For illumination, not support

As FMCG sales recover, this sector regains its vitality as a refurbished tool of marketing.

Time was when market research (MR) was synonymous with the Fast Moving Consumer Goods (FMCG) industry. So it was that the slump in the sector at the turn of the decade also had an impact on MR, which had to endure a dull phase of neglect for quite a few years.

Today, as FMCG sales recover, corporate strategies go in for rehaul, topline thinking returns in a big way and marketers go into overdrive all over again, market researchers have regained their good cheer too. Estimated at about Rs 750 crore per annum, MR is expected to grow by 15-20 per cent over the next year. And there is the promise of some action in other sectors as well.

"Apart from the emergence of the newer sectors like telecom and finance," says B V Pradeep, director, customer and market insight, home and oral care, Asia, Hindustan Lever, "today most global agencies have a presence in India which has helped the sector grow."

Alongside this, most companies are also getting increasingly aware of how important MR can be as a planning tool. This has had an effect all of its own. Clients are not just getting research-savvy, they are also turning more demanding than ever before "" thinking up new ways of using market information.

Unilever, for instance, has developed a proprietary tool for classifying consumers called the Living Standard Measure. In addition, the company has over the last few years set up internal initiatives like Reconnect (with the consumer) and Insight Activator, which enable it to understand the findings of market research data and use the same in a more effective way.

"Clients now require data collection combined with business intelligence presented in a creative and dynamic way," says Veronique Jennin, general director, Esomar, a world body for researchers and clients, "The basic function of market research is changing, and this can be seen from the way research agencies and client companies are reorganising their business as well as from new types of research agencies and companies that are being created."

The numbers obsession over too, with clients taking a more rounded view of data, placing the findings within the context of past learnings and broader understandings of Indian market dynamics.

Ashok Das, managing director, Hansa Research, says that while it's mainly the larger companies that are doing research internally, the smaller companies are pretty much in the game too; they have research coordinators to recast the data to make it more relevant to them. In keeping with this, companies like Unilever have identified specific agencies to strike partnerships with that are strong in specific functional areas.

Clearly, just providing hard core data is not enough. This is because of data overload. Companies now have zillions of numbers sprawled all across their desks and clogging their computer memories, and the challenge is to make sense of the labyrinthe. The complexities of the wider market, as others have observed, also make it peculiarly prone to "response dissimulation" at the data-gathering level.

In such a scenario, the value that researchers add has to do with the insights and solutions they can provide in tackling market problems.

Digital technology, to be sure, is making data analysis easier. Das says that the improved database management systems make it possible to interpret the norms from previous studies and recommend specific steps that the client can take in a given situation. As a result, he says, "Today, there is more action-orientation".

According to Pradeep, who is also the President of the Market Research Society of India (MRSI), India has a big opportunity in doing outsourced data processing and analysis work for foreign clients.

"There is a huge realisation of the talent pool present in India, and the relatively lower costs and value addition provided make it an attractive destination," says Pradeep.

Not to suggest that the domestic business is anywhere close to exhaustion point. Globally, companies spend about 0.5-0.8 per cent of their sales on market research, according to industry insiders. If this were to happen in India, the industry would explode overnight to Rs 3,000 crore.

But then, contrary to what you might expect of a fast-growing economy, India underspends developed markets on advertising too (as a fraction of sales).

This suggests that free-voice competition in the market is still not as exuberant as it could possibly be. As with all market research findings, the international MR-spend figure of 0.5-0.8 per cent must not be used as a drunk uses a lamp-post "" for support rather than illumination.