INDUSTRIAL MARKET RESEARCH IN INDIA

Sharad Sarin

This article summarizes the state of the art of industrial marketing research in India. It covers
the orientations of organizations toward marketing research, the dominant profile of the
current marketing research activities; and the experiences and efforts in information
collection. The article highlights the emerging trends that will accelerate the acceptance of
marketing research in India.

India is a developing country and agriculture is the mainstay of the economy. Yet, nearly
50% of the national income comes from goods and services that are exchanged among
organizations. At 1985 prices, India's national income was Rs. 1600 billion [approximately
$122 billion]. Thus, nearly Rs.800 billion worth of goods and services are managed through
the domain of industrial marketing. In spite of this, marketing has yet to find its rightful
place in this exchange. Experiences of developed countries show that integration of
industrial marketing research with the main marketing function is evolutionary. This
integration may lag behind by 10 to 20 years, These remarks may lead one to believe that if
the marketing function per se, has to find roots within industrial marketing then perhaps
marketing research may be an alien and unknown concept yet to be utilized. The picture,
however, is not so dismal and disappointing when compared to other countries.

This article is an attempt to summarize the state of the art of industrial marketing
research in India. The remarks, observations, facts, and conceptualizations are based on
the experiences of some 30 different studies conducted by the author over the last 15 years.
Exhibit 1 profiles the product-market situations for the observations and comments made
in this article.

THE ROLE OF MARKETING RESEARCH IN BUSINESS

Out of nearly 100,000 registered units, 30,000 are engineering units in India. Besides
these, there are around 1.2 million small scale units. Ignoring the small scale units,
approximately 50,000 units may be involved in industrial marketing. Depending upon the
use and orientation toward marketing research, these 50,000 organizations can be
categorized into one of the following four categories:

Source:
-----------------
Industrial Marketing Management, Vol. 16, 1987, pp 257-264. [This article was originally
titled "Industrial Marketing Research in India: A Critical Review".]
EXHIBIT L PRODUCT-MARKET SITUATIONS

1. Raw Materials
 Bright bars
 Unsupported PVC films and PVC leather cloth
 Industrial and culture paper
 Limestone and lime

2. Capital Equipment

 High tension electrical switchgear

 Centralized lubrication systems
 Solar waterheater systems
 Mining equipment
 Ship building
 Low tension electric switchgear
 Storage batteries
 Boilers and heat exchangers
 Electric motors and pumps
 Steel wire ropeways
 Material handling equipment

3. Chemicals
. Synthetic pigments
. Phosphating chemicals
. Synthetic fertilizers
. Coal tar distillates
. Sulphuric acid

4. Components
 HT fasteners
 Control cables
 Transmission chains
 Conveyor chains
 Link chains
 Textile parts
 Rubber components for automobiles
 Steel forgings
 Steel tubes
 Hand tools
 TV tubes
5. Consumables
 HDPE barrels and drums
 Industrial leather gloves

6. Office Equipment
 Electric typewriter
 Plain paper copier

7. Services
 Residential housing complexes

1. Those committed and having internal arrangements [in the minority].

2. Those with some internal arrangements, but basically indifferent [in the minority].
3. The ad hoc users [a large majority]
4. The ignorant and suspicious [also a large majority]

The Committed Minority

In this category of companies, the marketing research has become an integral part
of the marketing function. The companies are convinced of the payoffs from regular
marketing research activities. Instead of the marketing research department trying to
justify its existence, it has to budget its time and efforts due to tremendous pressures from
the user departments. Market potential studies, image studies, product-position studies,
scanning of regulatory environment, maintenance, and updating of data bank, effectiveness
of advertisements, and so on are some of the regular activities of the research department.
Marketing research in this sense has become the hub of the entire business activity.
Creation of such a culture and concern for marketing research is essentially due to the firm
and continued support from the top management.

The case of a leading steel tube manufacturer is a good illustration of the

evolutionary integration of marketing research with the main function. This happened due
to a combination of many factors. But having reaped the benefits, the research has become
the culture of this organization. Today, the old one-man department of marketing services
has become a large department humming with activities. Only a few Indian organizations
would have such an elaborate arrangement for information collection, analysis, and its use.

The Basically Indifferent with Some Internal Arrangements

A minority but with indications of a positive outlook, marketing research has yet to
become a function of this organizational culture. Thus, the use or abuse of the marketing
research finds heavy correlation with the fluctuations of the marketplace. In these
organizations, top management has still to demonstrate faith in the research. Its lack of
confidence in the research is evident by frequent transfers of personnel from the marketing
research departments. Thus, when the going was bad, in spite of having a large marketing
research department, the company's marketing personnel confessed ignorance on the end-
uses and end-users of the products marketed by the company. But when the going became
good, the marketing research manager was left with hardly any staff members. Similarly, a
successful trading company could not resist the temptations of reaping short-term benefits
by transferring personnel from a marketing research and planning cell. This cell was
formed after constant persuasion of nearly five years. It was, however, demolished within
three months. This love-hate relationship will continue until the time top management fails
to change its outlook. The only positive aspect of these organizations is the creation of some
administrative arrangements.

The Ad Hoc Users

A large number of organizations, including very successful conglomerates, would

fall into this category. In spite of recent major restructuring, there are no administrative
provisions for marketing research in these organizations. Depending upon the situation,
marketing research is carried out as an ad hoc activity. This can be done either by a
temporary task group or by outside agencies. This neglect or lack of concern for marketing
research on a regular basis, even among very large and successful organizations, is rather
appalling. To accept that marketing research has no role in these organizations is not
supported by their own experiences. A case of very successful conglomerate is highly
representative of this category.

The whole organization is divided into seven to eight business groups with each
group having a number of divisions. In all there may be around 1000 engineers and MBAs
working in this organization. In almost all of the product categories this organization
would rank among the top three. Yet when the corporate advertising manager approached
one of the individual managers for the dominant buying attributes to be incorporated into
a press advertising, the manager drew a blank. There was virtually no research in spite of
this division being the largest advertiser in the whole organization. Not surprisingly, the
division has no provision for regular marketing research. Such examples are not isolated to
this organization alone.

The incident described took place in early 1980. Even around 1985, the division has
failed to recognize the need for regular marketing research. In such organizations, the
emergence of the research culture may take another seven to ten years, i.e., until the time
competitive pressure is not severe.

The Ignorant and Suspicious. with No Internal Arrangements

With no administrative arrangements, the other half of the majority would fall into
this category. It is difficult to change the views of executives of such companies until their
organizations experience major upheavals and battering by external environments. They
are of the opinion that:

 They already know what they need to know.

 They do not believe that marketing research can truly help their organizations.
 Working under this belief system, these companies try to justify their behaviour
through the stagnant product-market characteristics of their business. To these, even a
simple graph is a piece of modem art and the finding of a quick analysis, a threat to their
make be1ieve world. The presence of this class is the greatest barrier to the diffusion of
marketing research culture in India. It may require multipronged interventions before
achieving any attitudinal change. Deep rooted under this overt behaviour, however, is the
suspicion that they would be conned by some high sounding jargon of a professional.
Equally deep rooted is the threat of being exposed; that their present tasks can be done
better. Only an enlightened top manager could act as a catalyst and alter the situation. This
will be possible only when research is viewed as an investment and not as a cost. Like the
observations of Schlegelmich, Boyle and Therival, these organizations are ignorant of
marketing research as a management tool that could improve their performance.

THE ORIENTATION SCALE

Based on the earlier observations, the development of an orientation scale, reflective

of the gaps that exist between organizations in their use and outlook toward marketing
research, is possible [Figure 1],

The orientation scale indicates the gap that exists between those who have realized
the effective and potential contribution of research and those who have not. This diffusion
and acceptance of marketing research in India seems to be similar to the experience of the
UK. Though Wilson does not discuss the acceptance pattern, in India at least, the adoption
may follow a skewed bell curve with a time gap between early adopters and early majority.
In short, there is a long way to go before marketing research could become an integral part
of marketing for the majority. This agrees with the views of Ames and Hlavacek.

Far too many industrial firms have not realized the strategic and tactical value of
the fact based market information. Many industrial firms do not even have a market
research unit. When an in- house marketing research staff does exist, it is typically the
most underpaid and underappreciated units in the firm.

It may also be worth mentioning that, even in the case of the small minority, the
acceptance of marketing research was due to the pressures of the external environment
such as government regulation, increased competition, and technological innovations. It
seldom emerged due to a proactive outlook of the management.

THE TYPES OF RESEARCH

Ten years ago, Vora indicated that the proportion of various types of
research/studies being conducted in the field of industrial marketing research in India were
those shown in Table L

The dominance of market related research in India is similar to the US findings of

Twedt. Even by 1985, the market related research seems to dominate the industrial
marketing research in India. However, the experiences over the last decade indicated some
qualitative changes in the outlook of the Indian marketers.

FIGURE 1: AN ORIENTATION SCALE:

a. The committed minority with internal arrangements

b. The indifferent minority with internal arrangements
c. The ad hoc users with no internal arrangements
d. The ignorant-suspicious with no internal arrangements
e.
====== ------------ ,,,,, //////
= = =[d] = = - - - - - -[c] - - - - , [b]. / / [a]/ /
====== ------------ ,,,,, //////
Gap

Low commitment high commitment

////// a] The committed minority with internal arrangements

,,,,,, b] The indifferent minority with internal arrangements
--- c] The ad hoc users but no internal arrangements: the half
majority
=== d] The ignorant-suspicious and no internal arrangements: the
balance majority

TABLE 1: RESEARCH/STUDIES IN INDUSTRIAL MARKETING RESEARCH

Type of Research Proportion [1975J

Product/Service 3%
Market Studies 60%
Promotion
Distribution 37%
Others

Until recently, the major preoccupation of the sponsoring Indian organizations used
to be restricted to the quantification of the demand and the demand-supply gap. A recent
development is their realization that the Indian customer is not averse to superior products
at higher prices. Because of this, the sponsoring organizations have started appreciating
the inclusion of competitive analysis, research on organizational buying behavior, gaps in
the service packages of the competitors, and so on. A few, of late, have also started
acknowledging that market share and success would be an outcome of an entrepreneurial
decision rather than mere opportunities as reflected through the demand-supply gaps. This
is a welcome change. It implies wider terms of reference for market demand studies. It will
help in better evaluation of the fit between opportunities and capabilities. It will also lead
to reduction in product or project failures.
 Besides the market studies for market potential and opportunity analysis, some
organizations have also started conducting research on advertising effectiveness, media,
product-service attributes, image feedback studies, and so on. This is, however, limited to a
few organizations. The earlier discussions on the corporate culture and outlook can explain
the limited use of research in these areas.

THE EXPERIENCES OF DATA COLLECTION

Quality research presupposes sufficient, relevant, and authentic information. The

major problem is not so much with the unfamiliarity of the techniques of data collection
among Indian researcher, but with the efforts required to collect the desired information.
Wilson had mentioned the easy access of American researcher to secondary data sources as
contrasted to the generation of the same information through field work in the UK. With
little knowledge about the latest developments in the UK, the Indian situation, even in 1986,
is similar to the UK situation of 1969.

Based on the authors' first-hand experience in data collection for the studies mentioned in
Exhibit L an attempt has been made to generalize the experiences.

Secondary Sources of Information

Surprisingly and contrary to general belief: one can find secondary information if
one has patience and perseverance. Unlike the US situation, or maybe even in some other
developed countries, a call on the phone to a good library may provide the entire source or
even the secondary information; the collection in India would require some time, money,
perseverance, and patience. There may not be any shortcuts, but having once collected it, a
researcher would find an ocean of data. The problem, however, is in converting this mass
of data into meaningful information. This again is very time consuming and at times
frustrating due to nonstandardization of the data. Lack of availability of current data is
also a usual problem associated with any developing country. But some improvements are
visible here.

An area that needs tremendous immediate improvements is of updated and clear

commercial information. For market studies, commercial information like imports and
exports is a must at least for a developing country like India. The compilation of this
information is slow and classification is not specific enough to provide product details.
Similarly, there is very little authentic and usable published information available on
channel members like distributors, dealers, and stockists.

The best starting point of collecting secondary information is the annual trade
directories of leading publication houses and association of industries. Compendiums of
stock exchanges also provide sufficient information on various companies. Similarly, many
published reports are available on macro level studies sponsored by government and
industry associations. The annual issues of trade journals, too, provide excellent
perspective on different industries. Sarwate and later, Satya Narayan have made excellent
attempts to consolidate the secondary sources for such information.
 In spite of the availability, the avoidance of field study for primary information will
still make the researcher very shaky. In short, any project on industrial marketing
research in India must have a provision for original field research. This may be a necessity
for another 10 to 15 years even for quick market studies.

Measuring Instruments like Structured Questionnaires

As mentioned earlier, the market studies dominate the industrial marketing

research scene in India. These studies, at least the comprehensive ones, require collection of
both facts and opinions. The multiple buying responsibility in industrial buying makes it
imperative to collect information from more than one respondent within the same
organization. Logically, a split questionnaire may work the best. But experience reveals the
version of majority towards questionnaires. The desire to have many details puts off the
respondents holding the facts. Similarly, forcing respondents to express their opinion in
black and white [on the questionnaire] makes them defensive and makes them avoid
answering the questionnaire. The best results have been obtained through in-depth
interview. This obviously requires the use of very competent and well informed
investigators. Availability of such investigators would imply the use of highly competent
and expensive investigators. This, combined with the necessity of primary research, makes
the industrial marketing research more expensive than the research for household
products for the similar sample sizes, and even for the same time spread in India. This is
likely to continue.

Mail Questionnaire Surveys

As is well known, the response is directly related to the perceived benefit seen by the
respondents. This has been true in India also. Thus, a mail questionnaire survey seeking
reasons for low capacity utilization in HT Fastener Industry could create a response from
early 50% of the manufacturers. However, the attempts of a subgroup, appointed by the
Planning Commission [the Apex Body for the planning of Indian economy] to ascertain the
information from manufacturers of bulk material handling equipment required repeated
efforts before sufficient information could be collected through mail surveys. Business
prudence would normally imply a faster reaction and 10% cooperation by all the
respondents to the efforts of a research team formed by the national government. This did
not happen and this is not happening in large number of situations. Mailing of 100
questionnaires to collect information on a communication study by Sarin could provide
responses from only five organizations. In short, mail surveys, too, could not be substituted
for direct field studies. Absence of an economical and efficient national telephone system
[which can be used for followup] is also a handicap, getting in the way of improving the
response to the mail surveys.

Cooperation from Respondents

Only a few days ago, a researcher returned from his trip to Delhi to collect
information on a project related to rubber products for automobiles. What was originally
thought to be a straightforward, fact-gathering exercise, turned out to be a nightmarish
experience for the researcher. Being a highly qualified professional, it shook his confidence
and forced him to doubt his competence to collect information for such projects in the field
of industrial marketing. The frustrations were due to resistance in sharing what seemingly
appeared to be straightforward and harmless information. It was felt that the status of the
researcher would help him to receive cooperation without much fuss and formalities. But
the reverse happened. The pitfalls included:

 Not disclosing the main purpose of the study for the reasons of confidentiality.
 No intimation to the respondents.
 Inadequacy of respondents to provide desired information due to uncertainties of
their end.
 Perceived fear among respondents that the study may prevent easy imports of the
rubber components.

These frustrations are frequent and widespread for a large number of field
researchers in India. Limitations of restricting the data collection to working days and
within office hours; time pressures on busy executives; inability of one respondent to
provide the complete information or react meaningfully to the questions; policies of some
organizations of not sharing or providing any information to outsiders unless the same is
cleared by the top management; long waiting time outside the offices; and the repeated
efforts to identify the right source or respondents are some of the factors that have made
the task of information collection very difficult. It is obvious that the art of information
collection is much more complicated than the science of developing measuring instruments.
Advance planning;listing of resource persons within responding organizations; advance
intimation of giving a feel of the information being sought and so on, are a few
fundamentals of this art. But following these requires time and effort that is seldom
available in a business research situation. Unlike the west, telephones and mailing system
have yet to become efficient enough to be effective in India.

THE COST OF THE RESEARCH

The cost here refers to the cost of research by outside agencies. Though the
character and scope of the study would determine the final cost of the research, a tentative
idea may be indicative for comparative purposes. Thus, studies with census approach to
sampling at 1986 prices, may cost the organizations anywhere between Rs.I000 to Rs.2000
[$80-$160] per respondent. On the other hand, a comprehensive national market study
with a sample size of 80 to 100 responding organizations may cost Rs.30,000 to Rs.40,000
[$2400-$3200]. This would imply a cost of Rs.375 to Rs.500 [$30-$40] per responding
organization. Based on the experiences of a large number of agencies, a realistic estimate of
the total average cost per responding organization for a national comprehensive study at
1986 prices may be around Rs.500 [$40]. This may be the total cost, including professional
charges, secondary data collection and analysis, preliminary/pilot research, and main field
research. The time span of such studies may be 15 to 25 weeks.
CUSTOM MARKETING RESEARCH FIRMS

Over the last 15 years, there has been an increase in the availability of outside firms.
Besides the old marketing research organizations, mainly of some large advertising
agencies, a large number of smaller organizations formed by professionals is an emerging
trend in India for industrial marketing research. Sarwate has listed some 95 such
organizations. The actual number of 1986 may be many more. Their availability has filled
the gap that existed around the early 1970s. A very welcome development is the
improvement in the quality of research output of these organizations. Though these
organizations might have yet to reach the levels of agencies in the US and the UK, the
competence and background of the professionals of these organizations is encouraging. The
growth of professional market research firms appear to be the most outstanding positive
development in India in the last decade in the field of industrial marketing research.

CONCLUDING REMARKS AND FUTURE DIRECTIONS

Some emerging trends are now showing that the next 10-15 years will be full of
developments in industrial marketing research in India. These trends are: increasing
professionalization of industrial marketing function by recruiting more and more engineers
with MBAs; widespread use of computers even in the marketing function;
professionalization of materials functions and hence pressures for better and speedier
services; technological innovations and reducing product life cycles; and the use of mass
media and other promotional tools besides personal selling.

SOME FUTURE DIRECTIONS FOR 'RESEARCH' ON RESEARCH

The implications of these trends need to be recognized by the marketers. It is certain

that 'research' would have a key role. to play in the continued and better performance of
the marketers. In Indian context, some of the research focuses may be:

1. Focus One: 'Organizational Related Issues.' Some of these could be:

a] Identifying the barriers both attitudinal and operational which are coming in the
way of wider acceptance of research.
b] Capturing and conceptualizing the 'management of change' in creating climate,
administrative arrangements and systems for marketing research function in India.
c] The quality and quantity of human resources for marketing research for different
types of product-market situations.
d] The benefit-cost studies. These could be 'cases' and can also address to the issues in
measuring the benefits and costs as well as in minimizing the 'cost' of research.

2 Focus Two: 'The Information Related Issues.' Another focus of the research could be
to sophisticate and strengthen the databases both at macro [industry, association
level] as well as the micro level. The attempt of the research should be to highlight
the efficacies and inadequacies of the available information sources as well as 'cost'
of information.
3 Focus Three: 'The Empirical Studies.' A third focus of research could be the
empirical studies highlighting practices and problems of Indian marketers. Above
would require a close cooperation amongst 'business' and academics. The challenges
are to develop mechanisms to accelerate this cooperation for wider acceptance of
research for better performance. Wilson's suggestion maybe helpful: The research
should not only be interesting but profitable also.