Thursday, July 24, 2008

Prioritise or perish!

Today we live in a communicated if not wired world where people are an audience first before they even think of becoming consumers. So there is a crying need to understand the media exposure and consumption patterns of consumers.

_ Cartoon by Ravikanth “As you can clearly see in the chart, the market we’ve to capture is behind these two hills ...”

I was reading an interesting and yet contrarian article in a business paper recently titled “Ignorance is bliss? It may also be rational”. The article spoke about the theory of rational ignorance which dictates that for a person to justif iably expend that time and effort in collecting additional information, the value of that information has to outweigh the costs of collecting it. The piece ends as follows: “If the difference in the value of outcomes is not significant, you may be better off not spending your time and money on collecting information on the available alternatives.”

Yes, there are instances of primary research projects that may be poorly designed or shoddily executed or findings that often lead us to ask “so what’s new?” Not to forget marketers, who by their very nature, seem so well organised [!] that often they do not have the time for information gathering, which leads us to agree selectively to this point of view. Yet the value of secondary research is often not recognised or respected, which is perhaps an indication of some of the reports that are currently available. Having said that, I must concede that the recently launched RK Swamy BBDO Guide to Market Planning is an insightful edition containing proprietary research that can help marketers, planners and agency personnel to be better informed about markets and their potential, so that their decision-making can be better and better informed.

India, a land of myths

India by its very nature is complex, stumping marketers and, on occasion, analysts as well. Marketers too have their own pet theories about markets in India and the Indian consumer. I am no exception to this rule. Examples are rife – the rural market is all hype, the North is a better market than the South, Hyderabad is the best test market, everyone is watching cricket, the only thing that works in India is celebrities … All of us are guilty of adding to this confusion with our own two bits of wisdom which is often untested. But there is no substitute for comprehensive research as this volume demonstrates. The survey covers 515 districts out of 593, of both urban and rural districts, in 21 States and three union territories of India.

The basic questions that anyone would ask about a particular district might well be: Does the district have the “means to consume?” This is arrived at on the basis of crucial parameters such as per capita income, bank deposits, number of house owners and percentage of affluent households, which helps us to come up with certain meaningful insights. But our experience does suggest that market potential, while important, is only half the story. Whether the district and its constituents have the inclination to consume is a larger concern. What is the ownership of telephones, which includes mobile phones as well, the ownership of cars, fast moving consumer goods and durables in the district that we are studying? All of this can provide a reasonable pattern of buying behaviour which can guide us in making a prediction of the future. This analysis has been done by the research group blending different databases to give it a greater level of objectivity and accuracy.

Today we live in a communicated if not wired world where people are an audience first before they even think of becoming consumers. So there is a crying need to understand the media exposure and consumption patterns of consumers. The module gives us a better understanding of the diverse audience that is India. What is the level of exposure /awareness of the district to media such as TV and radio and what is the level of female literacy in the district? Finally, can the district support the activity? What are certain important parameters like road density and population density in the district under review? As a consequence of all these questions and the study it is possible to arrive at the aggregate potential of the markets, the quality and affluence of the consumers and markets and the availability of mass media to consumers.

A problem of plenty

Every marketer knows that there are never going to be enough resources to do what one wants all the time. The size, complexity and choices that are available in India excite, and at times, confuse us. Brands try to be everywhere all at once and forget the basic principle that there is a minimum threshold level required for a marketing activity to bear results and they often enough end up spreading themselves too thin. I, as one who consults for companies, would like to know the answers to questions like these: Which are the emerging markets for a product category like a small car? Are there any markets that perform less optimally? How can we help set sales targets taking into account the potential of the market? Which is the best area to test market our products? Are the five-lakh-plus towns the easiest and best “low hanging fruits’? What should be the mix of urban and rural markets? The guide helps us to find the answers to questions like these.

Nuggets of information worth considering

One of the major features of the study is that it covers both the urban and the rural markets and comes up with the surprising insight that the rural market is as big as the urban market. With the exception of Maharashtra and Goa, the rural market accounts for at least 40 per cent of the market potential. Maharashtra is as big as Madhya Pradesh, Gujarat and Goa combined, thereby providing a greater opportunity to focus, consolidate and gain. Speaking of urban consumption, a relatively unheard of and often not considered market like Meghalaya finds a place.

The south zone offers the best quality markets be they urban or rural. Maybe one could see brands that are strong in South India continuing to grow and consolidate in these markets without trying to get national. The purchasing power per unit area is the highest in Kerala, which means that the State offers markets that are dense. One of the features of the guide is that it allows marketers to fine-tune or extrapolate the data in the context of the peculiarities of their own respective product categories. For example, someone who is marketing financial services can look into parameters that reflect means or ability to consume in addition to the quality of the market.

Information - the next big advantage

It is often said that any consultant is only as good as his current project, an agency is only as good as its current campaign, and a company is only as good as its current team. Yet in a constantly dynamic world there is one enduring fact and that is the value of information that is well-researched, timely and objective.

Although it is hardly original, I can say that you are only as good as what you know. In marketing what you know is about markets, their complexities, their peculiarities, behaviour of consumers, their affluence, their inclination to buy and their exposure to media. A study that provides information on these issues through the length and breadth of this diverse country is well worth subscribing to, following and using for making crucial marketing and planning decisions.


Hung over after the completion of IPL, I am not watching too much television nowadays, as meaningless contests such as the Asia Cup refuse to excite me. To add to my tedium was this uninspiring commercial from BSNL featuring Preity Zinta. In case you have not seen the commercial consider yourself lucky.

It features a traditional family coming to ‘inspect’ Preity Zinta for an alliance. To cut a boring story short, they check out the boy’s credentials and discover that he does not have a BSNL land line and reject the boy! BSNL like so many other brands has lost importance over the years to a variety of reasons and yet believes that all the complex marketing problems that arise out of poor customer service can be solved with a poorly executed TV commercial.
Long live the power of advertising, even if it does not work in this case!

(Ramanujam Sridhar is CEO, brandcomm, and the author of One Land, One Billion Minds)

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