Rural Marketing Research

Abdul Haseeb AhmedM.V.Nanda Kishore

Gaurav ChauhanSarthak Kumar Patel

Shantanu Khare

Learning Objectives

• Recognize the importance of information in marketing decision making

• Appreciate the Diff b/n in rural and urban marketing research

• Process of marketing research and the special tools required in the rural context

• Know about the research business and the major research agencies in india

EvolutionBefore 1980s: Thomson Rural Market Index• Developed by Hindustan Thompson Associates in 1972• Database providing info on Market Potential Value(MPV) of a

particular district• Determine potential on basis of demographic factors & overall

agricultural potential of district• Useful for segmenting RM for Agri inputs and durables

Limitations• Provide info upto District level not individual villages• Non-agricultural activities not taken into account

The Decade 1980-1990• The Institute of Rural Management, Anand(IRMA) initiated Rural

marketing course in 1980s• IRMA alumni initiated training programmes for companies

targeting the Rural markets• Gap between requirements for RM professionals and their

availability increased• Several institutions initiated Pilot projects on ‘going rural’ with

their products

Years since 2000• With International brands reaching urban india, corporates

understood the ‘first mover’ advantage of going rural• Need to develop Rural Marketing Information system• Human Resource Development strategy for RM

Significance of Information

Types of Decisions• Strategic Decision Making - Deciding on the objectives,

resource policies and strategies of the organization Eg Introduction of a new Product Starting a new Branch Adoption of new Technology

• Management Control Decisions - Efficient and Effective utilization of Resources and performance management

Eg Allocating Advertising budget to improve sales Adding new dealers to improve distribution Making market trend and pricing analysis

• Operational-control decisions - Deciding on how enterprises should respond to the day-to-day changes in the business environment

Eg Allocation of territories to sales persons Hiring and training the sales force Order Processing

Sources of Information

1. Gathering intelligence• Sales Force

• Periodical letters, meetings, seminars

• Middlemen• Staff

• Scanning publications• Browsing internet• Attending meetings, conferences, seminars and workshops

• Company• Participating in industrial exhibitions, development programmes

and sponsoring events

2. Internal Reporting• Sales invoices

• Product type, size and pack type by territory or consumer• Avg volume of sales by territory or sales person

• Orders received• Extent of customer service acceptance level

• Stockhodings• Ascertain stocks in line with demand

3. Marketing research

The systemic design, collection, analysis and reporting of data and findings relevant to a specific marketing situation facing the company– Ad hoc & specific problem oriented– Continuous in order to gather info about the trends

Information Support to Marketing-mix

Mix Decision Research Internal Records Decision support

Product Item(brand) decision

•Existing products sales•Consumer preferences•Mkt growth rates & share trends

•Existing products sales•Production cost analysis•Idle capacity•Profitability data

•Concept testing•Screening models•Business analysis

Price Price determination, price change

•Competitive prices •Discount structure

•Cost data•Company policies

•Mark-up Pricing•Supply-demand analysis

Promotion Personal selling team

•Competitors practices•Mkt growth rate

•Current Mkt coverage•Target coverage

•Territory-allocation models

Advertising & sales

•Competitors practices

•Sales and ad expenditure data

•AIDA model•Promotion elasticity

Marketing Research

• Market research is “the systematic design, collection, analysis and reporting of data and findings relevant to a specific marketing situation facing the company.

-Philip Kotler

Marketing Research-Key Decisions

• The decision areas that require careful consideration of researchers are

1. Defining Problems2. Determining the research budget3. Choosing research design4. Determining sampling method and size5. Selecting appropriate data analysis tools6. Preparing the research proposal7. Organizing field work8. Analyzing and reporting findings

Defining Problems• “A problem well defined is a problem half solved.”• Methods:

• Funneling or narrow-down method• Problem audit• Background analysis• Situation analysis• Model development

• Various components of problem definitionManagement objectiveManagement problemResearch problemDecision criteriahypothesis

Determining the research budget

• General way of gathering data is from two principal secondary sources.

• Internal reporting system• Marketing intelligence system.

• Marketing research is conducted when EVPI is greater than the cost of obtaining it.

• Budget decision involves two steps• Specifying the approximate value of information.• Determining the maximum amount that can be spent.

Choosing research design

• Different research approaches are identified based on

Based on Purpose Exploratory, Descriptive and causal

Based on nature of data Quantitative and qualitative

Based on sources of data Primary and secondary

• Exploratory research: – It loosely structured and the basic premise is to provide

direction to subsequent, more structured method of enquiry.– To gain familiarity with a phenomenon or to achieve new

insights into it. – Also called Formulative Research.

• Descriptive research:– The main goal of this type of research is to describe the data

and characteristics about what is being studied.– To portray accurately the characteristics of a particular

individuals, situation or a group.

• Causal research: – Explores the effect of one or more variables on other

variable(s), with reasonable level of certainty by controlling the impact of other influencing variables.

Aspect Exploratory Descriptive Casual

Research Purpose Know the variables Describe the variables Verify and validate relationship

Research setting Natural learning(Class room)

Class room Lab experiments, field experiments

Sample scope Small non-probability samples

Large probability and non-probability samples

Small probability samples

Nature of data Subjective opinions Subjective opinions Objective behavior

Data collection Secondary and Primary on a small scale

Primary Primary

Nature of output HypothesisIndicative

Description Substantive

PredictionConfirmative

Application Growth directions, behavioral trends

Market potential, product usage, sales analyses

New product acceptance, consumer preferences, behavioral patterns.

Which one will fit to rural market??

• Exploratory research :– In rural markets, this kind of research is more useful for

companies looking for information to make entry decisions– Companies like LG, HUL, Godrej, Colgate have already spread

their wings.

• Descriptive research :– In rural markets, this kind of research is more useful for

companies looking for information on consumer preferences, consumer behavior, brand loyalty.

– Agri-input companies selling seeds, pesticides, fertilizers, farm equipment will be interested in conducting this.

Quantitative v/s Qualitative Research

• Quantitative research:– It is numerically oriented– It requires respondents to give specific answers that are

measurable.– It often involves statistical analysis

• Example:– Bsnl might ask it customers to rate it over all service as

» Good» Bad» Poor» Very poor

• This kind of scaling technique cannot be used in rural areas as the respondents are less educated.

• Qualitative Research:– No fixed set of questions– The discussion happens b/n interviewer and the respondent– The respondents own thoughts and feelings are determined.

• Example:– HUL personnel may stop a consumer who have purchased Lux

and ask him/her why he/she has chosen the soap.

• Research of this sort is mostly done face-face employing one or more following techniques

– Observation– Interviews– Group decisions– Focus groups– Participatory research meathod

Primary v/s secondary market research

Primary

• Fresh collection needed• Sources

– Consumes– Sales person– Dealers– Experts– Organizations

• Methods– Survey– Observation– Experiments– Projective techniques

Secondary

• To be searched and selected• Sources

– Libraries– Media– Trade associations– Internet– Research organizations

• Methods– Purchasing from other

sources– Scanning available databases

Contd..

• Merits– Accurate first hand

information

• Demerits– Expensive– Time consuming

• Application– Consumer purchase process– Brand loyalty– Promotion effectiveness

• Merits– Economical and easier to

obtain

• Demerits– Data gaps– Non- availability of relevant

data

• Application– Trends in income, savings and

consumption– Demand estimation– Understanding of Changing

lifestyles

Determining sampling method and size• In primary data collection, the researcher has

to decide three things :1. Sampling procedure2. Sampling methods3. Sampling size

– Choice of Sampling procedureFactor Probability Non- Probability

Information needed Totals Averages or proportions

Expected cost of errors High Low

Population Heterogeneous Homogeneous

Allowable error Low High

Non-sampling error Small Large

– Sampling Methods– Random Sampling– Stratified Sampling– Cluster Sampling– Quota Sampling– Convenience Sampling– Judgment Sampling– Purposive Sampling– Snowball Sampling

– Sampling SizeFactor Large Small

Time Available More Less

Accuracy High Low

Cost High Low

Population Heterogeneous Homogeneous

Selecting appropriate data analysis tools

• The type of data analysis and the choice of analysis technique depend upon the following factors

– Purpose of research– Type of data ( Quantitative or Qualitative )– Number of variables being examined ( One or More )– Type of measurement scale used ( Interval, Nominal, Ordinal )– Number of samples to be compared (One or More )– Nature of samples (Dependent or Independent )– Size of the samples ( Small or Large )

• Data Analysis Methods– Univariate

» T test» Z test» One way anova» Chi-square test» Mamn-whitney U test» McNemar test etc..,

– Multi-variate» Anova» Rank correlation» Multiple regression» Factor analysis» Cluster analysis» Conjoint analysis» Multi-dimensional scaling

Preparing the research proposal

• The elements of research proposal are– Executive summary/abstract– Background/introduction– Objectives/hypotheses– Methodology– Time schedule– Research staff and equipment– Cost estimates-recurring and non recurring – Appendices(any relevant information)

Organizing field work• Key steps

– Preparation of data collection plan that specifies• Number of supervisors• Number of field investigators• Period of data collection• Budget

– Organization of research effort• Selecting investigators and supervisors• Training the staff• Allocating work• Briefing the investigators • Compensating the staff for the work turned out

– Controlling• Supervising the data collection with respect to time and cost• Checking the data for validation• Carrying out corrections if any.

• The entire research depends on the efficiency, effectiveness and ethical integrity of the investigators.

• Do’s & Don'ts– Do’s

– Appearance– Greetings– Language and culture– Rapport– Investigation– Overcoming limitations

– Don’ts– Don’t pretend– Avoid direct inquiry– Don’t touch– Avoid suspicious behavior– Don’t become controversial

Analyzing and reporting findings

• General format– Title page– Table of contents– Executive summary– Introduction– Methodology– Findings– Limitations– Conclusions and recommendations– Appendices– Bibliography

Participatory Approaches

• Participant observation (PO)• Rapid rural appraisal (RRA)• Participatory rural appraisal (PRA)• Participatory action research (PAR)

Participant Observation (PO)

• The researcher actively participates in the rituals & activities along with the tribe so as to understand the shared meaning not as a passive & objective observer but as an active participant. The researcher can document the lifestyle, customs, values, interrelationships, etc. of the community members.

Rapid Rural Appraisal (RRA)

• In this method, the research team goes to rural areas & collects data using a combination of iterative methods & verification. It employs following techniques.

• Secondary data source• Observations• Interviews• Diagrams• Stories & portraits

Participatory Rural Appraisal (PRA)

• There are five key principles that form the basis of any PRA activity.

• Participation & empowerment• Flexibility• Teamwork• Optimal ignorance• Systematic

Drawbacks of PRA

• Time deadlines• Credibility• Hijacking• Formalism• Disappointment• Conflict of interest

Participatory Action Research (PAR)

• Par is more activist-centric approach in which participants take responsibility for reflection & preparing the research report.it is a reflective process of progressive problem solving led by individuals working with team to improve the way they address issues & solve problems PAR should not be confused with PRA. PRA is an assessment technique that could be part of a PAR process.

Innovative Tools

• Rural scaling techniques :LadderImages of facesColoursDiceCarom coins/Rummy coins/StacksPlaying cardPigeon hole3 point rating scale

Rural Vs Urban

• Respondents

• Urban consumers are educated and posses better comprehension and presentation skills.

• Rural consumers are semi or illiterate. They cannot understand sophisticated terms and tools.

Time

• Urban life is very time bound. They are hard pressed for time. So they are willing to spare less time for researchers.

• On the contrary rural life is not hard pressed for time. They may devote time for researchers.

Accessibility

• It is easy to access urban people geographically and psychologically as they know the importance of market research.

• Rural people are difficult to reach because of physical distances and apprehensions about researchers.

Secondary data source

• Large volumes of secondary data is available from multiple sources. Especially in companies that are there for a long period of time.

• Most companies are recent entrants in rural scene. The result is a paucity of internal historic data.

Primary data sources

• Data sources are many as well as large. Experts, middlemen, size of sales force, potential customers and opinion leaders are large.

• In rural areas male head of the family dominates. But now there is a marked transformation with substantial increase in disposal income.

Sampling

• Respondents form relatively homogeneous groups in urban markets. Income can be a criterion.

• Heterogeneous groups. Income and land holding to be carefully applied.

Data Collection

• Respondents in urban markets are comfortable with numbers, ratings and timelines.

• Rural people require simplified instruments. Respondents are comfortable with naïve approaches of categorization like colours, pictures and stories.

MNCs Vs Indian companies

• MNCs have and edge over several major Indian companies in terms of– Deep pockets– Greater emphasis on research– No prejudice like urban company – Technologically more advanced

• Pradeep Kashyap – Father of Rural Marketing

• Pradeep Lokhande – Founder of rural relations

• R.V.Rajan – Founder of RMAAI

Case Study

• Q1.Evaluate the questionnaire and suggest improvements?

Q2.Evaluate the research design in aspects-• Research Purpose• Sample Scope• Data Collection• Quantitative versus qualitative data• Primary versus secondary data