Market research helps companies know their customers. They need to find out which products consumers want and the quantity that is required to be produced, how and where to deliver and how best to reach the customers. All these are tasks of marketing research. Usually researchers go out armed with questionnaires and talk to potential consumers trying to figure out what is in their minds, how many people will actually pay the prices fixed for the products.
The traditional market research steps and methods are explained below:
1. Steps in Traditional Marketing Research:
The marketing technique that can be used can only be understood once we make a research plan.
The following eight steps help to chalk out a rural research plan:
i. Define the Research Problem and Objectives:
This stage, also called problem definition, involves defining what is to be studied. Research objectives could involve studying rural markets, distribution methods or rural consumer behaviour. Each of these objectives will have different methods for data collection. At this stage, the firm must establish clarity about the research and what is to be achieved by it.
ii. Develop a District-Wise Research Plan:
Since rural consumers are not homogenous, a district-wise research plan must be developed. The firm identifies what kind of research must be undertaken, works out the kind of questions that must be asked and to whom to ask those questions, along with methods of analyzing the data obtained.
At this stage, hypotheses that are to be tested are devised, steps to draw a representative sample are listed and the methodology is determined to collect data from the sample. Usually qualitative research is done as villages would not have large number of respondents.
iii. Search for Secondary Data:
Secondary data consists of published data available with government departments such as data on census, transport, schools, public health, and so on. Rural secondary data is patchy, but the researcher can tap trade associations such as Federation of Indian Chambers of Commerce & Industry (FICCI), Confederation of Indian Industry (CII) and industry associations, consultancies and rural journals. Professional research companies such as Nielsen, Accenture, Indian Market Research Bureau (IMRB), McKinsey, Ernst and Young and others undertake research and publish reports on rural markets, but these and other secondary data give a macro view of villages.
iv. Design a Primary Research Study:
Primary research is often needed because rural secondary data is just not sufficient. The method of collecting primary data is decided – survey, interview, observation or online data. Questionnaires are designed and translated into local languages and the methodology to conduct a primary study is chalked out.
v. Sample Selection:
Sample selection must be unbiased and as representative of the total population. This means all socio-economic groups in a village must be covered through cluster or stratified sampling. Though random sampling is preferred in urban areas, this is often not possible in villages. In villages, convenience sampling has to be done. At best, the researcher can ensure that all religious, caste and income groups are covered.
vi. Collect Primary Data:
Primary data collection poses a big problem for field workers — not only are large distances needed to be covered, but rural people are also suspicious of urban folk armed with questionnaires. One-to-one interviews are almost impossible as villagers usually gather around the researcher. Female researchers are needed to talk to females. People are also not aware of brands, so comparison is also difficult.
Respondents often give the answer that they think is expected of them rather than their real feelings, which also is a problem that the researcher face. Interviews are conducted by asking participants questions in small group setting. However, the researcher must have skills to interview villagers in local languages, explaining and getting information at the same time. Sometimes, insights about rural life are obtained not by asking questions but through merely observing markets and consumers.
vii. Analyze the Data:
Statistical tests are applied to check the reliability and validity of data. However, methods such as correlation, regression, discriminant analysis and factor analysis can only be used if the size of the data is large. But this is unlikely to happen in villages. Cluster analysis, to find out commonalities in elements, may be one technique that can be used in rural market research. If the research is qualitative, removing researcher bias would be a major task.
viii. Use the Findings to make Marketing Decisions:
The last step is to make sense out of the data analysis and come to actionable points for the marketing strategy.
2. Sampling Methods:
Sampling is necessary because it is not possible to talk to or survey every consumer or non- consumer. In sampling, we select some people and question them and hope that the findings will be applicable to all the population. Selecting the few people to interview out of the total population is called sampling. The sample has to fulfill two basic criteria – it should be unbiased and representative of the total population.
Theoretically, in an unbiased sample, each member of the population should have an equal chance of being chosen. However, this is not possible in rural areas. Certain segments of the population are socially excluded, such as women or people of certain castes. Thus, non-probability techniques are used and usually convenience sampling is done. In probability methods, stratified sampling would be important in villages, so that the respondent chooses people from each strata. Cluster sampling would also be used if clusters are easily identifiable.
These are explained below:
i. Stratified Sampling:
Stratification is the process of dividing members of the village into homogeneous sub-groups. Then simple random sampling or systematic sampling is applied within each sub-group. For example, a researcher may choose a sample from each of the three strata, that is, the upper, the middle and the lower class, to find out consumer behaviour across the entire population.
ii. Cluster Sampling:
The total population is divided into clusters and then random samples from the groups are selected. For example, we may divide the population in a village on the basis of profession and then take random samples from each of the clusters chosen.
Non-probability sampling occurs when researchers select samples based on their subjective judgement. It is often done for practical reasons such as lack of time or resources to conduct full-fledged surveys. In villages, researchers need to do surveys based on samples they can access conveniently.
There are three common methods in non-probability sampling:
a. Convenience sampling.
b. Quota sampling.
c. Judgemental sampling.
a. Convenience Sampling:
Convenience sampling is a non-probability sampling technique in which subjects are selected because of their convenient accessibility. In villages, it means interviewing people who are present at a given time. The method, though quick, may not give reliable results.
b. Quota Sampling:
In quota sampling, the population is segmented into mutually exclusive sub-groups and then entities are selected from each segment based on a specified proportion. For example, a company may wish to survey 30 people in each village, which is a quota that must be achieved.
c. Judgemental Sampling:
When a researcher uses his/her judgement in selecting the entities from the population, it is called judgement sampling. For instance, a researcher may decide to interview the sarpanch or opinion leaders in a village, or ask them for referrals in the hope of getting quality answers. This is called judgemental sampling.
3. Rural Market Research:
Rural market research is neither easy nor it is a series of steps, because customers are spread over large distances and are sometimes not exposed to brands and products. Secondary data on village consumption habits is patchy.
Traditional methods of market research thus have their limitations in rural areas. Since companies do not have accurate information about village buying habits, many companies have burnt their fingers trying to build supply chains to rural areas. Most companies simply look at the population data—about 850 million underserved people—and conclude about the huge opportunity it represents. But unless they know the people and what they buy, efforts at rural marketing are destined to fail.
Consumer research helps in all aspects of marketing strategy. It is needed to answer questions and help in marketing strategy.
Research helps companies to:
i. Identify Potential Customers and Segments:
Identifying rural customers and finding prosperous segments within the rural population is a major task of rural market research. This calls for gathering granular data.
ii. Finding Motivation to Use Products:
An important question to be answered is – why do people buy certain products? For example, a washing machine may be purchased for washing clothes in urban areas but may well be used to churn milk in villages. Such insights can help companies modify their products.
iii. Understand Existing Customers:
Companies need to understand customers as to what makes them buy and what they value. They can discover who influences buying decisions and what role models are popular among the rural folk. Further, companies find out which products are purchased for functionality and which ones for aspiration in villages.
iv. Identifying Purchase Habits:
Purchase habits or from where people like to buy, in what quantities and at what times are some of the important parameters. It results in designing specific distribution channels to serve rural areas. While some goods are purchased from the village shop, others are bought from a nearby town.
v. Develop Marketing Strategy:
Decisions such as product design, pricing, packaging, distribution and making communication strategies are guided by market research. Research also gives information about competitors so that companies can develop their counter offers.