10 Nov 2016 20:10 IST

The role of market research panels

What is the point of consumer purchase panels and retail panels? Read on to know

Market research is a field growing in importance as markets become more globally competitive, in all product and service categories. Most developed economies see a few research panels running to track consumer behaviour.

The behaviour being tracked could pertain to product purchase, media consumption, leisure habits or other such behavioural traits. There are also special panels, such as retail panels, that help in tracking consumer behaviour. Let us briefly understand two kinds of panels — consumer purchase panels and retail panels.

Consumer purchase panel

A consumer purchase panel is present in most countries. It is present in India too, and is run by research company IMRB.

It consists of a set of housewives who have agreed to be part of the panel (The term housewife here refers to the lady of the house, not to their employment status), which essentially involves reporting the details of all purchases made at home across product categories such as biscuits, cooking oil, detergents, dishwashing liquids, hair oil, et al.

A diary is provided for the purpose of recording details of each purchase, as and when it happens. The details include brand name, pack type, pack size, the price paid, whether it was bought on a promotional or special price offer, and other such aspects.

Panel selection

The selection of the panel is a complex process that needs to strictly adhere to the rules of random sampling, to ensure that the composition is as closely representative of the entire population as possible.

The data from the panel is normally collated on a monthly basis and then appropriated to the population. This yields various estimates, such as of the consumption volume of different categories, of brands within categories, and of the contribution of each pack size to a brand’s sales.

Two more important uses of these panels are to study the way consumers shift between brands, and understand the consumer’s profile.

Retail panel

A retail panel delivers almost the same information as a consumer purchase panel, but varies in methodology. A panel of retailers is set up (again, under strict sampling guidelines) and is asked to cooperate with data collection process on a monthly basis. The data collected is simply the stock quantity of all pack sizes of each pack type of each brand of each product category.

While the task sounds simple, it is quite time consuming and cumbersome. One more piece of data is collected from the retailer — the amount of stock purchased by him from the distributor, in the last month. From these two pieces of data, an estimate of how much the retailer has sold in the month can be arrived at.

For instance, let us assume that the retailer has a stock of 20 packs of Tiger biscuits. Last month, he had a stock of 19 packs. In the interim one month, he bought eight packs. Using this information, one can calculate that he sold seven packs (19-20+8) during the month.

This data, when aggregated across the sample and extrapolated to the population, will yield a fair estimate of the size of the market for each pack, brand, or whichever type one wants to know about.

Each panel has its own pluses and minuses, but both co-exist fairly comfortably in most markets.

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