RESEARCH METHODOLOGY
LESSON –40
Friends, now let us discuss some of the real life case studies and
see how the techniques of research methodology is helpful to
solve them.
Case Study No.5
Antiseptic Cream
1. Marketing Brief
1.1 Background
Dettol Antiseptic Cream (DAC) was launched in the Indian market
by Reckitt & Colman of (India) Ltd. DAC was introduced as part
of a line extension strategy. DAC was to be a complementary
product to dettol liquid, which presently was the market leader
with almost 90% share of the antiseptic liquid market.
1.2 Intended Positioning
“DAC offers Dettol protection in cream form. It is effective against
minor cuts, burns, wounds, insect bites, shaving nicks, boils and
rashes”.
1.3 Competition
Boroline has the lion’s share of the antiseptic cream market,
especially in Eastern India. The other well known brands in the
market are Savlon, Boro-Plus and Boro-Calendula. In addition to
these, there are a few products/brands with very specific usage
areas like
Burns Burnol
Dry skin/chapped Lips Various Cold Creams
Pimples Various cosmetic creams like Clearasil,
Fair & Lovely
Shaving Nicks Various after shave lotions.
One aspect of the competition which was not anticipated earlier
was that DAC ,might face competition from Dettol Liquid itself.
1.4 Recognising a Problem Area
Over the last few years performance of I’ AC has been a matter of
concern as the sales did not reach the expected level with time.
This raises the basic question: “Why are sales not picking up and
what should be done to rectify the position?”
Let us examine where the problem could lie.
i. Distribution
This does not seem to be the problem area since the extensive
distribution network for other products of Reckitt is being used
for DAC.
ii. Potential Market
There are a number of brands in the antiseptic cream market and
some of them, specially Boroline is doing very well. It is indicative
enough that there is a market for antiseptic cream. So the objective
would be to find out what people see in Boroline cream which
they find lacking in DAC.
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On taking a closer look, it would seem that DAC is perceived as an
antiseptic cream to be used specifically for cuts and wounds, may
be because of the Dettol brand name. In case of cuts and wounds,
people may prefer to use established antiseptic liquids, like Dettol
or Savlon, which they might already have at home and arc currently
using. In that case, it would appear that there is not enough market
potential for a cream like DAC, given the way it is being currently
perceived by the people. .
On the other hand, it seems Boroline is perceived as a “general
purpose cream” which can be used for cosmetic purposes. like dry
skin and chapped lips, pimples etc. as well as for medicinal uses
like cuts and wounds. Hence, Boroline would be a handy all-
purpose cream to have at home.
This research study proposes to verify these hunches.
iii. Media Support
Media support for DAC has been restricted to insertion in
newspapers and magazines, hoarding and point of purchase
displays. These media have also not been extensively used. Thus
the problem could be that the media support is insufficient.
Insufficient media support would mean
• People are not aware of DAC.
• People may be aware of DAC but may not be convinced enough
to buy it.
On the other hand, the media support may be sufficient but the
message might not have got across to the consumer. This would
mean that the intended positioning might not have been achieved.
A detailed study of the media support is beyond the scope of this
report. However, as a spin-off benefit the study proposes to find
out the level of awareness of DAC’s “advertisement” among the
people.
Marketing Research Ohjectives
i. To study the incidence of skin problems and brands used in
those situations.
ii. Ascertain the elements (attributes) consumers look for in an
antiseptic cream.
iii. To examine how satisfied the consumers are with DAC and
Boroline for different elements that they look for.
iv. Assess consumers awareness and recall of DAC’s advertisement.
2. Research Design
2.1 Reserach Hypothesis
The research study tested the following hypothcses.
Hypothesis 1
“If I have minor cuts or wounds, I’d rather use Dettol liquid or
any other antiseptic. Why should
I use DAC?”
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 Hypothesis 2
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“If I were to use an antiseptic cream I’d use. Boroline which is a
general purpose cream rather than DAC which is not a general
purpose cream”.
2.2 Information Required
To achieve the research objectives the following information is
required
i. What are the most frequently occurring skin problems?
ii. What do people do when they have these skin problems?
iii. What do people want in an antiseptic cream in terms of various
attributes and benefits derived from the product?
iv. How is DAC viewed in terms of the above attributes/benefits?
v. How is Boroline viewed in terms of the above attributes/
benefits?
vi. What is the brand DAC’s awareness in the market?
vii.What is the extent of DAC’s advertisement recall?
viii. What is the message retained from the DAC’s advertisement?
2.3 Sources of Data
All the above information is collected from primary sources.
2.4 Data Collection Mode
The data collection instrument used for obtaining the desired
information is questionnaire. The logic of questionnaire
development is highlighted below.
2.5 Questionnaire Design
At the outset a fairly exhaustive list of usage occasions and qualities
of an antiseptic cream was
arrived at and a pilot survey was conducted to narrow this list
down.
2.5A Pretesting
The pretesting of the questionnaire (i.e. the process of
administering the questionnaire on a conveniently selected group
of people to test its clarity, ease of response etc.) was done on a
sample of fifteen respondents. Depending on the difficulties
encountered by them in answering the ques-tionnaire, its initial
format was suitably modified to finally arrive at the one given in
this report.
For example, the query as to what people use for various usage
occasions was made open ended as it was observed that the close
ended question in the pretested questionnaire made the respondent
biased.
Terms like ‘value for money’ and ‘after use visibility’ did not seem
to make much sense to the
respondent and so these two terms were omitted in the final
questionnaire from the list of attributes.
Few changes were also incorporated in the questions pertaining to
rating of attributes for the different brands so as to make them
unbiased. For example, in the pretest respondents were asked to
rate brands for smell on a 1- 5 scale with bad at one end and ‘good’
at the other. In the final questionnaire this was changed to ‘odour’
varying from ‘medicinal ‘odour’ to ‘perfumed ‘odour’.
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246
2.58 Final Questionnaire (a copy enclosed in the Appendix-I) In
consonance with the information requirements, questions were
designed in the sequence to collect the following data.
Question No. Content
i. This question gives us an indication of the most frequently
occurring skin problems.
ii. This open ended question would give an indication of what
people currently do for the various skin problems mentioned.
iii. The perception of an ideal antiseptic cream is sought from the
respondents by asking what “magnitude” of each of the
mentioned attributes would they desire in an antiseptic cream.
iv. Here the respondent is asked to rank the chosen attributes in
order of importance on a seven point scale.
v. This question is used to obtain the level of unaided recall of
the various brands of antiseptic creams among respondents.
vi. This question indicates whether the respondent has heard of
the concerned brand (i.e. DAC).
vii. This question is used to find out if the respondent has used
DAC and Boroline.
viii.Consumer’s perception about DAC is obtained from this
question.
ix. The perception of Boroline is obtained from this question.
x. This question determines the level of DAC’s advertisement
recall and message recall.
Finally some basic information about the person responding are
collected.
2.6 Sampling
i. Respondent
The target respondent of the study consisted of people from
different income groups residing in Calcutta. .
ii. Sampling Unit
Household
iii. Sample Design and Sample Size
The study had purposely chosen a convenient sampling procedure.
It was decided to take a sample of 100 respondents.
3. Data Analysis
The data obtained from the respondents was first edited and the
valid (87) responses were retained for the purpose of analysis.
Data were represented graphically using ‘Lotus’ package in the
personal computer.
Scaling: The ordidnal scale data on ranking of usage occasion
frequency (Q.1) and importance of attributes (Q.4) was converted
to an interval scale using the Thurstone’s Case scaling technique.
(See Appendix-II for details).
3.1 Dissatisfaction Score for Each Brand
The ‘dissatisfaction’ score for a particular attribute for a particular
brand is defined as the dif-ference between the score on that
attribute for the ideal antiseptic cream and the brand. The average
‘dissatisfaction score’ for each attribute was calculated for DAC
and Boroline. Weightage was then assigned to the various
attributes, using the interval scale derived for their ‘importance of
attributes’, using the Thurstone scaling technique. Then, the average
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dissatisfaction score for the brand as a whole was calculated both

RESEARCH METHODOLOGY
Table 1
for DAC and Boroline, using the formula: Percentage break-up of brand used
7 for each skin problem
Usage Do Boroline DAC Detrol Bumol Oyher
Average dissatisfaction score = ∑di . Wi Occasion Nothing Liquid Brands
i=1 Boils 35.23 9.09 1.14 1.14 2.27 51.13
Dry skin/chapped
where di = average dissatisfaction score for attribute i, lips
4.6 25.26 - - - 70.14
Wi = weight age for attribute i Shaving Cuts 18.39 18.39 5.76 12.64 - 44.82
Minor burns 7.53 9.68 2.15 - 65.59 15.05
i ranges from] to 7 Insect bites 42.39 6.52 7.61 7.61 4.35 31.52
The dissatisfaction scores for Boroline and DAC were compared. Cuts/scratches 8.32 23.96 11.46 30.21 3.13 22.92
7 Blisters/ skin peels 53.34 7.78 1.11 1.11 4.44 32.22
Rashes 38.64 - 1.14 1.14 - 59.08
Frequency of use index for brand ‘a’ = ∑ Wi pai
i “Other brands” comprised mainly of cold creams for dry skin/
where p i = percentage of people who use brand ‘a’ for usage
a
chapped lips, after shave lotionsor shaving cuts,’doctor’s advice’
occasion i for rashes, and cosmetic creams like Clearasil.
Wi = weightage for usage occasion i. See Exhibit-A, in the Appendix-III
Here the percentage of pcof1lc who use Boroline for a particular Various Usage Occasions of Boroline, DAC and Dettol is shown
occasion was multiplied by the weightage for that usage occasion in Table-2
and this was added over all the usage occasions. A similar index Percentage break-up or usage occasions for Boroline, DAC and
was calculate for DAC. Detlol Liquid
3.2 Presentation of Data
This is a summary of the results obtained from respondents. Boroline DAC Dettol
Boils/Pimples 8.79 5.57 2
1. Usage occasions: The ranking for the frequency of occurrence of
Dry skin 24.18 0 0
skin problems when converted to an interval scale using the
Thurstone Case V method, (see Appendix-IIA for details) the Shaving cuts 17.59 17.86 22
following picture was obtained Minor Burns 9.89 7.14 0
Insect Bites 6.59 25.0 14
Cuts & Scratches 25.27 39.29 58
Blisters/skin peels 7.69 3.57 2
Rashes 0 3.57 2
100.00 100.00 100.00

For a Pie-Chart See Exhibit – B1 and B2 in the Appendix-III

Figure 1: Thurstone Case V scale for frequency of occurrence of
skin problems
2. What people do when a skin problem arises is shown below:
3. The average scores of the respondents on their agreement/
disagreement with the seven attributes statements is given in
Table-3 for an ideal antiseptic cream, for Boroline and for DAC.
The scores range from -2 to + 2, as follows
-2 strongly disagree
-1 disagree
0 neither agree nor disagree
1 agree
2 strongly agree
It is observed that DAC is perceived as having high antiseptic
qualities, a medicinal odour and is not a general purpose cream.
Also, it is non-staining, does not sting on application, is not
greasy and is easily available. Boroline does not have high antiseptic
qualities and is a general purpose cream with a perfumed odour. It
is also not staining, does not sting on application and easily
available.
Ideally, the consumers would like a general purpose cream, with
high antiseptic qualities. They are indifferent to the odour but
would not want the cream to be staining. It should not sting on
application and should be non-greasy.

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 Table: 3
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Usage Occasion Weightage % of Users
Boroline DAC
Average scores on product attribute, for Ideal antiseptic cram,
Boils/Pimples 0.108 9.09 1.14
Boroline and DAC Dry skin/chapped lips 0.184 25.06 0
Shaving cuts 0.104 18.39 5.76
Ideal
Attributes DAC Boroline Minor burns 0.130 9.68 2.15
Antiseptic Insect bites 0.162 6.52 7.61
Cream Cuts/Scratches 0.172 23.96 11.46
Medicinal Odour rather 0 0.7 - 0.7 Bisters/Skin peels 0.07 7.78 1.11
than Perfumed Odour Rashes 0.68 0 1.14
Staining - 1.0 -0.6 - 0.6 Weight Frequency of Use Index Boroline: 14.5
Greasy -0.4 -O.1 0.7 DAC : 2.6
Sting on Application -0.6 -0.2 - 0.7 See brand usage summary in the graphics enclosed in Appendix –
General Purpose Cream 0.7 0 1.0 III
Easily available 2" 1.0 0.7 7. Antiseptic creams respondents were aware of (unaided recall).
High Antiseptic qualities 2" 0.9 0.3 Brand Percentage of respondents

“ These were assumed to be 2, since the consumer would obviously Boroline 62

want these attribute in an ideal antiseptic cream. DAC 45
See Exhibit C in the Appendix-III for a graphical exposition. 8. Number of respondents who had heard of Boroline and DAC
Dissatisfaction Scores
Heard Not heard
4. The ranking for the importance of the various product
attributes. When converted to an interval scale using the Boroline 86 1
Thurstone Case V scaling Technique is represented in Figure 2. DAC 78 9
(See Tables in the Appendix II for details).
9. Number of respondents who have ever used Boroline and
2.8 DAC
2.6 Antiseptic qualities
2.4 % Used % No: used
2.0 General Purpose usability/ Availability
1.8 Boroline 89.7 10.3
1.6 DAC 67.8 32.2
Non-staining characteristics/odour
1.4 Non-stinging characteristic
1.2 Non-greasiness 10. AD-recall
Number of respondents who had seen the DAC advertisement
1.08 before.
1.0
Number Percentage
Figure 2: Thurstone Case V scale for importance of attributes Seen Advertisement 48 55.2%
5. Dissatisfaction Score in different attributes brand combination Not seen advertisement 39 44.8%
Table 4
Mean dissatisfaction scores for each attributes for DAC and Of the 48 respondents who had seen the advertisement, 15
Boroline. respondents or 31.3% could correctly recall the product’s message.
11. Demographic Data
Attribute Brand
Age Percentage of respondents
DAC Boroline Less than 35 years 63
Greater than 35 years 37
Odour 0.10 0.14 Monthly income
Staining characteristic 0.10 0.14 Less than Rs. 2000 25
Greasiness 0.09 0.12 Grtater than Rs. 2000 75
Sting on application 0.28 0.17 Sex 42
Availability 0.20 0.20 Female 58
Antiseptic qualities 0.32 0.43
6. Weighted Frequency of Use Index
Table 5
Weighted frequency of Use Index for Boroline and DAC

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248 11.556
Testing of Hypothesis ii. Ho: DAC is perceived as a general purpose cream

RESEARCH METHODOLOGY
Hypothesis 1 vs H1: DAC is not perceived as a general purpose cream. Similar
Ho: “If I have cuts or wounds. I’d use dettol liquid or some other to
antiseptic rather than DAC v/s i. Reject Ho if T < t
HI: Negation of Ho here Yn = 0.013, S = 1.123, n = 87
i.e. Ho: πL = πDAC vis HI: pi > πDAC since value of Test statistics> tabulated value, NO is rejected
Where πL is population proportion of people using any branded i.e. DAC is not perceived as a general purpose cream.
antiseptic other than DAC; πDAC is the population proportion iii. Ho: I’d use Boroline rather than DAC.
using Dettol Antiseptic Cream.
This hypothesis can be inferred to be correct by the following
PL - PDAC facts. The weighted frequency of use index has a value 14.5 for
Test statlstte Z = S.e (PL- PDAC) Boroline and 2;6 for DAC. This implies that Boroline has a greater
where PL is the sample proportion of consumer using any branded change of being used than DAC. The usage of DAC and Boroline
antiseptic other than Dettol Antiseptic Cream and PDAC is the for the 4 most frequently occurring skin problems is compared in
sample proportion of consumers using Dettol Antiseptic Cream. the Table below.
% Who use
Sample data shows PL = 22/87 πDAC =11/87
P= nl + PL+ n2PDAC Usage occasion DAC Boroline

Dry skin/chapped lips 0 22

n1+n2
Cuts/scratches 11 23
=0.212 Insect Bites 8 6
(P is a pooled estimate of usage) Minor Burns 2.15 9.68
S.e. of (PL - PDAC) = √pq/n
Z = 2.156 This table confirms that for the most frequently occurring skin
problems, Boroline is used more often than DAC. Combinil1g
The tabulated value of Z at 5% level of significance = 1.64 the earlier results it can be inferred that Boroline is used more
Since Z calculated > Z tabulated, because of its general purpose usability.
the. null hypothesis is rejected. Hypothesis 3
i.e. The sampled consumers seem to use Dettol liquid and other Advertising Effect on DAC usage
antiseptic creams more than the DAC. H1: There is no relationship between the DAC use vi5-a-vis
Hypothesis 2 exposure to the various DAC advertisements.
Ho: If I require to use an antiseptic cream, I would use Boroline V/s H1: There is some relationship.
which is a general purpose cream Dettiol Antiseptic Cream
rather than DAC. . User Non User
v/s HI: Negation of Ho
Seen Advertisement of DAC 30 18
To test this hypothesis some sub-hypothesis have to be Not seen advertisement of DAC 29 10
formulated. 59 28
i. Ho = Boroline is a general purpose cream
v/s HI: Boroline is not a general purpose cream. Since X2 calculatcd (= 1.386) < X2 tabulated (= 3.84) the null
hypothesis is accepted. This is, use of DAC is not related to
i.e. Ho : µ < 0 where, m = mean score of consumer perception on exposure to DACs advertisements.
a five point scale
Conclusions
H1: µ > 0
To obtain an answer to the question, “Why arc sales of DAC not
Reject Ho if test statistic (T) > tabulated value of t with (n - 1) picking up?” which was the major thrust of this study, we may
degrees of freedom. recapitulate the results of different hypotheses.
where Test Statistics (T) = Yn Hypothesis 1: “If I have cuts or wounds, I’d use dettol liquid or
s/√n some other antiseptic liquid rather than DAC” has been accepted.
Data shows Hence, for cuts and wounds which is a frequent skin problem,
DAC does not find significant application.
Yn = 1.034
Hypothesis 2: “If I require to use an antiseptic cream, I’d use
S = 0.65
Boroline which is a general purpose cream rather than DAC”. This
n = 87 hypothesis has also been inferred to be true.
Since T < t Ho is accepted. In other words, Boroline is perceived as These two hypotheses together indicate why there is not sufficient
a general purpose cream. market demand for DAC. Further, the way DAC is currently

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 perceived, gala showed it is not perceived as a general purpose 2. When any of the above problems arise, what do you generally
RESEARCH METHODOLOGY

cream but has Specific medicinal application, there is not enough do? Indicate your response to each by writing against the
market potential for it. when a person wants to buy an antiseptic problem. Whether you use any antiseptic, in case you simply
cream, he examines the total bundle of benefits that the cream ignore any particular skin problem then write nothing
offers. People do not buy an antiseptic cream which has specific Boils/Pimples …………..
medicinal usage viz., cuts and scratches. They would rather use
Dry Skin/Chapped Lips …………..
Dettol liquid. If at all they are to buy a cream, it would be a general
purpose cream. Shaving Cuts/After-shave Dry Skin …………..
This view is further confirmed by the weighted frequency of use Minor Burns ….………..
index which has a value 14.5 for Boroline and 2.6 for DAC. This Insect Bites …………...
means that Boroline has a greater chance of being used than DAC. Cuts/Scratches ……………
Hypothesis 3: Use of DAC is not related to the consumer’s exposure Blisters/Skin Peels ……………
to various DAC advertise-ments.
Rashes ……………
Brand Awareness 3. Listed below are some statements about an Ideal Antiseptic
Awareness for DAC among the sample was quite high 55% of Cream. Indicate your response to each statement by putting a
the respondents had seen the DAC advertisement before and 31 tick-mark against the response you prefer most.
% of the respondents could correctly recall how the product was
i. An ideal antiseptic cream should have a medicinal odour rather
advertised. However, advertisement recall and use of DAC does
than a perfumed odour.
not seem to be related.
Recommendation
It seems unlikely that sales for DAC will pick up if the current
Strongly disagree neither agree agree strongly agree
state of perception prevails. However, it is true that there is lot of
potential in the antiseptic cream market. Boroline enjoys high disagree nor disagree
sales volume and there are other brands like Boro-Plus and Boro- ii. An ideal antiseptic cream should be staining.
Calendula in the market. But these are all positioned as ‘General
purpose cream’. So it can be concluded that the potential lies in
‘general purpose’ antiseptic cream. Strongly disagree neither agree agree strongly agree
This leads to the question whether DAC should be re-positioned disagree nor disagree
as a ‘general purpose cream or not’. But it would be difficult for
iii. An ideal antiseptic cream should be greasy.
DAC to achieve such a position in the consumer’s mind. This is
because the brand name “Dettol” has a medicinal connotation
and it would be a hard task to convince the consumers that DAC
is a ‘general purpose cream’. Strongly disagree neither agree agree strongly agree
Appendix 1 disagree nor disagree
iv. An ideal antiseptic cream should sting on application.
Questionnaire
Dear Respondent,
We arc conducting a survey about antiseptic cream. We would be
grateful if you express your opinions on the following list of Strongly disagree neither agree agree strongly agree
questions. disagree nor disagree
1. The following is a list of eight common skin problems. Please v. An ideal antiseptic cream should be a general purpose cream.
rank them from 1 to 8 in order of how frequently they occur in
your family. Give rank ‘1’ to the problem which occurs most
frequently and rank ‘8’ to the least occurring skin problem. Strongly disagree neither agree agree strongly agree
Boils/Pimples disagree nor disagree
Dry Skin/Chapped Lips 4. When you buy an antiseptic cream, which of the following is
Shaving Cuts/After-sha Ve Dry Skin the most important to you, the next most important, and so
Minor Burns on...Rank them from 1 to 8 where ‘1’ indicates the most important
and ‘7’ the least.
Insect Bites (Ants, Mosquitos Etc)
Odour
Cuts/Scratches
Non-g R Easiness
Blisters/Skin Peels
Non-stalning Characteristics
Rashes
Non-stinging Characteristics
Availability

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Antiseptic Qualities vii.Dettol Antiseptic Cream has high antiseptic qualities

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General Purpose Usability
5. Please name the antiseptic creams you are aware of.
Strongly disagree neither agree agree strongly agree
…………………………………………………………………………………………………….
disagree nor disagree
……………………………………………………………………………………………………..
(If You Haven’t Heard of Boroline Please Skip The Following
6. Have you heard of the following creams?
Question)
Boroline [ yes/no]
9. Listed below arc some statements about Boroline. Indicate
Dettol Antiseptic Cream [ yes/no] your response to each statement by choosing one of the five
7. Have you ever used the following creams? responses available.
Boroline [yes/no] i. Boroline has a medicinal odour, rather than a perfumed one.
Dettol Antiseptic Cream [yes/no]
(If You Ha Vent Heard of Dettol Antiseptic Cream, Please Skip
The Following Question) Strongly disagree neither agree agree strongly agree
8. Listed below are some statements about Dettol Antiseptic disagree nor disagree
Cream. Indicate your response to each statement by choosing ii. Boroline is staining
one of the five response available.
i Dettol Antiseptic Cream has a medicinal odour, rather than a
perfumed one Strongly disagree neither agree agree strongly agree
disagree nor disagree
iii. Boroline is greasy.
Strongly disagree neither agree agree strongly agree
disagree nor disagree
ii. Dettol Antiseptic Cream is easily staining Strongly disagree neither agree agree strongly agree
disagree nor disagree
iv. Boroline stings on application.
Strongly disagree neither agree agree strongly agree
disagree nor disagree
iii. Dettol Antiseptic Cream is greasy Strongly disagree neither agree agree strongly agree
disagree nor disagree
v. Boroline is a general purpose cream
Strongly disagree neither agree agree strongly agree
disagree nor disagree
iv. Dettol Antiseptic Cream is stings on application Strongly disagree neither agree agree strongly agree
disagree nor disagree
vi. Boroline is easily available.
Strongly disagree neither agree agree strongly agree
disagree nor disagree
v. Dettol Antiseptic Cream is a general purpose cream Strongly disagree neither agree agree strongly agree
disagree nor disagree
vii. Boroline has high antiseptic qualities.
Strongly disagree neither agree agree strongly agree
disagree nor disagree
iv. Dettol Antiseptic Cream is easily available Strongly disagree neither agree agree strongly agree
disagree nor disagree
10. We are showing you an advertisement (It is an advertisement
Strongly disagree neither agree agree strongly agree of DAC. But the brand name is disguised)
disagree nor disagree (If Your Answer Is ‘No’, Please Skip The Following Questions)
i. What is the brand being advertised? …………………..
ii. What do you recall from the advertisement? …………………..

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 Kindly Furnish Some Personal Information Which Shall Be Appendix-II B
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Treated In Confidence ii. Product Attributes

1. Age (Years); Greater Than 35 Less Than 35 From the data obtained from the respondents, the following
2. Monthly Income: Less Than Rs. 2000 Greater Than Rs. table B1 was constructed.
2000 Table-B1: Observed proportions preferring attribute x (top of
3. Sex: Male Female table) to attribute y (side of t-able)
Preferred Attrlbute
4. Address......................................................
Non-
Attribute: Odour Non- Non-Slin- Avail. Aq GPU
Appendix-IIA slaining
Charac. Greasiness illg charac.
The thurstone’s scaling technique has been used to construct a
1 2 3 4 5 6 7
univariate interval scale from the input data of rankings for usage
1. Odour" 0.00 0.46 0.59 0.57 0.32 0.10 0.21
occasions and importance of product attributes.
2. Non Stain. 0.54 0.00 0.61 0.55 0.30 0.07 0.26
i. Usage Occasions 3. Non Greas, 0.41 0.39 0.00 0.48 0.23 0.06 0.22
Using the data ‘obtained from the respondents, the following 4. Non Sting. 0.43 0.45 0.52 0.00 0.27 0.06 0.27
table-A1 was constructed 5. Avail. 0.68 0.70 0.77 0.73 0.00 0.17 0.40
6. Antiseptic
Table A1: Observed proportions findings usage occasion x (top 0.90 0.93 0.94 0.94 0.83 0.00 0.83
quality
of table) more frequent than usage occasion y (side of table) 7. G.P.U. 0.79 0.74 0.78 0.73 0.60 0.17 0.00
G.P.U = General
More Frequent Usage Purpose Usability
Occasion
1 2 .3 4 5 6 7 8 From the data of Table Bb the ne).:t table 82 was prepared, which
1. 0.00 0.26 0.47 0.45 0.35 0.31 0.65 0.62 summarises the z values appropriate for each proportion.
Table B2:
2. 0.74 0.00 0.73 0.73 0.57 0.62 0.86 0.86
3. 0.53 0.27 0.00 0.47 0.31 0.26 0.60 058 Attribute
Attribute 1 2 3 4 5 6 7
4. 0.55 0.27 0.53 0.00 0.32 0.29 0.66 O.64
5. 0.65 0.43 0.69 0.68 0.00 0.49 0.78 0.81 1 0 –0.10 0.23 0.18 –0.47 –1.28 –0.80
2 0.10 0 0.28 0.13 –0.525 –1.40 –0.64
6. 0.69 0.38 0.74 0.71 0.51 0.00 0.87 0.83 3 –0.23 –0.28 –0.05 – 0.74 –1.56 -0.77
7. 0.35 0.14 0.40 0.34 0.22 0.13 0.00 058 4 -0.18 –0.13 0.05 0 –0.61 –1.56 –0.61
8. 0.38 0.14 0.42 0.36 0.19 0.17 0.42 0.00 5 0.47 0.525 0.74 0.61 0 –0.955 – 0.255
6 1.28 1.48 1.56 1.56 0.955 0 0.955
7 0.805 0.645 0.77 0.61 0.25 –0.955 0
From the data of this table, the nex1 table A2 was prepared.
Which summarises the z values appropriate for each proportion. Total –2.245 –2.14 –3.63 –3.04 1.135 7.79 2.13
Table A2 Mean(Z) –0.321 –0.306 –0.519 –0.434 0.162 1 .113 0.304
More Frequent Usage Occasion R 1.198 1.13 1 1.084 1.681 2.631 1.823
Usage 1 2 3 4 5 6 7 8 (Case V scale values)
Occasion
Weightage 0.113 0.114 0.094 0.102 0.158 0.248 0.171
1. 0.000 - 0.643 - 0.075 - 0.125 - 0.385 - 0.495 0.385 0.305 Wi
2. 0.643 0.000 0.615 0.615 0.175 0.305 1.68 1.08
R’ values have been obtained by adding 1.519 to each mean Z
3. 0.075 -0.615 0.000 - 0.075 - 0.495 - 0.645 0.252 - 0.205
4. 0.126 - 0.615 0.075 0.000 - 0.465 - 0.555 0.415 0.355
value.
5. 0.385 - 0.175 0.495 0.465 0.000 0.103 0.775 0.875 Weightage have been assigned as follows:
6. 0.495 - 0.305 0.645 0.555 - 0.403 0.000 1.125 0.955
R. i
7. - 0.385 - 1.08 - 0.252 - 0.415 - 0.775 -1.125 0.00 0.205
8. - 0.305 - 1.08 - 0.205 0.355 - 0.875 - 0.955 - 0.205 0.000 Wi = _____
Total - 1.035 4.513 - 1.298 - 0.664 2.92 3.67 - 3.827 -3.98 7
Mean-Z -0.207 - 0.903 - 0.259 0.133 0.585 0.735 - 0.765 - 0.796
R' 1.589 2.697 1.536 1.929 2.381 2.53 1.031 1 ∑ R. i
Wi 0.108 0.184 0.104 0.130 0.162 0.172 0.07 0.068 i =1
No. Usage No. Usage No. Usage
Occasion Occasion Occasion
Blisters
1
Boils/Pimple 4. Minor Burns 7. /skin
.
peels
Dry
i skin/Chapped 5. Insect bites 8. Rashes
lips
Shaving cuts/after-shave
3 6. Cuts/Scratches
dry skin

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Appendix III

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Abbreviations and Their Expansions Used in the Charts
Antiseptic Usage Occasions
BOl Boils
D-sk Dry Skin
S-cu Shaving Cuts
M-bu Miner Burn
I-bi Insect Bits
C-cs Cuts & Scratches
Blis Blisters
Ras Rashes
Dac Dattol Antiseptic Cream
Antiseptic Brand Names
Bor Boroline
Det Dettol Liquid
Bur Burnol
Oth Others
Attributes or Qualities of An Antiseptic Cream
G.p. General Purpose Usability
Odo Odour
Sta Staining Characteristics
Gre Greasiness
Ava Availability
Anti Antiseptic Characteristics
Sti Stinging Characteristics

Case Study No.6

Sunrise (India) Ltd’
Introduction
India has a unique destination of being the biggest producer,
consumer and exporter of tea in the world. Even though in many
parts of the world tea is emerging as the most popular hot beverage,
the domestic market for tea was almost saturated, wherein the
segment sizes and market shares of individual companies were
not amenable to drastic changes without major upheavals occurring
in the market. This relative stability in the market was a source of
comfort to the leading firms in the industry like Sunrise (India)
Ltd. as it made high entry barriers for any new entrant and thus
posed great challenge in terms of getting a foothold in the market.
However, over the last two years or 50, a wind of change has been
blowing across the tea market in India. While the change is
perceptible at the national level too, its intensity is sufficiently
strong in some markets, to be a cause for concern even to the
existing large firms in the industry.
Tea Industry
In 1987 India produced 674.2 million kg of tea and thus claimed
more than a half of the total world production, with Sri Lanka
securing a distant second position by producing 213.3 million kg.

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11.556 253
 of the 674.2 million kg produced in India, 209 million kg were
RESEARCH METHODOLOGY
exported leaving around 465 million kg for domestic
consumption. Even though the increase in the quantum of
production between 1986 and
1987 is of the order of8%, the growth rate in domestic consumption
is only around 4% per annum.-
The production of tea in India is primarily concentrated in two
regions of the country, namely:
• In the north eastern states of Assam, Tripura and the Dooars
and Darjeeling areas of West Bengal.
• In the Nilgiri hills of Tamilnadu and Ktrala in the South.
Tea is basically marketed in two blends i.e. ‘leaf and ‘dust’. While
the northern states of the country are primarily leaf consuming
areas, the southern states and Maharashtra comprise mainly of
dust consumers. The major categories of the two blends that are
available in the market shown in
Exhibit -1
Tea which is produced in the gardens is either sold through the
various auction centres in the
country or directly sold to the intermediaries in the trade. In 1987
the various auction centres in the
country handled a total of 472.5 million kg of tea of an annualised
average price of Rs. 25.12 per kg.
Auction centres in South India sold 111.2 million kg at an average
of Rs. 22 per kg, while the rest of the market sold 361.3 million kg
at an average price of Rs. 26 per kg.
Exhibit 2 shows the principal channel flows in the tea trade. From
the chart it is apparent that tea
is finally sold to the consumer in two forms namely.
• In loose form
• As a branded product in packets.
At the national level ,in early 1988 it was estimated that 70% of
the tea in the country is sold in the loose form with the rest being
sold as a branded product in packets as shown in Exhibit 3.
However, this figure varies widely from state to state, with states
like West Bengal having 95% of the tea sales in the loose form.
The mode of operation of the loose and the packet tea segments
are very different. The two forms also differ widely in terms of the
profitability of the channel members. The margins of the various
channel members in the two segments are shown in Exhibit-4.
Due to the high margins involved in the loose tea trade
considerable amount of dealers push exists for the same. Thus to
compete with loose tea, packet tea manufacturers have traditionally
relied on generating demand through pull strategies aided by mass
media advertising.
Loose tea and branded tea also differ in terms of their prices.
While loose tea prices generally vary from Rs. 24 to Rs. 46 per kg,
packet tea prices vary from Rs. 40 per kg to as high-as more than
Rs. 160 per kg. However the bulk of the packet tea sales are in the
price range of Rs. 40 to Rs. 65 per kg. There is a widely held
consumer perception that the higher prices of packaged brands
are due to the packaging and various promotional costs involved
in their marketing. Thus a packaged brand of comparable price as
a loose blend, is generally perceived to be of inferior quality than
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254
the same. This may be one of the reasons for the dominant status
of the loose segment in the market.
From the demand side, the tea market may be classified into two
segments, namely:
• The household consumers and
• The ‘hot tea shop’ trade and other institutional buyers.
The two segments differ considerably in terms of their
consumption patterns. The preferences of the household
consumers across the different regions of the country are not
exactly known. But the major hotels mostly purchase tea ‘bags’
and other packaged leaf blends, the ‘hot tea’ shop segment by and
large prefers dust blends throughout the country. This is so because
it is felt that dust blends generally give more number of cups per
unit weight than leaf blends, and are in general cheaper too.
Despite the fact that the loose tea segment comprised the bulk of
the market, structurally it is a fragmented industry. Each major
town or city in the country has its major tea traders, who buy in
bulk from the various auction centres in the country or from the
gardens directly. Subsequently this stock is sold either through
their own parlours or through secondary dealers.
In contrast to the loose tea segment, till recently the packaged tea
segment was virtually dominated by two firms. The structure of
the packaged tea market in the pre pouch period, is shown in
Exhibit-5.
Packaged Tea Segment - A Profile of the Major Companies
This section will give a brief overview of the current businesses
of the major firms comprising this segment.
I Star (India) Ltd.
Star (I) Ltd. is the Indian subsidiary of an Anglo Dutch
multinational company named Omo International PIc Currently
International holds about 40% of Star India’s equity capital. In
early 1988 it was estimated that Star India’s share of the packaged
tea market was around 60%. The list of its brands is given in
Exhibit-6. One of its brands namely ‘Red Star’ which is a CTC
leaf blend is the largest selling brand of tea in the country.
‘Since the early 1980s Star (I) Ltd. has been attempting to diversify
into other lines of business. While many of its diversification
attempts specialiy into the non-related areas failed, the company
has build up a strong presence in the national coffee market, as
also in some other lines of food products.
II. Sunrise (India) Ltd
Sunrise (I) Ltd. was established in India in 1893, as a part of the
world wide operations of a British tea company. In 1972, Omo
International Pic acquired a major part of the world wide businesses
of its overseas principals, and consequently Sunrise India became
a subsidiary of Omo International. This change however did not
affect the operations of Sunrise (I) ‘Ltd., which continued to be a
single product company being only in the business of tea blending,
packaging and marketing. By the end of 1970s due to a variety of
factors, the general performance of Sunrise deteriorated sharply
and its profits carne under severe squeeze.
To revive Sunrise (I) Ltd., Omo International sought the help of
another of its subsidiaries in
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India, namely Detergents (India) Ltd. Detergents (1) Ltd. is one
of the major manufacturers and
marketers of soaps and detergents in the country, and enjoyed an
excellent reputation amongst its
investors, customers and in professional circles too. As a part of
the rehabilitation scheme for
Sunrise (I) Ltd. two major changes were brought about:
i. The complete management team of Sunrise (I) Ltd. was
overhauled and a team of highly competent professionals were
transferred from Detergents (I) Ltd. to Sunrise (I) Ltd.
ii. Detergents (I) Ltd. which was also in the business of
manufacturing and marketing dairy products, vanaspati, edible
oils and animal feeds, transferred these businesses to Sunrise
(I) Ltd. for a consideration. This implied that from being a
single product company,
Sunrise India became a diversified food and beverages company.
Due to the addition of all these product lines the turnover of
Sunrise India jumped from around Rs. 105 crores in 1982-83 to
more than Rs. 350 crores in 1986-87. The ‘length’ of Sunrise
India’s Tea ‘line’ is shown in Exhibit-6. While star (I) Ltd. is
stronger in the leaf markets, Sunrise India has a strong presence in
the dust segment with its ‘Emerald’ and ‘Suntop’ brands.
III. Seth Tea Co
Seth Tea Co. was promoted by Seth Oil Co Ltd., which is a member
of the famous Seth group of companes in India. Initially Seth Oil
Co. Ltd. had acquired a number of tea gardens belonging to a
British tea company, a!1d launched a few brands in the market.
The tea brands of Seth Tea Co. are shown in Exhibit-6: However
none of these brands could capture a ‘decent’ market share. It is
noteworthy here that while Star (I) Ltd. and Sunrise (I) Ltd. bought
bulk of their tea at the auctions, Seth Tea Co. has a captive source
of supply from the number of tea gardens owned by it.
In late 1986, Seth Tea Co. launched a new brand in the market
called ‘Seth Tea’. Initially the tea
sold under this brand name was a leaf blend, which the company
claimed was of the Assam ere variety, being straight from its
gardens in Assam. Subsequently a dust blend was also launched
in the areas which are primarily ‘dust’ consuming. In March.1988
the company launched another blend of CTC leaf tea, which is
cheaper than the Assam CTC blend introduced by the company
earlier. This cheaper blend of ere leaf was launched primarily in
the dust belts, with an eye to capture the
market from ‘Red Star’ which has been the most popular brand,
amongst the leaf blends in these
areas.
The salient points of the marketing strategy adopted by Seth Tea
Co. vis-a-vis their new brand may be summarized as:
i. 0ffer Value for Money to the Consumer
All these blends of ‘Seth Tea’ were priced at around Rs. 4O/kg.
Thus these were priced at the lower end of the packaged segment.
The quality offered for this price was however claimed, to be better
than other packaged brands of comparable price. Thus it was
hoped that consumers of more expensive brands of tea will switch
over to the new brand. Simultaneously it was expected that the
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11.556
low price of the brand will upgrade some loose tea consumers to
RESEARCH METHODOLOGY
packaged brands. The prices of various blends of ‘Seth Tea’ along
with ‘Red Star’, ‘Emerald’ and ‘Fine Dust’ which are dominant
brands in their respective segments are shown in Exhibit-7
ii. Effective Positioning
The available tea brands in the market have been positioned using
diverse strategies. The marketing strategy for ‘Seth Tea’ utilized
benefit positioning for the brand, with the claim that it offers the
freshness of garden packed tea. It may be hypothesized in view of
the success of the brand that, ‘freshness’ is one of the most -
sought for attributes in tea. The various attributes/images that
are sought in any tea by the consumers are shown in Exhibit-8.
iii. Innovative Packaging
Till the introduction of this brand, tea has traditionally been packed
in cardboard carton or aluminium foil packs. ‘Seth Tea’ unlike any
other till then was launched in plastic pouches. The customer
perceptions about plastic pouches, as a packaging medium is still
not known for certain. However there is a perception in the market,
that customers consider plastic packaging as being cheaper than
the conventional forms of packaging. Thus for the same price the
consumer may perceive the tea in a plastic pouch to be of a superior
quality than that in a conventional packet
iv. Save on Promotion Costs Through Use of Family
Brand Name.
The different blends were all marketed under the brand name of
‘Seth Tea’. This implied substantial reduction in promotional
costs, as the company. did not need to advertise separately for the
different blends. In fact one advertisement was run for this brand
on the National Network of Doordarshan, featuring a popular
star of Hindi films.
v. Generate the Much Needed Dealer’s Push for the
Brand.
As mentioned in the previous section, branded tea always lacked
in terms of dealers push as compared to loose tea due to the
lower margin offered to the trade members by the marketers of
major packet brands. Seth Tea Cc as shown in Exhibit-4, decided
to offer the retailers a margin of around 10% on the company’s
basic price as compared to the 5% margin offered on the traditional
packets. “It was hoped that this margin which compares favourably
with the margin on loose tea, will generate the much needed
dealer’s push for the brand.
Since its introduction, this brand has notched up impressive sales,
in practically all areas of the country. Current estimates are that
nationally it has acquired approximately 15% market share in the
packet tea segment. However in some states like Maharashtra its
gains are much more impres-sive.
Research Problem
As mentioned earlier that the tea market in India is virtually
saturated, a substantial gain in market share by any player in the
market means a concomitant loss to one or more of its
competitors. Thus the gains of Seth Tea Co. in the market must
have been at the cost of some other packaged tea producer or the
same may have one from the loose tea segment. However, as yet
thc source of gain for ‘Seth Tea’ is not clear. Thus the change in
market structure/shares that is occurring with the emergence of
255
 this new segment namely that of ‘pouches’ is also not known Exhibit-2
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with certainty.
All these changes occurring in the market, warranted” reappraisal
of the strategies of the
existing firms. However, any such action must be preceded by a
thorough study of the market.
Consequently to start with Sunrise (India) Ltd. decided to study
the tea market in Maharashtra. Some characteristics of the
Maharashtra tea market is given in Exhibit-9. The study should
cover in detail the following aspects:
i. Estimate the market size of tea by segments.
ii. Do “a gain/loss analysis to determine the source of growth of
‘Seth Tea’ pouches.
iii. Study the Distribution System-(Width and Depth) of ‘Seth
Tea’ and their mode of operation.
iv. Ascertain Pricing/Margin strategies of ‘Seth Tea’, and its impact The dashed lines indicate flow of loose tea and the solid
on its rapid growth.
Exhibit-3
v. Ascertain support to ‘Seth Tea’ through various media. Loose vs. Packet Tea Shares
vi. Ascertain perception/consumer responses of current users of
pouch vis-a-vis loose/packet tea in the following cities in
Maharashtra; namely Bombay; Sholapur and Nagpur.
These perceptions should pertain to both ‘product attributes
and packaging.
vii. Study the ‘Hot Tea Shop’ trade, in terms of its consumption
pattern and the effect of ‘ Seth
Tea’ on the Same.
Keeping in view the background information given in the case,
decide on the following:
i. Research Design
ii. Key infom1ation needed
iii. Sources of Information Position Pre Pouch Period
iv. Questionnaire ‘Design Exhibit-4
v. Plan of action Margin Structure In Tea Trade
Exhibit-1 SL No. Channel Intermediary Margin(%)
Principal Categories of Tea Blend
1 Broker 1.5-2.0
Leaf Dust 2 Loose Tea Trader 3.0-6.0
Orthodox Leaf premium Dust 3 Secondary Wholesaller (Loose Tea) 3.0-4.0
Premium C.T.C Leaf Popular Dust 4 Loose Tea Retailer 15.0-20.0
Popular C.T.C Leaf Discount Dust 5 Redistribution Stockists 2.5-3.5
(Packet Tea) (5.0)
6 Packet Tea Retai1er 5.0-6.0
(10.0)
Note: The figures within brackets indicate the corresponding
margins offered by Seth Tea Co. on ‘Seth Tea’.

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 RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

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258 11.556
Market Structure survey. The results from this analysis have been used to project

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Segment the s~grnent sizes for the whole of Maharashtra.
Pre 'Seth Tea' Post 'Seth Tea' Town Popular Discount Serh Dust Dust Pkts. Loose Total Dust
1. Packet Dust Dust (T/Wk) (T/Wk) Dust (T/Wk.)
Tea taunch period (T/Wk.) (T/Wk) (T/Wk.)
lounch paiod 1986
2. Pouch 1988 Bmbay 2.25 055 - 2.8 57.2 60.0
Tea (T/Wk) (T/Wk) Pune 0.45 0.75 0.1 1.2 11.0 12.2
Nagpur (11 Towns) 9.4 1.6 5.2 16.2 275 43.7
3. Loose 364.0 330.0 Nasik 3.8 2.3 1.0 7.1 7.0 14.1
- 90.0 Sholapur (5 Towns) 8.1 25 3.1 13.7 5.3 19.0

612.0 600.0 Total 24.0 7.6 9.4 41.0 108.0 149.0

State o(Maharnshtrn 191.0 60.0 79.0 330.0 510.0 840.0
976.0 1020.0 Pre 'Seth Tea' Lounch Period
Post 'Seth Tea' Launch Period 1988
1986
(T/Wk.
Note (TIWk)
)
Annual growth rate of 2.% has been assumed for the state of Pkls Pouch Loose T oral Pkls Pouch Loose Total
Bombay 73.0 - 118.0 191.0 72.0 8.0 121.0 201.0
Maharashtra. this being the growth rate of population for the Pune 10.0 - 25.0 35.0 9.0 1.0 27.0 37.0
state. Nagpur (11
20.0 - 32.0 52.0 18.0 6.0 31.0 55.0
Towns)
Segment Wise Analysis Nasik. 5.0 - 15.0 19.0 4.3 1.7 14.0 20.0
Sholapur (5
1. Leaf Vs. Dust Segments: Maharashtra is predominantly a dust Towns)
11.0 - 10.0 21.0 9.7 3.3 9.0. 22.0
tea market. However the cities of Bombay and Pune and to a Total 118.0 - 200.0 318.0 113.0 20.0 202.0 335.0
great extent Nagpur and Nasik constitute a sizeable leaf tea
market. Hence, Gain from packaged segment = 11 Tens (55%)
It is estimated that even in the upcountry towns, on the average 5- Gain from loose tea segment = 9 Tons (45%)
6% of the packet tea sales are of leaf blends, with Star India’s ‘Red Projecting for the whole of Maharashtra:
Star’ being the major brand.
Total Market Size for ‘Tata Tea’ Pouch = 90 Tons/Week.
Seth Tea Ltd.’ had initially introduced two blends namely, ‘ere
Gain from packaged tea segment = 50 Tons/Week
DUST’ and ASSAM ere LEAF in the dust and leaf consuming
areas respectively. However since March 1988 another leaf blend Gain from loose tea segment = 40 Tons/Week
namely ‘CTC LEAF has been introduced into the market.

No. of Towns Total no. HTS Sample Size Tot Consump/Week Sun Scar Seth Loose
-Tons/Wk.
17 16,600 130 62 tons 3.0 3.85 2.85
52.75

Hot Tea Shop’ Trade

Most of the leaf tea sales in thc state are of CTC varieties. The
In these 17 markets, the market size is
segment wise market structure is as follows:
Total Market size = 326.0 Tones/week
Segment Segment size (T/Wk) Consumer Segment = 264.0Tones/Week (80%)
HTS Trade = 62.0 Tons/Week (20%)
Leaf Tea Segment 180.0
Dust Tea Segment 840.0 Projecting for the whole of Maharashtra:
1020.0 Total ‘HTS’ segment size = 200 Tons/Week.
Loose Tea Market
Segment Wise Market Structure of Leaf Tea Segment
The loose tea market can be divided into two categories based on
Town Popular Pronium Seth Leaf Total Pkt. Loose Leaf the size/population of the town.
Leaf Leaf (TIWk.) Leaf (T/Wk)
(T/Wk) (T/Wk.) (T/Wk.) i. Those in cities with population of 3 Lakhs and above.
Bombay 45.0 15.0 8.0 68.0 63.0 In these markets usually the share of the loose tea segment varies
Pune 5.2 1.2 0.9 7.3 16.0 from 60-70% in the total tea market. The retail price of loose tea
Nagpur (11 Towns) 5.4 1.0 0.8 7.2 15 varies from Rs. 3O/kg to Rs. 44/kg,”
Nasik 2.2 1.0 0.7 3.9 3.1
Sholapur & Others 2.2 0.8 0.6 3.6 6.4
However the bulk of the tea sales are of variety priced around Rs.
Total 60.0 19.0 11.0 90.0 90.0 38!kg to Rs. 42!kg. The dealer’s margin varies from 15% to 20%
and hence the product enjoys considerable amount of dealer’s
Segment Wise Market Structure for Dust Segment. The following push. This explains to a great extent the large market share enjoyed
analysis is for the tC’,’.1lS which comprised the sample for the - by this segment in these markets. The big dealers in these towns
buy the tea directly from the Calcutta/Cochin/Conoor auctions.

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11.556 259
 The broker’s commission is 1.5% and the Wholesaler’s
RESEARCH METHODOLOGY
commission is 6%. Most of the sales of loose tea in Maharashtra
arc of dust variety and the ‘HTS’ trade is totally dominated by this
segment.
ii. Those in towns with population less than 3 lakhs. In these
towns typically, the loose tea trade occupies a smaller share of
the tea market. The useful market shares being of the order of
10% to 30% the reasons for this low market share of the loose
tea segment may be attributed to:
• Lack of proper supply of loose tea. The tea has to be procured
by the ‘Kirana Merchants’ of these towns from the nearest big
city. Consequently the cartage and other associated expenses
have to be borne by the concerned merchant in the small town.
Compared to this, there is regular supply of most of the
packaged brands; thus saving the dealer all the trouble of
transporting the product himself.
• The tea available in these markets is of a cheaper variety, selling
for around Rs. 28/kg to Rs. 32/kg. Thus lower price combined
with higher costs yields a margin to the dealer of the order of
4% to 5% which is comparable to his margin on most of the
packaged brands.
The above two factors have to a great extent mitigated the dealer’s
push for loose tea in the said markets.
Case Study No .7
Personal Computer
1. Introduction
Computer industry is the fastest growing industry in the world
with an estimated size of $160 billions in 1989. This ubiquitous
machine is revolutionising many fields of human activity and
posing itself indispensable to the burgeoning populations of
users all over the world. The range of computers available in the
market extends from the mighty super computers like Cray XMP-
24 to the small personal computers.
The Indian PC industry came into its own in 1984 with the
launching of Neptune PC, as IBM PC compatible by Minicomp.
Since then it has been a story of phenomenal growth for the
industry. Sensing the tremendous opportunities available in the
industry, many new companies entered the market. The PC market
is now characterised by cut-throat competition, although the core
product of most of the companies are similar, if not identical.
The USP of the companies is understandably after sales support,
low price etc. Although the Indian market is not growing as fast as
its western counterpart, it is certainly rising compared to other
products. In the personal computer business the marketing
function is assuming greater importance due to the dynamic,
competitive nature of the industry and high rate of technological
obsolescence.
2. Market Size and Trend
In value terms, the PC market was worth Rs. 400 crores in 1988-
89, up from Rs. 230 crores in 1987-88 and Rs. 108 crores in 1986-87.
But still, the installed base of computers is disproportionately
small for an economy of India’s size. In volume term 26000
machines were sold in 1987-88. A growth rate of 50% is envisaged
till 1995. The growth in value terms and volume terms of the PC
market over the years is shown in Exhibits 1 and 2 Personal
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260
computer sales in four geographic regions in India show that the
market is not uniformly distributed throughout the country. Sales
was Rs. 87.2 crores in thc west zone while east zone managed only
Rs. 34.69 crores. Market size of Narth India was Rs. 55.32 crores
and South India accounted for Rs. 52.79 crores worth of sales in
1987-88.
According to various types of personal computers marketed in
India, the break-up of different models’ usage are as follows:
PC-386 (with 2 Floppy Drive) 15%
PC-AT (with a 2c% chip) 40%
PC-XT (with hard disk drive) 40%
PC (The latest variety of powerful PCs including mini computers)
50%
Industry experts are of the opinion that the new variety of very
powerful PCs with more than 100 times memory capacity of PC-
386 will cover 15% of the PC market with percentage shares of
PC-XT and AT coming down to 30% each in the next 3 years.
The main user groups of personal computer are corporate sector,
small business, education –al/scientific institutions and software
houses.
3. Demand Scenario
The demand for PCs has gone up due to the fall in prices. This
was made possible when the government decided to liberalise its
import policies. The new computer policy (NCP) provided a fill
up to the industry. The underlying factors which boosted the
demand are termed as:
a. Accelerating Elements
Demand for PCs is expected to maintain this upward trend for
many reasons. These are:
1. With fall in prices, they are becoming more affordable, especially
to institutions and some individuals. Although a PC (priced at
Rs. 280(0) is not yet within the reach of the common man,
people belonging to the upper segment of income have,
however, started installing PCs in their home as a means of
entertainment for their grown-up children.
2. Rapid computerisation in banking and service sectors like
Railways, Airlines, Telephones, T.V’s network programmes and
NICNET have boosted the demand for PC. It has greatly
improved the efficiency of operations and people at large have
appreciated its value.
3. User friendly software is increasingly available and this has greatly
facilitated many to install a PC.
4. Improvements in complimentary products like peripherals (e.g.
better printers, more memory space, etc.) have enhanced the
benefits possible from the PC.
5. Better after-sales service is being offered. Indian firms are tying
up with foreign com-panies and making use of their superior
technology and established brand names, both of which increase
the effectiveness of the product to the customer.
6. Increasing awareness of the potential of the product has also
increased its demand.
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b. Inhibiting Factors

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The demand has been somewhat inhibited due to:
1. High rate of technological obsolescence - customer feels the
machine may become outdated soon.
2. Lack of awareness, Indian customers at large still do not know
the capabilities of the product.
3. High price - The existing price of a PC generally puts off many
small organisations and individual customers to adopt it.
4. The various fears being expressed in association with large scale
computerisation, specially the fear of further unemployment
and dehumanization of life etc. have also in hibited the growth
of demand.
The competitive scenario of the Indian Personal Computer
industry in 1988-89 is briefly projected in Exhibits 3.1, 3.2 and 3.3.
Q. Given this background, outline a marketing research study
among the manufacturers of personal computers to examine
the following issues for each of the companies.
a. What is its position in the PC market?
b. What are its comparative strengths and weaknesses vis-a-vis
the major competitors?
c. Who are its target customer
d. What promotional schemes does it adopt?
e. Its perception about buyer’s need.
f. The views on growth potential of different customer groups.
g. The distribution method(s) with specific emphasis on retailers
and after sales service arrangements.

References
1. Research For Marketing Decisions, Paul E Green and Donald S
Tull. Englewood Cliff NJ. Prentice Hall. Inc., 4th Edition,
2. 1976. 2. Handbook of Marketing Research, Robert Ferber
(Ed.) New York. McGraw Hill, 1974.
3. Marketing Research: An Applied Approach, Thomas C. Kinner
and Jammes R. Taylor, Singapore, McGraw Hill, 1983.
4. Marketing Research: Text and Cases, H.W. Boyd, Ralph Westfall,
S.F. Stasch. Homewood, Itlinois, Richard D. Irwin Inc., 1977
(4th Edition)
5. Marketing Research: Methodological Foundations, G.H.
Churchill (Jr.) Hinsdale, Illinois, Dryden Press, 1976.
6. Marketing research: Applications and Problems, Arun K. Jain,
Christian Pinson and Brian T. Ratchford, New York, Wiley,
1982.

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7. Marketing Research: Information Systems and Decision

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Making, Bortrem Schoner and K.P. Uhl, New York, Wiley, 1975
(2nd Edition).
8. Cases in Maneting Research, W.E. Wentz, New York, Harper &
Row, 1975.
9. Marketing Research: Meaning, Measurements and Methods,
D.S. Tull and 0.1. Hawkins, New York: Macmillan, 1976.
10.Marketing Research: Fundamentals and Dynamics, Gerald
Zaltman and P.S. Berger, Hinsdale, Illinois, Dryden Press, 1975.
Notes

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