One of the most important aspects in designing a market research (MR) questionnaire is the sequence of the questions. Each question that you ask poses a potential danger to sensitize or condition the respondent, and thereby bias the respondent in the subsequent questions. One example is that asking a question like ‘Have you heard of Brand X?’ itself raises conscious awareness of the respondent who may not be consciously aware of the brand. Another example is that if a respondent is asked to indicate which brand s/he buys and later if s/he is asked to rate the brands, then there is a danger that the respondent might try to be consistent with his or her earlier answers, and hence will give higher ratings to the brand the respondent buys.

At a high level, the general rules are:

1. Ask the most important questions first when the respondent is more active.

2. Ask those questions which are most sensitive to conditioning such as attitudes and preferences earlier.

3. Ask factual and historical information towards the end as respondent becomes less enthusiastic and fatigued.

In a well-designed questionnaire, the respondent should not know the brand of interest (the brand for which the research is being conducted) up to a desired stage, thus avoiding any respondent bias. If the respondent comes to know that the research is being done for Brand X, then the respondent may become biased towards the Brand X. So, any question that has a danger of revealing the brand of interest must be delayed until all the information that is prone to conditioning is retrieved.

The most popular way of designing a questionnaire is the funnel approach. ESOMAR defines the funnel approach as ‘A way of ordering questions in a questionnaire so that general questions are asked before specific questions. This ordering avoids the responses to specific questions biasing the answers to general questions.’

Typically, the questions regarding awareness of the brands in the marketplace must be asked first. In fact, if the awareness of brands is being measured, then awareness must be the first question which must be asked when the category is mentioned.

Purchase Intention (PI) is one of the most important measures and is very sensitive to conditioning, so it should be asked immediately after the awareness question or as soon as possible depending on the research objective. In controlled experiments, the purchase intention should be asked immediately after exposure to the treatment.

PI should be followed by the attribute ratings – which attributes (category) are considered important by the respondent?. Brand Evaluation on the attributes should be asked next. All the brands that featured in the earlier purchase intention question must be individually evaluated against the attributes. Moreover, it helps to quantify the Fishbein Model. This can be followed by questions on brand behaviour, category behaviour, psychographics, and demographics.

Question Sequencing is a huge research area and there is a lot of interesting research regarding the right position of a question, the right way to frame a question, and the right scale to be used. One example is that some experts say that the consumers tend to be biased towards the left side in a Likert Scale. Another example is that some experts say that demographics should come at the start, while others say that demographics should come at the end. Some people take the middle path by asking the key recruitment demographic questions early and then postpone the rest of the demographic questions until the end.

All the above mentioned factors together make questionnaire design a very interesting and a crucial work in quantitative market research. But due to very demanding timelines, practising market researchers may not always be able to devote enough time for the questionnaire design.


If you speak to any Territory Sales In-charge or Manager (TSM) of a large FMCG company, they are going to mention one huge problem called price undercutting that affects their daily work. In an earlier post, I have written about how the wholesale trade leads to price undercutting. In this post, I am going to write about how the Territory Sales Persons use the so called ‘visibility budgets’ for undercutting practices.

Wikipedia defines price undercutting as: ‘Price cutting, or undercutting, is a sales technique that reduces the retail prices to a level low enough to eliminate competition‘. In most cases (more than 95%) the competition is not with a competitor’s product, but it is the competition between a company salesman and a wholesaler selling the same branded product at different prices.

Let’s understand this with an example. Let’s say there is a brand X of soap which the TSM is supposed to sell at Rs.32 per piece to the retailer. Let’s say, the area allocated to this TSM is adjacent to a big wholesale market called Bhindi Bazaar. There are twenty retailers distributed across his area and some of the retailers are at a stone’s throw distance from the wholesale market.

So, when the TSM goes to the retailer, the TSM realizes that the nearby wholesaler is selling at a very reduced price. Typically, the conversation between the retailer and the TSM goes like the below:

TSM: Naya scheme aaya he, aap bees pete (20 cartons) lelo… itne price mein milega aapko

Retailer: Kitna padega? Rs.32?

Retailer: Saab, Bhindi Bazaar mein Rs.26 per piece mein mein mil raha he (single carton mein bhi)

So, the TSM thinks that he cannot compete with the wholesaler’s undercutted price. The TSM calls the Area Sales Manager (ASM) or his supervisor and tells him the problem.

TSM: Rate ka problem he Sir

ASM or Supervisor:  Mein samajhsakta  hoon… per manage karlo

ASM or Supervisor: Aapka monthly target se shortfall hora hein

So, the TSM realizes that he is not going to get much help and he has to reach his monthly target by any means.

The TSM uses the visibility budget to get out of the problem

Generally, FMCG companies put up some display material or place their product very attractively in the shelves or as separate displays in the retail stores. The company pays a certain amount of money to the retailer for doing so. The TSM gets a certain budget to pay the retailers to place or stick the brand display material. Typically, the price for a shelf in a retail shop may range from Rs.300 to Rs.1000 per month. Generally, companies buy 1-4 shelves and pay the respective money per month to the retailer.

The TSM uses this money to reach his sales targets instead of giving it to the retailers. In our example, as the wholesaler is selling at Rs.26 per piece, the TSM will sell the stock at Rs.25 per piece (Re.1 less than the wholesaler’s price), but tells the retailer to give the bill at Rs.32 so that the company cannot find out about his undercutting practice. The TSM reaches his monthly target through price undercutting.

So, what happens to the display material of the company?

All the display material provided by the company will be placed in the TSM’s house and will probably be used by his son for making paper rockets.

What happens during the visibility audits?

FMCG companies also do some visibility audits or sometimes the brand guys would like to visit the field for some reason. Suddenly, the TSM will come to know that tomorrow morning there is going to be an audit of the display material. Within a few hours, the TSM and his salespersons will place or stick the display material in all the stores or a subset of stores where the audit is going to happen. They tell the retailer that they are going to remove it tomorrow and it is only for one day. Most retailers don’t mind it.

On the next day, when the auditors come and check, they find everything to be fine and they go back and send appreciation mails that this area is 100% compliant and that the TSM is doing a brilliant job. On the next evening, the TSM tells his salesperson to remove all the display material.

This is how the TSM achieves his sales target through undercutting practices. It is important not to blame the TSM completely but to understand that the origin of the problem is mainly due to large wholesalers. The sales teams do talk to the wholesalers and fix their prices or sometimes they solve the problem by re-allocating the markets.

The big danger in all this process is that the retailer is getting used to this practice, and it will impact have a negative impact on the brand in the long term. Nevertheless, price undercutting is a harsh reality of sales in the FMCG world.

Ideas are a dime a dozen, at least in the start-up world.

Paul Graham once said that ideas mean something, but execution means far more. He also said that if he provided the entire idea to a team and the team executes the idea, he would still be entitled to less than 10% of the company. 

“What matters is not ideas, but people who have them” – Paul Graham.

In the context of this post, when I say ‘idea’ it is not only the raw idea like lets build a social network for kids, but an idea that also includes answers to questions like – will customers buy/use you and how do you know it?, how will you make money?, how will you go-to-market?, etc.

If one spends little time around start-ups, then one will very soon realize that the idea doesn’t matter much, and it is actually the people behind the idea that matter so much more.

Here are five reasons why the team matters more than the idea?

1. An idea doesn’t have any saleable or usable value. Ideas alone don’t hold any value to the end customer, because the customer has to solve a particular problem by using a product or a service and not by using the idea itself. If you don’t believe this, try selling your start-up ideas.

2. Ideas are relatively easy to arrive at. This is probably the reason why almost everybody has start-up ideas, even including people who think they don’t have one. On the other hand, execution (tech/business) demands a certain depth of know-how and a good amount of motivation for a long period of time.

3. An idea is not the reality, it is a wishful piece of organized thought. A startup is not about the idea, but it is about the  team that actually transforms an idea into a product or a service with their know-how and their motivation. Therefore, if the people behind an idea are good and motivated, then chances are that the idea might translate into a good product or a service eventually.

4. Ideas change with time, but the team might not change. Or I can say that it is much easier to change the idea than to change the team. If you put a good team behind any idea, they would at least bring out the best possibilities out of the idea. So, what happens to the idea is actually dependent on the team that is behind the idea.

For example, I am not saying that Mark Zuckerberg would’ve made a multi-billion dollar company out of any idea during his collegeBut, I am saying that if Mark got interested in an idea, he would’ve seen it through into a product or a service, trying to come up with the best possibilities to do so.

5. In the startup world, there are so many ideas floating around perennially that the startup community is not very excited to listen to only ideas anymore. Having an exciting idea doesn’t really separate you from the crowd. Investors actually almost every time look at the execution (the growth or the product or the people) behind the idea, because it is very difficult to judge an idea in isolation. You either have to have the product (or traction) or you have to be a highly motivated team with a strong reputation for execution and know-how or probably balance out the previous two, in order to have a small chance of success in the start-up world.

We all have ideas; it just doesn’t matter!

India has about 600+ million mobile phone users with about 800+ million subscriptions (SIM Cards base). About, 60% of these users are in Urban India. Now, imagine converting all those mobile users to smartphone users.

Thanks to its population, India is a huge market for smartphone manufacturers. In the coming 2 years, smartphone manufacturers look to cannibalize a large pie of the feature phone market in India, and supply trends like the narrowing price-gap between the feature phone and smartphone, and the entry of more handset makers are accelerating smartphone adoption in India. Smartphone has a very high aspirational value, and people will adopt it in the first opportunity. It is only time that smartphones will be everywhere in Urban India.

So, how is a smartphone defined, how many smartphone users are there in India, and what is the growth?

According to Nielsen’s report released in Sep’2013, there are 51 million smartphone users in Urban India. Nielsen’s definition of smartphone is ‘phones with operating systems that allow installation of applications’. According to IDC APEJ Quarterly Mobile Phone Tracker, companies have shipped 12.8 million units in Q3’2013 and 10 million units in Q2’2013. There is a 229 percent y-o-y growth compared to the Q3’2012 number of 3.8 million units.


If we assume a quarter on quarter growth of 20%, the number of smartphone users in Urban India will reach 105 Mn by Sep’2014.

Deloitte’s technology, media, and telecommunications predictions revealed on 31 Jan, 2014 say that the number of smartphone users in Urban India will cross 104 million in 2014. 

City-wise breakup of the smartphone users in India

According to Internet and Mobile Association of India (IAMAI), Mumbai has the highest number of smartphone users followed by Delhi.


Where does India stand in the global smartphone market?

According to a recent report by the market research firm Mediacells, there will be 1.05 billion smartphones shipped in 2014, and 70% of those smartphones will be bought by new users and 30% will be bought by existing users as replacements.

Mediacells estimates that India (Urban & Rural) will add 172 million smartphones in 2014 to have a total of 250 million smartphone users. Even if  India is going to add about half that number of users (90 million – Urban 50 + Rural 40), India is going to have 160-170 Mn smartphone users by the end of 2014. 170Mn is a huge number, and remember this is a semi-optimistic estimate. India will be the second largest smartphone market in the world, surpassing U.S. and behind only China.








Startups typically have three broad ways of funding their companies. They are incubators/accelerators, angel investors, and venture capitalists (institutional investor). Generally, Incubators and Accelerators help the start-up team to set-up the company, and shape the start-up’s Go-To-Market strategy. This article is limited only to explain how the equity dilution works and won’t get into the details of valuations of start-ups.

The typical amount of money different investors pump in and the equity they take is as follows.

Startup Fundraising Options

Understanding Equity Dilution with an Example

Let us take a start-up named XYZ Labs, and we shall walk through how the equity of the founders and the early investors gets diluted as the company goes through various rounds of investment. For the sake of simplicity, lets say the company has gone through an Angel round and one VC round (Series-A). Let’s say the angel investor took 20%, and the venture capitalist took 25% of the company for $N and $M post-valuations respectively. Let’s see how the equity gets diluted.

In any round of investment, if an investor is taking x% of equity, then the equity of all the existing equity holders will come down by x%. So, if I say y% goes down by x%, then the calculation is:     y%*(100-x)%     Or      y%*(100-x)/100

Let’s start with Founders of XYZ Labs holding 100% of the company, and having a first angel round of 20% for $N valuation.

Angel Round

Let’s say the angel round is followed up by a Series-A round of 25% and $M valuation.

Series A

So, as mentioned above, at each stage of investment, the equity of the earlier investors or founders (equity holders) will get diluted. But, with higher valuations in every round, the diluted equity will have more value than in the previous round. Also, typically in Series-A there will be an additional 12.5% of Employee Stock Option Pool (ESOP) that is to be allocated. I haven’t considered ESOP in the above example to keep things simple.

The typical equity dilution at various rounds of investment looks as follows.

Equity Dilution

So, how does it happen in practice?

In practice, your earlier investors won’t like their equity to be diluted too much in the further round of investment.So, they would like to put some cap on the dilution.

The other important thing to notice is – the type of equity that the investors and founders hold is different. Lets understand that with an example. Let’s say the company XYZ Labs is being acquired by some other major company ABC Labs. So, will all the equity holders of XYZ Labs be paid at once? The answer is No. Typically, the order of payouts is as follows:

1. You first clear out any debts that XYZ Labs owes to any banks or other investors.

2. You then start paying out the equity holders in the following order:

a. Preferred Stock

b. Common Stock

The stock that the founders hold is called Common Stock. This has the least priority during payouts in case of bankruptcy, mergers & acquisitions, etc. As the investor would want to have an early and safe exit, the investors’ stock comes with certain preferences over the commonly held stock, and it is called Preferred Stock. Preferred Stock could have preferences such as conditions on future dilution, priority during payouts, option of investing in future rounds, etc. Additionally, preferred stock can also be converted into common stock to maximize investors’ returns. Also, since debt is payed before equity during payout, some investors will give you money in the form of debt (debt note) and not in the form of equity. Because investors know that debt has the highest priority during the time of payout, and hence they can have the earliest exit .

Now, you see that not all of us in the company are equal, and not all money is equal. But, remember that investors are putting their money on you at early stages and are taking high risk. So, it is justifiable for them to look for a safe and early exit with maximum return. As an entrepreneur, you will hear many terms such as convertible debt, participating preferred stock, etc. These are various payment preferences for the investors to have maximum return, and a safe and early exit under various situations of bankruptcy, mergers and acquisitions, or dividend payouts.

If you’re interested to know more about the start-up terms, please refer to the below link to a Forbes post.

Hope you found this post useful. Thank you.

At any period of time, the consumer base of a brand is comprised of two sets of buyers:  New Triers, and Repeat Purchasers.

Repeats, New Triers

The terms are self-explanatory. To put it simply, Repeat Purchasers are consumers (or households) who repeated the purchase of the brand, and New Triers are consumers (or households) who bought the brand now, but who didn’t buy earlier.

A little more detail

For example, lets take two annual periods 2007 and 2008. Repeat Purchasers of a brand X are those who bought the brand atleast once in 2007 and also who bought the brand atleast once in 2008. New Triers are those who didn’t buy the brand in 2007, but bought the brand atleast once in 2008. Lapsers are those who bought the brand atleast once in 2007, but didn’t buy the brand in 2008. So, it is evident that whenever we refer to the terms New Triers, Repeaters, and Lapsers, we should always have two periods for reference. These periods can be an year, a quarter, a month,  or a week. Similarly, the terms New Triers, Repeaters, and Lapsers can refer to the number of consumers or households depending on the industry. In Telecom or IT, typically it might refer to the number of consumers or users of your device or app, whereas in FMCG it might indicate the number of households that bought the brand. So, whether it refers to consumers or companies or households depends on the industry data, but the philosophy remains the same.

Various Segments of the New Triers of a Brand

So, continuing with the previous example, New Triers are those who didn’t buy the brand in 2007, but bought the brand atleast once in 2008. The important thing to notice is the criteria ‘atleast once‘, which means some number of new triers might have bought the brand multiple times in 2008 (say once in February, June and October of 2008). Don’t get confused with Repeater because the Repeater has bought the brand atleast once in both 2007 and 2008.

So,  a New Trier of a Brand X in 2008 comprises of all consumers (or households) that have:

- Not bought the brand in 2007, and bought the brand in Jan’2008 and never bought the brand again in 2008.
- Not bought the brand in 2007, and bought the brand in Jan’2008 and repeated the purchase in Jun’2008
- Not bought the brand in 2007, and bought the brand in Feb’08 and Aug’08 and Dec’08.
- Not bought the brand in 2007, and bought the brand only in Dec’08
- Not bought the brand in 2007, and bought in ………………

So, regarding New Triers of a brand,  the marketer is interested in finding out:

- How many New Triers have bought the brand in the year 2008?

- Out of the New Triers of 2008, how many consumers (or households) went on to repeat purchase my brand in the next 12 months? For example, if a New Trier purchased the brand in May 2008, then did he repeat purchase my brand in the next 12 months or in 2008. You can define the period as you wish. This shows us the effectiveness in understanding if the problem is in converting the new trials to repeat purchases or is the problem of the brand not getting enough trials? (Please note that these repeaters are different from the brand repeaters in 2008).

- How many First Time Ever Buyers?  If you observe carefully, the new triers in our example are consumers (or households) who didn’t buy in 2007, and bought atleast once in 2008. So, the consumer (or household) could’ve bought in 2006, but didn’t buy in 2007 and then bought in 2008. So, these type of consumers are also New Triers in 2008, but they are not buying the brand for the first time.

So, First Time Ever Buyers of Brand X in 2008 are those who didn’t buy the brand anytime before, but bought the brand X in 2008.

- Among the New Triers (consumers or households) that my brand got in 2008, how many of them are category entrants (consumers or households that were not using the category before, but entered the category with my brand), and how many of them are brand entrants (consumers or households that were using some other brand in the category, but not using your brand). This is especially important for SKUs that are launched to drive the category and brand recruitment.

- How many of the New Triers of my brand in 2008, were using some specific brand ABC before. For example, if a user was using a brand Cinthol in 2007, but now she bought the brand Dove of the same category in 2008.  So, this will help the marketer understand which are the brands that I am pulling consumers from?

- What is the Average Revenue Per User (ARPU) or the Average Volume Consumption of the New Trier? Am I recruiting the high category volume consumers? Do my New Triers increase the volume consumption along the line?

- Is my New Trier also buying some other brand? Is he buying both Cinthol and Dove ?

Similarly, there are a lot of things that can be done on the New Triers, Repeaters and Lapsers. So, one can slice and dice the data in anyway we want to look at and analyze for key insights. I will write down more details in another post.

Thank you.

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