Best Practices in Market Intelligence for India by GIA


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India is a complex market due to the regional diversity, rural-urban divide, presence of a large unorganized market, and multiple legal and administrative systems. Companies that have understood the nuances of handling India’s complex business environment have been successful. This white paper seeks to help illustrate some of these nuances, and offer some possible solutions to overcoming the inherent MI challenges in India. This presentation shows selected slides from a GIA white paper. To download the entire white paper that you are interested in, please visit

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Best Practices in Market Intelligence for India by GIA

  1. 1. Best Practices in Market Intelligence for India Webinar presentation November 2, 2010
  2. 2. Presenters•  Ms. Stephanie Tan, Global Intelligence Alliance !  Marketing Manager, Asia-Pacific !  Webinar conferencier•  Mr. Vishwanath Desai , Global Intelligence Alliance !  Senior Consultant, Hong Kong !  Webinar presenter
  3. 3. GIA is a strategic market intelligenceand advisory groupGlobal Intelligence Alliance (GIA) was formed in1995 when a team of market intelligencespecialists, management consultants, industryanalysts and technology experts came together tobuild a powerful suite of customized solutionsranging from outsourced market monitoringservices and software, to strategic analysis andadvisory.Today, we are the preferred partner fororganizations seeking to understand, compete andgrow in international markets. Our industryexpertise and coverage of over 100 countriesenables our customers to make better informeddecisions worldwide. - page 3
  4. 4. Access local knowledge in over 100countriesGIA Group has 13 offices on 4continents. Together with affiliatedGIA Member companies, certifiedGIA Research Partners andconsultants, GIA provides accessto local knowledge in over 100countries.All GIA Network companies adhereto GIA’s Research and AnalysisQuality System as well as the SCIPCode of Ethics. - page 4
  5. 5. Webinar content outline•  India – Country overview•  Growth themes•  Challenges of conducting MI in India•  Recommended solutions•  Case studies
  6. 6. India overview
  7. 7. India fast facts!  Became a trillion dollar economy in 2007.!  World’s second most populous country after China with a population base of 1.16 billion as of July 2010.!  Supports 16% of the world’s population, on 2.5% of world’s land area.!  World’s largest democracy with 29 states and 6 union territories under one central parliamentary government.!  Internal consumption adds to more than 50% of India’s GDP.!  GDP growth projected at 9.4% for 2010-11 and 8.4% for 2011-12.!  Remains a preferred destination for foreign capital: FDI inflows have jumped 4 times since FY05.
  8. 8. Country overviewIndia is often divided into 4 overall zones India Fact File Population growth 1.4% p.a Land Area 3.29 mn sq km Population density 324 persons per sq km Form of government Constitutional Republic and a representative democracy Number of states 29 states & 6 union territories Capital New Delhi Per capita income Nominal: USD1,124.4 p.a. Religion 6 main religions Languages Hindi (national language), English (business language), 22 (official languages) Key festivals 8 Currency unit Rupees (INR) Rural-urban mix 70% people reside in rural areas Households 240 mn Literacy rate 65%
  9. 9. Western IndiaWestern India is one of the most developed regions in the country and is highlyindustrialized. Proactive government policies and relatively better infrastructure(social, physical and industrial) have helped in attracting investments (foreign anddomestic) over the years into the region.Maharashtra GujaratMaharashtra is the third-largest state in India in terms of Gujarat is one of the fastest growing states and most area and the second-largest in terms of population. industrially advanced states of India. Mumbai, the financial, trade and commerce capital Gandhinagar is the state capital. The state ranks of India is the state’s capital city. amongst the top five with regards to per capita income.•  Per capital NSDP of the state is higher than the country average. •  Tertiary sector contributed almost 50% to the•  Tertiary sector contributed more than 60% to the state’s income in 2008. state’s income in 2008. •  The state contributed, 21% to India’s exports and•  There are 58 SEZs in the Maharashtra. 15% to its industrial production in 2009. •  The state boasts of 83 product clusters, 202 industrial estates, 60 SEZs.Maharashtra Industrial Development Corporation (MIDC) is primarily responsible for the development of While the entire region boasts of high foreign tourist industrial infrastructure in the state. The government intake, Goa in particular has a flourishing tourism of Maharashtra is also promoting the development of industry. several Special Economic Zones (SEZs) across the state
  10. 10. Northern IndiaNorthern India is pre-dominantly agrarian but the rapid GDP growth is changing theeconomic landscape. The region is progressively moving towards manufacturing andservices sector driven economy. Despite the recent uptake in investments in the region,economies of Jammu & Kashmir, Himachal Pradesh and Uttarakhand are primarilyagrarian and are driven by tourism.Uttar Pradesh RajasthanUttar Pradesh is the highest earning state of the region. Rajasthan is the largest state (land area wise) in India. Despite growing its per capita NSDP at CAGR of Jaipur is the state capital. 10% during 2001-09, the state ranks low in per capita NSDP on account of high population density.•  Uttar Pradesh ranks among the top states in India in •  Tertiary sector contributed nearly 60% to its terms of agricultural production. income in 2009.•  Tertiary services - IT, electronic services, printing •  The state has 5 operational SEZs and has in- and publishing contribute more than 50% to the principle approval for developing another 6 such state’s income in FY09. industrial clusters.•  The state has a robust industrial infrastructure, including 15 industrial areas, 12 specialized parks, Bureau of Investment Promotion (BIP) and Rajasthan three growth centers and four industrial Industrial Development and Investment Corporation infrastructure development centers (IIDC). (RIICO) are responsible for promoting investments and•  The state has 18 notified and functional special developing industrial infrastructure in the state. economic zones (SEZ). The state has proposed 40 IT/ITeS parks (apart from IT SEZs), two biotech zones and a knowledge park.
  11. 11. Southern IndiaSouthern India is well developed in both manufacturing and services sectors. All thesouthern states also rank high as tourism destinations. Southern states are consideredas India’s outsourcing hub. All the IT firms, BPO service providers and captiveoffshoring units have operations in all or either of the capital cities of these states. Stategovernments of these states have been able to attract significant investments into theknowledge sector through proactive policies and incentives.Karnataka Tamil NaduKarnataka is the fifth most populous state in India Tamil Nadu is amongst the most industrialized states economy and its economy is primarily driven by in the country and has the highest level of technology and energy sectors. Bangalore is the urbanization. capital city and it is regarded as the silicon valley of India due to the significant presence of IT •  The tertiary sector registered a high growth of companies. 11.9% and contributed 55.3% to the state’s income.•  The tertiary sector witnessed the highest growth and •  The state has a total number of 53 SEZs and has contributed 55% to the state income in 2009 a high concentration of automobiles and auto followed by the secondary sector (29%). components, chemicals and rubber•  The State has 15 operational SEZs and 97 PPP manufactures. (Public Private Partnership) projects.
  12. 12. Southern India – Cont’dKerala Andhra PradeshKerala is heavily dependent on tourism and is also a Andhra Pradesh is the fourth largest state in the leading agricultural state. country in terms of land area. Hyderabad is the state capital. The state has emerged as a•  The tertiary sector is the largest contributor to the knowledge based state with key industries such state’s economy, and grew at 12.5% in 2008 as IT / ITeS, engineering, pharmaceuticals, biotechnology etc.•  The State has 24 SEZs and has the highest literacy rate in the country. •  The state’s tertiary sector contributed 61% to the state’s income in 2008 followed by the primary sector contributing 35%. •  The state is well developed in terms of infrastructure. It has 37 public private partnership projects for the roads sector. It is also the first state in the country to initiate a PPP Metro Rail project.
  13. 13. Eastern IndiaThe eastern region has the highest number of states and is the least developedregion in the country. Most of the states in the region rank below the per capitaincome benchmark. Eastern states are primarily agrarian with key focus on sectorssuch as tea, food processing / agro processing, bamboo, handloom and handicrafts,mines and minerals, and iron and steel. These states are also heavily dependent ontourism. However, due to inadequate infrastructure development and difficult terrain,tourism industry has not picked up to its true potential in these areas. This isespecially true for the North-eastern states.West BengalWest Bengal provides an entry point in Southeast Asian markets and shares its international borders with countries like Bangladesh and Nepal. Kolkata (the capital city) is the fourth largest city in India and provides lower cost of operations for a business as compared to other metropolitan cities in the country.•  The State’s tertiary sector contributed 61.2% to the GSDP followed by the primary sector at 26.8%.•  In terms of infrastructure, West Bengal is well connected to the rest of the country. The state also serves as a gateway to the seven North-eastern states.•  It is a leading agricultural state with suitable climatic conditions for fisheries, horticulture etc. It also has abundant natural resources of minerals.While growth and development have varied across states/regions, the overall themesunderpinning the India growth story are unequivocally domestic consumption, infrastructureinvestments and outsourcing. We have profiled these growth themes and the varioussectors that are influenced by these underlying drivers
  14. 14. Growth themes - page 14
  15. 15. Domestic consumptionDriving India’s overall growth Internal consumption adds to more than 50% of India’s GDP. Some sectors that will be directly impacted by the growing consumer base: • Education • Healthcare • Telecommunication • Banking • Insurance • Organized retail • Tourism and hospitality • Automobiles & auto components Other industries/sectors that are directly beneficiary of the growing domestic demand include financial services (capital markets, asset management, NBFCs), media and entertainment, consumer durables and food processing.
  16. 16. InfrastructureGovernment paving way for private sector involvementDrivers• India’s strong economic growth is putting tremendous pressure on its core infrastructure in all major cities and ruralcentres in India > urgent need for infrastructure improvement• Sensing that significant funding is required to sustain economic growth, the Planning Commission had envisaged aplanned outlay of USD 500bn into the infrastructure sector between 2007 and 2012. It has further raised the estimatedinvestment outlay at USD 1.5tr in the next plan period (2013-2018).• Government is actively encouraging private sector involvement in infrastructure sectors incl. roads, telecommunicationsnetworks and power generation. Regulatory frameworks that are conducive to foreign direct investment (FDI) havebeen developed in an effort to encourage private participation in infrastructure investments Growth opportunities in key infrastructure sub- Industries / sectors that will be beneficiary of the sectors: massive infrastructure spending in India include: •  Ports •  Logistics and warehousing services •  Roads •  Construction and construction equipment •  Railways •  Travel and hospitality •  Air •  Infrastructure financing •  Power •  Urban Infrastructure .
  17. 17. OutsourcingIndia’s service growth engineThe outsourcing industry can be broadly categorised into Information technology services (IT), business processoutsourcing (BPO) and Knowledge process outsourcing (KPO), which is a sub set of the BPO industry. The majoroutsourcing export component is IT services and solutions, one of the first areas to be offshored to India.The key service areas for IT, BPO and KPO Segment Key service areas IT Traditional services include application development and maintenance (ADM), testing services and infrastructure solutions. Key players have evolved over time to now offer remote infrastructure, consulting and system integration services. More recently, in line with global demand, providers are increasingly offering Service Oriented Architecture (SOA) and cloud computing solutions to client organisations. BPO Human resources, finance and accounting, technical/customer support, sourcing and procurement, etc. High value/complex services offered by the largest BPOs today include business transformation and platform based solutions. KPO Service areas include legal, publishing, research and analytics and certain ITeS services (such as e- learning), among others.Source: Valuenotes researchThe outsourcing industry now contributes 26% to total Indian exports (merchandise plus services), employing anestimated 2.3 mn people directly in FY10. - NASSCOM
  18. 18. Challenges of conducting MI in India& Recommended solutions
  19. 19. Major challenges encountered while conducting MI•  Presence of large unorganized and grey markets•  Complicated legal environment and multiple jurisdictions•  The rural urban divide•  Regional diversity•  Inadequate data collection•  Lack of secondary information•  Ethical issues
  20. 20. Recommended solutions•  Significance of local partners (with strong industry network)•  Primary research and due diligence•  Innovative estimation techniques and alternate sources of data•  Importance of strategic recommendations
  21. 21. Case Studies
  22. 22. Business Case (1) - Market sizing, Channel &communication strategy for power tools in India Industry: Industrial products - Power tools Geographic scope: India nationwideStrategic objective/issue •  A leading manufacturer of portable electric power tools wanted to understand details of market demand, which customer industries posed highest demand, customer needs and drivers for purchase of products in various customer industries in India (e.g. construction, fabrication, woodworking, manufacturing, automotive, government services, etc.). The client was an existing player in the market and wanted to leverage insights to develop a stronger product portfolio, marketing communication and sales strategyApproach •  GIA suggested a two-phase approach Phase 1: •  GIA used local consultants to conduct >75 interviews on-the-ground with suppliers/manufacturers, local and international manufacturers (competitors), distributors, and other value chain players to size the demand for portable electric power tools by highest opportunity product and customers segments. Data was cross- checked and analyzed in-house to form the basis of reporting. Phase 2 •  Through local consultants, GIA conducted 400+ interviews with power tool users, purchase decision makers and influencers across the nation covering key customer industries. •  Research covered: •  9 key products in the client’s portfolio •  15 key customer industries (top 3-5 industries for each products) •  About 10 local and foreign competitors – page 22
  23. 23. Business Case (1) - cont’dApproach Recommendations on   Trigger of purchase  Product and user group focus   Channels used for purchase  Marketing message and channels   Product information sources   Purchase decision criteria Insights per user group and per product   Motivators to switch brandAnalysis and   Influence of advertisementrecommendation   Influencers at point-of-saleformation Summary and analysis   Purchase decision making process   Importance of after-salesPhase 2 End user purchase behavior analysis services>400 interviews withpower tool users, in End user product requirement analysis   Product features requirements &over 15 customer preferencesindustries End user market positioning analysis   Product application   Cases of malfunction/ breakdownPhase 1 leading to purchase of new toolSecondary research Determination of key professionaland >75 interviews with user groups by product   Top brands users are aware of inpower tool producers, the marketsuppliers, distributors,   Perception of brands by attribute Market sizing by professional   Most recently purchased brandand value chain players user groups and key products for each product   User satisfaction by brandConsultative workshopwith client for projectsetup
  24. 24. Business Case (1) – cont’dSolution•  For total product market GIA established current demand (volume and value) by customer segments and analyzed key market trends and drivers/inhibitors•  Demand for each product was segmented by key customer industries and competitor share•  Demand by each top customer industries was segmented by product types and competitor share•  For top customer groups, GIA conducted in-depth customer intelligence to understand in details key purchase drivers, communication channel, purchase process and decision makers Market sizing and segmentation Recommendations Customer intelligence Competitive landscape
  25. 25. Business Case (1) – cont’dKey Benefits•  Quantitatively identified key product segments and customer industries with highest growth potential in next few years, and most effective channels as well as communication messages to reach end customers and improve brand awareness•  Client also gained an understanding of their market positioning and areas for improvement•  Strengthened local business expansion strategy Marketing communication strategy Customer industry prioritization Marketing & sales strategy at Point-of-Sale Product prioritization
  26. 26. Business Case (2) – Market opportunity assessmentfor mobile based wealth management solutions forHNWI in India Industry: Media and Information technology Geographic scope: India nationwideStrategic objective/issue •  A leading global provider of information services wanted to assess opportunities to develop and commercialize a new mobile based wealth management solutions and information services for High Net Worth Individual (HNWI) investors in India. •  Client also wanted to understand behavior of potential HNWI customers, their information needs and the value they would put on a mobile solutionApproach •  GIA conducted in-depth interviews with 15 HNWI to develop understanding of investment behaviors of HNWI, their wealth management information, transaction and other needs, unmet needs/pain points, usage/perception around mobile and the value/cost associated with such a proposition •  Further GIA suggested a deep-dive study to formulate product development strategy including identification of the core functions, contents and proposition attributes that the HNWI’s need on the mobile platform as well as developing a business case and proposition – page 26
  27. 27. Business Case (2) – cont’dSolution•  GIA developed in-depth understanding of investment objectives, attitude towards risk and information needs of potential customers through in-depth interviews with HNWI across various cities in local language•  Identified current gaps in information needs, investment channels, willingness to pay, purchase drivers and inhibitors for mobile based solutions•  Analyzed the information, formed conclusions and verified key conclusions with selected HNWI interviewees Investment attitude of HNWI Conclusion and recommendations customers Investment objectives & research needs of HNWI customers Willingness to pay for investment information
  28. 28. Business Case (2) – cont’dKey Benefits•  Client gained a comprehensive understanding of needs and preferences of HNWI investors in India as well as market opportunities for new mobile based solutions•  Clear picture of opportunities and challenges supported by facts and opinions of potential target customers•  Client benefitted from a series of recommendations pertaining to product development roadmap, channel strategy for the business Commercial strategy Challenges and opportunities Product development Critical success factors considerations & road-map and road-map
  29. 29. Thank You for YourAttentionContact UsFor additional informationabout Global IntelligenceAlliance and our services,please send an email toinfo@globalintelligence.comor log on to the GIA
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