Marketing Research - An Introduction The idea of this session is to introduce Marketing Research, from a practitioner’s point of view. It starts of with some ‘real life’ briefs that we get in agencies. Thru discussions, we initiate how research is designed (or data sought from secondary sources) for each of these briefs. It goes on to explain basics like Qualitative/Quantitative, Syndicated/Customized research (discussing clear examples), steps involved in a project and researcher’s role. The session ends with an exercise… basic data from a post-launch study is given. How to interpret and give marketing inputs? TEAMS WILL BE ASKED TO PRESENT IN THE NEXT CLASS. Interpretations and marketing recos will be discussed after that. Some real life post-launch research examples will be discussed after that (e.g. 1. Dove soap initial post launch… why did it fail initially in some markets and what were the research findings? 2. Aqua Fresh toothpaste launch case) Overall, after these two sessions one gets an idea of how researches are designed from marketing problems, what are the different types of research and steps involved, how are the research data interpreted to give marketing recommendations Marketing Research - An Introduction

Client Brief : “Where do we advertise? We are planning to launch a low-priced entry level car We would target 2-wheeler owners, and hence, advertise accordingly In which newspapers, magazines and TV programmes should we advertise? “Where do we advertise? Explain the brief. Typically students answer “advertise in youth magazines, M TV Roadies, etc.” Explain what could be the impact/wastage due to wrong media selection (using gut feel and no formal research data). Explain how this brief can be addressed thru primary research. But the scale and cost of the primary research will be huge. So, talk about secondary data sources like IRS and TAM which will address this brief. Explain what these studies are and what data can be bought from these sources economically to address the issue. Explain that there would be a need to ad rates and media planning issues which can be tackled by other experts in that area. Bring clarity in the fact that a new research (primary data) is not always necessary to be conducted for a new brief. It’s a marketing problem, which can be addressed in different ways! 2

Client Brief : “Should I use the new product formulation?” Our company sells the largest soap brand in India Our R&D team claims to have developed a similar product formulation (at 5% less production cost) for this brand Should we replace the current product with the new one? Ask students about ‘Is there a need of any research here’? New product formulation is superior, so it can anyway be used. Take ideas of what research could possibly be done here. Give ideas about a ‘Blind product test’. Since students have studied ‘Marketing’ papers in Yr 1, explain them by saying - Here effect of all the other P’s of marketing needs to be negated and only the Product (P) needs to be studied. Explain how. Who should we go to for this research? The target group is very important as it’s a product study for a very large brand… Explain that properly. Can give examples for product categories where consumer loyalty is very high (e.g. cigarettes) and how important it is to go to ‘regular users’ of a brand for studying the effect of product change IMPORTANT: Who should we go to for this research? 3

“Should I use the new product formulation?” (CONTD.) Exactly similar Client Brief as the previous one… But this time for a very small brand of soap in the Economy segment For the previous case and this one… Take the example of Lifebuoy (or Lux) and Dyna as the two soap brands and explain the context for target group only. IMPORTANT: Who should we go to for this research? 4

Client Brief : “Is there a market for hi-tech re-bars”? We want to set up a new steel manufacturing plant worth Rs 50 crores to market advanced technology construction bars Should we go ahead and invest? Discuss the concept of having In-depth interviews with experts and extrapolations from secondary data to arrive at estimations. It should be made clear that all kinds of market research do not need to be conducted among end-consumers. Nor do we need large sample sizes for all research. Just set the context of doing research for non-FMCG products or technical products. 5

Very simply put, Marketing Research is… The Systematic Search and Analysis of information To help in marketing decision making 6

Marketing Research Process Client problem Brief Agency Proposal Questionnaire Design Data Processing Data Collection / Fieldwork Data Analysis & Reporting Discuss the steps in the entire process, where the market researcher’s involvement is high Solution 7

Initial stages of the Marketing Research Process Client problem Brief Agency Proposal Problem Definition Stage Management Decision Problem OR Business Problem: Problem confronting the Decision Maker (or “Top Mgmt”) Marketing Research Problem: Problem that entails determining what information is needed Initial steps are mostly to do with problem identification… 8

Revisiting the first Client Brief : We are planning to launch low-priced entry level cars We would target 2-wheeler owners, and hence, advertise accordingly In which newspapers, magazines and TV programmes should we advertise? 9

Management Problem and Research Problem MANAGEMENT DECISION PROBLEM: How do I maximize my reach to the target group (i.e. 2-wh owners) with my planned advertising budget? MARKETING RESEARCH PROBLEM: Among 2-wh owners, which newspaper has the highest readership and better reader profile? Similarly, which magazine?... Which TV prog? How do the ad rates compare for these? So, what’s the ROI? 10

Management Problem and Research Problem Refer to case-let on soap packaging (Print-outs to be given) Discuss the Mgmt Decision Prob and Market Research Prob 11

Types of Market Research

Qualitative & Quantitative Market Research In depth & flexible data from small sample Softer feel No numbers Impressionistic Quantitative Structured data collection from large samples Rigorous Numerical Deterministic Aids Understanding Give examples of Quant and Qual studies. For example product test, simulated test marketing use Quant as they give “Go / No-Go” decisions. Explain, with example of a research, that requires both qualitative and quantitative tools. Developing a new positioning strategy for an unsuccessful soap / shampoo brand (e.g. Fiama Di Wills) can be used as an example. Aids Assessment 13

Outputs: Quant and Qual, Ex Concept Test Overall Likeability Concept 1 Concept 2 % Did not like the offer 2 10 % Like the offer a little 13 20 % Like the offer quite a bit 31 27 % Like the offer very much 54 43 Concept 1 clearly liked more – higher % of positive response On exposing Concept 1, there was a spontaneous response that it should come in “bright coloured” packaging. Also, on asking to associate with filmstars, “Katrina Kaif” and “Deepika” were mentioned For Concept 2, “light colours” and names of filmstars like “Juhi Chawla” and “Kajol” came up

Customised & Syndicated Market Research Initiated by the Client To solve an identified problem Research design customised E.g. Product test, ad pre-test, post-launch track Syndicated Initiated by the Research Company Standardised Off the shelf E.g. Retail Audit, TAM, IRS 15

Customised & Syndicated Market Research Examples of Syndicated research (Census, IRS, NSSO) outputs to be shared Reference from ‘Marketing Whitebook’ and ‘We are like that only (By Rama Bijapurkar)’ 16

“Market Research works!”

“Market Research works!” – Some recent examples DOVE – More than doubled its revenues in last 3 -4 yrs, in spite of soap category growing at slow rate BINGO – One of the largest snacking brands in India now GODREJ NO. 1 – Largest soap brand in 2 states GOLD FLAKE – One of the Top 5 brands of the country, consistently for the last 10 years Dove – Talk about usage and attitude studies among premium soap / shampoo users, ad pre-tests, positioning studies. BINGO – How the need of regional flavours was explored. It’s an impulse category, so ads researched only on certain parameters. GN 1 – How promotions have been researched and matched with buying behaviour… different in different Indian states. Gold Flake – How rigorously products are tested and how any change (in pack or physical appearance of the product) is test marketed. 18

Group Assignment

Group Assessment – Post-launch Track (Background) A new soap brand - Verde, has been launched nationally While the company would get its internal sales figures (after a month or so) that is not enough to take proper marketing action Competition sales would come from sources like ACNielsen’s Retail audit, etc… but even that is not enough Thus an MR agency has been commissioned to do a brand health check in 3 key markets, 45 days after launch Discuss… why??? Need to know brand awareness, trial, etc Discuss… client brief, agency’s study design …Q’re content (Mind measures and Behavioural measures) Fieldwork, Data entry and cleaning have been done and now you get the basic tables. 20

Group Assessment – Post-launch Track (Basic Data) Brand Performance: 45 days post launch ‘VERDE’ soap Chennai Delhi Mumbai Total Awareness 24% 78% 40% Trial 8.9% 11.1% 10.8% Repeat Purchase 1.8% 2.2% 4.5% MOUB (Regular Users) 0.4% 0.5% ASSUMPTION: 50% of advertising spends for ‘Verde’ have been in national channels. Rest of the 50% in regional channels have been split equally among the 4 zones TASK: (To be submitted/mailed next day, by 4pm. Any 3 groups to present) (i) Comment on difference in performance in the 3 markets and DRAW HYPOTHESES ON POSSIBLE REASONS FOR THE DIFFERENCES, (ii) What marketing decisions/actions could possibly be taken for each market? 21

Key to the Assignment First compute the following ratios to understand how the conversions are happening Trial/Awareness Ratio Repeat/Trial Ratio MOUB/Repeat Ratio 22

Chennai Possible reasons for its performance Low awareness, a clear function of advertising budget allocation. Viewership of regional channels very high in South (also more number of regional channels), but ad spends here were equal to that in other zones Low regional spends… were local celebrities used in ads? Hence low ad recall and awareness level Awareness to Trial conversion highest, indicating other aspects of marketing mix (distribution, promo offers, etc) are in place Possible actions Re-allocate ad spends – higher ad spends in regional channels of South compared to other zones. Also, re-look at the media plan Regional / local flavour in South-based ads… so, relook at the creative too Maintain distribution and promo offer thrust in spite of moderate current sales. Offtake can increase substantially once awareness starts increasing 23

Delhi Possible reasons for its performance Very low awareness to trial conversion. Could be a result of poor distribution, lack of promo offers Is the soap being stocked in the correct pack-sizes based on the buying behaviour in this market? Is there a very strong competitor with loyal customer base? Is the competitor giving additional promo offers due to this new launch Consumers aware, but not finding enough strong ‘Reasons to buy’ in the proposition. Has the positioning been too down-market for Delhi? Possible actions Distribution thrust Promos, bundled offers as suitable, ‘promoters’, special display in modern format Higher trade incentives for a short time so that channel members recommend… this could increase trial Can tweak the proposition for this market, in case the above do not show increase in trial 24

Mumbai Possible reasons for its performance Very high trial to repeat and repeat to MOUB conversions – a clear effect of satisfactory product usage experience Awareness level quite low in spite of such high national TV channel spends and fair allocation in West. Could be a result of low thrust in non-TV communication spends Possible actions Awareness building. Continue TV ad spends, also look at other media vehicles, especially outdoor Forced trial… free samples with other large non-soap FMCG brand. This could eventually increase MOUB because in this market, once they try there is a high chance of converting to regular usage 25