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Written By: Yogin Vora on October 1, 2009 1 Comment



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Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.

For the past three decades India¶s banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans
or cosmopolitans in India. In fact, Indian banking system has reached even to the remote
corners of the country. This is one of the main reasons of India¶s growth process.

The government¶s regular policy for Indian bank since 1969 has paid rich dividends with the
nationalization of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank counters for getting a draft
or for withdrawing his own money. Today, he has a choice. Gone are days when the most
efficient bank transferred money from one branch to other in two days. Now it is simple as
instant messaging or dial a pizza. Money have become the order of the day.
The first bank in India, though conservative, was established in 1786. From 1786 till today,
the journey of Indian Banking System can be segregated into three distinct phases. They are
as mentioned below:
‡ Early phase from 1786 to 1969 of Indian Banks
‡ Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
‡ New phase of Indian Banking System with the advent of Indian Financial & Banking Sector
Reforms after 1991.
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase
III.

Phase I

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial Bank of India was established
which started as private shareholders banks, mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913,
Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank
of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline
the functioning and activities of commercial banks, the Government of India came up with
The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949
as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with
extensive powers for the supervision of banking in india as the Central Banking Authority.
During those day¶s public has lesser confidence in the banks. As an aftermath deposit
mobilisation was slow. Abreast of it the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders.

Phase II

Government took major steps in this Indian Banking Sector Reform after independence. In
1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale
especially in rural and semi-urban areas. It formed State Bank of India to act as the principal
agent of RBI and to handle banking transactions of the Union and State Governments all over
the country.

Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July,
1969, major process of nationalisation was carried out. It was the effort of the then Prime
Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was
nationalised.

Second phase of nationalisation Indian Banking Sector Reform was carried out in 1980 with
seven more banks. This step brought 80% of the banking segment in India under Government
ownership.

The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country:
‡ 1949 : Enactment of Banking Regulation Act.
‡ 1955 : Nationalisation of State Bank of India.
‡ 1959 : Nationalisation of SBI subsidiaries.
‡ 1961 : Insurance cover extended to deposits.
‡ 1969 : Nationalisation of 14 major banks.
‡ 1971 : Creation of credit guarantee corporation.
‡ 1975 : Creation of regional rural banks.
‡ 1980 : Nationalisation of seven banks with deposits over 200 core.
After the nationalisation of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.

Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions.

Phase III

This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up
by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put to
give a satisfactory service to customers. Phone banking and net banking is introduced. The
entire system became more convenient and swift. Time is given more importance than
money.

The financial system of India has shown a great deal of resilience. It is sheltered from any
crisis triggered by any external macroeconomics shock as other East Asian Countries
suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the
capital account is not yet fully convertible, and banks and their customers have limited
foreign exchange exposure.
  
   





The nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then
prime minister. It nationalized 14 banks then. These banks were mostly owned by
businessmen and even managed by them.
‡ Central Bank of India
‡ Bank of Maharashtra
‡ Dena Bank
‡ Punjab National Bank
‡ Syndicate Bank
‡ Canara Bank
‡ Indian Bank
‡ Indian Overseas Bank
‡ Bank of Baroda
‡ Union Bank
‡ Allahabad Bank
‡ United Bank of India
‡ UCO Bank
‡ Bank of India
Before the steps of nationalization of Indian banks, only State Bank of India (SBI) was
nationalized. It took place in July 1955 under the SBI Act of 1955. Nationalization of Seven
State Banks of India (formed subsidiary) took place on 19th July, 1960.

The State Bank of India is India¶s largest commercial bank and is ranked one of the top five
banks worldwide. It serves 90 million customers through a network of 9,000 branches and it
offers ² either directly or through subsidiaries ² a wide range of banking services.

The second phase of nationalization of Indian banks took place in the year 1980. Seven more
banks were nationalized with deposits over 200 Crores. Till this year, approximately 80% of
the banking segment in India was under Government ownership.

After the nationalization of banks in India, the branches of the public sector banks rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
‡ 1955 : Nationalisation of State Bank of India.
‡ 1959 : Nationalisation of SBI subsidiaries.
‡ 1969 : Nationalisation of 14 major banks.
‡ 1980 : Nationalisation of seven banks with deposits over 200 crores.

 


 
The following are the Scheduled Banks in India (Public Sector):
‡ State Bank of India
‡ State Bank of Bikaner and Jaipur
‡ State Bank of Hyderabad
‡ State Bank of Indore
‡ State Bank of Mysore
‡ State Bank of Patiala
‡ State Bank of Saurashtra
‡ State Bank of Travancore
‡ Allahabad Bank
‡ Bank of Baroda
‡ Bank of India
‡ Bank of Maharashtra
‡ Canara Bank
‡ Central Bank of India
‡ Corporation Bank
‡ Dena Bank
‡ Indian Overseas Bank
‡ Indian Bank
‡ Oriental Bank of Commerce
‡ Punjab National Bank
‡ Punjab and Sind Bank
‡ Syndicate Bank
‡ Union Bank of India
‡ United Bank of India
‡ UCO Bank


  


  ! "  #$
‡ Vysya Bank Ltd
‡ Axis Bank Ltd
‡ Indusind Bank Ltd
‡ ICICI Banking Corporation Bank Ltd
‡ Global Trust Bank Ltd
‡ HDFC Bank Ltd
‡ Centurion Bank Ltd
‡ Bank of Punjab Ltd
‡ IDBI Bank Ltd


  %



 $
‡ American Express Bank Ltd.
‡ ANZ Gridlays Bank Plc.
‡ Bank of America NT & SA
‡ Bank of Tokyo Ltd.
‡ Banquc Nationale de Paris
‡ Barclays Bank Plc
‡ Citi Bank N.C.
‡ Deutsche Bank A.G.
‡ Hongkong and Shanghai Banking Corporation
‡ Standard Chartered Bank.

   
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Written By: Yogin Vora on August 17, 2009 3 Comments

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³Secondary data consists of information that already exists somewhere, having been collected
for another purpose´. (Kotler & Armstrong). In other words, secondary data are those which
have been collected by someone else and which have already been passed through statistical
process

There are two sources of this data:




- this is data which is available within the company, although companies do
not make full enough use of the information that is routinely collected

)*
  - this is data which has been published for commercial reasons. A key
source of secondary data is the library service and most good libraries have a wide range of
sources. Some government data is available free, other secondary data can be very expensive.

It is important in a research project to know what data is available since this will guide the
structure and format of the fieldwork in the primary data collection stage. It is possible that
secondary data sources can provide the complete answer to the problem under scrutiny. The
least it will do is save time and money in directing the scope of the field work. It can also
influence the choice of data collection methods used in the field work.

)* +

  
  

Internal sources of data are found within the organization. Most organizations have masses of
data which should be well handled and organized. Sales figures, past and present, broken
down by product, product range or brand

? Sales figures broken down by market segment to observe trends in the market

? The relationship between sales figures and the cost of sales force expenditure, and
promotional activities, including packaging.

? Information about competitors, their products and the segments they serve. The data should
be so comprehensive that it should be possible to predict how they will respond to changes in
your company strategy.

Many organisations employ sales personnel who have direct access to the customer, and are
sources of both formal and informal information. Both types must be recorded weekly and
submitted appropriately. Sales people work in a variety of situations, in business to business
markets, in offices taking orders over the telephone, in over-the-counter sales or by visiting
customers at their premises. They have access too much information about customers, and
their needs, and to what is happening in the market overall. Attendance at conferences,
exhibitions and meetings also gives opportunities to observe competitor personnel, and their
behaviour. The customer service or complaints section in an organisation is also important,


  +    
 "  
,

)* +)*
  
  

In addition to your university library there are some key libraries which can provide
substantial and specific sources of information.

City libraries such as Manchester or Birmingham are excellent sources. There are many
more.

London libraries include Statistics and Market Intelligence Library

? Science Reference Library

? City Business Library

The leading Business Schools¶ libraries such as:


? London Business School

? Manchester Business School

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V 

? Business Information Year Book



  

? Europe World Year Book

 

  

  

? Directory of British Associations

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? Guide to Official Statistics (HMSO)

? Regional Statistics (HMSO)

  
  

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? Annual Abstract of Statistics (population, manufactured goods, etc.)

? Monthly Digest of Statistics (monthly, but similar to above)

  
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? The Financial Times : The Times

!   

Kotler and Armstrong say that ³primary data consists of information collected for the specific
purpose at hand´. In other words, primary data are those, which are collected afresh and for
first time and thus happen to be original in character.

Once the desk research is complete the researcher will have a much clearer idea of:

? The up-to-date and relevant data

? What data still needs to be collected to find a solution to the problem under scrutiny.

To achieve the data and information the research teams need to answer certain questions:

? What is it necessary to know?

? Who will have the information which is sought?

? What is the best method (quick and efficient) to use to collect this data?

It is important to streamline the answers to these questions to avoid collecting a mass of


irrelevant data by inappropriate or inefficient methods.
Types of primary data

The two types of data are:

? Quantitative Data

? Qualitative Data

â
   " 

As the term implies this is data which is expressed in numbers. Quantitative data is quite easy
to collect, and a large amount of reliable and valid data can be collected largely by
questionnaire in quite a short period of time. It is a fairly formal approach. This data arises
from what is termed ³closed questions´ because the respondent is restricted in the choice of
answer the respondent can give.

E.g. Do you prefer to do your shopping in town centers or a purpose built shopping complex
at the edge of town?

(a) Town Centre [ ]

(b) Shopping complex [ ]

(c) Both [ ]

E.g. Do you live in this town? YES [ ] NO [ ]

â    " 

Qualitative data is obtained from group discussions or in-depth interviews and its findings are
based on content rather than numeric analysis. Qualitative data is said to be much more
subjective than its counterpart. Questions are open-ended and can lead to a free ranging and
in-depth discussion on a specific point which provides a variety of rich data. There are no
numbers or digits in this data and it is not subject to statistical interpretation.

E.g. what further facilities would you like to see in the leisure centre and why?

.!) %!&'.''(()

1)  )/'&)c

Observation becomes a scientific tool and the method of data collection for the researcher
when it serves a formulated research purpose is systematically planned and recorded and is
subjected to checks and controls on validity and reliability.

Under the observation method the information is sought by way of investigators own direct
observation without asking from respondent

Example

In a study relating to consumer behaviour the investigator instead of asking the brand of
wristwatch used by the respondent may himself look for the watch.

'/''V)
1. The method eliminates subjective bias

2. The information obtained under this method relates to what is current happening it is not
complicated either by past behaviour or future intentions and attitudes.

3. This method is independent of respondent willingness to respondents as such is relatively


less demanded of active co-operation on the part of the respondents as happens to be the case
in interview or the questionnaire method.

4. This method is particularly suitable in studies, which deal with subjects who are not
capable giving verbal reports of their feeling for one reason or the other.

 '/''V)

1. Its s an expensive method

2. The information provided by this method is very limited.

3. Sometimes unforeseen factors may interfere with the observational task.

4. The fact that some people are rarely accessible to direct observation creates obstacle for
this method to collect data effectively.

2) /).

Surveys are concerned with describing, recording, analyzing and interpreting conditions that
exist or existed. The researcher does not manipulate the variable or arrange for events to
happen Surveys are only concerned with conditions or relationships that exist, opinions that
are held, processes that are going on, effects that are evident or trends that are developing.
They are primarily concerned with present but at times do consider past events and influences
as they relate to current conditions.

1. Survey type researches usually have larger samples because percentages of responses
generally happen to be low, as low as 20 to 30%, especially in mailed questionnaire studies.
Thus, the survey method gathers data relatively from the large number of cases at a peculiar
time; it is essentially cross-sectional.

2. Surveys are conducted in case of descriptive research studies, usually appropriate in case
of social and behavioral sciences because many type of behavior that interest researcher
cannot be arranged in realistic setting.

3. Surveys are example of field research and are concerned with hypothesis formulation and
testing analysis of the relationship between non-manipulated variables.

4. Surveys may either be census or sample surveys. They may also be classified as social
surveys, economic surveys, and public opinion surveys. Whatever be their type, the method
of data collection happens to be either observation or interview or questionnaire or
opinionnaire or some projective technique. Case method may as well be used.

5. In case of surveys, research design must be rigid, must make economical provision for
protection against bias and must maximize reliability, the aim happens to be to obtain
complete and accurate information.
6. Possible relationships between the data and the unknowns in the universe can be studied
through surveys.

/
   

The data collection through questionnaires can be done through four ways as follows;

? Structured disguised

? Structured ± nondisguised

? Non-structured ± disguised

? Non structured ± nondisguised

Note: Non disguised data collection is also called as direct method & disguised is also called
as indirect method.

   

A structured data collection is a formal list of questions framed so as to get the facts. The
interviewer asks the questions strictly in accordance with pre- arranged order. For e.g. this
method can be used when the information is based on the expenditures of the consumer on
different types of clothing like. Cotton woolen or synthetic, etc.

This structured questionnaire can be of two types, disguised and non- disguised, based on
whether the object or the purpose of the survey is revealed to the respondent.

The main advantage of this method is that, the information can be collected in a systematic
and orderly manner.

However when it comes to personal questions, this method seems to be less effective.

0     $ - In this case the researcher does not disclose the object of the
interview, because he feels that by revealing that the very purpose of the interview will get
defeated.

0  1

   $  In this case the everything is pre- arranged and the
researcher reveals the objective of the survey to the respondent. This is the most widely
followed approach in market research. This is because it is generally felt that the respondent
should be taken into confidence, so that he can realize the relevance and give desired
information.


   

It is a kind of data collection method where the data to be collected is not pre- arranged or not
listed in a proper structured format. Therefore the entire responsibility is left on the
researcher to ask the respondent, in the way he feels fit. The researcher only has certain main
points on which he develops the questions to be asked. Such a method is devoid of rigidity
and the researcher has sufficient amount of freedom to collect the data in the order he wants.
Again here there are two main types of non-structured methods of data collection.

0 
    $  again here the objective of interview is not described to the
respondent
0 
  1

   $ 1 like in case of structured non- disguised, the
respondent is taken into confidence by revealing the purpose of the survey.

Survey Method of Data Collection

2   

The respondent is asked a structured set of questions in a preconceived format. However he is


not made aware of the purpose of the survey. Such methods are useful in obtaining
psychographic profiles, wherein, similar responses from a set of respondents would club them
under a specific lifestyle segment.

'"
 

1) Since respondents are not aware of the objectives of the research, they do not give biased
opinions.

2) The interviewer¶s bias is reduced on account of the structured nature of the questionnaire.

  "
 

1) The respondents may show disinterest as he does not know the purpose of the survey.

2) It cannot be compared with other similar studies which are structured but non-disguised
i.e. it would be difficult to check the reliability and validity of the results.


2   

Herein, the respondent is again not aware of the purpose of the survey. At the same time, the
questions posed to him do not follow an already throughout sequence. Projective techniques
are available to get the innermost motivations, fears and aspirations of the respondent. The
data lends itself to a more qualitative analysis.

For e.g. in the case study discussed in the adjoining column respondents were also asked to
complete the following sentence in the latter part of the questionnaire.

'"
 

1) It is very interesting to the respondents who might participate willingly.

2) It is less time consuming & costly to collect the data as well as to analyze it since the
number crunching involved is not there.

3) It is very useful to bring out the inner motivations and aspirations of the respondents.

  "
 
1) The respondents might not take the entire data collection effort very seriously; rather treat
it as a game.

2) The qualitative research is totally dependent on the interpretations made by the researcher.
It does not have any numerical analysis to support.

2
   ,

Herein, the purpose of the survey as well as nature of the questions is made known to the
respondents. The interviewer has little room for his own interpretations, as the questionnaire
is fairly structured one to lend itself to statistical analysis. Most of the descriptive studies
using the statistical survey method would fall under this category.

For e.g. based on the exploratory survey in the form of secondary data analysis, in-depth
interviews and focus group interviews and focus group interviews, in the case of fresh orange
juice, the data collection method most suited was the structured non-disguised type.


2
   ,

The purpose of the survey is made known to the respondents and there is no rigidity in the
questioning process. It is similar to the in-depth interviews and group interviews, which were
discussed earlier. The flexibility in the questioning process allows attitudes and opinions to
surface very freely and allows the respondents to speak deeply about the subject matter.

Opinions of the industry experts on how the industry would fare or economists on the
direction of the growth of the economy or various financial institutions like IDBI, ICICI, or
UTI etc., expressing their views on how the stock markets would be performing, are all
illustrations of non-structured data collection methods. This method is gaining a lot of
importance these days with a number these days with a number of experts being available on
a variety of topics. Opinions of them would be crucial to consider before arriving at decisions

-"  
&   

2   

In this case, the observers are told to record the actions of the respondents on a structured
form but the respondents are not made aware that they are being observed. It is a structured,
disguised study.

For e.g. observers may pose as customers to observe the sales made by salesman over
counters in departmental stores selling a variety of brands of jeans, shirts, etc. in order to
observe any type of brand push or persuasion by the sales person.

As a variation, he may position himself in the shop with permission by the management and
observe the sales person interact with customers.
'"
 

1) The actual behavior of the person of interest is recorded (i.e. either salesman or customer);
so chances of predisposition bias are low.

2) A natural setting is provided. For e.g. the arrangement of display options might be
observed which one attracts the customer the most.

  "
 

1) It is not very ethical to observe peoples reactions by keeping them in the dark. It might be
construed as spying.

2) The data recorded is totally dependent on the observer and his skills.


 2   

In this case, the observers are left free to observe the actions and responses of the respondents
by using their own discretion to decide what may be of relevance and what not. This makes
the exercise non-structured.

For e.g., social research observers may not be fully aware of what action options, could occur
at the point of observations, so that flexibility of recording is necessary. Also, at times,
reports on competitive activity on more than one parameter are required, all of which might
be difficult to spell out in detail.

'"
 

1) The observer is not restricted and is free to observe the happenings in detail.

2) The actual behavior of the respondent is recorded with no predisposition bias.

3) It is very time-consuming and expensive. The purpose of research is lost if it takes too
long.

  "
 

1) The observer may miss out important activities and record less relevant ones.

2) Observer bias is very high.

2
   

The respondent is aware that he is being observed and the observer too is instructed to make
the records, as per a predetermined structure.

The situation is similar to that in the experiments, which had been described where, control
groups do not exist. The settings for such studies are usually not the natural atmosphere but a
laboratory/ artificial setting. Use of mechanical/electronic devices like pupillometers/laser
scanners in super markets/channel switch recorders to observe consumer behavior is being
increasingly made in a structured manner with the respondent fully aware of the same.
For e.g. if the respondent is questioned about the choice/preferences of brand before he enters
a shop and the actual brand purchased by him afterwards to gauge whether he has been
influenced by the salesman, it is a structured non-disguised observation.

'"
 

1) The ethical issue of not informing the respondent is taken care of.

2) The structure in the study makes it less prone to manipulation and the data collected more
reliable and valid.

  "
 

1) The respondent is predisposed and so a bias creeps in to actions.

2) The interaction between the respondent and the observer may influence the actions.


2
   

The respondent is aware that he is being observed and the observer is free to make his
observations, without using any preconceived format.

In many social research conditions involving rural areas, the observer might have to explain
the rural folk the reasons why he is there and conceive them how the study will be useful to
them. It may be required on the part of the researcher, to stay with the respondents to make
any meaningful observations. Situations at orphanages, mental asylums, old-age homes or
even public hospitals would benefit from such approach.

For e.g. if the issue of providing and using clean drinking water is to be studied at the village
level, actual observation of collection and usage has to be made in each of the homes or else,
they may report wrong actions.

'"
 

1) The method offers a high degree of flexibility to the observer and also takes care of the
ethical issues.

2) Delicate social issues like child labor use of drugs, women welfare, use of hygienic food,
water, dowry deaths are suited to such treatment.

  "
 

1) It is very expensive and time-consuming and lends itself to qualitative analysis only.

2) The analysis is totally dependent on the observer¶s skills and interpretations. The time
taken and the unstructured nature of the survey may frustrate the observer.


  
   

& 

'"
 

? May be only method

? Not subject to interviewer bias

? Respondents work at their own pace

? Assures anonymity of respondent

? Wide distribution possible

? Best for personal, sensitive questions

? Generally least expensive

  "
 

? Very little control

? Long response time

? Cannot explain ambiguous questions

? Difficult to change sequence of questions

? Sequence bias; respondents can view entire questionnaire

+
&

'"
 

? Comparatively low cost

? Wide distribution possible


? Interviewer supervision is strong

? Quickest methods of data collection

? Allows easy use of computer support

? Sequence of questions is easily changed

  "
 

? Interviewer bias

? Difficult to establish representative sampling frame due to unlisted numbers


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" 

'"
 

? Probably highest response rate

? Allows use of any type of question / questionnaire

? Sequencing of questions is easily changed

? Allows probing of open-ended questions

? Allows clarification of ambiguous questions

? Interviewer supervision and control

  "
 

? Generally most expensive

? Costly to revisit ³not-at-homes´

? Relatively slow

? Interviewer bias





'"
 

? Very fast turnaround

? Very inexpensive

? Fairly versatile

? Survey responses automatically entered into a data file

? International sample possible


  "
 

? Sample is still not ³representative´ of general consumer markets

? Respondents may have concerns with privacy

? Response rates are dropping as novelty declines

' ) .

A leading computer company in India, ranking among the top five computer companies, is
planning to launch the micro-computer range of a reputed computer company of the USA in
India. Here exists fierce competition in the computer market, forcing companies to look at
alternative operational or marketing options that they can use, in order to sustain and increase
their market growth rate as well as market share. In this context, the company was interested
in using Direct Marketing as a viable alternative, for marketing products more effectively and
at a minimum expenditure.

!-

The decision problem faced by the company was thus to take a decision regarding the
function of the salesman in the selling process. The real research problem faced by the
company would be to test out the following hypotheses:

? The purchaser has some perceptions regarding the various Micro-computer vendors,

? There exist some attributes that influence the purchaser¶s decision;

? The salesman performs some objectives in the above process,

? The purchasers will accept the concept of Direct Marketing.

The information needed would be on the following variables:

? Attitude toward the new technology

? Level of satisfaction with the service and support of the existing micro-computer vendors,

? Attributes influencing purchase decision;

? Objections in meeting the salesman;

? Impact of direct marketing on purchase behavior;

? Attitude toward direct marketing.

This information would have to be collected from EDP heads of different target segments like
the Government, Public Sector Undertakings or Private Organizations, etc.

â 
3'


What is the research design that the company needs to use?

1. There are three types of research designs:


1. Exploratory research.

2. Descriptive research.

3. And causal research.

The research design that we have selected is descriptive research design. Now the exploratory
research design focuses on the discovery of ideas and is generally based on the secondary
data. This type of research is best suited for us because the company wants to know the
information which is as follows:

1. Attitude towards the new technology.

2. Level of satisfaction with the service and support of existing micro-computer vendors.

3. Attributes influencing purchase decision.

4. Objections in meeting the salesman.

5. Impact of direct marketing on the purchase behavior.

6. Attitude towards direct marketing.

Q.2 Describe the method of data collection and mode of communication to be used for the
proposed survey. Assume no cost constraints, but a time constraint of four weeks to arrive at
the result of the research

There are two methods of data collection

? Survey method (Questionnaire method).

? Observation method.

Survey method (questionnaire method): respondent is questioned directly about his attitudes,
opinions, demographics, etc.

Observation method: respondent is simply observed and his actions are recorded either by
physically watching him or through certain mechanical or electronic device. In the case above
it is quite obvious that we have to use the survey method and in survey method we have to
use the structured /disguised method. In this method the respondent is asked a set of
structured of set questions in a preconceived format. However he is not made aware of the
purpose of the survey.

Then the mode of communication used would be telephonic survey because the number of
respondents contacted is fairly large and the time to contact them is less. The cost involved in
this method is moderately high as skilled telephone operators need to be employed and also
there may be a need to call the respondents more than once but cost is not a constraint for us
we are concerned with the accuracy and timely availability of the required data.

'!4)1& 'V'

Growth is the oxygen that all companies need to survive and flourish. Sustainable growth
requires the continuous delighting of existing consumers and the widening of this consumer
base over time. The rules of the game are clear. Winners succeed by developing powerful
insights based on a deep understanding of what consumers seek, creating products and
services to meet these needs in unique, distinctive ways, and ensuring access by making these
products available and affordable. In recent years, however, there have been three changes in
the rule of the game:

? Access to capital is far easier than it was a few decades ago. Capacities are, therefore easy
to put up, and, in many cases, already available and can be hired very quickly.

? Segmenting media is far easier today than it was a few years ago, given the explosion of
regional and local television options. This has lowered entry barriers, and has resulted in a
relatively higher quality of access to smaller regional markets when compared to what it was
in the past.

? Finally, in what is perhaps the most far ranging change that is taking place, there is a huge
battle for the consumer¶s share of wallet. As a matter of fact, the share of wallet of FMCG
and basic products has actually declined by almost 2 per cent in the last two to three years.

The fight for the share of wallet is driven by some key changes in consumer attitudes that
have taken place in the recent past. First, there is a huge change in the attitudes towards debt.
Where debt was seen as anathema amongst Indian families not too long ago, debt today is a
perfectly legitimate and easy way to create assets and aspire for a better lifestyle. This
changing attitude has seen the emergence of a number of very easy credit financing options.
The second key shift in attitudes has been rising aspirations and changing attitudes to
recreation, entertainment and lifestyle expenditure. As a consequence, today, a basic product
like soap or a detergent competes with a credit card, cell phone or digital camera. It is, after
all, bought with the same rupee.

Compounding this reality is an explosion of choices of products that have such seemingly
subtle differences between one and the other that they are often not even perceptible to
consumers. These imperceptible differences accentuate the tyranny of sameness that number
of brands and categories have fallen prey to. This tyranny of sameness has led, in many
categories to a vicious spiral of consumer down-trading, price based competition, value
destruction, erosion in profit margins and the consequent death of brands.

So, what makes for winners today? How do brands break out of this vicious spiral? The
answer, ironically, must lie in much stronger, much more powerful iconic branding. While
this does sound simplistic, the difference between winners and loser is really in the way they
bring brands to the market place, in the way their brands engage consumer unexpectedly,
delightfully and with deep relevance.

The commonly-used examples of iconic branding are brands like Nike, Coca-Cola, Levis,
Star buck and so on. What sticks out about these examples is the fact that in these cases,
branding lias been dune very successfully through lifestyle and badge value. Others are those
that have created a truly differentiated experience²for example, StarBucks, or closer home,
barista. However very few people believe that an FMCG brand, a soap or a shampoo, or for
that matter a food brand can aspire to the same iconic value. I believe, passionately, that it is
possible to build an FMCG brand to be as powerful as the Nikes of the world. We must
remember that FMCG, products such as these are bought by the consumer for either her own
use or for her immediate family. She uses these brands in the privacy of her bathroom,
bedroom, kitchen or home. In addition, because of their very nature, she meets these brands
very frequently and shares a very personal, often intimate moment where the use of this either
gives her personal joy as she cares for herself or the joy of caring for those she loves.
These are brands that I would call ³I´ brands for the truly intimate relationship that they have
with the consumer,

³I´ for appealing to the inner self, not for badge value,

³I´ for appealing to the individual in me and helping me live my life with joy,

³I´ for going well beyond product attributes and benefits to what I would call inspiration.

So,how can we get to iconic branding? To me, iconic branding is about really getting three
things right: The first and most important is segmentation. Now, segmentation is a much used
word, but it can make the difference between winning and losing.

Segmentation must go way beyond the generic functional attributes and features if it has to be
truly powerful. It must seek to understand the functional, the psychological and the emotional
gratification that the consumer derives.

A very good example from our company, Hindustan Lever Limited, is Lux. This is a brand
that has been marketed as µthe soap of the stars¶ for more than 50 years. Endorsed by film
stars, it is a product that has always stood for glamour and luxury. A deep engagement of
consumers over the last couple of years has shown that the consumers in Lux¶s target
segment looking for Luxurious Products that make her feel beautiful and special. A deep
understanding of this desired µfeeling of specialness¶ has led to a strengthening of the Lux
position in the recent past from the µsoap the stars¶ to a soap that µbrings out the star in you¶.
It is a shift that recognises that each woman is special, that there is something magnetic and
star-like in every woman, and that the consumer is not willing to buy into a brand whose only
reason for existence is that it is endorsed by stars. It is, therefore, a very significant shift that
has essentially come about due to a very deep consumer understanding that goes beyond the
functional and captures the emotional and psychological facets as well. The result of this shift
is a brand that connects more deeply with the consumer, and puts it in a place that is more
unique and distinctive in the consumers mind when compared to many other products with
similar functional attributes. In a market that has, by and large, remained stagnant, the Lux
brand has grown close to double digit in the last three years.

The second principle behind iconic branding is what I call a powerful brand idea that the
brand must always live and breathe. A brand must have an idea if it is to break out of the
tyranny of sameness and stand for something that is big, bold inspirational. In a sea of choppy
waters, the brand stand tall and be a guiding beacon of light for consumers to want to belong
to, A brand idea must come from a clear understanding and articulation of the defining
purpose and vision of the brand, a role that the brand seeks to play in the larger contest of
consumers¶ lives. The brand idea is the starting which defines the philosophy, the ethos and
the culture of the brand, which must then be reflected and manifested in each and every facet
of the brand doing so, the brand moves beyond being a physical tangible product, but
embodies a bigger purpose, a bigger thought, which can become a source of sustainable
competitive advantage.

An example within HLL where we have seen this work powerfully is Lifebuoy. For over 100
years, Lifebuoy was a tough cleaning soap with strong germicidal perfume. In the late 1990s
and in the early 2000-01, the brand started losing relevance which forced us to go back to the
basics and really try to understand it in a far deeper and relevant way. From this consumer
engagement came the understanding that Lifebuoy was a soap that not just about germ
protection, but really something bigger. It was a brand that met the basic health and hygiene
needs of consumers and offered them peace of mind and emotional reassurance. This was not
a brand that was in the soap bussiness²this was a brand in the peace of mind business. This
lead to a powerful articulation of the brand purpose ´to make a billion Indians feel safe and
secure by meeting their health and hygiene needs.´

This philosophy was reflected in every element of the product mix: the packaging with its
shift from the masculine symbols of health and robustness to family health; the advertising,
which moved from champions shooting football goals to a family doctor giving a simple tip
to be free from hygiene problems; the perfume, which was changed from a harsh carbolic
smell to a more fresh and clean smell that all family members liked. In addition, the brand
invested in a large-scale rural hygiene education programme (lifebuoy Swasthya Chetana)
directly contacting 70 million rural consumers as a first step to living by the guiding purpose
of the brand, a result of this, in a market that has remained stagnant, Lifebuoy has grown at
well over double-digit rates for three years in a row.

The third principle behind iconic branding is : engage consumers through an all-pervasive
360-degree approach. With the fragmentation of television as a medium and the enormous
clutter on the screen, it is vital that brands go beyond television to engage consumers and
touch them unexpected and myriad ways, in ways that bring out the idea that the brand stands
for with deep relevance and meaning. It is critical that brands seek to do this in multiple ways
at multiple touch points.

Fight for attention and relevance is a fight for the consumer¶s share of mind. Brands must,
therefore, look at ways of bringing the brand idea alive at every potential occasion where
there is a role for the brand using unconventional media at events and indeed at the point of
purchase. Equally, it is critical to do this with scale, to do this in a manner

Where it can make a genuine difference to the brand and its growth. For scale, it is vital to
have fewer, bigger brands. One of the driving factor; behind our power brand strategy within
HLL. Is to give fewer brands bigger scale so that this brand can then be truly iconic.

The key question for companies is to really answer how they can build iconic brands in a
sustainable and distinctive way. How can companies stay ahead of the game and, therefore
shape trends rather than follow changes and trends. Believe that the key catalyst for this
transformation of brands to truly iconic brands is an empathetic and deeply connected
organization that is consumer facing. I believe, it is not just the marketing department¶s rule
to understand consumers. It is the role of everyone in the organization to engage consumers
deeply since these consumers are the very reason for an organization¶s existence. I also
believe that in the new world of today, deeper functional specialization even within
marketing will make a huge difference in building iconic brands. Specializations, where there
is a group of people who are passionately committed to driving innovation that is living and
breathing the brand idea, while a separate team of people is focused on realizing and
executing the idea amongst the multiple touch points where a brand interacts with its
consumers. Finally, I believe that it is vital to create a culture of learning, when people within
are curious about changes, curious about what can be learnt not just from within the category,
but about what can be learnt from disconnected categories. A culture where people are
always looking for better and newer ways of doing things. A culture where people embrace²
indeed thrive on²change and learning.

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