Once retailer is aware of the broad demographic of the region, he needs to understand the buying and lending patterns of households and what it is that the consumers look for. This information is largely gathered by three agencies. The National Council of Applied Economic Research (NAER) conducts the Market Information survey of Indian Households – MISH, the National Readership Survey IMRB and the Indian Readership Survey. They are a good indication of the structural changes occurring in the Indian market in terms of income, product ownership and the rural urban divide. It is necessary to also understand trends in urbanization as the pace of urbanization also has an impact on the development of retail in that particular region or area.
Market Information Survey of Households (MISH) is one of the most comprehensive primary data based annual surveys conducted, covering a massive ample size of 300,000 households drawn from each district of India. MISH tracks consumer demographics and consumptions patterns across a wide variety of product categories by collecting data on manufactured goods.
The National Readership Survey in India is one of the largest in the World, with a reporting sample size of over 2,13,000 individuals to track media exposure and changing consumer trends in both urban and rural India. The NRS is conducted annually, by three research agencies—the Indian Market Research Bureau (IMRB), TNB mode and AC Nielsen. The socio- economic classification (SEC) groups urban Indian households on the basis of education and occupation of the chief wage earner (CWE: the person who contributes the most to the household expenses) of then household into five segments – SEC A, SEC B, SEC C. SECD, and SEC E households in that order.
The SEC classification of the population done by the NRS is based on the education and occupation profile of the individual or household. This classification rates the households as A1 / A2, B1 / B2, C, D, and E 1 / E 2 where, A and B are supposed to be the most affluent classes of the society. The C class households fall under the middle income category while the D and E class households are the low and middle income classes.
An analysis of the spending patterns by the various SEC groups indicates the changes in buying patterns and the changes in the aspiration of the consumers. This is of great importance to the retailer as it gives him an indication of the type of products needed in the various markets. For example, since the last decade, households belonging to the mid and low socio-economic classes are becoming relevant target groups for certain products. They have driven penetration for certain durables like television and pressure cookers. This suggests that households in the mid (SEC C) and low (SEC D&E) socio – economic classes are segments that can no longer be ignored. Marketers faced with the issue of slowdown in growth due to saturation in the high socio-economic classes should examine these segments more closely as they represent increasingly important sources of future growth. The data collected by way of the NCAER or NRS reports are indicative of the attractiveness of the markets.
Research after setting up a retail store:
After opening a retail store, the research requirements of the retailer change. He would now be concerned primarily with the level of satisfaction of the target customer. At this stage, research can help the retailer in the following areas:
1) Evaluating the customer satisfaction with the exiting range of products and service.
2) Generating ideas for and developing new products
3) Evaluating the acceptability of the products and pricing of new products
4) Understanding the customer profiles
As the retailer expands to multiple locations, research becomes essentials. The methods commonly used by retailers are:
Focus Group Discussions, using a large amount of stimulus material. A dummy model of the store or the layout of each floor is presented to the group and the group members are asked how they would move around. This involves a virtual walk through and aids in understanding how consumers shop and the amount of time they spend in various sections. However, as the group members are aware that they are under observation, the behavior may differ significantly.
Accompanied observation: Here, the researcher may provide paper money to the consumer and ask whom or her to shop as she would under normal circumstances. By accompanying the consumer, the researcher can understand the movement through the store.
Profiling customers as they enter / leave the store to understand what they have purchased, etc. This can be done using a questionnaire to aid the understanding of products purchased, satisfaction with the sales staff, billing and delivery procedures, etc. It can also be used to understand customers feedback on events and promotions conducted at the store.
Most retailers would commission research at this stage for a specific purpose or for understanding that they wish to develop. Market research is thus an effective tool, which can aid the understanding of consumer markets.