MICA Market Ratings

VariablesDistricts UATowns

Indian Market Potential. Indexed.

SourceS of Data

Census of India 2001 Ministry of Agriculture- Land Use and Value of Crop Production- 2001-02 Fertilizer Association,2006- Fertilizer Consumption Audit Bureau of Circulation of India- Jan-June, 2005- Circulation of Dailies Reserve Bank of India –Report on basic statistical returns- 2006 National Sample Survey, 2004-05 – MPCE

Indian Market Potential. Indexed.

IntroDuctIon

Good business sense dictates that for a venture to be successful, returns must exceed the inputs, both financial and physical. In an increasingly competitive landscape, it is imperative that returns for every venture be estimated with some degree of certainty before it is even rolled out. These returns are directly linked to the potential of the market in which the venture is rolled out. In order to successfully roll out a venture or a marketing campaign in multiple markets, it becomes extremely important to identify markets with the highest potential. This is the context in which a market potential study assumes importance.

India presents a unique challenge due it its vastness and diversity. Marketing resources and efforts must be optimized in various markets to maximize returns. The most popular area segmentations are states, metros, urban and rural. The state as a division is fairly large and diverse. To take marketing decisions based on knowledge at this aggregate state level would lead to suboptimal returns. This is why market potential ratings for areas within states become relevant and important. These areas have to be geographically identifiable and compact enough to enable localization of marketing efforts.

MICA Market Rating (MMR) attempts to address this problem. Covering 579 districts across the country, MMR is perhaps the largest and most comprehensive market potential study of its kind. It uses data on demographic and economic variables taken from reliable sources like Census of India, RBI, NSS, and Audit Bureau of Circulation among others. Advanced statistical methods are then applied to this data to derive the market potential rating for each of the 579 districts.

Who can uSe MMr

MMR can be used by strategic decision makers to make informed marketing decision in various industry sectors such as Advertising, Manufacturing, FMCG, Durables, Banking & Finance, Food Products, Automobiles, Pharmaceutical, Travel & Hospitality, and Telecommunication etc.

MMR can also be used by consultants, entre-preneurs, academicians and students to get a better understanding of the market potential across India.

SalIent featureS

Market Ratings for 579 districts/district groups of India indicating overall district potential. Figures for given variables based on complete enumeration rather than estimation or extrapolation. Consequently, these figures can be easily used for relative measurement. Since the market potential of a district is a linear combination of various economic and demographic

variables, the ratings are additive over a group of districts. Dividing the market rating of one district by another gives a relative market potential of the districts. Flexibility in terms of constructing new ratings for a particular product category or geography by

altering the weights of the principal variables.

aS a by-proDuct

Ratings of Rural segment of districts Ratings of Urban segment of districts Ratings of 79 Urban Agglomorations

Data on 42 DeMographIc anD econoMIc varIableS Separately

For district level (urban + rural) For urban and rural segments of the districts For the 79 Urban Agglomorations Data on 29 demographic and economic variables for 5154 towns

DIgItIzeD MapS of all DIStrIctS WIth pIctorIal locatIon

Urban towns Tehsil headquarters National and state highways Railway lines with railway stations

uSer Interface perMIttIng

Enlargement and reduction of map Retrieval of desired data Entering of specific market and company data along with demographic and economic variables data Enabling simple arithmetic calculations of the data for better understanding

varIableS rural urban

(25 varIableS) (23 varIableS)

DeMographIc

Total Population Number of Households Literate Population Total Workers Main Workers Main Cultivators Agricultural Population Non-Workers

oWnerShIp

Radio/ Transistor Television Telephone Bicycle Two-Wheelers Jeep/Van Circulation of Dailies fInancIal ServIceS

Bank Deposits Bank Credits Number of Bank Accounts Number of Bank Branches

agrIcultural

Cropped Area Irrigated Area Value of Crop Production Fertilizer Consumption

Towns

Variables

aMenItIeS

Water Source Bathroom Facility Number of Rooms Electrified Households LPG Users Number of Hospitals / Health Centers Hotels/ Lodges/ Guest Houses Hospital Beds Educational Institutes Number of Commercial Establishments Number of Factories Number of Worship Places

prIncIpal varIableS anD theIr coeffIcIentS

rural SegMent

Total Population 0.3053 Electrified Households 0.1252 Cropped Area 0.2731 Irrigated Area 0.1590 Bank Deposits 0.1372 urban SegMent

Total Population 0.2775 Hospital Beds 0.0314 Bank Deposits 0.2690 Circulation of Dailies 0.1100 Hotels / Lodges / Guest Houses 0.2040 Car Owners 0.1080

MethoDology

25 indicator variables 23 indicator variables for the Rural Segment for the Urban Segment

Factor Analysis Technique to select statistically independent Principal Variables

5 Principal Variables 6 Principal Variables for the Rural Segment for the Urban Segment

Discriminant Analysis to determine coefficients for the linear combination

of Principal Variables

Rural Market Potential Index Urban Market Potential Index

Weighted Linear Combination of Rural and Urban Market Potential Indices based on Projected Consumer Expenditure

for Rural and Urban Segments

District Market Potential Rating

Why MMr IS eSSentIal for your organIzatIon

MICA Market Ratings (MMR) give the overall relative market potential of different districts. Since the Ratings have been obtained as a linear combination of demographic and economic variables’ values, the Ratings are applicable for a wide range of consumer products.

These Ratings can be manipulated as common arithmetic numbers; that is to say the Ratings can be added over different districts to get the overall rating for that district group. The rating of one district can be divided by the rating of another district to understand the relative potentials of the two districts.

The company’s and industry’s performance can be evaluated by dividing the corresponding information by the rating of the district(s).

In case companies want to focus attention only on the urban/rural segment of the districts, MMR provides ratings separately for urban and rural segments. It has to be clearly understood that urban and rural ratings are not directly comparable; that is to say if the rural rating of a district is higher than that of urban rating of that district, it does not imply that rural potential of that district is higher than that of urban potential of that district. This is due to the fact that variables used are different for rural and urban and the base districts used are also different for rural and urban ratings.

In line with the above, some corporates may like to concentrate only on larger cities. Hence Ratings have been worked out separately for 79 cities and urban agglomerations with population over 5 lakh.

The software allows entering company and industry data and analysis, using Ratings data, to evaluate the relative performance different areas.

Besides the Ratings data, information is also given on various demographic, economic and financial variables at district level, enabling the user to relate his company’s performance using the data on other variables.

In addition to rating data, information is also provided on various economic and demographic variables at the district level, enabling the user to relate his company’s performance with other available variables of his choice.

Since MMR provides basic data for several variables at the district level, in case the user feels the need to assign a different set of weights to the data for hi specific product category or for a particular geography, the software provides the flexibility to do so.

zone-WISe Market ratIngS

Zone Market Rating North Zone 444.44 West Zone 376.81 South Zone 317.34 East Zone 262.08 All India 1400.67

top 10 DIStrIctS

State District Market Rating Maharashtra Mumbai 100.00 Delhi Delhi 83.84 Karnataka Bangalore 32.67 WestBengal Kolkata 29.21 Tamilnadu Chennai 23.43 Andhara Pradesh Hyderabad 19.63 Maharashtra Pune 15.52 Maharashtra Thane 14.32 Gujarat Ahmedabad 14.19 West Bengal Medinipur 8.30

relatIve penetratIon at zonal level

TVs as a % Cars as a % of Radios of Two wheelers All India 90 21.7 North 88.3 27.8 East 58 27 West 124.9 19.5 South 93.6 18

SAmpleDATA

InDex ScoreS for SpecIfIc econoMIc paraMeterS

Parameters All India North East West South Electrified Households (%) 55.4 51.8 26.5 73.2 71.9 LPG Households (%) 17.4 19.7 8.6 23.2 18.4 Radio Households (%) 34.9 40.4 31.2 29.6 37.8 TV Households (%) 31.4 35.7 18.1 36.9 35.4 Bicycles (per 1000 pop.) 82 91 87 72 71 Two Wheelers (per 1000 pop.) 22 24 10 28 27 Cars (per 1000 pop.) 5 6 3 5 5 Households with Bank Accounts (%) 13.8 14.3 10.5 19.2 11.9 Per Capita Deposit (Rs.) 20138 21163 10027 29696 20890 (incl. Commercial A/C)

Irrigated to Cropped Area (%) 40.5 61 32.7 24.7 36.4 Fertilizer Usage (kg) 279 198 258 392 428per Hectare of Irrigated Area

Crop Value (Rs.) 21613 20942 29879 13044 27414 per Hectare of Cropped Area

correlatIon coeffIcIent for MMr anD Several varIableS

Correlation Coefficient Variables All India North East West South Two Wheelers 0.68 0.92 0.62 0.43 0.88 Cars 0.89 0.99 0.86 0.91 0.93 Deposits 0.98 0.99 0.92 0.99 0.98 Radios 0.77 0.91 0.67 0.84 0.76 TVs 0.86 0.94 0.80 0.85 0.88 LPG Households 0.88 0.96 0.81 0.84 0.88 Electrified Households 0.77 0.92 0.78 0.81 0.72 Circulation of Dailies* 0.88 0.99 0.92 0.95 0.92 Population 0.67 0.78 0.64 0.76 0.65 Cropped Area** 0.78 0.76 0.76 0.83 0.76 * Considered for Urban Segment only

** Considered for Rural Segment only

Mudra Institute of Communications, Ahmedabad (MICA), Shela, Ahmedabad – 380 058 Gujarat INDIA Tel: + 91-2717-308250 Fax: + 91-2717-308349 email: mmr@micamail.in

Project Team: G. Parthsarthy Vina Vani

Shailesh Yagnik