Marketing Research Chapter Case Block-2 Ch.5

End Chapter Case:
Marketing Research for Lorino

Soumitro Ghosh, MD, Tabeffer India, felt that his company had
developed a product with the potential to be a winner: a tablet based soft drink,
branded Lorino. The results of the market research that he had commissioned
indicated that consumers were not only interested in the concept, but also liked
the flavors in which Lorino had been test-marketed. However, breaking into the
soft drinks market would not be simple. While the concentrates segment was
stagnant, the aerated drink segment was dominated by global players with huge
ad spends. The product had two overriding advantages. It didn't have the
inconvenience of mixing, sugaring and stirring and disposing of the package
unlike tetra pack. Company had worked out a third-party contract distribution
arrangement with Gretas, which was also distributing soaps, biscuits and hair
creams. Tabeffer India also hired the services of product profile, a leading
market research firm. The initial research revealed the following facts:
(A) The consumption pattern in volumes was; filter coffee: 3.9%, malted drinks:
2.2%; instant coffee: 1.8%; and soft drinks: 1.1 %. The soft drinks market,
though a low-volume in comparison, was far more impressive in terms of
value Rs 1,300 crore per annum.
(B) Aerated Soft Drinks (or ASDs) accounted for Rs I,l 00 crore; tetra packs, Rs
150 crore; concentrates, Rs 60 crore; branded squashes, Rs 25 crore.
(C) ASDs consisted of Colas (70%), Lemon drink (20%), Orange (1 0%).
(D) There are three brands in the Cola segment of ASD: Life, Prime and Vic.
Life is a 100-year-old global brand with a brand image built around fun,
youth and socializing group. Prime is a close rival of Life in several markets
around the world. Vic had a near-monopoly position, with a 60% share of
Cola market. With its macho image it had tried to position directly against
Prime.
(E) In the lemon segment Misty was the single largest selling brand in the 70s
and 80s, which initially used its hygienic, and thirst quenching values.
Later it projected an anytime drink image highlighting the occasion-brand
association. Its cloudy appearance was well received, Thus, the six broad
conclusions were analyzed by the company:
• The brand image during the launch will be vital.
• ASD brands have enormous ad spends.
• Global brands have been successful only in the Cola segment.
• Tetra packs have seen the largest number of failures, but also single
largest success.
• Brands targeting several demographic and psychographics segments
have not been successful.
For five years, the concentrates market has defied all attempts at expansion.
Questions
1. Develop an 'image plan' for Lorino.
2. How will you develop product concept for Lorino before launching?
End Chapter Case II: J. P. Boon Marketing Limited: Setting up of Market

Research Department
The corporate management of the multi-product, multi-market manufacturing-
cum-marketing enterprise faced about five years ago the problem of whether or
not to set up a market research department. A brief retrospect will eventually
show that the management could not take a final decision in this regard, in the
course of five years, due to various factors.
Within two-three years of setting up the manufacturing units, the corporate
management came to realize that the decisions to set up the units were all wrong
and that the demand for the products was much less than what had been
envisaged earlier. There is a saying about market research and market survey-
"If the market research is very good, it is just something: if it is average, or even
good, it is bad." This relates to the market research efforts as well as the results.
There is much truth in the saying. Obviously, the market research efforts were
not undertaken in a systematic way, since they considered it to be an additional
responsibility over and above their existing ones, including selling in a highly
competitive market.
The need for further market research for some other new products arose at
this state and the company could not really decide what to do. Any market
research, to be effective, should end6avourto establish consciously and
systematically the size of the market as well as the expected market share under
varying levels of prices, keeping in mind that overheads and even direct costs,
might have increased out of proportion by the time a product is ready for
competitive marketing.
Pricing considerations are of paramount importance since market research
findings are the bedrock of a host of analyses and information used by the
corporate management in taking major capital investment decisions. Needless to
say, a wrong investment decision not only means an irretrievable step but can
consequently be damaging and frustrating.
In the real sense, investment in marketing research is expected to produce
additional revenues or reduce costs in much the same way as a new piece of
equipment. Yet there are no widely accepted procedures for evaluation of the
returns, nor is there any standard set of criteria for evaluating the economic
feasibility of proposed projects. While dealing with the cost-benefit analysis for
market research, R. I. Day in his paper, "Optimizing Marketing Through Cost
Benefit Analysis" has outlined the main features of such analysis as follows:
1. Review objectives that are being sought.

2. Establish criteria to be used in evaluating the alternative.
3. Identify relevant alternatives with particular reference to assessment of the
economic costs and benefits or gains associated with it.
4. Recognize time pattern of benefits and costs. Our ability to foresee the
future becomes so limited after say, ten or fifteen years.
5. Recognize uncertainty. Decide alternate strategy and outcomes. Apply
probability criteria and come to the decision of a better strategy.
6. Develop a mode to suit the analysis with the built-in probabilities to take
care of uncertainties.
In his article, "The Current Marketing Question", Twedt reported that return-
on investment approach to post marketing research expenditures had been
useful in appraising the value of marketing research at the Oscar Mayer
Company. The formula used by Twedt is:
Worth or Value of Finding x Proportion of Crucial Cases = Return on
Investment
Annual Marketing Research Budget
Twedt reported that the return on investment computed in this way for his
company was 351 percent of the previous year. According to Twedt, this
method has turned out to be a matter of good personnel relations within the
company, since it provides a reason for a mutually helpful annual review of the
dollar value of the information supplied by the marketing research department.
"Although, according to us, Twedt's a good approach to evaluate expenditure in
marketing research on a historical basis, one limitation of his formula is that it
does not provide a basis for setting a budget for a future period in which the
anticipated circumstances may be quite different from those of the immediate
past period.
Questions
1. How will you calculate R.O.I. for setting up a marketing research
department?
Develop research objectives for JP Boon Moon Marketing Limited.

Marketing Research Chapter Case Block-2 Ch.5

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How will you calculate R.O.I. for setting up a marketing research department?

What are some research objectives JP Boon Moon Marketing Limited should consider?

End Chapter Case:

Marketing Research for Lorino

End Chapter Case II: J. P. Boon Marketing Limited: Setting up of Market

1. Review objectives that are being sought.

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