Rural Marketing Research

Abdul Haseeb Ahmed M.V.Nanda Kishore Gaurav Chauhan Sarthak 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

Evolution
Before 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 Product Decision Item(brand) decision Research Existing products sales Consumer preferences Mkt growth rates & share trends Internal Records Decision support Existing products sales Production cost analysis Idle capacity Profitability data Concept testing Screening models Business analysis

Price

Price determination, price change

Personal selling team

Competitive prices Discount structure

Competitors practices Mkt growth rate Competitors practices

Cost data Company policies

Mark-up Pricing Supply-demand analysis

Promotion

Current Mkt Territorycoverage allocation Target coverage models Sales and ad expenditure data AIDA model Promotion elasticity

Advertising & sales

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 Problems 2. Determining the research budget 3. Choosing research design 4. Determining sampling method and size 5. Selecting appropriate data analysis tools 6. Preparing the research proposal 7. Organizing field work 8. 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 definition

Management objective Management problem Research problem Decision criteria hypothesis

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 Based on nature of data Based on sources of data Exploratory, Descriptive and causal Quantitative and qualitative 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 Research Purpose Research setting Sample scope

Exploratory Know the variables Natural learning (Class room) Small non-probability samples Subjective opinions Secondary and Primary on a small scale Hypothesis Indicative Growth directions, behavioral trends

Descriptive Describe the variables Class room Large probability and non-probability samples Subjective opinions Primary

Casual Verify and validate relationship Lab experiments, field experiments Small probability samples Objective behavior Primary

Nature of data Data collection

Nature of output Application

Description Substantive Market potential, product usage, sales analyses

Prediction Confirmative 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 Survey Observation Experiments Projective techniques

Secondary To be searched and selected Sources

Libraries Media Trade associations Internet Research organizations

Methods

Methods
Purchasing from other sources Scanning available databases

Contd..
Merits
Accurate first hand information

Merits
Economical and easier to obtain

Demerits
Expensive Time consuming

Demerits
Data gaps Non- availability of relevant data

Application
Consumer purchase process Brand loyalty Promotion effectiveness

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. 2. 3. Sampling procedure Sampling methods Sampling size

Choice of Sampling procedure

Factor Information needed Expected cost of errors Population Allowable error Non-sampling error Probability Totals High Heterogeneous Low Small Non- Probability Averages or proportions Low Homogeneous High Large

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

Sampling Size
Factor Time Available Accuracy Cost Population Large More High High Heterogeneous Small Less Low Low 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 Selecting investigators and supervisors Training the staff Allocating work Briefing the investigators Compensating the staff for the work turned out

Organization of research effort

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. Dos & Don'ts
Dos
Appearance Greetings Language and culture Rapport Investigation Overcoming limitations Dont pretend Avoid direct inquiry Dont touch Avoid suspicious behavior Dont become controversial

Donts

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 : Ladder Images of faces Colours Dice Carom coins/Rummy coins/Stacks Playing card Pigeon hole 3 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 comfortable with timelines. urban markets numbers, ratings are and

Rural people require simplified instruments. Respondents are comfortable with nave 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