Mumbai, July 1: Worried if there is a market for another television brand? Concerned that housewives will not warm up to your concept refrigerator? Scared about the acceptability of your washing machine design? Marketeers relax, help is at hand: A C Neilson has introduced a new Bases model for the durables and service sector in India. For a minimum investment of Rs 5 lakh, the research firm will take your concept and marketing plan, and in four weeks, provide concrete data to base your decision on in terms of proceeding with the launch or not.The Bases model -- a research tool -- is already being used for sales forecasting of new products and concepts in the FMCG category in India for the past one year. Now, recognising that there is a growing need for pre-launch research in other products too, the Bases model is being extended to durables too.
Says A C Nielsen's executive director Sarang Panchal: ``The market research 0is merely a function of demand for a category. In India, about 70 per cent of marketresearch is done for FMCG products. It is the only sector that is systemised. All the competition happens there so they need market research. For non-FMCGs, the time has just arrived. With deregulation in various sectors, companies want a research tool to forecast the success of a new product.''
The firm has recruited a team of research analysts for the new tool and expects durables, consumer electronics, financial services, health and insurance (if deregulated), personal care and clothing, software and hardware, telecommunication and travel and tourism sectors to tap the new model.
It is to be noted that A C Nielsen took over the $100 million Bases International (USA), last year in July. Prior to that, Bases, led by chairman and CEO Lin Lynn, was a franchisee of A C Nielsen. It took Lynn 10 years to develop the Bases model, and another two years to make it applicable to non-FMCGs.
Now, says AC Nielsen Bases, vice-chairman Lin Lynn: ``New product launches can be a risky business, with an estimated twoout of three new products being withdrawn within three years. This model helps in minimising the risk element in product launch management.'' Lynn was in Mumbai this week, to brief the new team on the extended model for consumer durables.
According to Lynn, poor product quality is a key failure factor. Others include unappealing product concept, incorrect pricing strategies and insufficient advertising and promotional support. Besides problems with the product itself, underestimating competitive retaliation can also be fatal, he adds. The Bases model helps marketeers -- in FMCG and durables -- with decisionmaking support throughout the life of a brand, with separate modules like: * PreBases: Helps accurately prioritise concepts for further development. It screens, evaluates and provides initial volume estimates on a number of concepts.
Bases I: Tells you who and how many will try the product. It provides volume estimates based on the concept only for two years from launch. Bases II: Appraisesconcept/product fit and sales potential for new products. It provides accurate volume estimates for three years, testing both the concept and the product. Bases LX (line extension): Addresses products being added to an existing brand range or brand name used in a different category. Bases Restager: Assesses and minimises risks associated with relaunching a new product. It measures sales potential for products being relaunched. Bases IV: Can be used for tracking new products after launch.In addition to sales forecasting, AC Nielsen Bases also offers a range of diagnostic tools providing insights into consumer perceptions and behaviour that drives sales.Model approach
So just how does the Bases model work? ``It is a validated sales estimating system that integrates consumers' response data with manufacturers' marketing plans to assess the volumetric potential concepts and products prior to their introduction to a market,'' says Panchal.
According to the research methodology, aconcept screener test is first undertaken after the agency gets a concept and the marketing plan. The agency then approaches a sample of respondents -- who depend on the nature of product. For example, for a durable the customer base is much larger than if the new product is a personal computer.
The sample is selected after a clear target respondent profile is drawn: men/women; age 20-45 years; SEC: A/B/C/D/E households; primary decision makers of the brand in a household.
The most important step of course is analysing the data and forecasting volumes. In order to forecast sales, consumer response data is integrated with the marketing plan. The consumer response is required on the following measures: purchase intent, likeability, perceived price/value, uniqueness and claimed purchase behaviour.
The marketing plan provides inputs regarding the following: advertising spends, distribution, coverage, promotion activities, likely competitive reactions, category purchase/usage behaviour. Consumer data isscaled down using internal norms and marketing plan information to arrive at a realistic estimate of the likely in-market consumer response.
According to the model, volume estimates depends on two components - trial and repeat. These components are arrived at in the following manner:
Trial components (trial rate, trial units): These are obtained on the basis of consumer data obtained, which is suitably downscaled according to the agency's database. The consumer response is required on the following measures: purchase intent, likeability, perceived price/value, uniqueness and claimed purchase behaviour. Repeat components (repeat rate, repeat units or repeat frequency): This is obtained on the basis of response of the consumer's post trial of the product. The database compares the performance of the concept (consumer data base) and takes into account an average product performance in arriving at estimates for repeat components.Finally, based on potential triers and repeaters, a conclusion isdrawn on the possible cannibalisation of the existing brands. This analysis uses transactions and not volumes. Since neither purchase nor transaction are taken into account, the proportions represent per cent of purchase. However, this extent of information is helpful to marketeers since it gives them an idea of the consumers who are likely to form the bulk of the buyers for the new brand.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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