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| Summary : Madison has
devised Town & Country (T&C) framework - a set of tools
and guidelines that assist advertisers harness the potential
of small towns and large villages. It starts with market
prioritization and proceeds to identify media options
for the selected market. Some of the key highlights of
the approach are: |
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T&C framework clusters markets based
on Market Attractiveness. Market attractiveness is estimated
for a product category by considering social, cultural,
economical and media factors.
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Once the markets are prioritized, T&C
framework suggests media options that are best suited
for a market and also minimizes media wastage, increasing
Media RoI.
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Our experience with T&C frameworks
indicate that there are dramatic differences in markets
prioritized and suggested media options between T&C
framework and conventional techniques.
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1.0 Introduction
To increase the growth
rates, most FMCG and consumer durables marketers are trying
to increase their market reach beyond large cities and exploit
the potential offered by small towns. A casual look at Indian
demographic profile in Table 1.0 speaks volumes about the
potential of towns with population of upto 5 lakhs (Small
to medium towns) and villages with population in excess of
5000. There are twice as many people in these markets than
large cities and large towns combined. For sake of brevity,
we will refer them as Town & Country markets
T&C markets are characterized by:
Relatively lower penetration of most product
categories implying immense growth potential.
More easily accessible than a typical sparsely
populated rural market which reduces the distribution cost.
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However, for all the potential, there
has been limited studies' focusing on the T&C markets. To
understand T&C markets better, Madison Media used the proprietary
framework - M:Cube and existing data to understand the T&C
markets and also explore cost effective means to reach the
T&C markets. For the uninitiated, M:Cube is Madison Media
Multiplier. The core philosophy of M:Cube is that like all
investments, RoI should be the key criteria in making media
investments. Among other things, M:Cube helps in prioritizing
markets by studying the relative attractiveness of a market
by quantifying the potential responsiveness to marketing
and media inputs. Simplistically speaking, M:Cube helps
in identifying the lowest lying fruit and the most cost
effective way to grab the fruit. The culmination of the
study was formulation of Madison T&C framework, which guides
media planners through the entire process of media planning
to harness the potential of T&C markets. This issue of Media
Matters provides an overview of T&C framework and some key
findings of the study.
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The
Media Newsletter from Madison
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2.0 T&C framework - Introduction:
Madison T&C framework starts with market prioritization and
proceeds to identify media options for the selected market.
For ease of explanation, we will use the example of a moderately
priced semi automatic washing machine. We will initially prioritise
markets by conventional technique and then examine inadequacies.
We will then redo the exercise using T&C framework. Table
below is output of an exercise to prioritize markets by using
conventional technique of product penetration and population
dispersion.
The skew towards TV is obvious as reach of Press in T&C markets
of above states (barring Kerala) is very low. Some of the
issues in the above prioritization process are:
2.1 Ignoring disparities within state
State is being considered as the basic geographic unit. Consecutive
economic surveys have established that development of infrastructure
and consumer demand is not uniform across the state. The disparity
gets accentuated when marketer moves from large towns to T&C
markets. It is in this regard, that one needs to consider
Socio-Cultural regions (SCR) as the basic geographic definition
for T&C markets. SCRs have higher socio cultural homogeneity.
For instance, consider the state of Gujarat, which is divided
into four SCRs. As shown below, there are substantial difference
in prosperity and media reach between various SCRs. 
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2.2 Inadequate weightage
to Responsiveness and Media efficiency
It is unlikely that all markets will respond in the same way
to media and other marketing inputs. The responsiveness is
dependant on social, economical and cultural profile of the
market. Also, media efficiencies are not equal in all markets.
Some markets are more cost effectively accessible by media
than other markets. Prioritization exercise needs to account
for these factors to increase the RoI on investments.
3.0 Cornerstone of T&C
framework
Madison T&C framework aims to address the above inadequacies
and prioritizes markets by simultaneously considering economic,
social, media and cultural indicators. The framework relies
on estimation of Market Attractiveness for each market. Once
the market attractiveness is estimated, then the markets are
clustered on the basis of attractiveness and homogeneity of
media options. As an output, the framework recommends most
effective media option for the prioritized markets.
3.1 Factors that determine Market attractiveness
Madison T&C framework has identified three key characteristics
to represent market attractiveness - Accessibility, Awareness
and Affordability (3As of market attractiveness). It is important
to note that T&C framework does not encourage "one size fits
all" type of approach by creating a set of indices to assess
market potential but discovery process of identification of
parameters is undertaken for every product category.
3.1.1 Accessibility
The primary characteristic of an attractive market is that
it must be easily accessible both for communication and distribution.
The problem posed by distribution gets exaggerated as we move
towards lower town classes. Larger percentage of people staying
in higher town class, within T&C definition, indicates easier
physical accessibility. Communication accessibility is determined
by higher reach of mass media. To assess communication accessibility,
Television reach was selected, as it is the media with highest
reach among T&C markets. Higher reach of television will come
with attendant benefits of higher awareness and exposure to
the life style led by "Metro" brethrens. This exposure acts
as a great stimulant for consumer demand.
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The
Media Newsletter from Madison
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3.1.2 Awareness
One of the challenges faced by marketers in T&C markets is
inadequate awareness about brands, product and its usage.
It is observed that low awareness level leads to
High inertia to adopt new products.
Reluctance to pay additional premium to pay for national
brands
Rampant usage of counterfeit brands
In Madison T&C framework, to study the general
awareness of a market, combination of literacy levels and
product usage is used. Literacy levels in a market can be
easily quantified. The T&C framework allows flexibility to
use any of the product usage details measured in NRS to stand
as a proxy for awareness. Selection of these parameters is
based on the "degree of awareness" marketer will require to
vend his product. Selection of too many parameters will dilute
the study and selection of wrong parameter will not adequately
reflect the required awareness level.
In our washing machine example, we have short-listed useage
of detergents to wash cloth as key determinant of awareness.
3.1.3 Affordability
Affordability in T&C markets cannot be easily quantified in
terms of Monthly Household Income (MHI) alone. Purchasing
power of Rupee varies vastly between different regions. Affordability
has to be evaluated in terms of ownership of durables and
lifestyle. Typically, product usage detail is used for evaluating
awareness and ownership or usage frequency is used to evaluate
affordability.
In the washing machine example, we have used following to
define affordability:
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Ownership of essential kitchen appliances
like LPG, Pressure cooker, Mixer-Grinder. These appliances
like washing machine reduce the everyday chore of housewife.
Hence, there are indications that these people are concerned
in improving the life style of housewife.
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Usage of moderately to high priced national
detergent brands like 501, Ariel, Super Nirma etc. Higher
usage of these brands over local brands indicate affordability
3.2 Clustering Markets
Madison T&C framework's clustering tool
clusters market based on market attractiveness and homogeneity
of media options. The clustering tool also helps in setting
threshold value for each of the parameter. Prior to recommendation,
it also analyses the relative
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importance of awareness and affordability
for the given category. Based on T&C framework, our broad
observation is this regard is as follows:
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For marketers of personal care products,
Awareness and not affordability is the key criteria.
Markets that have moderate to low scores on affordability
parameter but high on awareness invariably have higher
usage of personal care products (like shampoos, face
creams). Interestingly, more expensive personal care
brands are used in "highly aware" markets than in "highly
affordable" market.
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For consumer durable manufacturers,
affordability defines market attractiveness. However,
even in those markets that score high on affordability,
there is a need to have threshold value in awareness
scores to render the market attractive.
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For vendors of financial products,
awareness and not affordability is the key criteria
to make the market attractive.
In the specific case of washing machines, affordability is
an important determinant over awareness. To select specific
media options, target audience for washing machines is defined
by considering ownership of essential kitchen appliances and
usage of moderately to high priced detergent brands
4.0 Madison T&C Output
To provide readers gist of the information
output of T&C clustering tool, we reproduce extract of the
final market clusters for the washing machine, which has been
used as an example in this newsletter. T&C framework clusters
market into Highly promising, Most Promising and Average .We
reproduce only details for "Extremely promising" cluster for
washing machines.
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The
Media Newsletter from Madison
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As a reality check, we observed that above
SCRs constitute over 53% of existing washing machine penetration
in T&C markets.
Highlights of T&C output
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Only pockets of various states have been
selected which assists marketer and media planner to focus
their energies.
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Markets that would have been ignored
are highlighted by T&C framework.
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Unproductive spillover is minimized.
This is achieved by awarding penalty points to those markets,
which requires use of media with high spill over to non-prioritized
markets. For instance, if SCR Tanjore alone was selected
in Tamil Nadu then the market will attract high penalty
point as there are no adequate media options that can
target Tanjore only.
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Markets, which have high spillover from
other activity, are awarded bonus points. For instance
if Star TV, is selected, to reach metro markets, then
T&C markets having high penetration of Star TV is offered
bonus points.
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There is higher reliance on local media
as they will be most effective in T&C markets (like KutchMitra
for Kutch SCR).
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As there is minimum spillover to other
markets like large metros, marketers can offer product
variants and communication specifically designed for T&C
markets.
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Attractive markets where mass media options
alone will be insufficient are also identified for local
activity.
5.0 Observations regarding T&C options
Folowing section enumerates some key guidelines that media planners
need to follow while planning for T&C markets.
5.1 Define Target Audience before evaluating Press
In general, reach of press is quite insignificant in T&C markets.
However, fine-tuning the audience by including |
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products penetration data provides a better
picture. Press could be an important element of the media
mix in categories requiring high affordability.
5.2 Consider Channel Availability
In general, terrestrial transmission and
regional language programming is popular in T&C markets. Madison
T&C framework highlights that C&S options are most effective
for those product categories that rscore high on affordability
parameter. Planning for C&S homes in T&C markets is a challenge
as most TV sets in T&C markets cannot recieve more than 8-11
channels. Media planners nned to consider data regarding availability
of channels in prime band before finalising C&S channel options.
(Source:NRS)
As viewership data is sufficiently not available for T&C markets,
it is important for media planners to consider channels that
are available in the prime band while finalizing C&S channel
options for T&C markets.
5.3 Cinema is popular only in certain pockets
It is generally believed that cinema is a potent media for T&C
markets. The same is not necessarily true for all markets. Cinema
holds high promise only in following pockets.
6.0 Conclusion:
Madison T&C framework is a definitive asset
to the marketer in their quest to exploit the potential of
town and country markets. The framework assists in every process
involved in media planning - right from market prioritization
to finalization of specific media vehicles.
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| Archive |
Most watched TV sporting events of 2005
- April 02, 06
Media forecast for upcoming Cricket series-
February 06, 06
Regulating For Growth- December 05, 05
Trends in Mumbai print battle- October 29, 05
C
& S Homes: The big debate- September 14, 05
Household Potential Index(HPI) from IRS- July 13, 05
THE
TV SPORT MAP IN 2004-June 14,05
Asia Pacific C&S Markets 2005- Apr
28, 05
Consumer Spending Poll- Nov
08, 04
M- SPECTRA : MADISON’S MULTI-MEDIA REACH FREQUENCY
ESTIMATOR- Oct 04, 04
Effective Return on Cricket Ground Signage- Aug 18, 04
Media effect and its measurement in Rural India- Aug 11,
04
Euro 2004 – Performance Analysis- Jul 22, 04
Business Media Opportunities in India- Jul 10, 04
Election 2004: Monitoring of TV Coverage - Jun 26, 04
Election 2004 A Study by MAXUS - May 29, 04
SMS users are open to brand marketing - April 22, 04
Celebrity Endorsements Inside Out: A CyberMedia Study
- April 17, 04
Understanding women Study by MCI - March 20, 04
Consultation Note on Issues relating to Broadcasting and
Cable Services -
Jan 01,
04
SMS Selling Made Smarter?!- Dec 04, 03
ICCO World report October 2003- Nov 20, 03
DTH Studyby Initiative media- sep 23, 03
IRS Study- sep 17, 03
News Channels Analysis:NDTV Making Strong Inroads- Aug
25, 03
Unraveling CAS - Initiative Media - Aug 18, 03
CyberMedia Research - July 17, 03
Media Financial Wellbeing - A Study by ATG - June 06, 03
The "Surer" way of consumer contact -May 15 03
All
in All!
Mudra
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