Rochester Institute of Technology
RIT Scholar Works
Theses
Thesis/Dissertation Collections
8-21-1974
The Market in India for Optical Goods
P.S. Bhullar
Follow this and additional works at:
http://scholarworks.rit.edu/theses
This Thesis is brought to you for free and open access by the Thesis/Dissertation Collections at RIT Scholar Works. It has been accepted for inclusion
in Theses by an authorized administrator of RIT Scholar Works. For more information, please contact
ritscholarworks@rit.edu
.
Recommended Citation
THE
MARKET
IN
INDIA
FOR
OPTICAL
GOODS
MASTERS
THESIS
COLLEGE
OF
BUSINESS
ROCHESTER
INSTITUTE
OF
TECHNOLOGY
Research
Option
BBUB
7 71
andBBUB
772
Research
Advisor:
p-
s-
Bhullar
TABLE
OF
CONTENTS
Chapter
I
II
III
IV
V
VI
VII
VIII
IX
X
Introduction
and
Objectives
International
Marketing
Role
of
the
Government
Role
of
the
Planning
Commission
The
Importance
of
Import
Statistics
Industrialization
of
India
A
Profile
ofthe
Principal
Users
of
Optical
Goods
Research
Methodology
Analysis
of
the
Results
of
the
Research
Conclusion
Page
1
4
6
8
11
12
14
17
21
29
Appendix
A
Appendix
B
Research
Instrument
The
Use
of
a
Causal
Model
to
Forecast
Page
1
CHAPTER
I
INTRODUCTION
Until
recently,
market
information
was
either
not
available
ornot
needed
in
most
international investment
decisions.
Uyterhoeven
suggests
some
of
the
reasons
for
the
neglect
of
"marketing
deter
minants",
especially
in
underdeveloped
countries.
Historically,
the
reason
for
most
overseas
investment
was
to
create
a
source
of
supply
of
raw
materials
to
be
used,
not
in
the
host
country,
but
rather
in
the
investors
own
market
or
in
other
industrialized
nations.
Thus,
market
information
about
the
host
country
was
never
really
needed.
"Another
form
of
international
investment,
whichwas
prevalent
in
the
old
days,
was
devoted
to
the
creation
of
so-called
overhead
2
facilities,
i.e.,
railroad
and
public
utilities."Once
again,
marketing
dimensions
wereignored because
they
were
supplying
clearly
defined
and
already
existing
needs.
Since
World
War
II,
international
marketing
investments
to
supply
markets
in
the
host
country
itself have
grown
in
importance.
However,
most ofthese
investments
were
entered
into
largely
for
defensive
reasons-to
protecta
market
positionwhich
had
1.
Uyterhoeven,
Hugo,
E.R.,
"Marketing
Determinants
of
the
International
Investment
Decision",
Proceedings
of
the
Winter
Conference
ofthe
American
Marketing
Association,
Dec.
27-28,
1963.
Page
2
previously been
acquired
through
exports
but
which
was
jeopardized
because
of
import
restrictions.
Since
these
investments
were
made
to
supply
an
already existing
market
position,
the
need
for
addi
tional
market
information
was
less
pressing
when
compared
to
other
investment
considerations.
In
addition,
a
large
numberof
tradi
tional
investments
were
made
in
economies
characterized
by
severe
shortages.
Whereas
in
a
shortage
economy
selling
one's
goodsrarely
presents
a
problem,
it
is
recommended
that
estimates
on
market
size,
market
saturation
levels
and
marketgrowth
potential
be
obtained
before making
substantial
investments.
Today,
these
estimates
are
essential
when
investments
in
a
foreign
country
are
being
considered,
especially
for
productsthat
are
not
included
among
the
traditional
consumer
products.
The
same
idea
is
stressed
by
Smith3,
who
says
that
when
launching
new
industrial
products,
"nothing
beats
an
agressive,
lively,
appealing,
all-out-effort
-nothing
except poorplanning".
Market
research
is
needed
to
reduce
the
level
of
riskand
uncertainty
involved
in making
the
decision
to
manufactureand
sell
a
product
in
a
foreign
country,
For
the
purpose
of
this
paper,
we
assume
a
hypothetical
company,
which
has
been
in
existencefor
only
a
few
months.The
manage
ment
of
this
company
is
faced
with
the
question
"Should
we
manufacture
and
sell optical componentsor
instruments
in
India?"3.
Smith,
R.K.,
"Look
First,
Then
Leap",
Proceedings
of
the
48th
National
Conference
of
The
American
Marketing
Association,
Page
3
To
meaningfully
answer
such
a
question,
management
will,
to
begin with,
need
inputs
from
almost
all
the
variousbusiness
functional
disciplines,
and
then
they
will
evaluate
these
inputs
in
terms
of
the
company's
goals,
resources
and
attitude
towards
risk.
The
task
of
collecting
and
condensing
all
the
information
that
management
will
need
is
indeed
horrendous.
However,
there
is
usually
an
order
in
which
this
information
is
collected
and
presented
to
management.
Among
the
first
information
that
manage
ment
will
need
is
a
"feel
for
the
market".
Accordingly,
the
scope
of
this
paper
is
restricted
to
three
functions:
a)
Estimate
the
size
of
the
total
market
for
optical
components
and
instruments
in
India.
b)
Estimate
the
size
of
this
market
in
1980.
c)
Identify
a
few
optical
products
with
goodmarket
potentials.
No
attempt
will
be
made
to
establish
the
mamifacturing
feasibility
or
profitability
of
Page
4
CHAPTER
II
INTERNATIONAL
MARKETING
The
concepts
and
techniques
used
in
international
market
researchare
no
different
than
those
used
in
domestic
market
research.
The
difference
is
that
the
international
market
researchermust
understand
the
special
environmental
factors
and
institutions
in
the
region
of
interest.
These
special
factors
tend
to
increase
the
complexity
of
an
already
complex
environment.
This
meansthat
"foreign marketing
research
is
more
difficult,
as ageneral
rule,
than
domestic marketing
research".
One
of
the
major
difficulties
of
international
market
research
is
that
published
census
and
market
data
is
usually
scarcer
and
less
reliable
than
in
the
United
States.
This
problembecomes
very
acute
when
dealing
with
industrial
productsin
adeveloping
nation.
In
addition,
two
other
problems
become
significant:"a)
many
trade
associationswill
not
maketheir
data
public,
b)
buyers
in
other countries areless
usedto
cooperating
in
3
interviews" .
1.
Kotler,
P.,
"Marketing
Management",
Prentice
Hall,
1972,
p.
843.
2.
Ibid,
p.
854.
Page
5
4
Kracmar
feels
that
the
inavailability
of
secondary
data
should
not
discourage
the
researcher.
He
claims
that
"It
is
in
the
nature
of
research
in
any
field
that
the
researcher
obtains
only
a
small
fraction
of
the
facts.
The
larger
part
must
be
produced
by
the
researchers
themselves
In
business
absolute
accuracy
is
seldom
necessary.
What
is
important
in
the
developing
countriesis
that
reasonably
reliable
data be
forthcoming
on
which
plans canbe
formulated
with
the
assurance
that
they
will
not
be
entirely
wrong
" .Statistics,
important
as
they
are
asa
starting
point,
cannot
by
themselves
provide
the
whole
answer.
There
are
many
inputs
about
the
environment
and
the
industry
that
are
needed
in
order
to
intelligently
evaluate
the
market
potential
for
any
product.5In
the
literature
there
are
several
definitions
and
interpretations
of
the
term
"market
potential".
For
the
purpose ofthis
paper,
the
definition
that
will
be
used
is,
"Market
potentialindicates
the
relative
strength orability
of amarket
to
absorba
type
of
6
product
or
group
of
types
of
products
for
an
entire
industry".
4.
Kracmar,
J.Z.,
"Marketing
Research
in
Developing.
Countires",
Prareger
Publishers,
1973,
p.
15.
5.
Britton,
H.,
"Directories
andCensus
Data
in
Establishing
New
Product
Potentials",
Proceedings
of
the
44th
National
Conference
of
the
American
Marketing
Association,
June
20-22,
1962.
Page
6
CHAPTER
III
ROLE
OF
THE
GOVERNMENT
"The
extremities
of
the
spectrum
of
the
organization
of
economic
societies
are
(1)
full
command
organization
and
(2)
full
market
organization."
Under
the
former,
economic
organization
is
under
a
Central
Plan
through
which
all
economic
activitiesreceive
specific
direction
and
order.
Under
the
latter,
order
is
achieved
out
of
the
interaction
and
coordination
and
responsesof
and
to
free
decentralized
choices
and
decisions.
In
practice,
no
economy
is
"pure".
India
has
chosen
to
develop
as
a
mixed
economy,
permitting
both
private
and
government-owned
industries
to
assist
in
the
country's
development
towards
the
ultimateachievement
of
a
"socialistic
pattern
of
society".
India,
like
other
developing
countries,
had
to
meet
the
challenge
of
compressing
the
progressof
centurieswithin
the
span
of
gen-3
erations.
The
governmenthas
reservedfor
itselfthe
role
ofdeveloping
basic
industries.
Thus,
the
steel,
petroleum,
trans
portation
and
mining
industries,
etc.
are
all
in
the.
public
sector.
1.
Grether,
E.T.,
"Public
Policy Affecting
the
Competitive
Market
System
in
the
United
States",
Proceedings
of
the
Fall
Conference
of
the
American
Marketing
Association,
Sept.
1-3,
1965.
2.
Clement,
C.L.,
"Establishing
a
Business
in
India",
Overseas
Business
Reports,
OBR72-009.
U.S.
Dept.
of
Commerce,
19 72.
3.
Kulkarni,
M.R.
,"Industrial
Development",
National
Book
Trust,
Page
7
Also,
the
government
can
assume
an
entrepreneurialrole
in
any
industry
that
it
deems
important
to
the
development
of
the
nationand
which
is
being
neglected
by
the
private
sector.
Thus,
the
Page
8
CHAPTER
IV
THE
ROLE
OF
THE
PLANNING
COMMISSION
The
Planning
Commission
is
a
staff
agency
designed
to
prepare
national
plans
for
economic
developments.
These
plans
are
divided
into
5-year
periods.
The
process
of
preparing
a
five-year
plan
is
elaborate.
Initial
analysis
of
the
state
of
the
economy
and
a
reviewof
production
trends,
rates
ofeconomic
growth,
etc.
are
undertaken
about
three
years
in
advance
of
the
start
of
a
plan
period.
The
Planning
Commission
then
submits
to
the
Cabinet
for
review
a
tentative
rate
of
growth
for
the
upcoming
plan
period
together
with
a
list
of
objectives
and
problems
that
deserve
special
attention.
At
the
same
time
the
Planning
Commission
sets
up
aseries
of
working
groupscomposed
ofits
own
specialists
and
others
drawn
from
the
variousdepartments
ofthe
Federal
andState
governments
aswell
as
a
few
participants
from
outside
the
government.
As
a
result
ofthese
efforts,
a
draft
memorandum
is
prepared
which
highlights
majorpolicy
issues
for
Cabinet
consideration.
After
extensive
review,
the
final
report
on
the
plan
is
presented
to
Parliament
for
approval.The
scope
of
the
plan
coverssuch
subjects
asfinancial
resources,
agriculture,
irrigation,
power,
steel,
fuel,
education,
scientific
research,
health,
housing,
etc.A
section
of
the
plan
lists
the
Page
9
minimum
growth
rates
that
the
various
"industry
groups"should
achieve
in
the
upcoming
plan
period
if
the
overall
objectives
of
the
plan
are
to
be
met.
These
growth
rates
are
easily
trans
lated
into
objectives
for
the
industries
in
the
public
sector.
In
dealing
with
the
private
sector
through
the
government
assumes
a
"promotional
or
facilitative
role"2to
encourage
the
private
sector
to
develop
the
areas
that
are
lagging
behind
the
planned
rates
of
growth.
Because
of
the
very
important
role
of
government
policy
in
the
Indian
economy,
the
planned
growthrate
of
an
industry
is
a
good
starting
point
when
attempting
to
forecast
its
future.
In
the
past
the
economy
has
not
grownnearly
as
fast
as
the
plans
anticipated
it
would
(see
Exhibit
1)
.However,
in
recent
years
the
government's
planning
experience
suggests
"a
progression
from
dogma
toward
practicality".
In
January
Business
Asia
predicted
a
5%
growth
rate
for
19
74.
If
the
after
effects
of
the
recent
oil
crisis
do
not
continue
for
too
long,
it
is
hoped
that
by
1979
the
planned
growth
rate
of
5.5%
may
be
achieved.
2.
Bennett,
P.D.,
"Marketing
and
Public
Policy
in
Latin
America",
Proceedings
of
the
Winter
Conference
of
the
American
Marketing
Association,
Dec.
27-29,
1967.
3.
Honey,
J.C.,
"Planning
and
the
Private
Sector",
University
Press
of
Cambridge,
Mass.,
1970,
p.
18.
Eh
<
PC
S3
Eh 3=O
OdO
<
<
w
o
<
>
<:to
MQ
2
HI
-m1a!
4- '^S
m4
i
4
V-i
*!
I
I
1
vS v V5
-Ito
4
t
. .;i. CM 0~ v^
*&
a' 0) CD H rH ' Xf d rH O CO3^
CD x; * -p 3^ t(tJc:
cd ONa >
NO ,-<a 1 -P-H NO CD si NO
K)o
ON -.-f fc cd T-l2
~a
P CD
W)
.61J* pC
cd H ON 3t cdU
fc
iHrH
3
P
a<x:
T3-p
U
5
C
-* ^ cd o COO-5?
CD
fn
iH ON>)M
A
HSo
U^r-IH
00 cd cd tH3
0)3
3
o-C
C
C
c
-P
c
c
cd cd cdh>
-p
C
Q)C
CDW)
cd cdco cd H Q>
U
C
toU
CD o<
P<>-03 cd CO to
u
cd COCD
'
5
CD03si
C
CD-P>5
3
c
6
CO H+ o3
H
C
C
cq
CD o
t3 CO o CD CD CD ?* -P
f-i
CO PPh
CD o O CDsi
^t
Q U
H
3
o*
w
^5
**3
Page
10
Fifth Five-Year
Plan
The
fifth
five-year
plan
covers
the
period
1974-1979.
The
two
basic
themes
of
this
plan
are
(1)
self-reliance
and
(2)
elimination
of
poverty.
It
would
be
naive
to
think
that
both
these
colossal
problems
can
be
overcome
in
the
short
span
of
five
years.
The
goal
of
the
plan
is
to
reduce
net
foreign
aid
to
zero
by
the
1979,
i.e.,
at
that
time
the
only
foreign
aid
neededwill
be
used
to
repay
the
principal
and
interest
on
foreign debt.
"Domestic
technology
has
to
play
an
important
role
in
our
development
effort
and
drive
for
self-reliance...
We
should
formulate
a
program
of
R&D
and
design
engineering
aimed
at
absorbing
and
building
on
imported
technology.
. .The
plan
provides
for
substantialexpansion
of
engineering
industries.
It
is
envisaged
that,
besides
developing
the
output
of
modernsophisticated
plant
and
equipment,
much
more
attention
will
be
devoted
to
improving
simple
tools
and
implements
of
everyday
use. "5a
concertedeffort
to
implement
such
a
policy
will
sharply
increase
the
demand
for
scientific
instruments.
Thus,
whereas
the
planned
overallannual
growthrate
for
the
economy
during
the
fifth
plan(1974-1979)
is
5.5%,
the
planned
annual
rate
of
growth
for
the
scientificinstrument
industry
is
10.1%
(see
Exhibit
2)
.5.
Planning
Commission,
"Approach
to
the
Fifth
Plan,
19
74-79",
Government
of
India
Press,
January
1973,
p.
16-22.
EXHIBIT
2
5th Plan
Projections;
Annual
Growth Rate
G.N.
P.
5-5%
Agriculture
k.7f
Mining
&
Manufacturing
8.3#
Scientific
Instruments
10.1$
Basic
Theme
of
5th Plan;
1)
Self
Reliance
Page
11
CHAPTER
V
IMPORTANCE
OF
IMPORT
STATISTICS
"The
problem
of
foreign
exchange
control
-that
is,
increasing
the
amount
of
foreign
exchange
available
and
controlling
its
use
in
order
to
accomplish
development
goals-is
a
pressing
concern
of
the
developing
countries."1India
has
been
suffering
from
a
chronic
balance
of
payments
problem,
which
has
been
periodically
worsened
by
large
food
imports
and
recently
by
the
oil
crisis.
To
reduce
the
gap
between
imports
and
exports,
the
government
has
imposed
severe
restriction
of
imports.
"India
has
adopted
anaustere
import
policy,
although
imports
of
rawmaterials,
components
and
spare
parts
for
essential
industries
has
been
liberalized.
Imports
of
a
particular
commodity
are
not
permitted
if
there
is
adequate
production
in
India
of
the
same
or
similar
goods.
All
imports
require
alicense
in
order
to
enterIndia.
"^In
addition,
there
are
very
high
tarrif
duties
onmost
imported
items.
The
import
statisticsfor
the
optical
industry
indicate
the
areas
in
which
there
is
insufficient
indigenous
production
(see
Exhibit
3)
Also,
they
indicate
the
demand
level
for
particular
items.
Because
of
the
severe
import
restrictions,
it
is
reasonable
to
assume
that
the
actual
demand
for
these
items
would
be many
times
the
quantities
imported.
1.
Preston,
L.E.,
"Market
Development
and
Market
Control",
Proceedings
of
the
Winter
Conference
ofthe
American
Marketing
Association,
Dec.
27-29,
1967.
2.
Clement,
C.L.,
"Establishing
a
Business
in
India",
Overseas
CO o co CN r- r- co r-~
o co
r-cn V V .
rH CO r-H r^
o CN1 cn H CN CN] oo O-vf COCN]
co oo o <o r--co
o en CN r^ cm co -* H m CM CM
in H in
in in h cor~ co
CO CO C~ CNCN CO tT CN CN CO>sj< O
in in rH CO 30
Hn
oo r- in r-i t-i r- Cn
r- co r co
en * rH H CO 00 00 # CO Cn *3<
mco ocmo incMd
rco ^
en cn o in cn r-i m rr hco CO rH rH
CM CO CD CM O CM
^"sj< o ^
in co oo r~
cm m o
in H oo oo CM CO CN O
co r~ co
o CM CO co
r- co rr o cn >. *
H CO vf
in co CM "* 00 CO oo cn co cn CM
cmi-hco m "a*in
o co in cn co cn
rH co r~ rHCM
-* r-i co CO
<3*
rH <j^o in co^r oo oor~ r-t^rH COHr-t CN
ST rH r
oo
kn
co r~ CO-P CD COCDH
ft
3H
Ph-HM
MH04
0<
CO totj
g
G-rl
rd cn to(D
3
0
X!
rlB
fd CD6*
H rH0
rd3
O
H (0 Cd-H>Fn
cn cn 00 cn CO rH oo CD CM <tf CD cn V -s. rH i-\ r-t CN
00 co
00 CO H
00 O "^ m CO 00 CM o
cn V *. >. H CM rH ^
rH r- 00
r~ CO 00 rH
co in co cn cn . * H CO rH *3*
to
CD
toG
CD
CD
o
-pCD
o
cd -pu
cu
a
tow
>H
o
MH COg
m
rHPQ
to cd rH cd -po
+1XI
r-f3
rd uiO
H -P04
O
^ o 00 o co co qi r-H coo <* co co in cn
H co H
a
CD
-pg
o
g
D
to -pc
CD
e
CD
U
o
p
o
CD
i io
u
PL,
M
0
O
H rH,G cdcd Cnto
O
O CD
rf +J to
P
o g
ft,G CD
O
CU
rlo
CD
P
G
o
a
to pc
<De
CDW
rdP
0
P
XI
rH3
rd cno
H pft
O
in CM I m CMI
cn H Po
rdJ-l
m0)
oi
c
rdCOrH cn rH in vo
lO^PO CO coco
CN CD COCO
CO H-*
*rr-{r-i CO VD O CO COrH rH <^<^" roHr- ^p cn
*
*
rHOO OOOO^CMVD mco CCO<th rHcn
<-\ r-\ -{o"in Ho CN CO
p
c
CD
%
u
-p toc
u
rd rd COO
CD-Hcue
o o
o
c
o
too
0 CD U
C
HP
HOW
ffl
Eh<
c
rl P rdu
Q)
ft
O
U
rdW
toCD
taa,
o
<-\u
rd to toCD
ft
O
O
too
tn ^
C O
Ha
to pu
rdPu
ro CM to pfl
CD
E
M
-P toG
Hu a
tosi
rt-PQO
rd rdO
P
CD to-H
o
ft
CD
-PP
O
ft
ftXl
O
O O
3
toO
O
toU
U
CD
CD
OH H
CO
-Pa
ho
w
cd cn
"vTO
^rcn
r* cn cn cm
cm in cm in
HHO^1
CM
cor> r~o ^r H
o co r~-* t co
CDrH (Or-\ O
C--co o CM OO CNCN
o in o ^r r-~o r- co rHrHrH 00
CM -P
o
COCD
U
-PCD
CD
cm rci CM O cor^ O 30 ino
cu
Eh*Q
H0
ui
u
H
cn o o o o CM CN ** "tf CD CO CO CO to to rdH
O
to PG
CD
G
0
ft
0
o
oi-i o o rH CM rH rH H rH CO CD 00 CO cn o CN CD COu
M
toG
H o o ro co coH rl CNCnrHrHCn CnrHrHCNCOH
OO OOrHOO OrHOOOCN
cm^t rr^^cnen h ro co coco co coco rorocoroco cncncncncncn
r-i r-i t-{ r-{ r-i r-i r-\ r-t r-i r-ir-i rH H
VDCD'
COCOCOCDCO CO CO CO CO CO CO
0000 00 00 00 00 00 OO 00 00 00 00 00
RVfEE
'f
\
h
\LL\
Ofi}
~-j
r-*-T~ O2
5a
5
V\\LL\6NS
0\
5
-so2
l < 4T T ' * "' ~*
-o?
; ,^J
O
TJ
..._ . t-3
rH
^5
>
OO
M
2
OS, 01 -a
r3
W
c
-s
^^w
az
r3s
Ol * ft ~* -0 H ,N
o
r3 Ho
>
t-1>
173 01 M3
O
M>
Olo
r3oi
X
Rupee
$
millions
o>
2
INJ3
-*-CAJ CJ 3 4> 4 r9O
r9>
o
TJ
t-3 Mo
>
Q
O
o
a
oi
l^
*
MILLIONS
Page
12
CHAPTER
VI
INDUSTRIALIZATION
OF
INDIA
One
of
the
primary
goals
of
the
second
and
third
5-year
plans wasthe
development
of
agricultural
production
and
the
establishment
of
basic
industries.
It
appears
that
the
eraof
agricultural
self-sufficiency
is
finally
approaching;
in
three
of
the
last
five
years
no
net
imports
of
agricultural
produce
were
necessary.However,
as
long
as
irrigation
facilities
are
lacking
in
most
of
India,
its
harvest
will
continue
to
be
unpredictable.In
the
fifth
5-year
plan
the
emphasis
seems
to
be
shifting
from
agriculture
towards
industrialization
(see
Exhibit
2)
. Kotler^classifies
the
world's
economies
as
a)
Subsistence
Economies,
b)
Raw
material
exporting
economies,
c)
Industrializing
Economies,
and
d)
Industrial
Economies.
On
this
scale
he
ratesIndia
as
an
Industrializing
Economy,
with
manufacturing
accounting
for
between
10
and20%
of
the
gross nationalproduct.
This
need
for
industrialization
is
apparently
a
world-widephenomenon.
"What
alchemy
wasto
the
Middle
Ages,
industrialization
is
to
the
underdeveloped
world.
"2"The
development
ofan
economy,
at
its
1.
Kotler,
P-,
"Marketing
Management",
Prentice
Hall,
Inc.,
1972,
p.
844.
2.
Bennett,
P.D.,
"Marketing
and
Public
Policy
in
Latin
America",
The
proceedingsof
the
Winter
Conference
of
the
American
Page
13
core,
consists
in
the
progressive
diffusion
of
the
fruits
of
modern
science
and
technology.
Industry
is
the
most
dramatic
form
which
modern
science
and
technology
assumes."3If
this
trend
towards
industrialization
continues
and
it
is
not
hampered
by
wars
or
natural
disasters,
it
will
greatly
benefit
the
instrument
industry
in
general.
There
will
be
an
increased
demand
for
optical
instruments,
for
inspection,
comparison,
measurement,
analysis
and
process
control
purposes.
"Technological
transformation
can
be
hastened only if
adequate
attention
is
given
to
research
and
development."4The
technological
development
pace
set
by
the
industrialized
nations
is
indeed
very
fast.
If
India
hopes
to
catch
up,
it
has
to
do
more
than
copy
existing
processes;
it has
to
innovate,
and
the
smaller
the
tech
nological
gap
becomes,
the
greater
will
be
the
need
for
more
research
and
development.
Also,
asthe
program
for
industrial
ization
matures,
the
technological
research
efforts
of
the
government
institutions
will
be
supplemented
by
R&D
efforts
ofindustry. ^
The
implication
of
such
efforts
for
the
scientific
instrument
industry
are
obvious.
Rostow,
W.W.
,"The
Concept
ofa
National
Market
and
its
Economics
Growth
Implications",
Proceedings
ofthe
Fall
Conference
of
the
American
Marketing
Assoc,
Spt.
1-3,
1965.
Kulkarni,
M.R.,
"Industrial
Development",
National
Book
Trust,
India,
1971,
p.
280.
Bennett,
P.D.,
"Marketing
and
Public
Policy
in
Latin
America",
Proceedings
of
the
Winter
Conference
of
the
American
Marketing
Page
14
CHAPTER
VII
A
PROFILE
OF
THE
PRINCIPAL
USERS
OF
OPTICAL
GOODS
The
principal
users
of
optical
goods
in
India
are:1)
Scientific
Research
Organization
2)
The
Department
of
Defense
3)
The
Educational
Institutions
4)
The
Manufacturing
Industries
Scientific
Research
Organizations
The
need
for
optical
goods
in
scientific
research rangesfrom
the
simple
optical
components
to
highly
sophisticatedoptical
systems.
Optical
instruments
are
usedby
researchersin
the
fields
of
physics,
chemistry,,astronomy,
metallurgy,
engineering,
biology,
medicine,
etc.
About
92%
ofthe
R&D
expendituresin
India
is
financed
by
the
public
sector.It
is
some ofthese
prestigiousgovernment
insti
tutions
that
are
conducting
researchat
the
frontiers
oftechnology,
and
their
demand
for
more sophisticated equipmentwill
continue
to
increase
astheir
funding
increases
(see
Exhibit
4)
.Department
of
Defense
Optical
instruments
anddevices
are
usedby
the
Department
of
Defense
for
sighting,
ranging,
tracking,
surveillanceand
identi
fication
purposes.A
typical
list
of suchdevices
would
include
Page
15
binoculars,
telescopes,
periscopes,
weapon
sights,
range
finders,
night
vision
devices,
aerial
reconnaissance
systems,
etc.
Data
on
defense
expenditures
for
such
devices
is
not
available.
Whereas,
in
the
past
most
of
defense
needs
were
imported;
in
recent
years
the
government
has
been pushing for
the
indigenous
manufacture
of
the
simpler
systems.
Thus,
it
is
reasonable
to
assume
that
the
rate
of
procurement
ofoptical
systems
will
increase
faster
than
the
overall
defense
budget
(see
Exhibit
5)
.Educational
Institutions
Optical
components
and
instruments
are
usedby
schools
and
collegesmainly
in
the
teaching
of
"science
courses".
They
are
usedfor
demonstration
purposes
and
by
students
in performing
laboratory
experiments.
Because
of
the
severe
financial
limitations
underwhich
most
of
these
institutions
operate,
it
is
assumed
that
the
instruments
purchased
by
them
would
tend
to
be
inexpensive
.and ofgenerally
poorer
quality.In
1966
it
was
estimatedthat
"the
annual requirements ofscien
tific
instruments
for
replacement,
improvement
and
expansion
in
educational
institutions
including
the
science
and
medical
colleges
3
and
engineering
collegesand
polytechnicswas
150
million".
2.
Indian
Institute
of
Public
Opinion,
"Engineering
Industry
in
the
Seventies",
Monthly
Commentary
onIndian
Economic
Conditions,
Vol.
XII,
No.
1, Aug
--Spt.1970,
p.
1.
3.
Planning
Commission,
"Programs
of
Industrial
Development,
Page
16
However,
no
information
is
available
on
what
fraction
of
the
total
requirement
was
for
optical
instruments.
The
rate
of
increase
of
student
enrollment
in
science
coursesat
the
university
level
is
shown
in Exhibit 6.
Manufacturing
Industries
Optical
instruments
are
used
in
industry
for
measuring,
gaging,
inspection,
chemical
analysis,
and
for
controlling
online
manu
facturing
processes.
In
the
past
the
quality
controlfunction
has
in
general
been
neglected,
because
demand
has
outstripped
production
in many
industries.
However.-
as
the
industries
mature
and
the
gap
between
production
and
demand
narrows,the
quality.
control
aspect
ofmanufacturing
will
begin
to
be
emphasized.The
o
o
-4
oo
N>
ON
O
O
oo
o
o
o
-^
00
I
?
s?
os
?
cK3
V\
B
H r->H
H O CO ol-i
C
>C3
CD CD COs
5
>
<
so
>
W
>
2
2
a
>
>r)
C
W
t"< HHO
01W
o
t-3O
?0
o
a
H3>
K
id
o
01
o M r3 M MO
w
OIm
>
S3
O
X
X
to
.1._*....,..-, .(-
1-1
->--o
o
o
o
OH.
8
^
o
a?
iu
v.
2
O
H
>
01
O
*<.
>
.
s
?0
H- M
H* H3 ' '
r-*
>
H* L-1O
w
3
fd
X
to
i i
o
K
IX)Hj
2
O
M
t-3
W
MC
^
o\W
a
^^v*
CDS3
CD
t^l
?<3
CO03
o
*
^
w
**
rn
z
\^
o
(
w
1
^
^j
2
':
:*>"
OI
v ,
*
fn
5>
*-**
x:
u
\
1*1
<>
\aj
"Sj^
\CK
'i':':.
^
^
<N
;;i
1' i : ! "
;
;;'"'
-t
;":" '
i
.1
-.. .4..
. .
i
-1i
:-1
.!-.'.-.-.
.Lo\
^
>>
e
3
h*
H
M
H'
O
CO
0
2
M <J
W
S3
01
rH
r3
K
K
2
S3
O
tr1
tr1
td
2
-3 M2
03
O H
K
2
O
td
o
o
c
S3
01
03
w
X
PC
1 I
rH
r3
ON
N>
O
S
On
O
\N)-cere
e
2*
C*
M
2
O
G
~ -01r3
S3
M
>
^1
tr1r*
?n
Ltt
NO
S3
rX
On
o
W
o
C3
MII
a
CDr->
o
MO
H3 t-3o
Mo
2
M
2
M
^SNfc.
a
*
*
M
t
CN
w
l/c-Co
Page
17
CHAPTER
VIII
RESEARCH METHODOLOGY
Quest
for
Secondary
Data
The
goal
of
the
initial
phase
of
this
study
was
to
obtain
suitablesecondary
data.
Library
searches
were
conducted
at
the
local
libraries
aswell
as
at
the
Library
ofCongress
in
Washington
D.C.
Secondary
data
was
also
obtained
from
The
Embassy
ofIndia,
The
Bureau
of
International
Commerce,
The
United
Nations
Statistical
Service
and
the
international
marketing
division
of alocal
optical
instrument
manufacturer.
Unfortunately,
most
of
this
data
was
notsuitable
for
this
research
project.
The
"closest" classificationto
optical
componentsand
instruments
was
entitledScientific
Instruments.
This
classification coversa
wide
range ofinstruments
and
there
is
no
apparentway
of
breaking
down
the
data
in
terms
ofoptical
instruments.
However,
the
following
usefulinformation
was
obtained
through
the
searchfor
secondary
data.
1)
Statistics
on
India's
imports
of optical componentsand
instruments
.2)
Trend
information
on
the
principal usersof
optical goods.3)
The
business
environmentin
India
andthe
importance
of government plansand
policies
Page
18
Quest
for
Primary
Data
When
it became
apparent
that
the
secondary
data
available
was
inappropriate,
it
was
decided
to
obtain
some
primary
data.
The
process
of
acquiring
the
primary
data
wassplit
into
two
parts.
The
first
part
was
concerned
with
estimating
the
total
market
for
optical
goods
in
India.
It
was
felt
that
the
optical
good'smanufacturers
in
India
would
have
the
most
accurateand
up-to-dateinformation
on
this
subject.
Therefore,
ten
manufacturersof
optical
instruments
in
India
were
contacted
and
asked
to
estimate
the
total
market.
In
addition,
the
Optical
Manufacturers
Associa
tion
in
the
U.S.
and
publicationslike
Business
International,
Business
Asia
and
Asia
Letter
were
also
queried.
A
typical
letter
is
shown
asExhibit
8
.The
second
part was concernedwith
obtaining
answersfor
the
re
maining
objectivesof
this
paper.
The
sample
for
this
study
consisted
of
scientistsin
India
who
were membersof
the
Optical
Society
of
America
or
The
Society
of
Photo-Optical
Instrumenta
tion
Engineers.
There
were
only
33
such
individuals;
and
therefore,
it
was
decided
to
include
allof
them
in
the
survey.
This
sample
may
be
slightly
biased,
because
the
scientistsin
India
who
belong
to
foreign
professional societies wouldprobably
be
among
the
.prominent
scientistsin
India;
and
therefore,
their
needswould
tend
to
be
towards
more sophisticated opticalinstrumentation.
However,
this
bias
should notsignificantly
affect
the
results
of
Page
19
The
major
disadvantage
of
the
survey
is
the
non-response
problem.
1
However,
in
this
case
a
survey
was
the
only
practical
method
of
conducting
the
survey.
Therefore,
33
appropriately
designed
questionnaires
were
mailedout
between
May 24,
1974
and
June
12,
1974.
A
copy
of
the
survey
instrument
is
attached
under
Appendix
A.
Indian
postage
stamps
were obtainedand
stamped
return
envelopes
were
enclosedwith
each questionnairein
an
effort
to
reduce
the
non-response
problem.Since
the
time
for
completion
of
this
study
is
limited
and
because
ofthe
long
transit
time
for
the
(7
to
10
days)
,no
reminderswill
be
sent
to
the
non-respondents.Design
of
the
Questionnaire
The
questionson
Page
1
ofthe
questionnaire areintended
to
provideinformation
regarding
the
background
ofthe
respondentand
also
his
contacts withthe
marketplace.Question
1
on
page2
and question1
on
page4
shouldprovide
a
figure
for
the
percentageof
imported
optical goodsin
the
Indian
optical market.This
figure
willbe
used asa
check onthe
figure
for
the
total
optical goods marketthat
is
obtained
from
the
optical manufacturersin
India.
In
other words:1.
Simon,
J.L.,
"Basic
Research
Methods
in
Social
Science",
Page
20
(
Total
optical
imports
|
The
average
percentage
of
\
^\
obtained
from
Exhibit3/
imported
optical
goods
obtained
in
response
to
question
1
on
page
2
and
4
/The
total
optical
goods'/
market
as
estimatedby
\
/
the
optical
instrument
I
manufacturers
in
India
Question
3
on
page
2
and
question
2
on
page
4
shouldprovide
information
on
the
relative
importance
of
the
various usersof
optical
goods.
This
information
coupled
with
the
anticipatedgrowth
rate
of
these
users
will
be
used
to
forecast
the
market
for
optical
goods
in
1980.
The
major
assumption
is
that
the
same
"causal
factors"that
exist
today
will
exist
in
1980
and
that
they
will
carry
the
same
weight.
The
responsesto
question
4
on
page
6,
question
3
on
page
5
and
question
4
on
page
3
should
help
determine
the
products withgood
EXHIBIT 8
15A
Greenleaf
Meadows
Rochester,
N.Y.
14612
April
28,
1974.
Optical Manufacturers Assoc.
30
East
42
Street
New
York,
N.Y.
10017.
Sirs,
I
am
involved in
a
project
that
will
be
studying
the
market
for
optical
components
and
instruments
in
India.
This
study
is
being
conducted
at
the
Rochester
Institute
of
Technology,
under
the
guidance
of
Prof.
F.
Pallischeck.
Since
not
much
is
known
about
scientific
instrument
manufac
ture
in
India:
wewould
greatly
appreciate
your
help
in
this
project.
We
need
to
know
the
namesand
addresses
of
the
manufacturers
of
optical
instruments
and
components
in
India,
along
with
a
listing
of
their
products.
Any
descriptive
bro
chures
or
cataloguesof
their
productswould
be
extremely
helpful.
Statistical
data
about
India's
production
of
opti--cal
components
and
instruments
will
also
be
very
useful.
I
thank
you
in
anticipation
of
your
co-operation
in
this
project.
Very truly
yours,
Page
21
CHAPTER
IX
ANALYSIS
OF
RESULTS
Size
of
the
Market
for
Optical
Goods
Of
the
ten
manufacturers
of
optical
instruments
in
India
that
were
asked
to
estimate
m
the
market
for
optical
goods
in
that
country,
only
two
responses
contained
specific
information
on
market
size.
It
appears
that
either
they
did
not
know
the
approximate
size
of
their
industry's
market
or
they
were
unwilling
to
disclose
data
about
their
industry.1If
the
latter
is
true,
then
the
bias
in
the
data
obtained
would
probably be
towards
the
low
side.
The
two
estimates
of
market
size
that
were
obtained
are
Rs
45
million
and
Rs
125
million.
Some
ofthe
wide
variation
in
these
figures
could
be
because
the
respondents
ou>ndefinition
of
"the
total
market
for
optical
instruments
and
components
" .An
independent
estimate
ofmarket
size
can
be
obtained
by
using
some
of
the
data
obtained
in
response
to
the
questionnaire
in
Appendix
A
along
with
the
Import
Statistics
in
Exhibit
3.
Data
on
the
percentageof
the
respondentsbudget
for
optical
goods
,which
is
spent
onimported
optical componentsand
imported
optical
instruments,
is
summarizedin
Exhibits
9
and
10,
respectively.
i_-..
i
i
i i i t!
i
ii
iEXHI3IT
9
i!
i
i
i
p
erd
rentage
of
Resoonden
is
Budget
Spent
on
Imnorted
On-tic
\
!
!ali
Components
|
i
ii
j
1
i
i i
!
: 1
i
i
|
|
j
|
!
i
i
ii 1
Mode
= ;0to
io$
: int
eryal
:
i
Mean
=&&
* ~
b
1
w
i
i
1
to ,v\
!
1I
1 CDG
"f
.. ..._..- -!
! i T3
i
i
i i
NV
\V
^
CD I
i
1
-7^
N^nV
i
i
i
CH
"*
o
;
m\v
i
i
I!_
i -S5
k'-\
w
^;
S
\^
i ; 1i
f
!
i
i
3
*
*
N.
\ W
, ; ; :
j
1i i
i
i
* <NSNV
^
'1
!
|
^\\\V
NN>
^
:i
;
i i!
, S\\\VsSSV0
"%
202
1
:
Joj;
;
j
fc#
i
|
5%
|
|
/1
^J
Pv.'i24
;ag
ei
rf
Tmpnr'-tipfL-O.'ntLtia]
Camnonen ts
- trie
;i.t/
i
1
1 I 1 : , !
i
i
i
i
:
I
i
i
i
: !
!
i i i
|
l
i i
1
i
1
1
!
:
:
!
1 1 ! : ;[
-i ! .!;
' .-^,
1i
i
!
i 1 .!
i
,!
!
i
i
i
i
EXHIF
TT
1C
1
t.Eej
zneniage
^ofLJB1
-espondenis
Budfcei
:
on
Imiortec
ajtica.
L
Ins
trument?
|
;
!
i
I
Mode
0
to
2Q%"
i
En-t
er
zaZ
/
L'
Mt
2d.ll-27
.5/b
6
^Ht
1 1 ^k\\\\\^
l
i
*- i
CD i
- -
-i
TO ir
1
i'to
l
i
CD
F
-|
l
o
!
! ! 1
SJ?
1
ii
l
N>
^
;
i
i
i
nS
i
^
I
5^
!
VV\\
i
i
iC
>
j
|
my.
\
ko%
\
W\
\ &K
la%
!
Te
rccmt age
o
n
Lmp
orted
0]
3tl
ca.
L
1
ns-trumei
its
i
Page
22
The
mean
value
of
the
percentage
of
the
respondent'sbudget
spent
on
imported
optical
components
or
instruments
is
useful
only
if
the
total
budget
of
each
respondent
was
the
same.
Therefore,
the
mode
will
be
used
for
the
calculationsbelow.
The
modal
class
in
Exhibit
10
is
0-20%;
and
therefore,
it is
assumed
that
the
mode
lies
midway
in
the
interval,
i.e.,
at
10%.
The
modal
class
in
Exhibit
9
is
0-10%,
but
in
this
case
primarily
for
ease
of
computations
it
is
assumed
that
the
mode
lies
at
10%
rather
than
midway
in
the
interval.
The
result
of
such
an
assumption
would
be
aslightly
lower
estimate
for
the
total
market
for
optical
goods
.The
equation
described
onpage
20
may be
rewritten
as:Total
market
for
optical
goods
in
India
)
I
Imports
asa
percentageX
/
ofthe
respondent'stotal
budget
for
optical goodsI
From
Exhibits
9
and
10
./
/
\
/
Total
imports
\
=
/
of
optical
\
!
goodsinto
J
\
India.
From
/
\
Exhibit
3.
j
or
/Total
marketfor
\
[
optical
goodsin
.j
I
India
J'
(
V
Total
imports
of
optical goods
into
India
/
Imports
asa
percentage\
/
of
the
respondent'stotal
',
Page
23
Upon
substitution
of
figures
from
Exhibits
3,
9
and
10
in
the
above
equation:
Total
market
for