ASSIGNM

ENT

METHODOLOGY
OF
PRODUCT
RESEARCH
Prepared by:- Section IM-1

Deepak Virmani

Nakshatra
 Renubala

Rajesh Ranjan

Sanjeev

Sachit Chawla

Shivprasad Chauhan

Tajinder Pal Singh Puri

MARKET RESEARCH:

Market research is the process of systematic gathering, recording and analyzing of data about
customers, competitors and the market. Market research help create a business plan, launch a
new product or service, fine tune existing products and services, expand into new markets etc. It
can be used to determine which portion of the population will purchase the product/service,
based on variables like age, gender, location and income level. It can be found out what market
characteristics your target market has. With market research companies can learn more about
current and potential customers.

INTERNATIONAL MARKETING RESEARCH (IMR) can be defined as market research

conducted either simultaneously or sequentially to facilitate marketing decisions in one or more
than one country.

International marketing research plays an important role in the identification and development of
a company’s strategies for internationalization. It enables a business to identify, evaluate and
compare potential foreign market opportunities and develop a marketing plan. Research also
provides a company with foreign market intelligence to help it anticipate events, take appropriate
action, and prepare for global changes.

The marketing research existed ever since the man on this earth started exchanging the
merchandise. Evidently the marketing research was first used in the United States in early
nineteenth century (around 1820). First it was used by the newspapers to predict election results.
Thereafter the U.S. agriculture machinery manufacturers used marketing research for estimating
the potential demand for their products by collecting and using certain information.

As businesses expand further and further in international markets to broadens its horizons to fly
high, this not only give the business the opportunities which are yet to be tapped but also exposes
to the inherent vulnerabilities from the other international players, the role of timely and accurate
marketing research to guide decision making becomes increasingly critical. The need for
Marketing Research to support international marketing decisions has evolved over the past four
decades and is still it’s in budding phase. The basic purpose behind employing the marketing
research as an important and integral part of operations of any organization is that it allows the
organization to know where the potential possibilities lies and thus guiding to focus/concentrate
all the available existing resources in more productive and efficient way, thereby reducing the
cost of production and maximizing the profits.
For a company to launch a product in an international market, marketing research for the
same is required to be done for which the steps mentioned below are followed:

1. COMPETITOR ANALYSIS:

Competitor analysis has developed from a simple emphasis on gathering data about
competitors, to a much greater in-depth analysis of customers’ strategies and actions. The
most competitive businesses are those that effectively transform data relating to
competitors into “decision-relevant” insights. The great advantages of in-depth analysis
are that it is one means of learning more about the broader competitive environment,
generating insights into customers, distribution channels, suppliers, technology, and
competitive dynamics. CA is also used to reflect on and learn about one’s own
business—its vulnerabilities, limitations, and capabilities relative to current and potential
rivals.
When you are analyzing and understanding competitor’s marketplace strategy, it is
important to consider the following elements:

1.1 Product range:

What product-markets does the competitor compete in (i.e) the types and variety of
products offered by the competitor to the customers which will come in direct
competition with our products which are to be launched. Also the features, functionality,
service, availability of their products should be taken into account.

1.2 Product’s price positioning:

This research is done as to analyse the pricing strategy of the competitor (i.e.) at what
prices they offer their products and the reasons for such level of pricing which can be
good quality, quantity or disposability. This gives us a sense to formulate our own pricing
strategies so that we can fix our prices accordingly and can compete in the market.

1.3 Years of existence in the market:

The no. of years of existence in the market is directly proportional with the market share.
Longer the time you are in the market, larger will be your share in the market as well as
reputation. It acts as a negative force against us because it becomes difficult for
customers to switch from their trusted brand to a new brand. But then it depends on
various factors whether the customers are satisfied with the products available and what
is the perception of the brand in the minds of consumers and if there are any unmet needs
or expectations on which we can focus and create space for us in the market.

1.4 SWOT Analyses:

SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) is a method of
assessing a business, its resources, and its environment. Doing an analysis of this type is a
good way to better understand a business and its market. By doing this we will have a
clear view of where we can counter our competitors and where we have to be cautious.
SWOT analysis consists of the following two activities:
1. An assessment of the organization’s internal Strengths and Weaknesses and;
2. An assessment of the Opportunities and Threats posed by its external
environment.

Assessing the Internal Environment:

Internal scan or assessment of the internal environment of the organization

involves identification of its strengths and weaknesses i.e., those aspects that help or
hinder accomplishment of the organization’s mission and fulfillment of its mandate with
respect to the following Four Ps:

a) People (Human Resources)

b) Properties (Buildings, Equipments and other facilities)

c) Processes (Technology, M.I.S etc.)

d) Products
External Scan:

For the external scan the planners have to identify and evaluate the Social, Technological,
Economic, Environmental and Political factors (STEEP) in the environment outside the
organisation, which affect its success or survival.

(i) Social factors Demographics, income level, religious

affiliations, ethnic origins and Impact of
these factors on the preferences of people.

(ii) Technological factors Availability of new technology and

infrastructure like airports, seaports, roads,
railway transport, The type of technology
used.

(iii) Economic factors Liberalization, Privatization and

Globalization of Economy, Development of
specific sectors of industry, Unemployment
and Underemployment, Development of
Entrepreneurs etc.
(iv)Environmental Depletion of Natural resources,
factors Environmental sustainability, Pollution
control, Energy consumption, Regulations
of World Trade Organisation etc.
(v) Political factors Legislation affecting normal processing of
the firm , Control of Curriculum, trade
policies, tax structure.
 Collaborators - Different countries have different norms for foreign direct
investment according to the nature of the business. So, if 100% investment is not
allowed, we have to choose a company with which we can collaborate and introduce our
product. So a detailed study has to be done with regard to their past record, their
performance, consistency in their growth.

1.5 Competitor’s target market:

This involves scrutinizing of the segment of market on which our competitor focuses
on, whether the product they offer is for the premium segment, middle segment, lower
segment, or is it for kids, or gents, ladies, or elderly people.

Analyzing competitors target market is one of the most important steps in marketing
research for a simple reason that if our competitor has the target segment similar to
ours, then we have to bit differentiate our approach because they already would have
established a favorable image in the minds of the consumers. So this step gives us a
sense of what strategies we should formulate to outdo them.

1.6 Competition growth rate:

The rate at which the competitors are progressing is of great relevance to our company
because it signifies the potential of the market as these companies only form the whole
industry. For this CAGR(compound annual growth rate) of the companies is recorded
(i.e.) growth recorded over the years. . It is not the actual percentage that you make off
an investment in a certain period of time. Instead, its a value that describes how fast
your investment would have grown if it grows at a steady rate, instead of the varying
rates that it actually did grow at. It smoothes out the returns year over year.

Calculation of CAGR helps setting the goals and targets of the company considering
the pace in the growth of the market. It also act as an indicator of feasibility for our
company launching the product.
2. OVERALL MARKET:

It has been rightly said that the war is half won if you have clear knowledge about the
battlefield correctly before going for a war. Some of the prime issues are:

2.1Overall market Size: A deep study of the overall market size is required by the
researcher so as to quantify the research findings. The number of buyers and sellers in a
particular market is the overall market size. This is especially important for companies
that wish to launch a new product or service, since small markets are less likely to be able
to support a high volume of goods. Large markets could bring in more competition. The
overall market size is one of the important parameters that an organization takes into
consideration before entering into product diversification or market diversification.

2.2Growth of Total Market: The growth of the market is the term generally being used to a
comparative picture of the general change in the amount of revenue generated by the
market in the present financial year as compared to the past financial year.

The growth of market gives a general trend of the market and it varies from
different industries/sectors to industries/sectors. Based on the past trend and data
of market growth rate helps in predicting the future market trends and the
prospective most probable growth rate. The marketing research can help to
forecast the fate of various industries and suggest the appropriate remedial steps
that are nee to be taken by the industries in order to avoid adversities and reap the
benefits.

2.3Addressable Market: with the help of marketing research the organizations can choose
the most profitable market segment i.e. by catering to the needs of a particular market
segment the organization can make maximum profits and avoid the un-necessary
competition. By looking at the past trends of the market growth helps the organization to
 choose and decide its addressable market i.e. it confines its services and products to this
particular segment only.

2.4Traditional Marketing Research: the traditional marketing research assumes that the
study participants are aware and are willing to describe their past experience, future state
of mind, emotions and behavior. Depending on this various methods are being employed
in the traditional marketing research like personal interviewing (in home, office,
telephonic), focused groups, surveys and mails to record and get the responses from the
consumers/respondents.

2.5Internet Marketing Research: the internet marketing research is becoming increasingly

important for the researchers to remain update with the latest technology and it has
brought many benefits to marketing researcher like few of them are low cost to reach
global/large number of audience, interactive nature, quick response/less response time,
innovation, measuring statistics easily and inexpensively. The internet marketing research
also possesses certain drawbacks like reach to only those who are in use of internet, result
decisions may be biased etc.

3. END USER/CUSTOMER ANALYSIS:

Launching a new product or solution is a challenge. There are large risks involved, risks
such as making the wrong investments, risk of slow market acceptance and risk that the
competitor takes the market instead. The difference between success and failure lies in a
launch that fits the customers' needs. Knowing how customers think is the key to making
good decisions for marketing and product people. It adds value to the decision process by
turning the assumptions on customers into knowledge and insight.

Customer Analysis identifies critical factors for customer success:

• Timing
• Functions and Features
• Price
• Packaging
• Potential Market size
• Target market
• Marketing strategy & competition
• Preferences for specific vendors
• Customer awareness
Customer Analysis Methods:-

• Telephone interviews based on standard questionnaires.

• Case studies are carried out as in-depth interviews - most often face-to-face.

• Focus Groups:
A professionally guided discussion among a group of customers. The methodology
enables the customers to develop their points of view along the way, giving higher
quality than an immediate not too well reflected response to a question would give.

4. ENVIRONMENTAL ANALYSIS:

While conducting the marketing research for launching a new product into the existing
market or existing product to a new market, the factor which is must and utmost essential to
be taken into consideration by any marketing researcher for making its research findings
more acceptable includes the environmental analysis. Environmental scanning is a process of
gathering, analyzing, and dispensing information for tactical or strategic purposes. The
environmental scanning process entails obtaining both factual and subjective information on
the business environment in which a company is operating or considering to enter.

There are three ways of scanning the business environment:

a) Ad-hoc scanning - Short term, infrequent examinations usually initiated by a crisis

b) Regular scanning - Studies done on a regular schedule (say, once a year)
c) Continuous scanning(also called continuous learning) - continuous structured data
collection and processing on a broad range of environmental factors

In today’s most turbulent business environment the best scanning method available is
continuous scanning. The macro-environmental scanning involves analyzing the following:

• Economy which include the analysis of the various factors which are indicators of the
economy like GDP, economic growth, per capita income, Unemployment rate, inflation
rate, currency exchange rates, trade deficits, balance of payment and future trends.

• Government stability and policies like government debts, corporate and personal tax rate,
import tariffs and quotas, export restrictions and restriction on international financial
flows.
• Availability of new technology and infrastructure like airports, sea ports, roads, rail
transport, education institutions, hospitals etc. to support the development and expansion
of business.

• Socio-cultural factors like population size, age distribution, income level, religious
affiliation, ethnic origins and their impact on the perception and analysis of the
consumers.

• Legal laws pertaining to minimum wages act, worker safety laws, copyright and patent
laws, anti-monopoly laws, and municipal licenses.

Due to industrialization and increase in population there was huge exploitation of natural
resources there by adversely affecting the environmental balance and thereby raising
threats for the mankind, therefore raising a huge amount of concern for the governments
thereby forcing them to formulate various strong environmental laws and standards (ISO)
to be practiced and followed by the various industries/organizations working under the
province of that country around the globe for the welfare of people of that country and
humanity as a whole and make earth a better and safe place to live. It is also apparent that
the environmental laws are different for different countries, so a detailed knowledge of
these laws of the prospective market is a must.

Some of the environmental laws that are formulated by various countries as production
standards for the organization around the globe include the following:

4.1CFC’s: the CFC’s (Chlorofluorocarbon) used to have a huge amount of utility in the
refrigerators, Air conditioners, paint spray cans, Deodorant spray cans etc. but due to its
proven adverse effect on the ozone layer and the environment led to the prohibition of use
of this compound/chemical in the production and servicing of the above mentioned
products. So due to the law prohibiting the use of CFC’s being enforced worldwide all the
above mentioned products which sell in the market today are “CFC free” and they also
bare the necessary label for the same.

4.2Effluents: the byproducts produced while processing or producing the products were
generally thrown out of the company in the open environment directly either in open
land, landfills, natural water body or in the air if it is gaseous in nature. Due to this the
top soil where the effluents were dumped turns to be infertile and impotent, the release of
untreated effluents in the water bodies lead to various health hazards and contamination
of the ground water by these effluents, destruction of the aquatic life and eutrofication of
the water bodies etc.
 The government sets and appoints a concerned authority to monitor the process of
processing and level of effluents released by the different organizations for their
compliance with the government safe standards, these authorities not only fine the
organizations deviating from the standards but also encourage the proper treatment of the
effluents before release in the environment by these organizations.

4.3 Radio Active Substances: the environmental laws are very strict as far as the use of
radioactive substance is concerned either for the production process or treatment of
various diseases because the proper handling, storage and disposal pose a major problem
for mankind as the exposure to this substance leads to mutation and truncation in the
genes. So the organizations like cancer research and treatment hospitals, powerhouses,
nuclear and radio activity research labs etc. which use this substance actively had to
maintain proper and safe standards and methods of using and disposing the waste.

4.4Carcinogens: the various organizations which use carcinogenic (cancer causing) raw
material as an integral constituent for the process of production like battery
Manufacturing, chemical producing etc. are under very high vigilance of the environment
protection agencies. These organizations are compulsorily bound to set up a effluent
treatment plant and treat the effluents properly before releasing them into the
environment.

4.5Emissions: in order to control the ever increasing levels of cabondioxide and other green
house gases the government sets up emission level standards to be followed by the
organization dealing in production like automobile. The product produced by these
organizations has to strongly in compliance with these standards to be sold in the market.
Some of these standards are the “EURO” and “BHARAT” Stage – I, II, III etc. due to
these standards more and more fuel efficient and low emission cars and other vehicles are
available in the market.

The introduction of the non-catalytic engines in the market has greatly reduced the level
of emissions of poisonous gases (Unleaded petrol engines).

5. MARKETING STRATEGIES:
5.1 COUNTRY SPECIFIC PRODUCT:

Although basic needs (eating, sleeping) are common to all human beings regardless of
their country of origin or culture, there are numerous cultural differences between
consumers across the world.

These cultural characteristics (language, religion, philosophy, traditions, customs, habits,

family arrangements, images, color, symbols, education, roles in the family, hobbies,
social organisation, ...) are the very factors which influence consumers, in the way of
fulfilling their needs, in the process of decision making for purchases, just as in their
consumer behaviour (frequency of purchases, use of the product). These cultural
characteristics, are therefore the kinds of factors which deeply affect the options of a
company with regard to launching a new product, and in particular, creating advertising

In terms of marketing research, the following points should be guidelines for marketers to
minimize the possible cross-cultural marketing mistakes:

a) Develop cultural empathy (recognize, understand, and respect another's culture

and difference);
b) Be culturally neutral and realize that different is not necessarily better or worse;
c) Never assume transferability of a concept from one culture to another;
d) Get cultural informants involved into the decision-makings.

5.2 LOCATION ANALYSIS:

Selecting a location not only requires deliberate data analysis and evaluation, but also the
expertise and experience to avoid the potentially disastrous pitfalls that result in or from a
poor decision. The location search and analysis includes three primary steps:

1. Define critical project drivers

2. Develop selection criteria

3. Conduct location selection

A successful project defines critical issues and objectives prior to discussing specific
locations. These initial considerations will drive the geographic characteristics of the
search area such as region and time zone preference.

The critical project drivers are those elements that must be achieved in order for the
project to thrive.

Whether you are looking for a new headquarters, R&D facility, manufacturing plant, data
center or back office operation, the first step is to ask several core questions to determine
the critical success factors for the new operation. What is the fundamental purpose of
establishing the new facility? What objectives should be considered and why? How do
these objectives affect organizational initiatives? What industry trends and internal
imperatives need to be considered in the decision? Answering questions such as these
will help clarify the primary drivers for the project.

Geographically defining issues may include proximity to an airport or interstate,

proximity to suppliers, and time zone, etc. Qualitative issues such as availability of
workforce skills may also be considered, as well as quantitative factors such as cost
parameters, site requirements, or startup time-frames.

Develop Location Selection Criteria

After identifying the project drivers and success factors, you should develop the location
criteria to evaluate whether individual communities meet those success factors. In this
phase, you assign relative weights and measurable criteria to the project success factors.
The location selection criteria allow you to compare the qualifications of the candidate
areas under review. The criteria also provide the framework for the community screening
and location selection. Using the selection criteria, you can assess the advantages and
trade-offs of a particular community, as well as rank a short list of communities based on
relative potential to support the project requirements.

Conduct Location Selection

The goal of a location selection is to determine the best communities for a particular
capital investment by systematically eliminating the less desirable communities from
further consideration, and identifying the more desirable candidates for more detailed
analysis.

The location screening is typically a three-step process:

1. Research and identify potential alternatives.

2. Evaluate the alternatives, matching your requirements with the candidate communities;
conduct cost and condition modeling.

3. Recommend locations for community due diligence; conduct investigations in the

communities to select the best.

Screening is based on geographic criteria (proximity to, or distance from: airports,

highways, rail, port, other company facilities, competitor facilities, market/region access,
center of sales activity, suppliers/vendors) and community attributes (labor force size,
population growth/decline, labor costs, labor availability, available real estate, economic
base, skills, education, competition, logistics, taxes, utilities). Common demographic
categories include:

• Population (totals, growth and breakdown)

• Labor Force (totals, growth and breakdown)
• Unemployment Rates (annual and most recent month)
• Employment by Sector
• Wage Index
• Educational Attainment and Presence
• Industry Presence
• Income and Housing

5.3 TARGET AUDIENCE:

Having a well-defined target market is more important than ever. No one can afford to
target everyone.

Before our business can realistically or effectively begin a marketing campaign, we

should be able to answer two vital questions: what is our target market, and what does
our target market want or need that our business can provide?

Targeting a specific market does not mean that you have to exclude people that do not
fit your criteria from buying from you. Rather target marketing allows you to focus
your marketing expenses and brand message on a specific market that is more likely
to buy from you than other markets.

With a clearly defined target audience, it is much easier to determine where and
how to market your company. Here are the steps to define target market:
A. Check out your competition

Who are your competitors targeting? Who are their current customers? Don’t go
after the same market. You may find a niche market that they are overlooking.

B. Analyze your product/service

Write out a list of each feature of your product or service. Next to each feature,
list the benefits they provide (and the benefits of those benefits). Once you have
your benefits listed, make a list of people who have a need that your benefit
fulfills. Choose specific demographics to target

Figure out not only who has a need for your product or service, but also who is
most likely to buy it. Think about the following factors:

• Age
• Location
• Gender
• Income level
• Education level
• Marital or family status
• Occupation
• Ethnic background

C. Consider the psychographics of your target

Psychographics are more personal characteristics of a person including:

• Personality
• Attitudes
• Values
• Interests/hobbies
• Lifestyles
• Behavior

Determine how your product or service will fit into your target’s lifestyle. How
and when will they use the product? What features are most appealing to them?
What media do they turn to for information? Do they read the newspaper, search
online or attend particular events?

D. Evaluate your decision

Once you’ve decided on a target market, be sure to consider these questions:

 • Are there enough people that fit my criteria?
• Will my target really benefit from my product/service? Will they see a
need for it?
• Do I understand what drives my target to make decisions?
• Can they afford my product/service?
• Can I reach them with my message? Are they easily accessible?

Defining your target market is the hard part. Once it is known that who we are
targeting, it is much easier to figure out which media we can use to reach them
and what marketing messages will resonate with them.

5.4Positioning:

The concept of positioning is often used together with the terms segmentation
and targeting. Those three elements work together closely when determining
which way to offer a product or a service in which markets to which target group.
Once the organization has decided which customer groups within which market
segments to target, it has to determine how to present the product to this target
audience. This allows to exactly addressing the needs and expectations of the
target groups with a tangible marketing mix that consists of product
characteristics, price, promotional activities and places to present the product.

Positions are described by variables and within parameters that are important to
the customers. Common examples are price, supporting services, quality,
reliability, and value for money. Often, customers position a product in relation to
a brand or product that is especially visible to them. This could be the market
leader or any other offer with a high media exposure and an above average
marketing budget. Therefore, it is advisable to use in-depth market research to
determine relevant parameters in order to understand how customers rate different
products and marketing variables.

Steps for Positioning a Product:

Following steps are recommended for determining and implementing the

positioning of a product. Although they focus on new product development, these
steps are applicable to a relaunch with new features or for a repositioning of an
existing product too.
 a. Define the segments in a particular market.
b. Decide which segments to target.
c. Understand what the target consumers expect and believe to be the most
important considerations when deciding on the purchase.
d. Develop a product (or products) that caters specifically for these needs and
expectations.
e. Evaluate the positioning and images, as perceived by the target customers,
of competing products in the selected market segments.
f. Select an image that sets the product apart from the competing products,
thus ensuring that the chosen image matches the aspirations of the target
customers.
g. Inform target customers about the product (promotion).

5.5 PRODUCT PORTFOLIO:

Product portfolio is defined as the mix of products manufactured or distributed by

a company.

Products age and die, just like people. And just like a community of people, any
range of products is best if it contains a mix of old and young; the developing and
the mature.

Products go through various stages if their life, and one of the best descriptions,
that has passed into common use, is the 'Boston Box' (so-called because it was
proposed by the Boston Consulting Group in the US) in which products are
described as having four stages. In the early stage the product has high growth but
low market share and so absorbs investment. In the second stage it enjoys both
high growth and high market share and is a 'star' product. However, it then
matures into a 'cash cow', needing little or no investment but producing good
returns. Finally, its market share falls as new products or changes in patterns of
 demand cause its demise into a 'dog' which warrants no investment and produces
low returns.

THE BOSTON BOX

It can be seen from this diagram that at each stage of its life, a product or service
has a different effect on the business. At one point absorbing cash and resources,
while at another generating cash with little investment.

The trick is to have a number of products or services at each of the different

stages, so that the 'cash cows' can fund the 'question marks' and the 'rising stars'.
Also, in terms of operating your business at a steady or growing rate of profit, you
will need to time the introduction of new products, so that there are always some
cash cows available to take the place of those that turn into 'dogs'.

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