Ever being paranoid about losing your passport while travelling abroad? This idea came to me while I was recently at the Rome airport checking in my luggage and a hassled passenger jumped in front of me, breaking the line to my annoyance. The agent smiled at him and gave him his and his family’s passport. Apparently, they had lost their passport a couple of days ago. The relief on his face was so obvious that it left me wondering.
Chew on this:
• You use your passport to enter a country and have to stay there for a few days before returning back to your country or visiting another one.
• Rather than carrying your passport and risk losing it, you deposit it to a ‘passport bank’ after immigration, before leaving the airport.
• The passport bank makes a copy of your passport and your finger print and stamps the copy as valid – one that you retain to use at hotels and other occasions.
• You travel freely for these days – even if you lose your copy, you can come back to this office validate your finger print and get another copy, while your original passport is safe.
• While leaving the country, you can collect your passport after paying the fee.
• A reasonable fee may be equivalent to a dollar a day, with a minimum of $5.
Now the business proposition:
There were approximately 840 million international travelers in 2006 according to World Tourism Organization (UNWTO). Out of this, 45% are air travelers and 7% are thru sea. For this exercise, we will consider these lots only since these are legitimate travelers. Out of these, close to one-third could be travelers not required to carry a passport and half of these could be discounted as same traveler doing a to-fro journey. That leaves us with 210m travelers. Assuming only a fourth of these use the service, we are talking approximately 50m travelers. If these people travel twice a year, five days per tour, on an average, we are talking about revenue of half a billion US dollars. If we have this service in about 1000 locations/airports around the world (most touristy/travelled) and cost of managing each location is 30000 dollars per month on an average, then the annual cost of the service is $360 million.
The success of this can depend on how trustworthy or reputed the institution is. A good bet could be a reputed bank, a credit card service or an airline. All it requires is a small, but well guarded office at most air and sea ports around the world. If an airline opens it, they can use their existing space. Most processes could be automated to save further on costs.
I understand that there are lots of assumptions in this back of the envelope plan. For example 50million travelers may be a high estimate – perhaps, but 50m by the third year of operation is not unconceivable. What about trust? A credit card company may score well here given that they already have a lot of your information anyway. Security? Yes, but then it is probably safer there than with the traveler. There could be more concerns. However one thing is very clear that there is a need, which means that logistics and math can be helped by technology to make this a business success. Buyers anyone?
Friday, December 26, 2008
Tuesday, December 16, 2008
10 things to know when doing market research in India
10 things international clients should know when doing market research (MR) in India
1. India goes beyond metros – Most research studies done by international clients are restricted to larger cities. They assume that if they have Mumbai, Delhi and Bangalore covered, they have pretty much represented the country. This is of course incorrect for mass market products but is also not true for high-end products like multi-function devices, servers, watches etc. Though these three cities coming from three different zones house the who’s who, given India’ s size and complexity, the mini-metros and other cities can be ignored only at the marketers’ peril. So even if budgets are small, take one or two smaller cities to make the results more representative. If you have budget for just one city, consider a mid-rung city that is closer to being nationally representative for the product. E.g. Ahmedabad, Pune, Cochin, Kolkata or even smaller ones such as Kota, Asansol, Mysore etc
2. Sampling – Coming from a background of phone or web surveys, international marketers do not really care about sampling. Questions you could ask your vendor to ensure a representative sample include how would you select households/offices to be surveyed, what kinds of localities are represented, how will sample be spread out across the city and so on. Questions like these will ensure that the vendor is not doing surveys close to his office location for the sake of convenience. Given that more than 90% of all surveys in India are still face to face, sampling matters.
3. Incentives – Most MR surveys in India do not offer incentives to respondents. This is especially true for the consumer segment. Even if the MR companies budget and charge the client for it, many times it does not reach the desired end. Understandably, the quality of survey is low. Respondents do not co-operate leading and those who do initially, back out mid-way thru the survey. Clients should ensure that incentives are budgeted and disbursed as agreed.
4. Length of survey– Unlike many international vendors, Indian vendors would rarely cost the study based on survey length. They would claim several ‘experiences’ of conducting face to face quantitative surveys of 40 minutes to an hour. Whereas this may be true for some, it is hard to imagine respondent co-operation for that long a duration. Keep the survey length small (20 minutes ideally) even if your vendor claims he can pull it off.
5. Web surveys – Those clients who want to save costs doing web surveys should chose this methodology very carefully in India. Net penetration overall is less than 5% and even in cities like Mumbai and Bangalore is less than 20%. Further, the term ‘net penetration’ in India is not comparable to that of, lets say, US. In US if one is a net user, there is a high likelihood that he is using it frequently, at least a few times (3-4 times) a week. However the numbers for India could be misleading. Most large scale surveys define net usage as ‘used in the last one month’. If you drill down to frequency of usage, you would find that there are very few users who use it three to four times a week or more leading to a much smaller ‘potential universe size’. Therefore, unless the product is for an up market youth or middle/junior executive in professional firms, this methodology may not work.
6. The top 1% of Indians by income are comparable to the top 1% of the population in even the rich countries. Getting them for a survey is very very difficult. They cannot be motivated by financial incentives (Hansa has had moderate success by enticing them to donate on their behalf to choice of their organizations like CRY, AIDS relief, Cancer Funds etc). Clients should look here for the quality of the interviewer (more on this later). He/She should not only be fluent in English, but also be very well groomed. To know whether the vendor can deliver on this audience, look up the quality of the key account reps who interact with you. Are they good? Could they pull off these interviews? Do not fall for the ‘we have MBAs on our payroll’ carrot. Most of these so called MBAs cannot even write a simple letter on a piece of paper without at least seven typos or grammatical errors!
7. Income data in India is not very stable. Given it is a male dominated society, homemakers, usually women, who are addressed this question, have limited understanding of the full household income. What they often report is what is given to them to spend on household groceries and utilities. Further there are some societies that over claim their incomes and some that understate making the adjustment complex. So my advice would be to stay away from having income as a criteria for respondent selection. Look for car ownership, air travel, foreign vacation and similar such variables to define high-end audience and two-wheeler ownership, household durable ownership etc as you move down the ladder. (Ask for a free copy to the Great Indian Pyramid white paper which deals more on this topic by writing to info@hansagcr.com)
8. Responsiveness – Most Indian vendors not experienced in dealing with international clients would not respond to your emails, if they do not have an ‘answer’. If you wanted to check the status of your project and there has been no progress beyond what was reported last Friday, they would not even say so. If you are dealing with such an agency, encourage them to respond even if there is no progress or bad news. Further, an Indian vendor, unlike most of those around the world would be happy to give you his personal mobile phone in case you wanted to get in touch with him. However, most mobile phones in India do not have a voice message facility. So if you were unable to reach him, you cannot leave a message. All he has from you is a missed call. So check with him if he has voice message set on his desk and mobile phone.
9. The interviewer – I strongly believe that the Interviewer is the single most important person in the entire MR process, not only the survey process. Sample some of your vendor’s interviewer. Most Indian vendors do not have interviewers on their payroll. Quite often, interviewers quit in between projects if they do not find it lucrative. Check with your vendor how he plans to pay his interviewers and how soon can he replace. Another complexity is that in most metros, there is a high percentage of internal migrants –people living in other Indian states coming to big metros to make a living. Given that questionnaires are primarily written in English and then translated in the local language of that state where the surveys are taking place, internal immigrants not well versed in English find it difficult. And there are many of them. As a client, and depending on the respondent level, you could either ask for English speakers or local language speakers or both. Check with the agency if they would like to translate the questionnaire in Hindi as well as most internal migrants are from poorer Hindi speaking states of north and east. The bigger issue however is if the survey is to be conducted purely in English. Fluent English interviewers doing face to face in India are now a rare breed. Call centers, private banks and other upcoming sectors have sucked them up. Thanks to price wars and clients unwilling to pay for good MR data, it is not feasible for the industry to retain good interviewers. Result often is bad quality. Given that clients know that MR costs in India are half than China and probably a third of Brazil, they should encourage vendors to hire better interviewers and should be willing to pay for it.
10. Finally, the vendor. One rule that works especially well for the MR industry in India is that beware of the lowest bidder. In order to win projects I have known many vendors that quote below cost and later cut corners on incentives, poorer interviewers, and quality control etc, which you as a client will never know sitting thousands of miles away. Also be wary of vendors that say yes to every request of yours. Find out about the data collection team. How many offices does he have of his own and in which cities? How well networked is the organization to have real time information on projects? Keep your ears open – he may not make a suggestion twice and almost never strongly. After all you are the client and he wants your business. For example, if you ask for a video shoot and he says that it will be difficult. Don’t brush him away saying that other vendors offer it. Ask him why he thinks that it will be difficult to ensure that there are no surprises later.
As easy it may seem since people there speak English, things can get complicated beyond imagination. Go well prepared.
1. India goes beyond metros – Most research studies done by international clients are restricted to larger cities. They assume that if they have Mumbai, Delhi and Bangalore covered, they have pretty much represented the country. This is of course incorrect for mass market products but is also not true for high-end products like multi-function devices, servers, watches etc. Though these three cities coming from three different zones house the who’s who, given India’ s size and complexity, the mini-metros and other cities can be ignored only at the marketers’ peril. So even if budgets are small, take one or two smaller cities to make the results more representative. If you have budget for just one city, consider a mid-rung city that is closer to being nationally representative for the product. E.g. Ahmedabad, Pune, Cochin, Kolkata or even smaller ones such as Kota, Asansol, Mysore etc
2. Sampling – Coming from a background of phone or web surveys, international marketers do not really care about sampling. Questions you could ask your vendor to ensure a representative sample include how would you select households/offices to be surveyed, what kinds of localities are represented, how will sample be spread out across the city and so on. Questions like these will ensure that the vendor is not doing surveys close to his office location for the sake of convenience. Given that more than 90% of all surveys in India are still face to face, sampling matters.
3. Incentives – Most MR surveys in India do not offer incentives to respondents. This is especially true for the consumer segment. Even if the MR companies budget and charge the client for it, many times it does not reach the desired end. Understandably, the quality of survey is low. Respondents do not co-operate leading and those who do initially, back out mid-way thru the survey. Clients should ensure that incentives are budgeted and disbursed as agreed.
4. Length of survey– Unlike many international vendors, Indian vendors would rarely cost the study based on survey length. They would claim several ‘experiences’ of conducting face to face quantitative surveys of 40 minutes to an hour. Whereas this may be true for some, it is hard to imagine respondent co-operation for that long a duration. Keep the survey length small (20 minutes ideally) even if your vendor claims he can pull it off.
5. Web surveys – Those clients who want to save costs doing web surveys should chose this methodology very carefully in India. Net penetration overall is less than 5% and even in cities like Mumbai and Bangalore is less than 20%. Further, the term ‘net penetration’ in India is not comparable to that of, lets say, US. In US if one is a net user, there is a high likelihood that he is using it frequently, at least a few times (3-4 times) a week. However the numbers for India could be misleading. Most large scale surveys define net usage as ‘used in the last one month’. If you drill down to frequency of usage, you would find that there are very few users who use it three to four times a week or more leading to a much smaller ‘potential universe size’. Therefore, unless the product is for an up market youth or middle/junior executive in professional firms, this methodology may not work.
6. The top 1% of Indians by income are comparable to the top 1% of the population in even the rich countries. Getting them for a survey is very very difficult. They cannot be motivated by financial incentives (Hansa has had moderate success by enticing them to donate on their behalf to choice of their organizations like CRY, AIDS relief, Cancer Funds etc). Clients should look here for the quality of the interviewer (more on this later). He/She should not only be fluent in English, but also be very well groomed. To know whether the vendor can deliver on this audience, look up the quality of the key account reps who interact with you. Are they good? Could they pull off these interviews? Do not fall for the ‘we have MBAs on our payroll’ carrot. Most of these so called MBAs cannot even write a simple letter on a piece of paper without at least seven typos or grammatical errors!
7. Income data in India is not very stable. Given it is a male dominated society, homemakers, usually women, who are addressed this question, have limited understanding of the full household income. What they often report is what is given to them to spend on household groceries and utilities. Further there are some societies that over claim their incomes and some that understate making the adjustment complex. So my advice would be to stay away from having income as a criteria for respondent selection. Look for car ownership, air travel, foreign vacation and similar such variables to define high-end audience and two-wheeler ownership, household durable ownership etc as you move down the ladder. (Ask for a free copy to the Great Indian Pyramid white paper which deals more on this topic by writing to info@hansagcr.com)
8. Responsiveness – Most Indian vendors not experienced in dealing with international clients would not respond to your emails, if they do not have an ‘answer’. If you wanted to check the status of your project and there has been no progress beyond what was reported last Friday, they would not even say so. If you are dealing with such an agency, encourage them to respond even if there is no progress or bad news. Further, an Indian vendor, unlike most of those around the world would be happy to give you his personal mobile phone in case you wanted to get in touch with him. However, most mobile phones in India do not have a voice message facility. So if you were unable to reach him, you cannot leave a message. All he has from you is a missed call. So check with him if he has voice message set on his desk and mobile phone.
9. The interviewer – I strongly believe that the Interviewer is the single most important person in the entire MR process, not only the survey process. Sample some of your vendor’s interviewer. Most Indian vendors do not have interviewers on their payroll. Quite often, interviewers quit in between projects if they do not find it lucrative. Check with your vendor how he plans to pay his interviewers and how soon can he replace. Another complexity is that in most metros, there is a high percentage of internal migrants –people living in other Indian states coming to big metros to make a living. Given that questionnaires are primarily written in English and then translated in the local language of that state where the surveys are taking place, internal immigrants not well versed in English find it difficult. And there are many of them. As a client, and depending on the respondent level, you could either ask for English speakers or local language speakers or both. Check with the agency if they would like to translate the questionnaire in Hindi as well as most internal migrants are from poorer Hindi speaking states of north and east. The bigger issue however is if the survey is to be conducted purely in English. Fluent English interviewers doing face to face in India are now a rare breed. Call centers, private banks and other upcoming sectors have sucked them up. Thanks to price wars and clients unwilling to pay for good MR data, it is not feasible for the industry to retain good interviewers. Result often is bad quality. Given that clients know that MR costs in India are half than China and probably a third of Brazil, they should encourage vendors to hire better interviewers and should be willing to pay for it.
10. Finally, the vendor. One rule that works especially well for the MR industry in India is that beware of the lowest bidder. In order to win projects I have known many vendors that quote below cost and later cut corners on incentives, poorer interviewers, and quality control etc, which you as a client will never know sitting thousands of miles away. Also be wary of vendors that say yes to every request of yours. Find out about the data collection team. How many offices does he have of his own and in which cities? How well networked is the organization to have real time information on projects? Keep your ears open – he may not make a suggestion twice and almost never strongly. After all you are the client and he wants your business. For example, if you ask for a video shoot and he says that it will be difficult. Don’t brush him away saying that other vendors offer it. Ask him why he thinks that it will be difficult to ensure that there are no surprises later.
As easy it may seem since people there speak English, things can get complicated beyond imagination. Go well prepared.
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