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What do we mean by understand the market? Are we referring to competition? Are we referring to alternative products and services available in the market? Are we referring to stock and bond markets? No, we are referring to something far more basic - understand the market in terms of customers, investors. Understand what the key demographics are in the market in which you are operating or wish to operate. Understand the size of the market, understand its different social, ethnic, professional and cultural aspects. Understand all the contours of the localities within a large city that you want to focus on, or the contours of a small city if you are defining the entire city as your market. As an IFA in say Chennai, you may have set up your office in Adyar in South Chennai and are therefore logically expecting to do business with clients in and around that locality. Or, if you are an IFA in Rajkot, which is a much smaller city, you may be considering your market as any investor in the city of Rajkot. An IFA in Borivali, a Mumbai suburb, may however look to do business with clients in the western suburbs of Mumbai - in and around Borivali, rather than from the opposite side of such a large city.
Don't I already know my market?
Very often, we take the city or locality that we operate in, for granted. We've lived there for so long - don't we know all the streets like the back of our hands? Shouldn't this whole exercise of mapping out a locality or a city be more relevant for an outsider who comes into the city or the locality for the first time? Isn't it a waste of time for me?
We would submit that very often, it is exactly this familiarity that creates blind spots - that prevents us from getting a holistic picture of our market - and its changing contours, which is the foundation for any further efforts on segmenting, targeting, creating value propositions and other marketing steps and strategies that we will embark upon.
Here are some of the facts that we would recommend you take the trouble of putting together, for the city you operate in or the part of the city you wish to operate in.
Size of market
Population, growth in population
Literacy rates, trends in literacy rates
Total bank deposit base and number of bank accounts in the city
Total MF AuM and number of folios in the city
Total live life insurance policies in the city
Total number of vehicles registered in the city
Total number of houses / dwelling units registered in the city
Market segments
Number of practicing professionals in the city and growth trends : doctors, lawyers, CAs, architects etc
List of all large employers with no of employees in each organization
Key demographics - age profile of population, income profile, occupation profile
Key demographics of the city from a business point of view : major business clusters and types of business in each cluster - for example, wholesale cloth merchants in locality X, small scale garment factories in locality Y, brass exporters in locality Z etc.
Key demographic characteristics from a residential point of view - for example locality X is predominantly made up of retired government officers, locality Y is a new suburb with many new constructions, primarily occupied by young working couples etc
Major religions practiced, population by religion, localities with dominance of certain religions, if applicable
Prominent places & personalities
List of all schools with number of students in each school
List of all colleges with number of students in each college
Major social spots within the city / locality : names and locations of malls, multiplexes, public gardens, places of worship - areas where one typically sees large gatherings of people
Names of all community service organizations, clubs and NGOs
List of 25 - 50 of the most prominent citizens of the locality
List of all large housing societies with names and contact details of key office bearers
Competition
No of ARN holders
No of insurance agents
Number of banks, sub-divided into foreign, private sector and PSU
How is this going to help me?
When you put this whole fact sheet together, you may be surprised to see some obvious business opportunities that didn't strike you, before you made this effort. A prominent IFA in Delhi did a demographic mapping of the residents in the locality where his office is, and concluded that the majority of residents there were Government officers, most of whom were now in retirement mode. That insight prompted him to come up with a unique retirement solution which catered to their requirements, which helped him enhance his business significantly. A successful IFA in Guwahati did a similar mapping and figured out two key segments that he had not done enough work in, but which were present in large numbers - defense personnel and lawyers. He then put together offerings tailored for these segments, and accelerated his business. A leading IFA in Ranchi mapped out all the social organizations in his city and systematically went about associating with all the relevant ones in some form or the other. This not only satisfies his desire to serve society, but has acted as a significant business booster as references come by a lot faster and easier due to these social connections.
How do I get this information?
The list looks long, and you may be tempted to ask is how to go about putting this together. There is a lot of information that you perhaps already know, there is perhaps some data that you are not familiar with. Browse through the net, and you will stumble upon a fair amount of information about your city - some of which you may have overlooked. Sources like Wikipedia and district profiles uploaded by Governments and municipalities offer some basic data. Supplement this with some of your own mapping efforts, and you should be able to put together a reasonably comprehensive fact sheet / profile of your market. Once you have completed this preliminary exercise, don't be surprised if some business insights hit you right away. If they don't, no need to fret. As you go through the following articles of this series, you will see how this data can be used intelligently to sharpen your marketing efforts and drive your business forward.
All content in Marketing Wiz is created by Wealth Forum and should not be construed as views of Kotak MF.
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Marketing Wiz is a joint initiative between Kotak Mutual Fund and Wealth Forum, where we share insights on how distributors and advisors can accelerate their business growth by understanding and applying essential marketing concepts and practices. Marketing is often seen as a relatively weak link in an IFA's practice, and therefore offers high potential to deliver growth, if leveraged intelligently. It will be the endeavour of Marketing Wiz to help you strengthen your marketing capabilities, connect better with clients and prospects, serve clients better and thus enhance your own business growth.