Does market research help increase sales?

STRATEGY DEBATE

Three executives and an entrepruneur discuss the merits and not-so-good aspects of market research

 

BIJOY KURIEN
Chief Operating Officer,
Watches,
Titan Industries

 

‘The birth of an idea is often mid-wifed by market research’

WHY do some organisations invest heavily and spend a disproportionate portion of their time in analysing their markets, their businesses and their consumers, while others prefer to rely on their foresight and gut instincts? The difference is not the attitude but the approach.

Research by itself will not dramatically change an organisation. It is only the pipeline through which consumers communicate with companies. Organisations have to be prepared to act upon the findings.

All market research should have clear objectives. Initiating research without objectives is like setting off on a drive without a destination. It should solve a clearly-enunciated business problem.

Market research has to be tempered with organisational understanding. The knowledge resident in the field, the insights gained by managers and the deep-rooted understanding of industry has to supplement the information and knowledge that research throws up.

Research tends to be backward-looking — giving you a good view of the past — but the future can only be seen through the eyes of the foresighted.

Sales managers tend to focus on the immediate and are operational in outlook. Often, they have a very good understanding of current problems. Blended with trends and the understanding that research throws up, the insights are valuable.

Hence, market research needs to find a place for itself in the sales department. When this combination works in tandem, the business and sales problems seem like a breeze.

This combination is often the perfect recipe that organisations struggle to find. Market visits of sales and marketing personnel; first-hand knowledge from consumers and dealers; comparison of performance with other categories and industries; a general appreciation of economic, social and cultural change — all these provide nuggets of wisdom that integrate with research in providing the tools to solve business problems.

Why did this strategy not work as planned? How do we drive growth in a flat market? How do we grab share from our competitors? These issues confront organisations but the answers are often not available within. Market research helps to supplement the knowledge base within an organisation.

Researchers, with their contemporary research expertise, are often able to see parallels or opportunities. The birth of an idea is often mid-wifed by market research. How well you respect it and how well you do not override it or get overridden by it will determine the optimal and satisfactory use of market research.

Market research will never provide you with all the answers. In fact, it might not even address all the problems. Research techniques have their limitations since they do not simulate real-life consumer situations.

Moreover, consumers do not necessarily behave as they say. So, blind adoption of research recommendations is to be avoided. But it is an invaluable prop that can help solve business problems.

RAJESH PAVITHRAN
Chief Operating Officer,
Balaji Telefilms

‘Research need not necessarily speak on behalf of all TV viewers’

THE world over, history is replete with examples of organisations turning around because of excellent market research and effective use of the research data in the market place.

Products have excelled in the market place, prompting market researchers to push the envelope further. I, however, feel that market research would just be a sub-set of the entire marketing process.

For a manufacturer who invests a huge amount in research, no sample size could be most appropriate. He would like to know what consumers think about his product. While this is going away from the basic principles of the research industry, it is impractical to cover the entire market across various demographics and psychographics.

However, it is important and not imperative for some industries to invest in research methodology and utilise the findings in the market place. Industries like pharma, hotels or automobiles use research data effectively to manufacture better products or customise their products to the need of the market place.

From a media/entertainment perspective, while the leading players in the industry have invested in research, it would still not compare with other industries. That’s because the data has been used primarily to monitor the popularity of various programmes across demographics.

While a more qualitative research could be carried out, the broadcasting industry has been seen to shy away from allocating budgets for research.

The reasons are not hard to find. The number of TV-owning households in India is about 80 million and more than 50 per cent of them have access to cable and satellite channels.

With a majority of these households being a one-TV owning home, no data would be able to convince the players entirely about the tastes of these consumers who range from the age group of four to 50 years and above. That’s an extremely large base of population to reach out to.

The sample size could be extrapolated to the rest of the nation, but it would leave doubts over the efficacy of the data provided. While the ratings generated by independent rating bodies have been used universally by clients and advertising agencies, there have been talks about the accuracy of the same in certain circles.

But, notwithstanding the ratings scam of some years ago, the methodology used has never been been questioned. However, the need for a more robust system is certainly felt.

While feedback is critical, research need not necessarily speak on behalf of the entire 80 million TV-viewing households. The popularity ratings could also be an indicator of the audience response.

Most creative geniuses have made their work of art through sheer gut feel and that continues to be their forte even now. One does not hear of Steven Spielberg or Woody Allen resorting to reams of research data before embarking on any project.

It’s just their passion and, more importantly, their conviction that leads them to create history. One is not likely to see that trend changing too soon. Even in India, this will continue for some time to come.

(Pavithran’s views are personal and do not necessarily reflect those of his organisation)

C K RANGANATHAN
Managing Director,
Cavinkare

‘Research cannot be a substitute for common sense’

GETTING to know about consumers through research is like learning to drive a car by reading the instruction manual. Sure, research helps. But how much is what is debatable. For, research does not guarantee success.

I am not against market research; we do quite a lot of consumer research. But then, it can’t be a substitute for first-hand insights gained by engaging with the consumer. Neither can research be a substitute for common sense. Maintaining a hands-on approach with consumers is the key to marketing success.

Typically, some traditional tools of market research fall flat when it comes to researching the rural markets. Articulation of the rural consumers’ expectations and motivations are difficult to test through rational means of testing.

In our experience, some key insights leading to innovation have come from first-hand consumer encounters. For example, our entry into the fairness cream segment was based on the first-hand insight of people drinking saffron and milk for a fairer complexion. Based on this, we created a saffron-and-milk formulation, which will work externally as a cream.

Another example is the 50-paise shampoo sachet pack that has taken shampoo to the rural masses. It is a classic case of learning about consumers in their natural environment. While interacting with the rural consumer, we saw that the usage of soap on hair is very high.

When we advised the customer that washing hair with soap will damage it, he retorted that everyone had used soap on their hair for generations and nothing happened to their hair, nor to his. It was a revelation that challenging the customer’s strong beliefs is a very big task.

Fortunately, the shampoo advertisement has created an inspiration to use the product. Price is the only inhibitor. For the customer, the perceived value from using shampoo is zero, since he and his family use bathing soap for washing their hair too.

At Rs 2 a sachet of shampoo and four washes a month, the per person spend on washing hair works out to Rs 8 a month. There was no way the customer would willingly spend that kind of money just to keep his hair clean.

We got the feedback that the customer would be willing to try a shampoo if the cost of washing hair was brought down to Rs 2 per person per month. We worked backwards from this brief and launched the 50-paise shampoo. The result? The growth rate of shampoo use in rural India is almost twice that of the urban sector.

Recently, we entered the foods business by introducing pickles. Contrary to the conventional route, we launched single-use packs based on our first-hand understanding of consumer lifestyles, eating habits, usage, affordability and competition. No organised player had tried pickles in sachets before. The concept worked.

The point is, you will never have all the information to decide. Sometimes the speed to market is more important than perfection. Research cannot be a substitute for the will to act.

SUDHANSHU GOYALA
Vice president, market research, Pepsi India

‘Insights help identify items for which consumers will pay’

TIME and again, the business community has asked marketers this question — is the investment in market research worth it? Does market research help sell or does it just do a post facto analysis of marketing inputs, initiatives and investments? I owe it to the science and art of market research/insights/intelligence, which has contributed to the success of various brands, to answer with a passionate “yes”.

The starting point of all processes and investments (R&D, state-of-the-art technology, packaging and advertising) is “consumer need” and the end point is “consumer delight and brand loyalty”.

But how do we get to identify what might be the consumer needs that can offer opportunities for making a product for which consumers will pay? The answer is simple and obvious — market research.

Two examples to prove this point that can be recalled top of mind are Kachua Chaap (Tortoise) mosquito repellent coil and Hindustan Lever’s Fair and Lovely fairness cream.

Before mosquito repellent products became big business, consumer insights indicated the belief that creating smoke around the house by burning waste wood outside and incense inside would drive mosquitoes away. The fusion of these practices indicated a strong potential for a mosquito repellent coil that was burnt.

Kachua Chaap was the first brand to be launched in this category and now, a few decades later, it is still generic to the category. It’s a strong example of the power of insights resulting in sales conversion.

The nemesis of this category also came through insights. This time the insights indicated that consumers wanted mosquito repellents that were safer, convenient and more trendy. The result was mosquito repellent mats.

Then, research showed that changing the mats daily was and not knowing when the mat ran out of the chemical was considered a drawback. Thus came the next stage of repellents: a liquid in a bottle, attached to an electrical gadget.

Not only has consumer insights driven every stage of evolution in this category, it has also grown the category and increased consumer satisfaction.

Fairness cream is another example. Research indicated that before fairness creams, women were using traditional (largely home-made) preparations to improve their complexion. Fair and Lovely was the first brand to have used this insight to become the leader in a category that has further evolved as a result of consumer insights.

A few years ago when Pepsi India was planning to launch Aquafina, extensive consumer research revealed that a tamper-proof bottle cap, high-quality packaging and an attractive label were key levers differentiating Aquafina from the rest.

The Pepsi brand umbrella on the label certified reliability of quality. Consumer feedback was incorporated into the product/marketing mix and in less than five years, Aquafina has become the premium bottled water in India.