Posts Tagged 'market research'

Blinded by “Free”

During my last trip home, I happened to meet a family friend’s daughter who was doing her masters in US. She was on a vacation because she had not managed to land a “paid” internship in her industry. What with this recession and everything! She was almost at the end of her trip, so nothing could have been done about it. But out of sheer curiosity I asked whether she had tried any company in India/abroad for an “unpaid” internship. She made it very clear to me that she valued her vacation more dearly than an “unpaid” internship – where she would have to slog for no money as well as not get to take her vacation. I see her point of view but the irony of it all didn’t escape me.

Sometimes, the most valuable of “internships/education” are unpaid/underpaid and we don’t see the value of it until way later. I remember as a student writing articles for newspapers and for the kind of work I put in to write one article, I was really paid peanuts. However, what I learnt while doing the stint was how to do a thorough market research and write a professional article putting it together. Those hours of research, figuring out who to speak to, how to get to them and making a questionnaire (dynamically deciding what to ask/not), not to mention the intense exercise in listening and writing down the notes as fast as I could have been one of the best forms of “training” for a marketing job that I’ve had.

I also want to mention another incident where it kind of struck me real hard how we miss things when we are offered something for “free”. I was at a school in Chennai and talking to the owner’s son. He saw what I had to show him and calmly asked me how it would fit in with all the infrastructure that he was about to get fixed up by a “large education” company that had offered to especially “network” all his classrooms for “free”. I was stumped. Not only because the school was already built and that there will have to be considerable drilling and panelling work that will have to be done but also because the kind of state the school was in, it did not seem like it could take that kind of heavy weight infrastructure installation, not to mention the fact that he himself mentioned that his teachers will need enormous amounts of hand holding to use the infrastructure/simply go digital. What the large company was doing by giving them something for “free” was overselling them and leapfrogging them into a space where the “large company” had an upper hand in systems, content, installation and operation. It was a good move by the large company but a bad choice for the school, unfortunately they were not able to see beyond the “free”.

So, next time you are offered/get something for free, don’t forget to look at the fine print, well better still if you can foresee the writing on the wall sometime in the future.

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Market Research – Part 5

This is the 5th in the line of Market Research related posts and I shall attempt to cover market research methods used. (Note: These are based on personal experiences and learnings, so if I’m missing anything, kindly feel free to add comments)

So here we go:

Market research in my view happens in two distinct stages pre-product definition and post prototype stage (before mass production/final go-live).  Though, there are some industries which follow – create ‘em and they’ll come approach, but we will focus on industries where it is a necessity and a differentiator to do market research to understand the customers. I would also like to divide them up broadly as secondary and primary methods as below:

1. Secondary Market Research – When a company starts a market research project, first is mostly (mostly because some people like to start with a preliminary easily accessible primary sources of information and we will cover this in the next point below) a secondary research phase. Anything about the market, competition, customers, ecosystem, trends about the industry available online -articles, magazines, conference presentations, published research material, discussion forums, free/paid market reserach reports are used in this phase. The information is organized and presented, in the process forming/validating a few theses for market research work.

2. Primary Market Research – As I mentioned above, some marketeers prefer to do a preliminary primary phase first to focus and give direction to the secondary research process (believe me, there is a lot of information out there and one can get drowned in the process…and hence, this is a valid viewpoint). Initially, primary research candidates could include experts within the company/outside that one might get access to. There are perfectly valid reasons to start with one vs. the other depending on how prepared one is to ensure that the time of the expert is well utilized. The various forms of primary market research include personal interviews, focus groups, conjoint analysis, online surveys, forums/collaboration tools, alpha/beta product testing etc. These are then followed by detailed analysis of the collected data to provide insights on which features are important vs. nice-to-have, what will customers pay for, what kind of product roadmap should the company be investing in and what kind of channels to push the product through, even price point indicators can be obtained through the right mix of tools.

In the next post I shall cover some ground with a real-life example to wrap up this series on market research.

Internet Market Pie in India- Part 2

I have few updates to the first part of this analysis I wrote about and I shall also cover some aspects of web surfing like – what do people like to do most on the internet? what are the various access points for Indians of various age groups of Internet? what can prevent/accelerate the adoption of internet in India?

Tweet-tweet – You have Updates!

The data I had in my last post was of Feb 2009, apparently Indians showed a spike of 74% and reaching 200K users in Mar 2009 (as reported by pluggd.in here) as opposed to smsgupshup which is a group sms and interaction platform and claims about 20M users and $150,000 in revenue/month with over 90% of the users from India (as reported here). The semiconductor market from where I come, we report yearly CAGRs, but I guess, the game is played slightly differently on the internet, especially the web2.0 adoption space…

Show Me The Job!

It appears that about over 70% Indians are out searching for jobs on the internet – that is a mind-boggling number! So, one might wonder is this somewhat related to a career choice related dissatisfaction? Is it related to the high attrition rates prevalent in the hi-tech and services sector in India and hence, the data is just skewed because that category constitutes a large % of the Indian netizens? Or is it related to the fact that there is a serious lack of transparency and being in-the-know of what is out there for the job scenario is one of the most important things for Indian net users? Whatever it is, there is definitely an opportunity for building better career based services that satiates this curiosity and tempers the dissatisfaction of landing up “somewhere” without a growth path.

I talk English, I walk English, but I don’t read Engilsh

Next in line is the patronage of vernacular-based websites – this was revealing data to me to know that about 42% of Indian netizens use a local language website. I guess, even if the numbers are up/down 10-15%, the very fact that people prefer to see internet as an extension of their reading habits from other mediums is a good insight to keep in mind for not only internet marketeers but also products and services being offered for reach and penetration in India. So, if I offer a dating site in 4/5 major languages in India, will it be a big hit in small pockets, adding up to a large satisfied customer base? Maybe, it is already out there – please point out if you know…

The travel economies
I think, the largest example for successful E-commerce in India has been around travel. With about 20% of Indian net users having purchased a ticket (rail/bus/train) online at some point and I can relate to this. The next, in line, would be books, in my opinion, but I don’t have any data on that. Again, the fact that stands out here is that Indians pay for tangible utility delivered which is greater than the sum of all expense + trouble they would go through to make a payment online. Getting access to a travel ticket without having to pay a huge commission to an agent or standing in a long queue early in the morning to get the tickets before they are sold out are all good examples of costs which are overturned by the book online phenomena, for which the Indian is willing to sacrifice the irking thought that my card might get misused!

So, what problem are you solving really, that is way more than the service that you are offering to the Internet user?

I think, we have covered a fair ground here on data and insights, I shall reserve the discussion around access points and adoption for a later post.

Comments/feedback are most welcome.

Internet Market Pie in India – Part 1

How large is the Internet Market in India, really? I took a stab at collecting the latest information and slicing and dicing it as best as I could, so here we go.

Internet in India

Overall market in 2008 was estimated to be 55M and active users (those who have used it at least once in a month) are estimated to be 48M. Of these, about 45M are in urban areas.

Now, that we have covered the current numbers, how about some demographics and growth rates?

Demographics

Of the urban internet population about 67% come from non-top 8 metros. This was a good input to have – which means that the market is not highly concentrated and an internet marketeer looking for reach stands a good chance at it. Also, only 37% of the urban internet population is Sec A – which is again good news for reach and penetration.

With respect to age and gender: 44% of the users were males, 27% were college going students, 12% school students and the rest were females.

Broadband users not broadbased yet?

Broadband penetration in India is very low around 4.5M compared to 386M handsets. This is the most common comparison I always hear. I would say a more reasonable comparison would be broadband penetration vs. say, smartphone users or internet enabled mobile phones in India, both of which help deliver multimedia rich features to the end user and hence, increase streams of revenues for telecom service providers as well as the internet marketeers.

Growth projections

I have come across everything from a conservative 13% to a high of 40%. I prefer to go with the lower number, because if the numbers are on the higher side, I end up with better reach and bandwidth issues, which is a better situation to be in than no reach and wasted resources…based on the above growth rates, we can estimate the market to be overall at about 80M users in 2012.

In 2012, the market is predicted to be 80% urban vs.20% rural as against the current 94% urban and top 8 metros will have 30% market share vs. the current 37% market share.

How about Twitter you may ask….

Let us take a stab at the twitter market in India…the overall market is at 0.12Mn and 15-24 year olds lead the pack with 40% market share, followed closely by 24-35 year olds with 36% market share, the rest of it is lapped up by the 35+ segment. Also, men seem to be tweeting 4x more than women in India.

Sources of data: Comscore, Feb 2009, IAMAI India Internet Report 2008, pluggd.in

Interesting Links:
http://www.pluggd.in/india/twitter-india-audience-profile-3943/
http://www.iamai.in/

Market Research – Part 4

Analysis

This is fourth in the series of market research related posts and I would like to go over the analysis part here. This is one of the most important, often overlooked part or something on which the least amount of time gets spent. Data collection, verification and compilation takes away the bulk of the time mostly and while putting it together it is easy to lose sight of what was it exactly that you wanted to do. This is where the initial thesis and output slide deck templates help to keep your sanity. Let us take a quick look at the various aspects involved:

1. Data interpretation, presentation and insights

This is the first stage of any market research activity, where you are attempting to pull all the data together into a nice looking presentation and while in the process, stare at the data trying to come up with conclusions. This is NOT ANALYSIS. True analysis happens when you are able to get out of data collection mode, move into a parallel mode of data comparison against thesis and try to convert it into usable, insights and information. Now, this does not mean you might not have to do any more data collection but if done in brief spurts of analysis + data collection proves to be an effective and useful way to do market research.

2. Customer-centric thinking

This is again a part of the analysis thesis which says, there is no wrong way of looking at a presentation, just wrong ways of showing the information. Or in short, your audience is never wrong, knowing them and hence, presenting it in the form that will be interesting and useful to them is more important than any cool animation or sophisticated analysis you can do. Knowing what are the most important problems they need to address, knowing their limitations, knowing what their top concerns are, will help make a better presentation that will help your customer, in turn.

3. Anthropomorphing

I learnt about this aspect from a speaker from IDEO who spoke at ISB, the year I was there. He said, most problems and sample sets can be analyzed from the point of view of certain attributes of living things and making that analogy is a conscious decision and helps in amplification of the required parts of the information necessary for problem solving and discarding of the trivial parts. I use this sometimes and it is useful, for example while describing company cultures, while describing user experiences etc.

4. Quick prototyping and customer experience feedback

This is an under utilized technique outside of the “internet” space, though most user experience design firms seem to use it a lot. Part of the reason is the underlying cost of getting a prototype done and the other part is the belief, in the traditional product marketing folklore, that the customer does not know what he wants unless you give it to him. However, this is the acid test for the decision to wrap up market research or to continue working on it (although in true terms this aspect should never cease completely, just take a back seat & continue to operate in the background). If your prototype meets your market research findings or is way off, you have your final word on what to do next. Now, the prototype does not necessarily have to be a complete version, just incorporation of basic features is sufficient and reach to a random sample set of target customers should be enough. There could be more aspects about data presentation right from should I chose a line graph vs. a bar graph to display my information and I have found good resources on the internet around these, so I have attempted to cover things that I have uncovered from my personal experience and have not necessarily found online/in any classroom. In the next part, I shall attempt to cover different tools used in market research ranging from personal interviews to conjoint analysis.

Market Research – Part 3

This is the third in the market research series and I will cover issues in market research.

Issues

Accuracy vs. authenticity?

I have often wondered how important is it to have your market sized up to the last decimal point vs. knowing that what you have comes from a reliable source of data, which in all probability have covered only about 60-70% of the relevant market applications. In which case some of their numbers may be way off, but the rest will be in the ball park.

The lemon vs. apple vs. pineapple phenomena

In fact, when you look at market data, it is generally important to know whether the market is too small to enter, in which case you might be chasing a lemon or is it too large to dig your teeth into, and is a pineapple. One is generally seeking a market that is sizable and manageable to begin, like an apple. So, stating what those limits are for you and figuring out whether the market falls in that range is sufficient for top level market research. Beyond this – all you will do is purchase costly reports and try to triangulate them by spending equally costly resources searching for the information that does not exist and may not prove valuable in decision making.

Fast changing landscape

Also, given the nature of today’s environment, for a market research professional it is more important to know what are the factors that can possibly swing your data widely and know what might cause them to occur. Modeling possible scenarios based on market trend assumptions makes one realize a realistic limit for the market forecasts based on the trend assumptions.

When is being in the ballpark not sufficient?

Consider that you are launching a production line and the estimate and forecasting you make decides what kind of capacity is installed or purchased and it is not easy to upgrade. You can have large sunk costs or lost opportunity costs if the numbers varying up or down from the forecasts. At this stage, it is important to use forecasting techniques based on historical data (if you have any for your product in the market) or a parallel market (that best represents what you are launching).

When information is just not available

Generally, post a quick and dirty search for information sources on Google, the next resort for most market research professionals is to go after research reports. While, it is not a bad idea and gives credibility to your data when presenting before top management, I have found that the purchased costly reports generally either don’t meeting quality standards, that is they will not match data from random other sources or they will not be deep enough to be useful for an in-depth product launch level analysis.

Forecasting markets based on triangulated primary information

Now, your current or future competitors in the market publish a wealth of data in their annual reports, investor conference calls and meetings – only if you listen. People who have worked in the relevant industries are all around you and have an opinion on the market and trends and can help you validate/invalidate your assumptions and even, data sometimes – again, only if you look around and ask. Reaching out and listening to what they have to say is key. Beyond that it is up to your interpretation, your task at hand and what your management wants to see…

All the best with your market research and feel free to ping me if I have missed some obvious issues or if I have some concepts grossly mistaken, will be glad to get comments and feedback…

Market Research – Part 2

Triangulating the source of all errors away! Or Not?

For most, triangulation could mean average of different sources and for some, it means getting two independent sources which are giving you same data in the ballpark. But to me, it is to do as much with heuristics as with statistics. Why do I say that? After you ensure that you have independent multiple sources of information, you can do a lot of quick sanity checks. If the report is a year old, then it started out with some numbers which are historic shipments/data by now, but were forecasts for them, then – you can do a quick check to see how way off each source of data was with respect to the shipment information you have. Next step, check what is the data range, is it within 0.1%, 1%, 10% or 100%? If the error is in the range of 0.1-1%, I would either take the more conservative number or average out or weigh the source with more trustworthy historical numbers, higher. Beyond the 100% range, either we are dealing with different market definitions or some fundamental error in accounting method, need to determine which source is way off (might need some conference calls with analysts..or a third source to support one of the previous data sources) but beyond that you have to chose one and I would again go with the conservative number, unless I will have either forecasting or ramp up production related issues to deal with later. Now, if the error is in the 10% range, I would average out the numbers from the different data sources (if all other sanity checks are a pass), because this is most probably related to differences in assumptions and we are safer in the middle here. Comments, feedback, thoughts are welcome…


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