TERM-III: QUESTION PAPER: JUNE, 2010

MODEL ANSWERS (Questions 1, 1or, 2, 6 only)

1. Case study

Background:

In the given caselet, for Minit brand (Tablet-based soft drink), following inputs have
been provided, ie:

- Successful concept testing and initial test market reports showed that consumers
liked the concept as well as the flavours. (First level concept testing: can be Aided or
even unaided Research)

[Questions-
1: Who are the prospective consumers (Of MINIT)?
2: Where are they located?
3: What are their psychographic and demographic profiles?
4: What are their “Needs” and “Wants”? Can these be partially quantified?

- Objective-1:

How to break into soft drink market dominated by global players with huge
advertising spending? Which segments should be targetted? How?

Objective-2
- Emphasise twin advantages of Minit tablet-based soft drink – to target segments
only
Given:
- From Secondary Research: Available information.

Soft drink market is 1.1% with a value turnover of Rs.1600 crores per annum.

Answers:

(a) Research Design: [Exploratory via focus group interviews: use Aided Research mode]

Research design has to ensure obtaining answers to the following basic issues, ie:

(i) Identify interested consumers: Psychographic (Life style) and Demographic

profiles (Age, income range, education, male: female ratio etc.)
(ii) Identify their specific locations ie. metro cities, smaller towns, rural areas or a
combination.
(iii) Probable consumption patterns: Second level of Aided study.
 To obtain answers to the above, this marketing research should be aimed at
major, present consumption centres of soft drink (Identify present major
consumption centres from available published information sources / experts’
opinion survey). Then only, depending on research budget and time availability,
fix areawise population as well as possible sample size(s) to be interviewed – via
Focus Group Interviews, to start with.

Finally, during the stage of data collection (Via a combination of analyzing

available secondary data, data generated from focus group interviews and
experts’ opinion surveys), at initial stage, design the process of entry to ensure
financial viability of this new concept, ie, Minit. Design an Exploratory study.

For this, in addition to the above questions-answers, it will be necessary to

identify the following AFTER working out S-T-P.

For targetted buyer-user segments only:

Use the 6 Ps principle.

P1 : Target specific flavours: Segment-wise

P2 : Fixation of prices at the end-user level, as also at levels of distributors/dealers,
alongwith fixation of comission, incentives for the latter.

P3 : Process of Distribution, which will be direct for institutional market if any and,
for household level consumption, via wholeseller / distributors / dealers /
retailers.
[Intensive / selective / exclusive patterns to be pre-decided]

P4 : Promotion:
How to create awareness and through which media, which should be cost
effective (CBA(? During the stage of data collection, identify preferred sources of
awareness creation.

P5 : Process:

The process of establishing Logistics to ensure regular availability at different

centres.

P6 : Types of (Internal) people needed to ensure both internal and external

coordination, cohesion and communication [Process].

Plus: Develop close relationship with newly appointed Distribution Channel

Members(D.C.M.s)
 In addition to the above, desired Selling and Servicing structure, locationwise,
will have to be considered simultaneously.

To ensure all the above, prior to commercial and national launch (If possible),
this research design should be an Exploratory Study followed by actual
Selling/Marketing via appointed sales people, as well as local Distribution
Channel Members.

After a few months of product launching, only if called for, a Descriptive Study
may have to be organized IF this new concept fails to take off commercially.

OR

1. Quantification of qualitative data: is this at all needed? Why?

Ans.: This is necessary.

Qualitative data provide a range of possibilities, which may have a combination

of “Direction”, and some “Magnitude”.

For example:

Target segment-A is dissatisfied with available product-services offered by

company-1, as compared to a number of competitors.

The above statement shows, qualitatively, the direction of buyers-users’ liking

and/or dislike for a particular product class. Also, this does not offer any
“Magnitude” which alone will be followed later by a set of effective marketing
mix parameters, ie. the 6 Ps.]

To achieve the above depending on the study type, the following assessment
parameters can be used from needed quantification of qualitative statements.
These are as follows:

(a) Nominal scaling

This will just provide a “Direction” but no “Magnitude”.

(Example: Car Registration No. WBF 4240 is just behind Car No. WBF 4241).

(b) Ordinal Scale:

For example, 5-1 scaling can be used to assess as follows:

5: Excellent
4: Very important
3: Important
 2: So-so
1: Unacceptable.

From the above, it should be noted that 5-4 is not equal to 4-3, which, in
turn, is not equal to 3-2 and so on.
[Other scales: Likert, Semantic differential etc.]

Rational indicators (Scale)

(c) Ratio scale:

Example, Rs. 5 divided by Rs.3 is equal to approximately 1.7. [Rs. 5

Rs.3]

(d) Interval scale:

For example, a normal scale has a range of 1” upto 12”, where:

12”-11” is = 11”-10” and so on. [Exact quantification and clear magnitude].

From both the above mentioned scales, both exact direction and magnitude
can be assessed.

In real-life scenario:

Depending on types of data generation, a combination of above scales is

used to quantify, as much as possible, even qualitative data base. This will
miniimise subjectivity and individual bias prior to their required
interpretation, analysis leading onto conclusions and, finally, actionable
recommendations.

An example :Shoe case study (Refer: Annexure-I)

Need for quantification and qualification of generated data:

Data are generated from a variety of sources, prior to their conversion to information, which is
a basis for taking any effective decisions and thereby solve problems.

Beside in-company available data (Example: Sales Call Reports, Balance Sheets, Profit and Loss
statements, statements of the concerned Chairman etc.), balance data, which are needed for
problem solving and decision making have first to be identified, systematically and scientifically.
These are termed as Specific Information Bits (SIBs).

Thereafter, sources of SIBs have to be pre-determined by the concerned Researcher(s).

Broadly, these can be from a variety of sources like:
 - Published secondary data, which are reliable, valid, consistent and substantial
- Experts’ opinion survey
- Observations of actual Consumer Buyer Behaviour
- Market surveys
- Simulation
- Internal Jury of the Sales People(s)’ comments / internal experts’ opinion surveys
- DELPHI method
- Organising Causal Relationship studies
- Different types of Aided/Unaided research (For data generation)
- Analogous (Case) studies
etc.

During the process of data generation and later codification to analysis and interpretation, both
qualitative and quantitative data are needed.

For example: Using the above-mentioned Shoe case study (Annexure-I)

1. Qualitative parameters:

Nagaland specific Shoes have to be designed so as to combat the major menace of

numerous daily deaths, which are caused by poisonous snakes and other types of
animals, which throng the dense forest.

In addition to the above, besides reasonable cost, the specially designed shoes have to
comply with basic parameters like the following:

- Waist high specific types of gumboots, which ensure “Some protection” to the lower
limbs of daily woodcutters
- Reasonably comfortable manoeuvrality
- Different types of shoes for working men and women with different colour / shades,
designs and specifications, all of which have to be clearly specified in terms of
aspects like sizes, shapes etc.
- These Shoes should be in a position to withstand typical geographical conditions like:

 Rocky terrain
 Extremely slippery due to continuous rain fall
 Hard and piercing large rocks etc.

- Also specially for lady workers, “Reasonably good to look at”, may be another pre-
condition.
etc.

The above are a set of typically qualitative comments, which are usually specific for the
targetted buyers and users. These are, normally, general statements, which qualify the
generic requirements of the relevant, targetted end-user population.
Quantification:

Here, using the 6 P principle, specific quantification needs to be organized prior to production,
financial estimation, internal planning for raw material supply (Material Management
Department), overall Logistics etc.

Details are given below:

P1: Specific types of shoes – shapewise, designwise, colourwise and definitely sizewise. In
addition, for each model/grade/variety, monthly quantitative production targets have to be
fixed prior to their direct influence on Sales Planning.[Starting with STP target
fixation].

P2: For each of the above, fixation of prices, as well as credit terms for bulk supplies through
intermediate Distribution Channel Members (DCM).

P3: Specific decisions on distribution systems, which can be a combination of:

- Direct supplies for bulk markets

- Indirect supplies via DCM
- Combination of the above.

P4: Both promotional plans and media, as well as contents have to be target-market specific.
Specific details have to be taken regarding promotion via:

- Advertising and publicity: for mass level awareness creation and continuous
“Reinforcement”.
- Sales promotion – primarily for awareness creation / Aided Research (New launches)
- Personal selling: bulk market handling (Institutional) and handling intermediate
Distribution Channel Members (wholesellers/distributors dealers retailers
stockists etc.).

P5 : Detailed planning for internal intra and inter-departmental coordination, cohesion and
communication (Synergy). [Production, Finance, Marketing, Materials Management,
Low sticks etc]

P6 : Decisions on specific number and types of people for Sales and Marketing Management
functions, as also all related functions.

Therefore: Quantification of market’s “Needs and wants” is absolutely essential, prior to, for
example, decision on P.P.C. (Production, Planning and Control).

To sum-up:
It can be observed from the above explanation that quantification and qualification of targetted
buyer-user’s “Needs and wants” go hand-in-hand. Both are equally important, starting with
qualitative estimation(s) via, say, Exploratory Market Studies.

2. Marketing Research is a time consuming and expensive proposition.

As per definition, three broad types of research can be stated, ie:

(a) Market survey:

This can be termed as an Exploratory study, which is carried out primarily to identify
major causative factors / variables, which will affect, for example, sales and
productivity.

However, in this type of study, besides identification of relevant variables,

quantification of data is not attempted so as to establish, if needed, Cause-Effect
Relationship. [Definitive].

(b) Market Research:

This is one step ahead for both data collection and their interpretation / analysis.
Here, as in Descriptive Study, quantification is attempted based on known variables /
causative factors, which will affect dependent variables like sales and productivity.

Market Research is primarily related to Sales and Marketing Management problems.

Here, both assessment of demand and future potential (Via forecasting techniques)
can be organized for required quantification of collected data.

Marketing Research:

Marketing Research is an all encompassing (Wholistic) exercise. This will involve,

besides Sales and Marketing functions, all other relevant internal and external
variables, which will affect issues like, for example, the following:

- Establishing present and future market share (% and absolute)

- Establishing past, present and future market growth rate (%, absolute), which have
to include macro variables like inflation, purchasing power and attitude, levels of
technology, Trade Balancing like imports and exports, levels of present and future
competition etc.

To achieve the above, series of studies may have to be organized, starting with
Exploratory Study and may be even Descriptive Research.

Finally, to establish cause / effective relationship, causal research like Multiple

Regression, Factor analysis, Discriminant analysis etc. have to be organized so as to
arrive at cause-effect relationship.
 These are extremely expensive and time consuming studies, which are carried out for
very capital intensive projects and projects with far-reaching, usually long term
significance.

Factors considered for designing and implementing any type of market survey / market
research / marketing research:

Introduction: Any type of market study involves:

(i) Relevant data collection also termed as Specific Information Bits (SIBs).
(ii) Ensure data “Purity” ie:

- Reliability (Function of sources of data)

- Validity (Function of time)
- Consistency (Same/similar data from different sources)
- Substantiality (Enough data base on which effective decisions can be taken for
quality problem solving).

(iii) Data:

- Recording and codification

- Analysis and interpretation
- Drawing major findings conclusions recommendations on which actions can
be taken.

All the above relate to any type of problem in the generic field of Sales and Marketing
Management.

Major factors (Based on the above definition)

a) Insufficient data, in terms of quantity and quality

b) Unreliable data
c) Data, which are not valid, at a point of time.
d) Data, which are not consistent
e) Unclear and ill-defined study objectives and study constraints
f) Unclear about study limitations, like:

- Budget
- Time factor
- Geographical coverage
- Other resource availability
etc.

(iv) Need for identification of specific causative factors, which, singly or cumulatively,
influence dependent variables like sales, productivity, profitability etc.
 (v) In many situations, when there are more than one alternative(s), basis for optimal
decision making is unclear.
(vi) Finally, whenever and wherever relevant, qualitative and/or quantitative co-relationship
amongst factors causing Cause and Effect (Relationship), may have to be established.

6. Research Brief and Research Proposal are the practical aspects of any research as a
managerial tool.

Ans.
RESEARCH BRIEF.

The following concepts need to be understood clearly and data have to be obtained on each of
the issues mentioned below:
A] Background to the study:
It has four components:
A1] Background of the particular client organization and why they are
planning a particular study? This can be equated to SWOT analysis, ie:
- S,W (Internal assessment of the client firm’s “Strengths and weaknesses”)
- O,T (External assessment of the relative competition, opportunities and threats – later
for competition, if any)

A2] From the above, Symptoms will appear, ie. (Just to give few examples):
- Sales is falling
- Market share is going down
- Employee Morale/ is going down
etc.

A3] Based on all the above, internally, the Consultant will identify all possible
causative factors, which, jointly or cumulatively, are causing the above-mentioned
Symptoms (Stage of problem formulation)
A4] From the above, client and project specific probable causative factors will
be shortlisted (Stage of problem identification).
Few examples:
- Lack of adequate number of Sales and Service Engineers
- Lack of proper Market-Sales coverage: An organizational fallacy
- Poor quality of internal training

etc.

B] From all the above, starting from A4, clearly stated Research Objectives will be framed.
These can be, usually, a combination of quantitative and qualitative indicators.
An example:

i) During 2010-2011, in the city of Kolkata, our sales turnover for our existing
product/service has to go up by 10%, as compared to last year’s turnover.
ii) Employee Morale/ must go up by 10% (Vs. last year) in 2010-2011.
C] Study parameters:
Clearly identify and record those limitations / parameters, which are relevant for each
study.

Few examples:
- This study will have to be organised only within 4 metropolitan cities of India
- This study will be completed within 8 weeks of commencement of the Research
Project
- “X” number of fully trained field personnel and “Y” number of supervisors will work
under the overall guidance of Prof. (Dr.) P.K.Ghosh (Chief Consultant or the Project
Director).

Customised Methodology:
D] Finally, after the above-mentioned Research Brief has been fully clarified and quantified-
qualified, step by step, then only, internally, the Chief Consultant’s work starts, starting
with designing an activity flow diagram, which will be the first step of the customized
Methodology for solving any problem(s) with which the project started.

Research Proposal : Steps (Research Brief is a part of any study proposal)

1. Study background Research Brief

2. Objectives
3. Parameters
4. (Customised) Methodology
4.1 Activity flow diagram (How to go about?)
4.2 Universe vs. sampling – sampling techniques
4.3 Survey methods
4.4 Research Instruments
4.5 Findings
4.6 Report writing
4.7 Audio-visual presentation
4.8 Study team
4.9 Time-cost estimates
4.10 Back-up annexures.
 Annexure-I

A short case study on specific types of shoes for Nagaland.

Major objectives:

1. To understand the overall process of P.S.A. (Problem solving approach) for real-life problem
solving and decision making.
2. Relevance of quantitative as well as qualitative data base, which are reliable, valid, consistent
and substantial for problem solving and decision making within pre-defined limitations /
parameters.

Relevant background

At a point of time, in the state of Nagaland (During the early ‘60s), major occupation of the
inhabitants was wood cutting by able-bodied males and females within the age range of 16 years
upto 45 years.

Information on other inhabitants, age groupwise, have been separately given in two different
tables of the original case study. [Study the case].

Nagaland, at that point of time, was full of dense forests, where the woodcutters went daily to cut
wood, which was partly kept back for cooking purposes at individual homes. A part of the wood
was bartered to get hold of specific daily necessities (From traders) like wheat, pulses, edible oils
etc. In addition, the traders paid lumpsum amount of money to the reasonably cash rich young
generation, who believed in both hard work, as well as “Fun and games” like going to parties in
the evenings, dances, cinemas, buying apparels from far-flung Haats, which came up during two
days every week – mainly on the plains, which were located at considerable distance from the
high-rise mountains.

In these twice weekly Haats, as well as occasional Melas, very cheap quality of shoes, chappals,
gumboots etc. were also available, at fairly high prices, from local traders, who brought these in,
in large lots, from towns and cities located in the outskirts of the state of Nagaland.

Geographically, besides the dense forests, which were full of poisonous snakes, leeches and
other types of crawling insects (Which could cause considerable damage, mainly to the lower
portion of the woodcutters), this State was infamous for very high rain fall. Mostly, in the
mountains, the ground was uneven, slippery and full of large stones, which were sharp enough to
cut through the thin soles of the locally available chappals, poor quality of shoes and gumboots,
which were bought by the woodcutters at frequent intervals – at fairly high prices.

Major problem was the unfortunate daily number of fatal cases of victims (The woodcutters),
who had to go daily in the deep forests to cut wood. Many of them fell prey to these types of
poisonous, low-lying animals, which were plentiful in the long grass, which was rampant
throughout the forest.
On the other hand, as stated earlier, due to “Some” education, mostly by the local Christian
Missionaries, the Nagas were reasonably educated. Besides good monthly income, they believed
in a good and flamoboyant life style and, in general, wanted to “Live well”, as long as they are
alive!!

Socially, in general, they practised a matriarchal type of family-level culture. In short, ladies
dominated the household responsibilities, as well as authority.

Questions to the readers:

From all the above, alongwith the short case study on “Shoes”, using the problem solving
approach (PSA), identify, in brief, the following:

- The SWOT approach

- Internal and external Symptoms

- All possible causative factors, which, singly or jointly, influenced the above-
mentioned Symptoms [Problem formulation]

- Finally, using this particular case study, identify relevant causative factors [Problem
identification].

In general, you are expected to further state the following:

1. Specific Research Objectives, which can be a combination of both qualitative as well as

quantitative statements.
2. Identify the case-related limitations / constraints, from the view point of an Exploratory Study
to be designed by a Shoe manufacturer from Kolkata (Refer: The original case on “Shoes”).
 SHOE CASE

THE STRATEGIC PROCESS FOR

DECISION MAKING: A CASE STUDY
APPROACH
[HOW TO CHOOSE THE RIGHT PATH(S)?]

Background:

A firm XYZ (P) Ltd. had a flourishing business (Rs. 25 crores yearly turnover) in mid sixties
in/around Kolkata city for manufacturing and selling (Note: Not marketing) Leather Shoes
targetted only for the adult male population. They had started operation in 1935 in Kolkata, to
start with.

This firm was owned by a traditional family, whose eldest son or daughter took over as the
Managing Director (M.D.). At that time, Mrs. Xaveri (A 40 year old then family head) was the
Chairperson. She toed the family philosophy of only concentrating on male leather shoes.

The relevant organizational structure in Kolkata was as follows:

Ms. Xaveri, Chairperson

Functional Heads

Ms. A
Sales Manager Other functional heads

Mr. Ghosh
(A 25 year old Sales Trainee)

Competition was becoming intense in the urban areas from Bata and few other shoe makers. The
need was critical to identify:

- Either: Look for “Virgin” areas (One relevant, part populated area was then
unexplored Nagaland, a rocky, forest filled 1,250 sq.km. terrain, which was full of
snakes, leeches, poisonous animals etc., all of which populated the dense forests). This
forest provided a major opportunity of employment to the adult males, females (Age
range: 16-45 years). Most of them went everyday to the forests to cut wood, a part of
which was bartered for other daily essentials and thebalance was retained back to serve as
fire wood or outright sales to middlemen. Income was quite good (High liquidity).
Also, the spending habits of these local, semi-literate population was high. A major
percentage were Christians, whose Church going habits were quite strong, who also
worked hard, drank harder and enjoyed social evenings filled with dances, parties and the
like i.e. very extroverted.
 A major problem to the wood cutters was daily number of affected people, who were
poisoned by the numerous scorpions and similar dangerous animals, which thronged the
dense forests. Due to total absence of any type of protective below the-belt device (Say a
high, thick leathered Gum Boot type of specially designed shoes, clipped near the waist,
which could withstand, at least at the lower body portions, frequent bites from these
poisonous vermints), large number of wood cutters were affected daily, sometimes
leading onto deaths. Besides, the terrain was full of rocks, very slippery due to incessant
rainfall and, as a whole, posed a major challenge to any innovative, reasonably well
known shoe maker – none of whom ventured to operate in this area, at that time. In the
biweekly “Hats”, held several miles away from the high-altitude dense jungles, the local
inhabitants were forced to give up their daily work (Opportunity cost), trudge miles (Kms
were unknown atthat time) either way and buy necessities like very poor quality shoes,
sandals etc. at exorbitant prices, which hardly provided any type of safety from the
natural elements and were soon worn out, forcing repeat purchases!

Mr. Ghosh, the young trainee tried to do a quick “SWOT” analysis, based on which the
above qualitative aspects were unearthed. The basic goal was to explore the possibility
of market development (Refer: Cell 3 of Igor Ansoff’s Product-market mix) – in an area,
which may have potential (Future wants) for reasonably expensive adult male shoes.

The young Ghosh also came out with the following reasonably reliable and valid
population data. Two surveys were conducted as follows:

Survey one:

- Assess demographic characteristics of relevant population

(Number and types of people, income, purchasing habits for shoes etc.)

- Qualitative assessment of their interest to go in for shoes of much better

quality
(Quality was subjective but gave some indications regarding their:

 Probable needs / future wants

 Types of ‘Safety’ shoes needed
(Ladies also wanted “Comfort” shoes)
 Prices they were willing to pay
 “Some idea” about probable yearly purchase patterns
 Opinions about presently available “Locally made” shoes, sandals
and the extent of their local suitability for different ‘Segments’ of
possible buying – using population.

Based on the above collected information, Ghosh wanted to approach internally

his other functional heads, through Ms. A, 36 year old lady Sales Manager, who
was not only very traditional (By nature) but hardly encouraged her juniors to be
proactive on their own (Quite typical in many organisations) ! Ghosh persisted
and, at a major risk to his own career, approached the Chairperson, who allowed
 (With Ms. A’s grudging approval) a limited time and budget for possible, new
market exploration.

Spurred by Ms. Xaveri’s blessing and “Go ahead”, Ghosh fed the market data to
his R&D people with a request to design a few hundred pairs of adult male
shoes conforming to:

 Suggested leather type and to ensure safety to the user, who also
wanted a shoe to last at least six months, if not a year
 Initially suggested colour, shape, sizes, designs etc
 Within sought-after price indications.

Second survey:

Armed with these initial samples, Ghosh met at random mainly prospective male buyers,
who bought the shoes outright after the survey was completed. Ghosh collected more
realistic data on:

- Specific, desired shoe types [Need definition]

- Purchase frequency of adult males and probable purchase frequencies of
other target segments
- Price indications
- Indicative signals on:

 Where they will buy from?

 How to ensure promotion?
etc.

- Other probable targets’ opinions

(Young, old people, female adults, senior people).
[Many ladies, old people and even children showed interest to buy].

Sampling helped in further concentration of prospective buyer-user’s “Shoe needs” and also
whether it will be substantial enough for XYZ to proceed further.

The actual spot sales also indicated the spontaneity of response and what the target population
(Adult males) will like to buy [Product specifications, prices and terms, desired place(s) of
retailing, promotional “Tools”, type of firm-level positioning by XYZ etc.].

In short, these two surveys provided data for specific decision making, as follows:
 TABLE 1

BASIC MARKET DATA

Sr Clusters of probable buyer Population Yearly Total potential

Nos / target segments (Nos.) purchase (Per year)
frequencies
1 Adult males (16-45 years) 50,000 1.5 75,000 pairs
[Relevant
segment]

2 Adult females (16-45 60,000 2.5 1,50,000 pairs

years). (Includes fancy
shoes)
3 Young people (0-15 years) 1,50,000 2.00 3,00,000
4 Old people (Beyond 45 2,00,000 1.50 3,00,000
years)

Total = 4,60,000 8,25,000

shoe pairs
NOTE

- Which target segment(s) will you/your group go in for?

- Why? (How about traditional stigma of catering only to adult males?)
- How?
(Please use CBA approach)

- What more data will you need for your decisions?

Cut off point: 1,25,000 pairs per year.

Or, go in for other avenues of business growth.

* All are hypothetical data.

A note: 1. Is it at all necessary to?
- Do a SWOT?
- Go through expensive sampling
- Obtain data, which are reliable, valid, consistent and substantial
enough for decision making.

2. How about firm’s age old dictum of making only shoes for adult males?

Debate