with an established product? Would special merchandising efforts be necessary? Sales promotion as distinct from merchandising would be a long-term effort. This would include special trade terms for stocking and even pushing the sales of the product in question. The dealers could be made to feel a part of the family of the marketing organization as it were. They could be given advance information about the advertising and sales promotion efforts to be undertaken. There could be dealer contests, with prizes for the highest sales effected or the best display maintained. Merchandising is aimed more at the consumer. This could include the distribution of sample packs by door-to-door salespersons or through retail outlets along with other products, or even selling the product at a discount through door-to-door sales. Other merchandising efforts could be free gifts, multiple packs at a discount price, contests and competitions. Merchandising is a short-term effort to give a boost to sales, used in marketing a new product or pushing up the sales of a product facing competition.
The most effective instrument of marketing research, which applies information, accumulated through market research, to the actual market situation on the ground is test marketing. Such an operation is usually undertaken when introducing a new product. Obviously it is suitable mainly for consumer products. It involves the identification of what might be considered a typical market for the product, in terms of the market information secured. Test market operations are usually undertaken in an urban area as it provides conditions for a controlled experiment. A total marketing operation would be mounted for a limited period of time in the test market. This would involve the entire marketing mix, including advertising. The evaluation of the impact of this operation would reveal the strengths and weaknesses of every component of the marketing mix, from the product to advertising and the ultimate measure in terms of sale achieved. Such an exercise would help evolve a marketing strategy that could be expected to be effective. The advertising agency concerned would be very much involved in such an operation along with the client at every stage. It is obvious that marketing research would contribute a great deal to the evolution of a marketing communication or advertising' strategy. Research is also necessary to monitor the progress of marketing and advertising, secure feedback and evaluate the results of the entire operation.
There is no doubt that research provides valuable inputs for marketing and advertising. Nevertheless, marketing and advertising cannot design an effective strategy solely on the basis of the data thrown up by research. This should be obvious. If two manufacturers of say, high quality textiles or other consumer products, were to conduct market research, the data that would come up would be the same. Obviously, the imagination and intuition born of experience would make all the difference in the marketing and advertising strategies adopted by one as against the other. Research gives an idea of the trends in the market. Statistics can be interpreted differently. It is the same example of a half-empty or a half-full glass, depending on the perception of the viewer. Analysis of the statistics involves a wider perspective, including an understanding of human psychology, sociology and economics.
The results of market research are not always uniform. Even if the findings seem favorable for the introduction of a new product, the timing might not be appropriate. In the mid-sixties, I was associated with a paper exercise, on the basis of quite detailed market data, on the prospects of marketing frozen vegetables by a well-known multinational marketing organization with long experience of the Indian market and a virtually foolproof marketing set-up. The product was introduced but failed. Today frozen vegetables have become quite popular. On the other hand, a polythene packaging venture, launched without market research has been quite successful. In the mid-fifties, when market research was practically unknown, as part of the public relations campaign for the trade association of Swiss watchmakers, I happened to conduct a market survey. No modem techniques were introduced. It was confined to visits to shops selling watches in a number of towns and cities in eastern India. The findings resulted in a total change in the marketing strategy.
After all, a market deals with human beings. However statistically perfect, no study can guarantee a full understanding of how a human mind reacts. Hence, the need is to strike a balance between statistical and research data and individual judgment. At the same time the research should be geared to very clear-cut objectives, for instance, the search for an element that distinguishes one brand of the same product from another. This might be the result of a product analysis or the introduction of some element, which improves the particular brand. A study of the market might not throw up such features. It was a very casual shop survey, which provided ideas for a new use of a certain chemical product, which was about to be withdrawn. On the other hand, the mere emphasis of pinewood fragrance in an antiseptic lotion gave an edge to its sale against the competing brand, which also had the same feature, but failed to be the first to play it up. The campaign of Godrej refrigerators and the development of flexible shelves for extra space were the result of market research with the very clearly-defined objective of becoming a market leader: Research revealed the felt-need for adjustable shelf-space and a larger vegetable crisper.
An oft-quoted example of the imaginative use of research data is about the first introduction of the photocopier. Haloid Company of the USA (later known as Xerox Corporation) invented the photocopying machine and tried to interest IBM in marketing it. Market research findings revealed that it would take the next five years to sell even 100 such machines in the whole of the USA. Naturally, IBM turned down the offer. Haloid Company studied the research data and noticed that potential customers found the price too high. From this emerged the marketing strategy, resulting from the most searching analysis of the available data and making the best use of them for marketing purposes. The data provided only an indication of the problem. It was a human being that solved the problem. The strategy adopted was to lease out the machines or give them in rental at a reasonable monthly rate. The market responded well. Over the years, Xerox, a brand name, became the generic name for photocopiers.
Market research, particularly today, with the help of computers, can build up a consumer database in great detail. This can help segmentation of the market or pinpointing target areas in terms of location and people, on the basis of demographic, psychographics and response-based information. This helps in direct marketing, with a door-to-door approach of properly identified potential consumers or through mailing advertising material. Such a database also helps the latest method of tele marketing or using the telephone to contact prospective consumers. The success of such direct marketing depends on the continuous upgrading of the database. This is a difficult problem for a massive market such as India's. Such marketing is effective with small target audiences.
India is a poor country with a massive population. Poverty keeps a large section of the population outside the market. At the same time India is a large market, comparable to many of the developed countries. According to the National Council for Applied Economic Research (NCAER), India has 6.5 crore middle-class households earning over Rs. 60,000 a year. This would amount to about 32.5 crore individual consumers. Of this about 3.7 lakh households earn more than Rs 1,00,000 a year, while 10 lakh households earn more than Rs 2,00,000 a year. It is true that all these households will not buy all the goods or all the brands. There are buyers of different brands ranging from Ariel to Nirma, for instance, in the area of detergents, depending on the price.
The rural market consists of 90 lakh households or five crore people, with an annual income of more than Rs 25,000. This market is valued at Rs 6,500 crore. Over the last two years its growth is estimated to have stabilized at 12 per cent. This is according to the findings of the Operations Research Group. It further estimates that the Rs 9,600 crore urban market has been growing at about 19 percent.
All this is fine, but there is another side to the picture. The latest available data reveal that the annual growth rate of personal consumption expenditure has been declining from 5.25 per cent during 1987-88 to 1991-92 to 3.69 per cent during 1989-90 to 1990-91 alone. This means that the Indian market today is conditioned by fierce competition and consumers are seeking value for money. Greater efforts would be required not only to make consumers buy a product, but also a particular brand. This is despite all indications of a consumption-hungry burgeoning middle class. The perception of the intrinsic or imposed value of product or service is very subjective and can be different for different people. The task of marketing is to give the consumers what they want and at what they consider a fair price. This. is: the responsibility of the management or manufacturing or marketing organization. Every major business house usually has a marketing department that conducts in-house market research and marketing research. At a particular stage of development the major advertising agencies too set up their own market research departments. These have now expanded into subsidiary organizations. Independent research organizations have also come up.
With liberalization and increasing competition, market research has assumed major importance in the marketing mix. This is evident from the rate at which the established market research organizations are growing every year. The Indian Market Research Bureau (IMRB) and Market Analysis and Research Croup (MARC) have been growing at the rate of 25 per cent every year. According to some estimates the volume of market research business has been growing at the rate of 30 per cent per year. In-house research is also increasing. This seems to be particularly true of marketing organizations dealing in liquor, confectionery, children's goods and other products facing competing brands.
Independent market research organizations continue to provide very significant inputs. Some companies combine in-house research with utilization of the services of market research organizations. As the independent establishments deal with a wider range of products or services, their experience of adapting their methodologies to different marketing situations can be very valuable, as in-house research is confined to a very limited market, because it is concerned with a single or similar products or services. Through outside agencies there is access to wider market information. With the diversification of products and the widening of the consumer goods and durable market, under the new economic system, increasing accent on research will open up more prospects for the established and even new, independent research organizations. At the same time, certain sectors are likely to go in for in-house research in a big way at this stage, especially where big investment is involved for the consumers, such as industrial products, the financial sector and very high-priced consumer durables. In a sense these are developing areas with which independent research organizations are not yet familiar.
What seems likely is that for some time both in-house and independent research will grow. This has happened with advertising too, from time to time. There have been companies which have handled their own advertising and then ultimately taken their business to advertising agencies. Some companies have set up their own house advertising agencies and then stepped out of their confines to seek services from other advertising agencies, while the house agencies have opened up to outside business. These processes have helped the qualitative improvement of advertising in the country. This is the process that marketing research is going through today. This is going to lead to better understanding among the marketing, market research and advertising departments of business enterprises and market research organizations and advertising agencies for the all-round improvement of marketing and advertising in India. What is important is that this is an expanding and fast developing area for a very interesting and paying career.
If you have the imagination to be able to discover human beings in their socio-economic and cultural environment, in the array of statistics about markets, you might opt for a career in marketing and market research. But the inclination or even the inherent capability is not enough. You would have to go through proper training. That means securing an MBA. While marketing organizations would provide a higher entry level in terms of remuneration, the growth prospect would be slightly slower and lower than in an advertising agency or a market research organization. In such institutions upward mobility could be quicker. Further, the scope is wider. Research would be related to marketing communication in an advertising agency and hence provide creative opportunities to contribute to the development of a communication concept. Both in the agency and in the market research organization, the assignments would be more varied and so would be the challenges and experiences, as different types of products or services and hence different types of situations would have to be handled. In a marketing organization you would be confined to a particular product or product group and thus a limited market, with limited challenges and scope for wider experience. The opportunity to serve different clients through an advertising agency or a market research organization would seem to be more interesting and professionally a more satisfying prospect. It is also possible to move from the agency or the research organization to the other side of the table to the client. If you are very good and really ambitious, in a marketing organization you could always aim to reach the top, which, apart from financial returns, provides a higher social status and even political influence.
A career in marketing and market research also offers opportunities for setting up a consultancy service after retirement or even at a certain stage in one's career. Thus, the opportunities are varied, so are the challenges and financial returns and may be, even prestige. Of course, you have to start at the bottom, unless your family happens to own a company. It is for you to choose the area of marketing and market research, if you feel that is what you want to do and are confident that you have the essential qualifications.
