Titoo Ahluwalia, Chairman, ACN-ORG-MARG: For critical mass

Statistically, it takes two to tango, but three to plot a trend. Dots, that is. Let's count. In 1997, ORG merged with MARG, to gain leadership of the Indian market research (MR) industry. One. This year, ORG-MARG, now owned by the Dutch group VNU, is tying the slow knot with ac Nielsen India, also VNU-owned, to create an MR behemoth in an industry worth Rs 310 crore in billings. Two. The pharma tracker IMS Health could be next. Three?

"Well," says Kanwal Mohan Singh 'Titoo' Ahluwalia, Chairman of the Rs 122-crore ac Nielsen ORG-MARG, "the two companies have talked to each other, but nothing, absolutely nothing is on the cards yet."

The casual observer may join the three dots to read 'consolidation'. But this is not about tonnage capacity, it's about information. Which is perhaps why Ahluwalia never fails to earmark the pluralism that continues to characterise the market. "In India," he says, "the top two account for well over 60 per cent of the entire MR cake." The other player being the WPP Group's Rs 71-crore IMRB-which he helped start in 1971, incidentally. The two are rivals, for most practical purposes, and no single player has an overwhelming share of the Indian MR market (See The Indian Landscape).

Still, there's no obscuring the fact that ACN-ORG-MARG is India's sole supplier of retail audit data (ORG's original core). It has also got a strong hold over TV ratings, with its half-owned INTAM peoplemeter system now a data-provider to tam, ever since India's two rival rating systems started operating together, to enlarge the sample size and sell cohesive ratings to media planners. Ownership of the infrastructure remains separate, but as far as marketers are concerned, its now a single-window data shop.

Even in health audits, ACN-ORG-MARG has over two-thirds of the domestic business (this even without IMS Health, the global segment leader). Where the firm faces competition (mostly from IMRB and NFO-MBL), is in customised MR projects for clients (MARG's original forte), which account for nearly half the market and Rs 59 crore of Ahluwalia's topline.

AC Nielsen gives the whole set-up a fillip, spelling not just technology infusion, but numerical advantage as well. "Once the economy started opening in the early 1990s," says Ahluwalia, "it was clear that even India would also go the way of other markets, where critical mass would play a crucial role."

Multiple Sampling

A wider sample-spread amounts to having that many more tentacles in the market. The more tentacles, the better the firm's ability to take the market's pulse. As simple as that. The other thing assured by the quasi-merger, is size. As in any business, the bigger the better.

End of story, then? Not quite. It may just be the beginning. What about focus, for instance? Isn't ACN-ORG-MARG turning into alphabet soup-or will ac Nielsen overshadow ORG-MARG? Or are these to function as separate brands? What about client-conflict?

Good questions. Ideally, ACN-ORG-MARG would like to have it both ways. That is, retain the competing clients of ac Nielsen and ORG-MARG, with the two doing separate custom work-while also gaining from the synergies of both, which lie mainly in audit work.

The overall idea is to offer a full-spectrum suite of services, with audit data being used as a basis for higher-order jobs, custom-designed to solve specific problems. In other words, it wants its menu card to resemble a three-in-one gatefold, with basic pulse-reading services as the convergent centre-card, flanked by ac Nielsen and ORG-MARG's rival offerings (for conflicting clients).

"We have not heard anything new that the merger will bring to the market" Jenny Abraham, Managing Director, NFO-MBL

Sounds well-arched on paper. But are things really going by plan? Market insiders say that two entities have not really been competing for custom business, at least in Delhi, for about a year now. So, is the separation rather too subtle to attract rival customers? And what about overlaps? Surely, the top management would want to pare these down for the sake of efficiency.

"We believe the dual-brand strategy will work very well," says Partha Rakshit, Managing Director, ac Nielsen India Research Services, and member of the integration committee. Still, there are signs that VNU is toying with the idea of having just one brand in India, eventually.

How long this would take is anybody's guess. Which brand VNU might opt for, though, is less of a wonder, given that ORG-MARG already seems to be getting eclisped as an audit brand, with its FMCGs retail audit rechristened ac Nielsen Retail Audit.

Ahluwalia, however, doesn't want too much to be read into this, saying that ACN is strong in FMCGs, while ORG-MARG is big in financial, pharma and automobile research. It all adds up to a complementary co-existence, in his view.

Then, there's internal integration to worry about, an issue that still lingers from the 1997 merger.

In fact, employees still mostly identify themselves as being 'ORG', 'MARG' or 'ac Nielsen' people. "Yes," admits Ahluwalia, "historical baggage has not been completely shed and cultural differences are sometimes still an issue."

Some old-timers, for example, remain rather grumpy. "The ACN protocol is being thrust down across the product spectrum," groans a senior manager who decided to quit recently.

As for focus, ACN-ORG-MARG is looking at audit and customised, both. The unifying element? Well, MR is MR, an information business where credibility is the biggest asset and bias the biggest danger. The mission is to guard the integrity of the discipline, by presenting clients with the closest possible approximation of market reality (if not reality itself).

"A full-time large field-force does not necessairly mean good quality data" Thomas Puliyel, President, IMRB

Market Reading

The rest of the industry has its own take on the quasi-merger. Alok Shanker, Chief Executive of the Rs 15-crore Blackstone Market Facts India, expects ACN-ORG-MARG to concentrate on retail, "with investments in new technology et al", as it does worldwide.

"That's not true," reacts Rajiv Inamdar, President, ACN-ORG-MARG, chief of customised business, "In the Asia-Pacific region, ACN is No 1 in customised research, and its customised business is as big as syndicated retail."

Maybe, but will it reshape the industry's dynamics? Not significantly, feels Jenny Abraham, Managing Director of the Rs 27-crore NFO-MBL. "Both companies have been here for a long time, and we have not heard of anything new or different that the merger will bring to the market," she says.

If anything, some allied services will be spun-off into loosely independent units (for parent VNU), just as TV ratings are now part of Nielsen Media Research (NMR) in India, which prompted the exit of old media research hand Ashok Das last year from ORG-MARG.

The firm shut down its rural consumer panel in March 2001, and quit the Indian Readership Survey (IRS) in late 2001, partly because ACN was involved in the rival National Readership Survey (NRS) and partly because it was losing money.

Better to do what one's good at, better. This explains the money being pumped into modernising its retail audit, which will now use handheld scanners and the like, and will track new metrics too.

Marketers are demanding electronic real-time data feed, and going by Western standards, Indian market data continues to be slow and sketchy. This must change.

Modernisation has its costs. The firm has some 1,700 employees, nearly three times IMRB's, thanks to the manual retail operations. "Well," says Thomas Puliyel, President, IMRB "this is the cross that he (Titoo) has to bear, for a full-time large field-force does not necessarily mean good-quality data."

Safety In Numbers

On efficiency, ACN-ORG-MARG still has to get itself into shape. That's another reason, perhaps, why ACN-ORG-MARG's dominance doesn't seem to worry rivals much. "Our real supplier is the respondent, and it doesn't matter to him if one company is bigger then the other," says B. Narayanaswamy, Executive Director of Rs 16-crore Indica Research.

Also, it's not as if ACN-ORG-MARG has everything wrapped up. It doesn't have a household panel, for example, which is IMRB's monopoly here, despite ACN being a big player in this arena globally.

But how are clients responding to ACN-ORG-MARG's growing clout? "It is not an issue with the industry that they alone control retail audit data," says Anand Bhardwaj, Executive Vice President (Marketing & Marketing Services), Electrolux Kelvinator. Well, to the firm's credit, even marketers such as LG Electronics, which were disputing ORG-GFK retail data, have come round to become customers.

Also, the Indian market is forever sprouting MR hotshops. This acts as a guarantee against monpolistic pricing tendencies, if any. If ACN-ORG-MARG charges a premium, it's for quality and value addition.

Don't take that last part lightly. Sure, MR can't detect an asteroid on collision course with the Earth. But there's a lot that somebody like Ahluwalia, a man who has already been at the helm of four of the country's top MR firms, stores in his head-analysed and distilled. With some 12 exabytes of data being gurgitated by the world every year, what clients value most is the man's ability to see through the haze.