Business to business marketing in India and the Asian region.

Evolution of techniques for universe estimation, stratification and sampling in a rapidly changing environment
Bhupendra Mathur and T.S. Mohan Krishnan ESOMAR Business-to-Business Marketing, Vienna, April 1997

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Business to business marketing in India and the Asian region. Evolution of techniques for universe estimation, stratification and sampling in a rapidly changing environment Bhupendra Mathur and T.S. Mohan Krishnan ESOMAR Business-to-Business Marketing, Vienna, April 1997

Business to business marketing in India and the Asian region. Evolution of techniques for universe estimation, stratification and sampling in a rapidly changing environment
Krishnan Mohan, and Bhupendra Mathur, T.S. (IMRB), India STATISTICS AND INDIA A statistical critique once said that statistics is like the bikini it reveals the obvious but hides the important. India is a case in point. Take a look at these basic statistics on the country. Spread over 3.3 million square kilometers, the peninsula of India is the second most populated country in the world after China. Seventytwo percent of its people live in villages where the primary occupation is agriculture. The 28% urbanites live in 3700 towns spread over the entire expanse of the countryan apparent distribution nightmare for a marketer targeting at the urban population. India's per capita GDP is a mere 1280 US, one seventeenth of Singapore or Hong Kong, or eighth of Korea or Malaysia, or half of China. Of the 50 billion US paid up capital of joint stock companies, 50% comes from state controlled companiesso much so for privatisation. Now take another look at the same statistics: While 257 million Indians live in 3700 towns nearly 70% of them live in 300 towns, each with a population of over 100,000. Further over half of these, that is nearly 80 million live in the top 23 cities of the countryequivalent to the population of Mexico or Germany, or twice the population of Korea or thirty times Singapore. In other words less than 1% of urban towns in India house over 33% of the urban population, and nearly 10% of the total population. India's GDP of 300 billion USD is ranked sixteenth in the world, and over 99% of its 400,000 registered joint stock companies are not state controlled. UNLEASHING THE ASIAN TIGER The map of Asia is dominated by China and India two large masses of land approximately 13 million square kilometers in area, and housing nearly 40% of the world's population. Then there are smaller pockets of land, as small as a 1000 square kilometers which boast of a per capita GDP nearly as high as USA, Germany or France. These high performing Asian countries such as Singapore, Hong Kong and Korea, are vastly different from India and China not only in terms of economic indicators, but also in the manner in which business has been allowed to grow.
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TABLE 1: ASIAN TIGERS A SNAPSHOT

India GDP $ BN US Exports $ BN Imports Foreign investment inflow US $ BN Competitiveness* 294 25 27 1 69 97 103 8 132 151 162 2 377 96 102 0.8 71 59 60 4.5 143 45 55 2.7 175 40 32 3.0 522 121 116 34 Singapore HK Korea Malaysia Thailand Indonesia China

38

27

23

30

41

26

* Based on the world competitiveness report 1996, prepared by the World Economic Forum. Competitiveness is defined as the ability of a country to create added value and thus increase national wealth by managing assets and processes, attractiveness and aggressiveness, globality and proximity and by integrating these relationships into an economic an social model.

USA = 1 Japan = 4

Switzerland = 9 Germany = 10

UK = 19 France = 20

One of the primary drivers of the manner in which business has grown in the Asian region, is the extent of export orientation. Economies such as Hong Kong, Singapore and Taiwan have for long been trade oriented. Hence documentation of statistics and controls thereof have been of a high order, further facilitated by the limited size and spread of these countries. China, on the other hand, remained a closed economy for a considerable length of time, during which it concentrated on internally gearing itself for the export market. Hence when the market did open up, the areas both in terms of activity and location, that were allowed to be free were clearly demarcated. Therefore, while China is spread over a large area, the growth in business in the recent past has been predominantly in three coastal towns with most of the hinterland remaining protected and unexposed. The international press, in the recent past, has been alive with stories about India vividly described as the 'unleashing of the Asian tiger'. A series of actions in the last five years or so, broadly referred to as India's liberalisation program, have been a catalystto the unleashing ceremony:
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limiting controls leading to simplifying the procedures for registering companies and setting up businesses; acceptance of private sector participation in hitherto state controlled sectors such as steel, copper, power, roads, ports and so on; attracting direct foreign investment in greater number of sectors with provision for higher equity participation and hence higher share of profits; reducing the 'fat' content of state controlled corporations to increase efficiency and thereby enhance the 'returns on resource deployed' to the state; reducing taxes to allow businesses to increase their profitability; reducing import duties of products and components in industries where higher levels of economies of scale have been achieved overseas and the high import duties were stifling domestic growth, at the same time, losing the opportunity for exports through value addition.

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The impact of these is apparent:

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communication in the last five years has grown by leaps and bounds with the wide spread induction of electronic exchanges, and more recently with the decision to extend usage ofwireless technology through V-SATs, cellular and pager networks, and access to services such as the Internet and e-mail; induction of technology to the transportation sector. Today, India ranks first in global capacity for bus building, and by 2001, its annual sales of four million motorised twowheelers, will rank India second in the world. Most of the automobile giants of the world are setting up shop in a big way in India; PC sales have grown exponentially in the last few years, and its one million target for 19971998 would be tripled by 2001 at an estimated 51% compounded annual growth rate during this period; in industriessuch as photocopiers, where the duty reduction did not fall as in some of the other product categories, sales grew at a much lower rate.

The projections for India in 2001 are summarised in Table 2. TABLE 2: INDIA IN 2001
Sales (millions) Product Television Refrigerators Twowheelers (motorised)
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% of World 5 9 16

Sales 2001 14.0 3.0 4.0

World Rank 5 4 2

1991 4.0 1.0 1.4

1995 6.0 1.3 2.2

GDP on PPP basis projected at $ 3000 billion, fourth in world Infrastructure spends of over $ 100 billions by 2001. Telecom: $ 48 billion to add 12 million lines Power: $ 27 billion Roads: $ 10 billion

India will rank second in the world in twowheeler production, fourth in refrigerators, and fifth in televisions. India will spend USD 100 billion in infrastructure, nearly half of it in telecom. IMPLICATIONS FOR THE BUSINESS MARKETER The promises of accelerated growth, also promise to unleash challenges in marketing, distribution, and reach, which are subjects for the market researcher to imbibe in order to cater to the needs of the businesstobusiness marketer. To begin with, the layout and concentration of pockets of demand for industrial and business products, have implications on the abilityto service, and hence need to research, these markets. While urban agglomerates have attractedmigrants from rural India for employment and a perceived higher standard of living, through conscious effort of the government in the form of incentives and sops, new industries continue to be located in
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backward and remote areas of the country. Further, increasing awareness towards environment protection is slowly driving atlas the medium and heavy industries out of urban agglomerates. Those left behind, are attracted by the burgeoning real estate prices, and find it profitable to move out to cheaper locations viz. satellite towns, leaving the urban concentration to the service and trade sector. The marketers of business and industrial products need to organise their sales and distribution networks to cater to the distinct markets for industrial raw material & consumables, semifinished goods and equipment as opposed to office automation equipment and consumables. The former has a market spread across the country, largely outside urban agglomerates, with some localised concentrations as a result of raw material sources or local expertise/traditional industry. The latter has a city specific market theoretically in all the 3700 urban towns, though most national players concentrate on the top 300 cities with most focus on the top twenty-three cities. Other issues of concern include the spread of usage, viz. number of organisations, and number of establishments within each, that are potential users for the product under study, specificity of application i.e. whether the product finds application in specific industries or has general purpose application in a variety of industries, and, the extent of involvement in the purchase decision which has implications on whether the DMU (Decision Making Unit) would be centralised or decentralised. Depending on the above parameters the business marketer's need for research gets established, leading on tothe operational implications of meeting such research needs in the Indian environment. ISSUES FACING BUSINESSTOBUSINESS MARKETERS IN INDIA Let us consider two situations which illustrate typical issues facing businesstobusiness marketers in India. Situation 1: A large Indian company in collaboration with an MNC has had a significant presence in the Earth moving equipment market for over a decade. Business prospered mainly on the inherent strength of the product offering. It was also aided by the fact that its only competitor had a weak product offering. Lack of interest in the earth moving equipment business by the parent company of the competitor helped it only further. This is, however likely to change with the imminent entry of the top two tothree MNC brands in the Indian market. Given these threats, the options available to the company included modification/improvement of its existing models to help it align more closely with its customers needs and/or development of a range of new generation machines to match increasing expectations of its top end customers. The company undertook a country wide customer satisfaction survey to identify potential areas for improving its product. This resulted in the launch of a variant of its successful model with enhanced cabin comfort and more reliable hydraulic mechanism. The company also undertook a market potential exercise to assess acceptance of the new generation machines with existing and potential customer segments. Situation 2: A well established Office Automation company in India launched its range of fax machines in the early nineties soon after the government liberalised import of these machines. Since then sales has steadily grown at a rate over 20% per annum. The competition has also grown at this rate with several Indian and MNC brands coexisting in the market. Little documented information was available about the competition as several small players were either importing or smuggling kits of reputed international brands, assembling them locally and selling directly to customers.

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In these intervening years, the customer market profile has also undergone drastic changes with the emergence of several new segments like small exporters, small offices and home offices at the lower end of the market. In such a scenario, the company had little information available at its disposal to allow even an educated guess on the product penetration levels, market size, market share, customer profile and so on. Consequently, its market planning was seen to be reactive and ineffective. These cases bring forth two distinct marketing issues facing businesstobusiness marketers in emerging markets like India:
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Market development related issues; Market mapping related issues.

Market development related issues One would expect that this would be the core issues facing marketers in this part of the world. Two broad questions arise: a. What does the market need? Are customers satisfied with existing offerings? If not, what benefits are the customers looking for? What could meet this need? Do I develop a new product or will a modified version of the existing product suffice? What features, price and service level need to be bundled together? And to which segment of the market? b. What is the future market potential for my product? Who will be the buyers of my product? How many will sell and what is the growth potential? And where will the buyers be located? Who will be my future competitors/partners? What will be the state of the environment (Political, social, economical and cultural) in which I operate in and how will it impact my product? These issues could typically be associated with new markets like networking products where there are no past behaviour to predict the future or with traditional industries likes Electric Motors industry and so on. experiencing drastic changes in market conditions forcing them to selectalternate technologies from developed countries to more closely match the needs and expectations of the customers. More often, marketers restrict themselves to issue (b) and that too to estimating the quantum of future demand to evaluate the feasibility of a new project. Issue (a) is rarely raised and if does, it usually gets limited to knowing about Feature vs Price bundle preferred by customers to help decide on product and pricing strategies. Marketers undertaking market development exercises usually get bogged down by nonavailability of details on the product market (even substitutes) being researched. This leads them to spend considerable amount of time mapping the market in terms of spread, profile, size of buyer and so on, before arriving at the main issues relating to market development (Concept acceptance and so on). Thus, market development exercises in their absolute sense do not happen often enough in India. Market mapping related issues In the light of what was stated above, market mapping issues become pertinent not only for product categories which have been around for some time (PCs, Copiers and so on) and have been experiencing a steady growth but also for those that are

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likely to be introduced in future. The basic questions that usually arise in the minds of businesstobusiness marketers are: a. How do we define our current market? Who are our current customers? How many? Where? (Govt. Vs Private sector, by geographical regions, by strata i.e. turnover, employee size and so on) Who are our competitors? How do they operate? Who are the intermediaries? How do they function? b. What is the current size of the market we cater to? What is the annual market size? What is the penetration (Installed/user base) level? c. What is the performance level of my brand visvis others? What is my relative market share by region, by customer groups (large, medium, small or government vs private), by product subgroups (colour vs monochrome copiers)? How did my brand perform on aspects like awareness, consideration levels, brand image/loyalty and so on? There are several reasons as to why a market mapping study gains importance. for both the existing product and new product marketer. Some are more obvious while others are not:
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high level of opportunities with new segments developing rapidly; intense and volatile competition leading to an acute need for information on competitive action; lack of organised data collection effort by industry associations and government or independent bodies; proliferation of unorganised, grey or black market, introduced by imperfections in state policies, which are difficult to monitor.

Table 3 below illustrates issues facing businesstobusiness marketers in India with a few examples. TABLE 3: EXAMPLES OF ISSUES FACING BUSINESS-TO-BUSINESS MARKETERS IN INDIA
Issues Market development related issues: a) What does the market need? Rarely used, but are issues in traditional or more established industries experienced decline (and more in the nature of choosing technology from developed countries):
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Examples of marketing situations in India

Development of new Excavators Price to feature tradeoff for High end copiers.

b) What is the future market potential for my product? This is an area of concern in growth sectors where new avenues have suddenly opened up:
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Steel; Telecom services (Cellphones).

Market mapping related issues a) How do we define our market? This remains the most dominant need in the Indian market> Examples include:
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Market for PC servers (Who is buying/can

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afford)? Brominated water treatment chemicals (How many cooling towers & who are using it?)

b) What is the current size of the market we cater to? Again, a dominant need among marketers in a mature market as well as in a nascent one:
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What is the market for Networking products? How many printers were sold last year?

c) What i the performance level of my brand visavis Less dominant, but has become increasingly others? important in markets which are envolving to be highly competitive:
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Copier/fax market PC market

The issues discussed here for India remain constant across other less developed countries in the Asian region but vary in flavour depending on the market structure and development level. Table 4 below summaries the issues in a comparative framework for three regions in Asia. TABLE 4: COMPARISON OF ISSUES FACING BUSINESS-TO-BUSINESS MARKETERS IN THE ASIAN REGION
Issues India China Singapore / Hong Kong

Market development related issues: a) What does the market need? Not so important. Large variation in development from big cities to rural areas evenly accross the country with capacity to absorb most products. Therefore, need to identify segmentwise needs. Need to customise many products to meet local requirements. b) What is the future Key issue. market potential for my Most MNC players product? entering with long terms plans and need forecasts to decide on capacities, production level.. Profile of likely buyers not a major concern area Market mapping related issues a) How do we define our market? A key issue is most researches as there is hardly documented information on most markets. Increasingly important. Large variation in development from coastal areas to interiors with capacity to absorb most products. Therefore, need to identify segmentwise needs. Some need to customise products to meet local requirements Key issue. Concerns similar to India but more focus on addressable market. High importance. Need for researches on a regular basis to understand needs of end users, intermediaries in terms of reasons for preference, feature price trade offs (logit models) to segment customers for product positioning.

Generally available at a product category level. Need is more to assess short term demand more accurately for a specific product offerings and at segment level.

b) What is the current size Again a key issue as of the market we cater to? information on even. National lmarket size is not readily available
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More often tend to cover intermediaries and influencers rather than final customers as most JV's have restricted access to customers and need to deal with domestic distribution channels. Key issue but need more on addressable market size (coastal vs hinterlands).

An important issues as due to high level of competition there is marginal differentiation between products and therefore the need to segments and profile current buyers. Not so much of an issue as most information are readily documented and accessible.
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c) What i the performance Increasingly important in level of my brand visa competitive markets vis others? where established Indian brands are facing threats from foreign brands.

More documented support available on sales and so on. Increasingly important but Very important as several mainly for competition established brands would between foreign brands. like to evaluate their marketing programmes on their brand share.

ISSUES FACING BUSINESSTOBUSINESS MARKET RESEARCHERS IN INDIA A researcher in an emerging market like India has to deal with several complexities. On the one hand, there is a dearth of information relating to the state of the market in terms of players, spread of customer base, nature of distribution etc. and on the other, there is no reliable universe framework from which the researcher can draw out samples to validate results. Quite often researchers end up reinventing the wheel and answering similar questions on size, spread and profile of market through a painfully convoluted sampling methodology. Quite often, such arcane methodologies force the disillusioned businesstobusiness marketer to work in vacuum with little knowledge on the current and future market state. This results in suboptimal performance with most decisions being reactive, ephemeral and ineffective. As necessity is the mother of all inventions, the business-to-business research fraternity in India has evolved several standardised methodologies depending on the nature of research problems and the status of the target market. For the sake of convenience, we shall discuss these methodology using a framework which has been developed with the following factors:
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Nature of the product or service; Size and spread of the target market studied.

These factors are explained in detail below:

Nature of product or service

A product/service can be defined as generic to specific depending on its utility to the users:
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A generic product or services is one that facilitate general business activity but is not an important ingredient in the process flow of the business. Examples include PCs, copiers, fax machines, travel cards, financial software, business news clipping service and so on. A specific products or services is one whose need get determined by the activity of buyer/user. Examples include oil well cements, industrial lubricants, piston rings, engineering contracts, studio graphics package an so on.

Size and spread of the target market

Again, depending on the product category, the target market can be distinct, small and concentrated (for example oil well cement buyers) or diverse, large and wide spread (for example customers of copier machines). Table 5 depicts the ProductTarget Market Grid with the two variables forming the XY axes. A few illustration of target markets which fall in the four quadrants are also shown.
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The ProductTarget Market Grid has been found to be a useful framework for designing research studies as itallows researchers to formulate approaches depending on the position occupied (in the grid) by the product under study. TABLE 5: PRODUCT - TARGET MARKET GRID
Specific use QI Buyers of oil well cement, Ferro chrome alloys QII Buyers of industrial lubricants, hermetically sealed compressor buyers, Diesel generators (mid-high range) QIV Buyers of copiers, PCs, EPABX, security services Large

Generic use

QIII Buyers of VSATs, Networking products, central ACs Few

We shall discuss research design issues that pertain to products that fall within each of the four quadrants depicted in the grid to explain our case. Quadrant I: specific few This is perhaps one area where the marketer and the researcher are more often one and the same individual. In several companies, there are specific functions called 'ccount managers' who look after a set of customers. It is their specific task to identify needs, feed back to R & D for product development, test product acceptance and assess future potential. Often, it is advisable that business-to-business marketers themselves carry out the research requirements falling in this quadrant as there is need to possess adequate technical knowledge and insights on the product field researched. To illustrate typical research situations in this quadrant, take the case of research on usage of Oil Well cement in India. There are only two large companies who would be buying, namely, Oil & Natural Gas Corporation and Oil India Limited. As both the companies are state owned, there is plenty of data available from the government on their operational aspects. If adequate information (of the nature sought by the researcher) is not available from secondary sources, these companies can be contacted for personal in-depth interviews. Thus aspects like need, consumption, preference, future intention and so on, can be obtained directly by the researcher. Therefore, it is seen that issues relating to universe definition and sampling are none too complex in quadrant I of the Producttarget market grid. In most emerging markets, there are information available on target market from sources like Government departments, Industry association, trade journals, business publications etc. This facilitates a reasonably accurate definition of universe by the researcher. Where the universe size is small, it is prudent to undertake a census exercise as each case could possess unique characteristics. However, it may not always be feasible to undertake a census either due to wide geographical dispersion of cases or due to anticipated refusal/nonavailability of some cases. In such situations, sampling may be the only option available with the researcher. However, the researcher would need to identify appropriate surrogate variables that could be used as the basis for extrapolation prior to the sampling exercise. In the case of usage of water treatment chemicals, for example, it would be advisable to cover a few buyers to assess the need and the extent of use. One can then use that information to extrapolateto other buyers using their plant capacities (called
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cooling tower where water treatment chemicals are used) as surrogate variable. Other variables like turnover, no. of employees and so on can also be looked at as alternate surrogate variables depending on the extent of availability of such secondary information. Quadrant II: specific large Typical studies in this area involve products which find application in several user segments. These studies usually evolve in two stages with the first stageinvolving identification of application segments and the second stage involving location of directories/lists of companies to help develop universe definition and size in each application segment. Take the case of a product like hermetically sealed compressors which are the core of any airconditioning or refrigeration system. Application segment in India for such a product would include:
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Domestic Refrigerators; Airconditioners; Bottle coolers (Storage of Soft drink and so on); Deep freezers (Storage of meat and so on); Others (Display cabinets used in ice cream parlours and so on).

While detailed list of companies are available for domestic refrigerator manufacturers (as there are only four or five companies), there is no complete list of AC, bottle cooler, Deep freezer manufacturers as these are more often undertaken in the small scale (unorganised) industry. However, one can cover them significantly by allocating samples after stratifying the market into several classes. For example, among AC manufacturers there are about eleven national players who would account for nearly 5055% of the market (such data are available with the All India AC & Refrigeration Mfrs. Association ). The rest of the market of compressor buyers (may be 9001000 in nos.) will be spread across the country. Again, a large percentage of them will be concentrated in the top 810 cities and some activity specific zones (Bombay, Delhi, Calcutta, Madras, Ahmedabad, Hyderabad, Pune, Bangalore, Aurangabad etc.). Even in these cities, only a handful would account for most of the sales. Thus, a pareto analysis based on contribution by customer segments should lead to better efficiency of sampling. Within each application segment, a sampling list can thus be developed in one of the following ways:
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on the basis of advertisements in yellow pages in each city covered; by meeting local dealers/distributors of compressors; by meeting a few buyers and snow balling responses to identify other large manufacturers; by geographical sampling methods (similar to consumer retail audit methods).

The geographic sampling method comes in handy when any of the methods described above are likely to be ineffective. Take the case of the Photocopier shops in big cities in India. There are no directory/yellow page listings of photocopy shops in a given city. Snowballing exercise will be ineffective as there is no cohesion among these shops. A geographic sampling exercise involves the following steps:
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segregation of the city/area to be covered into several geographical blocks of near equal sizes (after excluding

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uninhabited pockets like sanctuaries, parks, lakes and so on) and numbering them in a spiral order on the map;
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isolation of area which would have a higher concentration of businesses being studied. Thus, photocopy shops would be found more in business blocks, commercial centres and educational institution zones. In our experience, such dense blocks are usually below 58% of the total area covered; undertaking a census operation in all the denser areas; selecting a subsample (usually 2025% of total geographical areas covered) of blocks from the less dense sections using a systematic sampling procedure. Again, a census will be undertaken in the blocks selectedrandomly through this process; the census estimates obtained from the sampled blocks can be extrapolated to the other blocks using the sampling ratio as the multiplier. The overall estimate of establishments can be obtained by summing this with the census estimate for denser areas.

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This methodology has been successfully validated for estimating Photocopier shops and Public telephone calling offices in India by relating to installs data of manufacturing organisations and government statistics. Once the universe is defined through any of the methods discussed above, the sample selection procedure can resemble the steps recommended for Quadrant I. One can follow a census exercise in sub-segments which are small and manageable or sample on the basis of surrogate variables identified. Quadrant III: generic few The product/service usually researched in this area have restricted application, despite their generic role as facilitators in business, owing to one or more of the following reasons:
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High price of product/service: An example would be the case of companies which have need for leased lines with high bandwidth to transfer large data between two locations. Such companies usually have an annual turnover above a particular level. Largeness/spread of company. For example, VSATs might find application with companies that have critical locations (like factories) in remote areas. Specific activity of business: The nature of business activity in certain segments might also determine the need for certain products (as in Quadrant I & II). For example, Financial companies have greater need for networking solutions than do Distribution oriented companies.

Universe definition and sampling methods will be similar to those adopted in Quadrant II except that application segment identification will be a lot more difficult here due to the generic nature of the product. Also, the surrogate variables used to define a universe will be more generic and might include:
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activity segments; size turnover or employee size; geographical location; governance multinational, private or government.

In a recent study undertaken to assess the market for VSATs in India, the target segments were identified on the basis of:
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ctivity segments;
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size (annual turnover); and governance.

For example, the segments chosen could include

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manufacturing companies classified into multinationals, Indian private concerns and government undertakings, banks & financial institutions infotech/telecom companies other financial services media and publishing and so on. . .

Qualifying criteria in terms of size (annual turnover) varied in each segment depending on the nature of business. For instance, the turnover cutoff for a Media and Publishing company was far lower than the cutoff for a manufacturing company. Ideally, lists of companies in each activity segments should be available from the Registrar of Companies in the respective countries. However, due to the geographic spread and lack of computerisation, there is no central source for accessing such a data. Thus, one ends up generating lists of companies in each activity segment by contacting industry associations, government bodies, Stock Exchanges and so on. For example, there are lists of top 3000 manufacturing companies classified by annual turnover available from stock market sources. Similarly, the Indian Bankers Association provides a list of Banks and Financial Institutions classified by asset base. Details of Infotech hardware and software companies, can be obtained from their respective associations. More recently several database companies like Kompass, Dun & Bradstreet have entered the Indian market and commenced compiling lists of companies by activity level of businesses. These are however, in their nascent stage and have limited scope for use by a market researcher due to the nonexhaustive nature of the data collected. Quadrant IV: generic large This is the most complex of the four quadrants as it is usually an establishment that becomes a base for sampling (unlike Quadrant III where it is usually the head office or the organisation as a whole which is the sampling base). Where the universe of target market is very large and diverse in nature, ownership of telephone is found to be a useful surrogate to demarcate the universe:
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establishments with telephones; establishments without telephone.1

There are a number of arguments for and against the use of telephone ownership criteria: Some of the advantages include:
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Most products/services which need to be researched are medium to high valued and therefore penetrate establishments that have atleast a telephone. Also, many office equipments depend on telephones: EPABX, Fax, WAN and so on; Telephone service is usually provided by a single entity (state owned in most cases). This facilitates access to a central
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database. While disadvantages include:

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dated publication (some telephone directories/lists made public can be as old as 23 years); nondemarcation of business vs. individual (residential) entries individual (residential) entries which in reality are business establishments operating from homes; nonavailability of directory information on magnetic medium to allow researchers to segregate and count relevant universe; long waiting lists for telephone connections resulting in several establishments sharing a telephone.

While these disadvantages exists, they can be mitigated to an extent by careful design of research. Moreover, the telephone directory is perhaps the only sampling base in many emerging markets. Alternate sources like the Commercial Yellow Pages, Trade directories and so on usually have major shortcomings:
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nonexhaustive; list organisations instead of establishments.

While a number of competing directories may be available for a given region of coverage, their integration can also prove to be nightmare owing to variation in:
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criteria for including organisations in the directory; information collected on organisations for example, employee size, turnover may be collected by some directories which others may not have; classification of organisation under standardised activity groupings.

Also, as the Yellow pages market is in a nascent stage, there is resistance among database marketers to allow access to researchers. Thus, telephone directory may be the only alternative left with the researcher. Several studies have been undertaken in the past using this as the sampling base and validating the results with the installs figures from manufacturers. Despite these advantages, there are several procedural problems in using the telephonic directory as it is usually not available on magnetic media in India. Thus, a sampling procedure needs to be designed to enable counting of establishments from the directory. The steps involved in sampling of directories are: a. Selection of a few pages of telephone directory using systematic sampling procedure. This is a more dependable method as it takes into account the varying frequency of alphabetic listings in the directory. In our experience, a sampling of 45% of directory pages (or 3035 pages whichever is lower) should allow estimating within + 2% error level. b. Counting of selected pages to isolate establishment sounding names (ABC & Company, XYZ Bros. and so on). c. Stratifying the counted establishments on the basis of the no. of telephone entries in the directory against each establishment. d. Extrapolating the count of no. of establishments from the sample pages to the total pages in the directory 2. In undertaking the counting exercise, care has to be taken to ensure that duplicate entries are removed. Usually, the address
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of the establishment mentioned can be used to identify distinct establishment location. Another important issue that gains importance in Quadrant IV (unlike Quadrant II and III where researcher's uses his/her discretion to adopt procedures according to the nature of product under study) is the issue of stratification. This is mainly because of greater efficiency afforded by a stratified sampling procedure. Here again, the telephone line can be a useful starting point for stratifying establishments in most cases. For instance, quotas can be set on establishments by no. of telephone lines listed against each establishment in the telephone directory. Stratas could be: 1 line, 2 lines, 3 lines, 4-7 lines 8 and 8+ lines establishment. It has been found that there is a high correlation between telephone line ownership and penetration level of various products. Table 6 below shows the results of a telephonic interview of establishments to assess penetration of basic office products by telephone line entries (in directory) per establishment: TABLE 6: PENETRATION OF COPIERS/FAX IN THE CITY OF MUMBAI (BOMBAY) NOVEMBER 1992
All Sample size Estimated universe % owning: Photocopiers Fax machines 3702 121570 9% 15% 1 2043 105780 5% 12% 2 924 9800 18% 26% 3 410 2600 42% 57% 47 231 2530 63% 66% 8 & above 94 870 80% 78%

Such stratification are equally applicable for premium business products as well. For example, in a study conducted to understand acceptability of high end EPABX systems, the market was restricted to cover the 3 or more line establishments. However, such prehoc stratification methods in the case of products falling in Quadrant IV are relatively inflexible and have their share of the problems. For instance:
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the proliferation of hunting lines3 in establishments where a single line entry against the establishment in the telephone directory could actually mean a large establishment with 8 or more lines; Lack of activity wise classification leading to the fact that a highly service oriented company will tend to have a greater proportion of telephone lines per person than a manufacturing company would ordinarily have.

This necessitated the development of reliable surrogates for stratifying businesses. It is felt that a classification system based on the number of employee and the nature of activity of businesses should allow for a stable classification system. While there are alternatives to size indicators like turnover, profits, capitalisation etc. (as discussed in sampling methods on Quadrant III), these are not entirely inflation proof and are amenable to comparison over time. The real problem in such stratification methods is the nonavailability of universe framework in the intended form. For example, in India there are Government of India surveys which collect information on the employee profile and activity of manufacturing units (not organisations). Similar information are however, not available for the nonmanufacturing sector. proprietory databases like Kompass provide details on activity and employee size but fail to cover an establishment sampling frame.
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In such a scenario, a twostage sampling procedure is warranted whereby the first stage involves selection of random samples from the telephone directory followed by a telephonic interview to stratify business establishments on employee size and activity. Table 7 below shows the result of a recent sample survey to stratify establishments on the basis of these two variables. TABLE 7: SPREAD OF ESTABLISHMENTS IN MUMBAI BY ACTIVITY AND EMPLOYEE SIZE MARCH 1997
Activity of establishment No. of employee 1 25 610 1125 2650 51100 101500 500 and above Not specified Total sample size (Accross %) Factory location 7% 26% 26% 13% 5% 4% 9% 4% 7% 82 (14%) Office location 14% 30% 23% 15% 5% 4% 2% 1% 5% 332 (55%) Service outlet* 16% 53% 14% 7% 4% 1% 1% 0% 4% 188 (31%)

* Service outlets include banks, restaurant, shops etc

Once such stratification has been achieved, quota can be set in each of the cells to increase the efficiency of sampling. Extrapolation of results at the country level
TABLE 8: COMPARISON OF ISSUES AFFECTING BUSINESSTOBUSINESS RESEARCHERS IN THE ASIAN REGION Quadrant Quadrant I India Industry associations are reasonably strong for most sectors either because these are state owned or they have existed for lobbing with govt. Thus, industry lists, data are reasonably strong Industry sources exist for the organised end of the market. However, there is little support on universe China Access to state controlled information lends easily to many information pertaining to such units. Singapore / HK State and associations focus on disseminating common information accross to all concerned to enable decision making.

Quadrant II

Same as above except that one needs to collect detailed inputs at the provincial level.

Adequate information avalaible at association level due to compact nature of country.

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Quadrant III

Quadrant IV

sizes, spread, profile and so on for the market where hybrid techniques have to be adopted. No single source of classifying establishment. Combination of industry databases cutting accross industries. Most complex and since establishment level sampling required refinement of a universal route like telephone directories required.

Rely on Govt. lists by activity.

Proprietory databases in compeuterised form are avalaible to allow stratification & sampling by activity, size and so on. Reasonably complex. Even simpler than above However, as most since need for organisations are stratification is further provincial based the need limited. for establishment level sample does not exist.

Another issue related to directory sampling procedures In a country like India is the level of coverage that is feasible within the cost constraints of the client. A true national level study would probably involve coverage of at least 300 towns, in which case the telephone directory sampling method would proves to be both costly and time consuming. Such method can be applied at best to a few cities only. This necessitates extrapolate of results from a few sample cities to the country level. This can be achieved after establishing a relationship of the relevant variable studied with some surrogate variable (usually the total telephone lines). For instance, in a study to assess yearly demand for photocopiers, the demand for photocopiers, predicted in 18 cities spread across various population strata, was regressed with the telephone line penetration in each city. This enabled one to develop an equation that related demand for photocopiers to the telephone lines in the city. Demand for Photocopiers across the country can thus be estimated by inserting the total telephone lines available in the top 5060 cities (where photocopiers can be safely stated to have penetrated) in the equation: Demand for photocopiers in a city telephone lines in that city

Demand for photocopiers = a x (telephone line) + constant Thus, in a way, there is a requirement for usage of surrogate variable in each of the quadrants discussed above. This is an issues that is likely to vary from product to product and region to region and requires the creative involvement of the researcher. A comparative study of methodologies across countries in the Asian region indicate that there are only minor variations in methodologies which are usually brought by differences in state of common interest data bases available with the researchers. Table 8 below provides a comparison of core issues that lead to variation in methodologies in each of the countries. WHAT THE STARS FORETELL Business to Business marketing & research in India is developing and maturing at a rapid pace to say the least. With growing competition from international players, the well entrenched traditional Indian companies too are feeling the need to understand and approach the market in a far more scientific fashion than through conventional approaches based primarily on gut feel or the undocumented learnings of a few experienced individuals. The fact that these few key individuals are being poached by new entrants at more attractive remuneration packages, is making the transition to scientific based methods more rapid. Market development issues, which in the current scenario are largely limited to market potential assessment exercises, will continue to grow in importance driven both by the increasing cost of error and increasing competition from players who are

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used to operating in markets with limited imperfections. Increasingly these would include inter alia market mapping issues concentrating on profiling customers, intermediaries, and competitors. With product offering getting more complex, newer segments emerging in the market place, and fierce competitive action, these studies are threatening to dominate the business research scenario in the years to come. The industry, however, is demanding quicker, cheaper and more efficient methods for addressing these issues. The critical bottleneck continues to be the absence of an appropriate sampling frame. International data base companies are active in developingindustry wise data bases that would build in demographics that lend themselves to focused research. Once these emerge they would take care of most research problems in the first three quadrants of our matrix. The fourth quadrantviz. generic use over a large customer base, would grow in importance as newer business efficiency products are launched in the market. Further, with the growth markets in India predicted to be the small and medium enterprises today specially for IT, communication, and business efficiency products, the need for a reliable estimate of universe size would be paramount. Given the dynamic nature of this end of the market, the sampling frame would need to be updated periodically unlike the industry data bases which could do with lower response times. The solution really lies in the periodic generation of survey based estimates on the size and profile of business establishments in the leading cities of the country. The IT communication and office automation industries, where the need has been realized, have initiated a study this year which has been syndicated and which would profile business establishments in the top 23 cities of the country, down to lowest end, with the only criteria being the existence of a telephone line. This study titled ITOPS '97, adopts the two stage telephones sampling route discussed under quadrant IV in the main body of this paper. The study would in addition to addressing the issues of penetration, market size and brand share of quadrant fourbusiness products, would provide a basic demographic profile of businesses in the top 23 cities in India. Once more and more studies of this nature, providing company or establishment data bases, are developed and syndicated, the marketers of business products will be able to update their knowledge base at a low cost and periodically. This would probably lead to more fierce competition since knowledge alone would no longer be a differentiator. In fact with basic knowledge on the market easily available, what would differentiate one marketer from the other would be the ability to utilize the available knowledge to build workableand effective strategies to succeed in the market place. This would lead to increasing demand on the researcher for more 'cerebral' work and less and less of determining historyreinventing the wheel! We would like to end this paper on this optimistic note. Developing countries such as India desperately need current data for effective marketing of business products. The role of the government, to whatever extentit existed in the past, has further diminished in this era of liberalization. Industry players along with research companies have to jointly implement systems that generate basic statistics on the market for all to share and absorb. While this necessitates a sea change in the thinking and approach of businessmen this change iscoming about, driven by increasing costs of inputs and professional competition. Exciting times are in store for the business marketer and researcher in the region. In India, if nontelephone owning establishment also need to be met for some low value individual use business products (like the use of cellphone by traders), it is preferable to contact customers using a household sampling methods. In this case, one meets a sample of businessmen/professionals /shop owners etc. who run establishments without telephones at their homes. The household route allows projections of sample results as the database is pretty strong in India with some 15 years of trends available on individual's occupation and income profile. RERERENCES
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ITOPS'97, a syndicated study on IT and office automation products in the top 23 cities of India, by the Business and Industrial Research Division of IMRB, India, 1997. Telefacts, a syndicated study on communication products in the top 8 cities of India, by IMRB, India, 1989. Various studies on copiers and faxes conducted by the Business and Industrial Research Division, IMRB, India, between 1985-1996. Experience through various assignment in China and other Far East countries by Sofres Consulting Asia Pacific Ltd., Hong Kong. ENDNOTES
1In India, in nontelephone owning establishment also need to be met for some low value individual use business products

(like the use of cellphone by traders), it is preferable to contact customers using a household sampling methods. In this case, one meets a sample of businessmen / professionals / shop owners and so on who run establishments without telephones at their homes. The household route allows projections of sample results as the database is pretty strong in India with some 15 years of trends available on individual's occupation and income profile.

Copyright ESOMAR 1997 ESOMAR Eurocenter 2, 11th floor, Barbara Strozzilaan 384, 1083 HN Amsterdam, The Netherlands Tel: +31 20 664 2141, Fax: +31 20 664 2922 www.warc.com All rights reserved including database rights. This electronic file is for the personal use of authorised users based at the subscribing company's office location. It may not be reproduced, posted on intranets, extranets or the internet, e-mailed, archived or shared electronically either within the purchasers organisation or externally without express written permission from Warc.

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