The Hindu Business Line : Research panels

Number crunching: Market research by consumer purchase panels and retailers has grown in importance with the competition across product and service categories.

Market research is a field that is growing in importance as markets across the world become more competitive in all product and service categories. Most developed economies have a few research panels tracking consumer behaviour.

The behaviour being tracked could pertain to product purchase, media consumption, leisure habits, etc. Besides, there are also special panels such as retail panels. Let us take up two kinds of panels — consumer purchase panels and retail panels.

Consumer purchase panels

A consumer purchase panel is present in most countries; in India it is run by the research company IMRB.

It consists of a set of housewives who have agreed to be part of the panel. (Oh, and the term housewife here refers to the lady of the house, not to their employment status). Being part of the panel essentially involves reporting the details of all purchases made in the home across product categories such as biscuits, cooking oil, detergents, dishwashing liquids and hair oil. A diary is provided to each panel member who has to write down the details of each purchase as and when it happens. These details include the brand name, the pack type and pack size, the price paid and whether the product was bought on a promotional or special price offer. The selection of the panel is a complex process that adheres to the rules of random sampling. This is to ensure that the panel composition is as closely representative as possible of the entire population.

The data from the panel is normally collated on a monthly basis and then aggregated to the population. This yields estimates of the consumption volume of different categories of brands within categories, the contribution of each pack size to a brand’s sales, etc.

Two more important uses of these panels are to study the way consumers shift between brands and to understand the profile of the consumers of different brands and different pack sizes.

Retail panel

A retail panel delivers much the same information as a consumer purchase panel does but varies in methodology. A panel of retailers is set up (again under strict sampling guidelines) and is asked to cooperate with the data collection process on a monthly basis. The data collected is simply the stock quantity of ALL the pack sizes of EACH pack type of EACH brand of EACH of the product categories. So, while the task sounds simple, it is clearly quite time consuming and cumbersome.

An additional piece of data is collected from the retailer — the amount of stock purchased by him from the distributor since the previous month. From these two pieces of data, we can estimate how much the retailer has sold in the month.

For instance, let us assume the retailer has a stock of 20 packs of Tiger biscuits. Last month, he had a stock of 19 packs. In the interim one month, he had bought 8 packs. We can calculate that he sold = 19-20+8 = 7 packs during the month. This data, when aggregated across the sample and extrapolated to the population, yields a fair estimate of the size of the market for each pack, brand, etc. Each kind of panel has its own pluses and minuses, but both co-exist fairly comfortably in most markets.

(Contributed by Kaybase, a business consulting firm. Mail: Info@Kaybase.com )

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