Interview
Research
In an increasingly crowded and competitive market,
Mumbai-headquartered market search has carged out a niche as
the largest wholly-owned market reasech agency in the country.
Principal correspondent Jain Shankara reports.
Sundara Rajan, Chief Executive Of The Mumbai-Headquartered
Market Search, has many achievements to his credit. In an
increasingly crowded and intensely competitive market, Mr.
Sundara Rajan, a mechanical engineer and an alumnus of IIM,
Ahemedbad, heads the largest wholly-owned market research
agency in India.
Just 39, Mr. Sundara Rajan is the India Bureau organiser
for the association of European Market Research Institutes
(AEMRI), the apex global body for market research. Knowledgeable,
articulate and experienced, he is a frequent speaker at the
forums organised by the AEMRI in various parts of the globe.
In this exclusive interview with BUSINESS BARONS, this first-
generation entrepreneur expresses his opinions about the prevailing
environment in the Indian research sector and how he sees
it evolving in the coming years.
Excerpts:
What is the prevailing scenario in the Indian market research
sector?
A. Sundara Rajan : One has to look at both
the long term and short term perspectives while addressing
this question. In the short term, a sense of unease pervades
the sector. Market Research as an industry provides services
to the larger economy as a whole. If one looks at the issue
from this angle, the Indian market research sector is not
faring well. The old economy has not revived as expected and
I don't see it picking up for at least the next six months.
The earliest I see a revival in the old economy segment is
in the latter part of 2002.
The success of the services sector depends to a large extent
on the old economy performing well. Within the services sector,
there are industries like insurance and telecom which are
witnessing high growth rates, but these need to be sustained
over a long period. With the old economy not picking up as
expected, there is concern within the market research sector.
However, having said this, I am bullish about the sector's
long-term prospects. With economic liberalisation gathering
pace, the market will open up still further. This means intense
competition, with consumers having a variety of choices. It
will become very important in the future to know the wants
of consumers and accordingly cater to these. From this perspective,
the market research sector holds immense potential. High and
rapid growth is a certainty in the long term.
How do you see the sector evolving in the coming years?
Rajan: I foresee a higher lever of mechanisation
in the industry, especially in data pick-up. One will witness
a dramatic shift in the point of purchase - from ordinary
grocery and road-side stores to shopping malls and mega department
stores. The latter will naturally be financially stronger
than the former and will hence possess the means to store
data, analyse and understand them, study purchases behaviour,
etc. Mechanisation will play a prominent role in this process.
How will this alter the working of
the market research industry in India?
Rajan: The data collected
will be large and analysing and understanding them will require
experts houses focusing on niche industries and markets. For
Example, industries such a processed foods and insurance will
witness rapid growth and catering to the requirements of players
in these industries will require specialised knowledge. Boutiques
offering specialised services will come up.
I forsee huge, monolithic, I know it all organisations
losing importance while sector-focused agencies will gain
prominence. Larger organisations will become data provides
while the smaller ones will provide analytical services. Provision
of value added services will become a prime determinant of
success in the future.
For example, in the rapidly burgeoning financial
sector, micro specialisation will become the order of the
day. The range of activities here is vast - from the ordinary
savings account to credit cards, home finance, consumer finance
and project finance. These segments being vastly different
from each other, there will be a need for different groups
of specialists to cater to each of these segments.
Several international market research agencies have
entered India in recent times. In which ways has this phenomenon
impacted the domestic sector?
Rajan: An important fallout
of this phenomenon is the intense competition for business
prevailing presently in the marketplace. These foreign agencies
have bought out Indian agencies outright now they are under
pressure to justify both their top and bottomlines.
Another important point I want to highlight
here is the migration of knowledge and talent. While global
mechanisms, models and frameworks are now available in India,
there has also been a corresponding outflow of talent from
India to foreign countries. The canvas of the Indian market
research professional has now expanded beyond imagination.
Data acquisition and processing have become
increasingly sophisticated. Packages are now available off-the
shelf to process data and the end result has become more refined.
Could you give a brief profile of your company, Market
search?
Rajan: Market Search was
established in 1991 and I am the chief executive of the company.
With the Indian economy opening up from the early 1990s, I
scented a huge opportunity in the market research sector.
Right from the beginning, we have concentrated on building
up our expertise in niche sectors such as processed foods,
construction materials, IT, automobile lubes and LPG sectors,
etc.
Market Search has tied up with three leading
UK agencies - Cadogon plc, Europe's largest travel, tourism
and infrastructure services research group, RMS plc, an agency
specialising in organised retailing, and Thomas International,
leaders in behavioural profiling.
Market search has progressed steadily and
today counts as its clients several blue-chip corporates such
as Mahindra & Mahindra, Parle Products, IOC, Godrej &
Boyce and Roofit.
What do these foreign alliances entail?
Rajan: Cadogon's expertise
lies in the travel tourism and infrastructure services sectors.
Within infrastructure, Cadogon's expertise lies in services
such as railways, telecom. Waterworks and other public services.
These sectors are poised for huge growth in the coming years.
As economy liberalisation progresses steadily, I foresee the
Indian economy becoming more services-driven.
Tourism is a key revenue generator and an
important sector for India. The country has witnessed a dramatic
rise in spending on travel and leisure and several states
have embarked on special drives to woo domestic and international
tourists. Cadogon's expertise in this field will prove immensely
beneficial to us; we will indigenise its models to suit Indian
needs.
RMS plc specialises in point-of purchase customer
behaviour. In association with RMS, we will introduce the
latest techniques in retail research into India. Here I want
to highlight a recent study which indicates that even Tier
II cities are set for explosive growth in the retailing sector.
Major Indian conglomerates and MNCs planning huge investments
in this sector; in fact, Marks & Spencer, a major client
of RMS in the UK, has entered the Indian market recently.
Our tie up with Thomas International will
help us in profiling behaviour, especially of high net worth
individuals. The underlying theory here is that an individual's
behaviour is a manifestation of one's emotions. The point
to be noted is that while behaviour can be measured emotions.
The point to be noted is that while behaviour can be measured,
emotions cannot be. Behavioural profiling is used to ascertain
what triggers a particular type of behaviour. I t is an exceptionally
useful tool to make customers happy: used in conjunction with
CRM applications, it proves extremely effective. With relationship
marketing assuming increasing importance, behavioural profiling
will prove especially useful big-ticket items such as high-value
automobiles, five-star hotels, etc.
How do you define organised retailing?
Rajan: For this, one has
to first understand the evolution that the retail sector is
presently undergoing in India. Previously, customers used
to go to kirana stores to purchases their necessities. This
later changed to bigger shops run by one man with a few employees.
Here, all the work was done manually. Gradually, more sophistication
seeped into this sector and department stores came into being.
Beginning in the mid-1990s, however, there
was an explosion of shopping malls and plazas where customers
interacted with professionals and not with just one single
person - the owner. An important point here is that customers'
requirements are catered to by trained staff. Today, organised
retailing has become an experience characterised by comfort,
style and speed.
How will the retail sector evolve in India?
Rajan: With general economic
growth and higher disposable incomes, this sector will naturally
witness an explosive growth. Besides, wealth has begun trickling
down to the lower middle-class and other sections.
The aspirations of these classes will increase
and this will prove a major growth driver. For example, a
product like soap will be the same in a kirana store and a
shopping mall, but a customer may prefer to buy it from the
latter - where the customer purchases a particular product
will become an important factor.
There will be another direct fallout arising
out of the explosive growth of organised retailing - one supermarket
coming up will adversely impact 100 small retailers - they
will have to either shut down their operations or spruce up
their quality standards. Either way the customer will benefit.
What is market search' expertise in retailing?
Rajan: Our competence lies
in understanding customer behaviour at the point- of -purchase
(pop). We use sophisticated observational and analytical techniques
to understand customer behaviour. Through this we can understand
the impact of factors such as packaging, lighting, positioning
of the product, etc., on the customer. Customer loyalty is
critical to the success of any product, and it is therefore
imperative to find out what makes a customer loyal to one
brand and also to find out what makes a customer loyal to
one brand and also to find out what makes a customer switch
loyalty from one brand to another.
Tell us about your company's competence in the field
of travel and tourism.
Rajan: Travel and tourism
in India has immense potential but is unfortunately under-exploited
. The opportunity is tremendous and happily the recognition
has now dawned on the powers-that-be that tourism can also
turn out be a major money-earner.
We not only have world-famous monuments like
the temples of south India. the Taj Mahal and the Qutub Minar
but we also have several beaches across the country.
The point I want to emphasise here is that
beaches do not necessarily mean Tamil Nadu, Kerala and Goa
but also the Konkan Coast, Orisa and Andhra Pradesh. Then
there are several hill-stations like Munnar and coorg which
are as beautiful as, if not better than many other hill-stations
which are presently attracting a large number of tourists.
Much also remains to be done to promote heritage tourism;
in my opinion, this is a much neglected area.
Market search's endeavour will be to position
and packages states, cities and tourist sites in the most
attractive manner so that people will keep returning to them.
The point to be remembered here is that tourists' expectations
are always high and hence it is imperative to deliver on the
promises made; their expectations have to be met, come what
may. Our expertise lies in understanding customer expectations
and then advising players in the industry as to how to meet
them. Success here lies in converting customers into ambassadors
of the places they visit.
Finally, how do you see growth for Market Search over the
next three years?
Rajan: We have grown steadily
over the last few years. We now have an office abroad - in
the UAE - which specialises in construction research. Our
international clientele has also registered remarkable growth
in the last few years. Given the immense potential inherent
in market research. I am confident of achieving a 30-40 percent
CAGR over the next three years.
TOP
|
