Market Mapping -MRA

8/13/2019 Market Mapping -MRA

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Meaning

Market mapping, as defined and developed by Malcolm McDonald and Ian Dunbar, is used inmarket segmentation to help companies identify the target group(s) for their segmentation projectand forms the second step in the segmentation process. It also has a number of other important

applications, such as tracking changes in the channels to market, presenting your own company's performance on these routes to market and illustrating where your sales and marketing resourcesare allocated, which can then be compared with how your key competitors allocate theirresources.

A channel map is one of the most important, but least used, elements of an effective profitimprovement program. It is the key to big, sustainable increases in profits and growth, especiallyin your most important accounts. It also provides decisive competitive differentiation building

big barriers to entry based on customer knowledge, relationships, and trust. This enables you tosecure and grow your most important customer relationships, and to penetrate and grow critical potential accounts.

The power of a channel map is that it gives you a detailed overview of the cost buildup as your products flow through your company, and into and through your customer s company. Theobjective is to identify ways to increase efficiency and reduce cost. You also can use the sametechnique for coordinating with your suppliers to lower your own input costs.

The starting point in a channel map is to partner with a customer, and select a few representative products.

Defination

A market map defines the distribution and value added chain between final users and suppliers,which takes into account the various buying mechanisms found in a market, including the part

played by influencers .

The Market Map framework

The Market Map framework is intended to serve two purposes.

1. For the policy maker and rural development planner, it is a conceptual framework for thinkingabout the commercial and institutional environment in which small-scale producers (includingsmallholder farmers) operate.

2. For the practitioner, it is a practical and potentially a participatory tool, that can be used torepresent and communicate knowledge about specific producers, their market-chains,institutional environments and service needs.


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Processes of elaborating the Market Map, if conducted in a participatory way, can also beimportant interventions in themselves - directly improving linkages and relationships betweenmarket-chain actors, and preparing the ground for introducing or generating innovation in

products, processes and market access.

The Market Map is made up of three inter-linked components. Market chain actors and their linkages Enabling business environment factors Business and extension service providers

The central component maps the economic actors who actually own and transact a particular product as it moves through the market-chain from primary producer to final consumer By better understanding the contribution each actor in the chain brings to the product, the aim is toidentify inefficiencies, inequities and losses which could be remedied, or added-value whichcould be captured by poor producers particularly. While many market-chains are characterised

by inequitable relationships between actors, a clear objective of the Market Map approach is tohelp stakeholders realise mutual benefits by improving the 'systemic efficiency' of the chain.Key to this is helping stakeholders become more aware of functions and processes along thechain that are needed to satisfy more lucrative or reliable markets.

The second component of the Market Map is a charting of the critical factors and trends that areshaping the market-chain environment and operating conditions, but may be amenable tochange. These 'enabling business environment' factors are generated by structures andinstitutions that are beyond the immediate direct control of economic actors in the market-chain.The purpose of charting this business environment is to understand the trends that are affectingthe entire market-chain, and examine the powers and interests that are driving change. This

knowledge can help determine avenues and opportunities for realistic action, lobbying and policyentrepreneurship.

The third component of the Market Map framework is concerned with mapping these servicesthat support, or could potentially support, the market-chain's overall efficiency. The range ofservices that can potentially add value is huge and include: input supplies; market information;financial services; transport services; quality assurance - monitoring and accreditation; technicalexpertise and business advice; veterinary services; support for product development anddiversification. Mapping 'services ' involves identifying particular service needs and theirlocations within the market-chain in order to get an overall picture of the opportunities for usingservices to improve market-chain efficiency or equity. This mapping is a precursor to

subsequently assessing the most appropriate mechanisms for delivery of services, in terms ofoutreach, sustainability and cost-effectiveness.

the various buying mechanisms found in a market, including the part played by influencers .


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Steps of Market mapping

1. Identify the types of customers (e.g Industrial customers)

Understand the areas while identify type of customers by help of sector, size,frequency, usage, benefits

2. Identification of key Intermediariesretailers (types) distributors, retail format available in targeted areas mail-or online etc

3 identify Influencers

consultants, contractors, media, kirana storekeeper etc

4.Volume and market share of key customers, intermediaries influencers ( all the above)

Benefits of Market mapping

Validate your value propositions and scale to a broader set of targets To Collect qualitative and quantitative information about your most appropriate markets,

clusters and segments. To Finding the right partners for your channel program based on geography, specialty or

market penetration. Specific recommendations and action plans necessary to create market and channel

advantages. The appropriate action plan for channel coverage and communication. Learn if your business model will hold up under the demands of increased sales volume Assess channel sales motions and measure penetration and effectiveness of channel marketing

programs.

Application of Market Mapping in Retail industry

India: Telecom market structure

In india Mobile penetration= 70%

The star markers indicate the shops in the area selling telecom products. We need to emphasizehere that initially an organization doesn t even have a list of these shops, let alone a map onwhich they are plotted.


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Example of a sales territory - Part of Bangalore City, India,

Above star marks outlets can be categorized in many ways. For example, we can have thefollowing categories Categorization of Outlets

Multi-brand outlets Those that sell telecom products of more than one telecom provider.These retailers are specialists in the telecom sector having an accurate understanding of atelecom customer. They end up being the biggest advisors to any sales manager and also the

biggest source of info regarding the competitors. Branded retail outlets Those that sell telecom products of a single organization. These

outlets are frequently company owned-company operated (COCO). However there can beother forms like franchisee owned-franchisee operated (FOFO). They are generally located inan up-market area where there is more customer foot traffic.

Kirana stores (Mom and Pop stores) These are friendly neighborhood shops selling avariety of products for daily consumption in a household. Many times these shops contributeonly a small amount of business to the telecom organization. However, they definitelyincrease the visibility and reach for any telecom organization.

For Vodafone india to do business in Bangalore city it needs to place its products within theseoutlets. They are the customer touch points and the breadth and depth of the sales channel.Therefore, having a list of these outlets is one of the foremost and critical steps. This activity can

be referred to as retail mapping.

How to do Retail Mapping


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Stage 1 : Obtaining and referring to an existing database - Many times channel salesmanagers and distributors of existing brands offer a new brand in anticipation of a largersalary and higher margins. They end up becoming an extremely important source of thisinformation. These people bring with them an already existing list either in the form of a fileor their awareness of the geography. The aforementioned method is the easy way out. This

would help you directly go to those shops. But no telecom organization will consider a ready-made list as absolute. Even if a ready-made list exists, validation and verification are thenecessary steps. It is definitely unethical to disclose confidential information of the list ofoutlets of a competitor. However occurrence of this conduct cannot be ruled out.

Stage 2 : Traversing the geography and visiting the outlets - Every morning all the channelmanagers and the employees of channel partners traverse the roads of their respectiveterritories. They stop at every outlet selling telecom products. They search for posters,danglers, streamers, non-lit boards, lit-boards and other such branding elements. They stop atthese outlets and record the information as needed.

Stage 3 : Retail Mapping Information Convey: The information collected in retailmapping is extremely critical to make strategic decisions for various functions in a telecomorganization. This information not only ensures an effective launch but also establishes asolid foundation and direction for the organization by aligning its strategy based on the truthsof the geographical territory. This territory is analogous to a battleground where thecompetitors fight everyday to get a bigger piece of the customer share.The main informationsought about an outlet is the number of activations and amount of recharge done for varioustelecom providers. This information helps assess the importance of that outlet. An outletdoing high activations and selling significant recharge is definitely a very critical outlet inwhich to place stock.

the information and its impact on the strategic thinking of marketing and sales functions in atelecom organizationon the basis of following parameters


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Sales strategy for retail outlets based on info gathered about them

Marketing strategy for retail outlets based on info gathered about them


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Vodafone s retail mapping process

Sampling Data of outlets :

Outlet A Outlet B Outlet C Outlet D Outlet E No. ofactivations permonth

10 25 150 300 50

Papar Recharge(In Rs.) permonth

100 - 1000 3000 2000

EletronicRecharge (inRs.) per month

1000 2000 30000 20000 30000

Noise in the As-is Process


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Elimination of Noise Present in As-is Process of Retail Mapping

Usage of information and location technology eliminates the noise generated during the as-is process and reveals the following conclusions:

1. The activities of manually generating the electronic form of the list by sales representativesand also manually collating the list by a backend person are eliminated in the to-be process.Hence noise, such as incorrect data entry, incorrect outlet names and categories, is not

present.2. Multiple versioning can be taken care of by the server. Whenever there is an update made

regarding any outlet, it flows to the server and a new version can be created. The versionscan also be tracked and controlled by the server.

3. The effort is drastically reduced as two steps are eliminated. The sales force can concentrateon other priority activities like channel management and feedback from market.

4. Wasteful expenditure in creating incorrect branding elements is eliminated.

5.

The real-time capture and update of store performance data can help to effectively tune thesales and marketing strategy.

Better Strategy Formulation

Since sales are all about handling the geographical territory, it makes great sense to map the parameters (refer to Figure 8). This can give vital inputs in formulating an efficacious strategy.


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Figure 8: Detecting the high potential sales areas example scenario (Part of Bangalore City,IndiaHYPOTHETICAL SCENARIO Consider a hypothetical map and assume the plotting of retail outlets with recharge sales > Rs.5000/- from 25th Aug 2011 until 3rd Sep 2011. The clutter in the encircled region shows manycellular phone recharges happening in that area during this period. Further investigation reveals amajority Muslim community in that region. The company can of fer special Full Talk Time

promotions for Rs. 786/- to generate maximum sales from that area during the festival period ofEid the following year (refer to Figure 9).


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Detecting the timing and location of selling a product example scenario (Part of BangaloreCity, India Better

targeting of low performance areas

The zonal manager often deals with a large area with many sales reps reporting to him. It is notfeasible for him to cover the entire territory during his visits. He needs to identify the areaswhich require his attention and target them during his visit.

HYPOTHETICAL SCENARIO

Consider a hypothetical map showing the initial A category outlets with last month s sales being less than 200 units (refer to Figure 10), indicating that they have not made salescommensurate to A category. The zonal manager can visit these outlets and areas tounderstand the causes and take corrective action.


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Detecting under-performing areas example scenario (Part of Bangalore City, India, Map taken

from

To-be Process of Retail Mapping

Each sales representative would have a hand-held device that is GPS-enabled. He would visit theshop, gather the data and feed them into the mobile enterprise application running on the hand-held device. This information would flow to a server in near real-time and update the centraldatabase. Additionally, the latitude and longitude of the outlet would also be recorded andupdated. The server would record information from all the sale representatives and collate thatinformation into a single master list.


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Market mapping based on Sales Territory helps in following

Measure performance of each region Identify underperforming sales territories Adjust resource allocation Outline high-potential zones to explore new services Improve visits by sales representatives Redefine territory assignment Simplify territory realignment Improve travel time use Reduce travel costs Improve sales coverage Gain better insight into sales effectiveness and performance by territory

Documents

Market Mapping -MRA