The Indian Consumer[/b]
The middle class male consumer
The middle class of India is for whom most of the advertising is targeted. Even in the lower middle class, consumer products like biscuits, talcum powder, hair oil, hair cream, toilet soaps, leather foot ware, casual foot ware, wrist watches, quartz watches etc. are purchased.
To get a much better understanding of the middle class “male” head of the family, consider the following characteristics:
Security Seeking:
The middle class generally consists of security seeking people. Even though they are receptive to new ideas, they do not very readily dash into new ventures. The middle class man does not only want economic security, but he also wants emotional security.
He will not do something that is likely to upset his emotional ties. He wants social security. He wants to be part of society. He does not want to be a rebel or an outcast. Being part of society he enjoys a degree of protection. He is likely to welcome new innovations is they satisfy his sense of security. If he feels that a particular idea will help him improve his economic position or social relationships he will accept it. Anything that is likely to upset this balance is going to be discarded by him.
The middle class Indian normally lives in a fixed income. He has to manage his finance in a rigid budget. He wife selects reasonably good furnishings and uses modern cooking gadgets. He usually has a two-wheeler of this own. He aspires for the well-to-do lifestyle he sees on TV. So his purchases are generally materialistic in nature. Because of this he likes to make large purchases and pay for though the different credit facilities that are made available to him by the banks and other financial institutions.
Now days practically everything is made available to him on installment payments. The availability of credit facility acts as a temptation to buy. His desire for bringing home more and more material comforts is realized by the availability of credit facilities.
The State Bank Of India campaign of a few years ago, "Be a big shoppers! Make a big buy! Take home a car, a VCR or a sewing machine today! You can do it now with the big buy scheme..." appealed to many Indians.
The system of "credit cards" is also growing in the country at a very fast rate. It is expected that in the near future, Indians will be the biggest users of credit cards second only to America.
The middle class Indians have many of their possessions, largely because they are "status conscious" or "prestige conscious". The middle class man’s finances may be tight and he may even struggle to meet ends. Still, he looks for more than average comforts, and plans for more material possessions. These possessions act as status symbols. By appealing to this prestige a marketer may motivate the middle class man.
The middle class man is a home loving man. He assigns a lot of importance to the well being of his family. He spends a good portion of his income on the education of his children. His children get priority in his budget. He without much resistance will adjust to the changing fashions of his college going children even though these changes may be costly for him. The concept of "small family more comforts" has gone well with him. The "family tie" binds him so strongly that anything that appeals to this "human bond" will find his ready acceptance.
His son's education or his daughter’s marriage are life long dreams for him. Any thing that appeals to these dreams will catch his immediate attention.
However, the middle class man is greatly influenced by his wife especially on his buying decisions. Tooth-paste, hair oil, magazines or tape recorders, the purchasing decision is consented by her. There are certain buying decisions that are made by his wife solely so the middle class housewife is another important person to study from the marketing point of view.
It is important to consider the literacy of the Indian consumer.
For Example: When launching a marketing campaign, if all the advertising is done though a non-visual/non-audio media like the newspaper, the marketer must know whether his target consumer is in a position to read the advertisement i.e. is the target consumer literate.
Literacy in India has made remarkable progress since Independence. This has been further confirmed by the results of the Census 2001. The literacy rate has increased from “18.33%” in 1951 to “65.38%” in 2001. This is despite the fact that during the major part of the last five decades there has been exponential growth of the population at nearly 2% per annum.
The male literacy rate has increased to 75.85%, which shows an increase of 11.72%.
On the other hand, the female literacy of 54.16% has increased at a much faster rate of 14.87%.
The male-female literacy gap has reduced from “24.84%” in 1991 to “21.70%” in 2001. Mizoram has the smallest gap (4.56%) followed by Kerala (7.45%) and Meghalaya (8.27%).
All States and Union Territories without exception have shown increase in literacy rates during 1991-2001.
In all the States and Union Territories the male literacy is now over 60%.
For the first time since independence there has been a decline in the absolute number of illiterates during the decade. In the previous decades, there has been a continuous increase in the number of illiterates, despite the increase in the literacy rates, but now for the first time the total number of illiterates has come down by 31.96 million.
The number of literate persons has increased to 562.01 million in 2001 thus adding an additional 203.61 million literates in the country.
Rajasthan has recorded the highest increase in the literacy rate among the States/Union Territories of India. The state also recorded very good increase in the female literacy. It was 20.44% in 1991 which has increased to 44.34% in 2001.
Madhya Pradesh also recorded a good increase in female literacy rate. In 1991 the literacy rate of females was 29.35% which has increased to 50.28% in 2001.
It is important to consider the literacy of the Indian consumer.
For Example: When launching a marketing campaign, if all the advertising is done though a non-visual/non-audio media like the newspaper, the marketer must know whether his target consumer is in a position to read the advertisement i.e. is the target consumer literate.
Literacy in India has made remarkable progress since Independence. This has been further confirmed by the results of the Census 2001. The literacy rate has increased from “18.33%” in 1951 to “65.38%” in 2001. This is despite the fact that during the major part of the last five decades there has been exponential growth of the population at nearly 2% per annum.
The male literacy rate has increased to 75.85%, which shows an increase of 11.72%.
On the other hand, the female literacy of 54.16% has increased at a much faster rate of 14.87%.
The male-female literacy gap has reduced from “24.84%” in 1991 to “21.70%” in 2001. Mizoram has the smallest gap (4.56%) followed by Kerala (7.45%) and Meghalaya (8.27%).
All States and Union Territories without exception have shown increase in literacy rates during 1991-2001.
In all the States and Union Territories the male literacy is now over 60%.
For the first time since independence there has been a decline in the absolute number of illiterates during the decade. In the previous decades, there has been a continuous increase in the number of illiterates, despite the increase in the literacy rates, but now for the first time the total number of illiterates has come down by 31.96 million.
The number of literate persons has increased to 562.01 million in 2001 thus adding an additional 203.61 million literates in the country.
Rajasthan has recorded the highest increase in the literacy rate among the States/Union Territories of India. The state also recorded very good increase in the female literacy. It was 20.44% in 1991 which has increased to 44.34% in 2001.
Madhya Pradesh also recorded a good increase in female literacy rate. In 1991 the literacy rate of females was 29.35% which has increased to 50.28% in 2001.
Up until recently, large part of the marketing that was done in this country was done, targeting the urban population of the country. Now the marketing potential of the rural part of the country is rapidly growing. Let us get an understanding of the urban and rural break up of the country.
26% of the population lives in the cities or in urban India. The remaining 74% lives in the villages or in rural India. The population of the country is spread over the villages but is very concentrated in the cities. India has six of the largest cities in the world. These are - Calcutta, Bombay, Delhi, Madras, Bangalore and Hyderabad.
Besides these cities, there are six other cities that are growing at a very rapid rate and have a huge concentration of the population. These are - Ahmedabad, Kanpur, Pune, Nagpur, Lucknow and Jaipur. In addition to these cities, there are around 4000 towns that have concentrations of the population.
In the cities, there are a lot of jobs available now-a-days due to call centers and BPO's. This has given many more people purchasing power. Items that were luxury items a few years a go are seen in every house in the cities.
Besides the cities 74% of Indian population lives in the villages. As the standard of living in the villages also improves, many modern facilities are available in almost every house hold in the villages too.
Now a days the TV is there in most of the houses in the villages too. This has exposed them to a lot of advertising lifestyles and products. The villages have become a huge market that will be of great consequence in the near future. In the future, companies with a strong product distribution system reaching all the villages will have a very strong advantage over the rest.
The country is growing, and is a place where business will thrive in the near future. To understand this better consider the following favorable shifts that have taken place in the consumer patters of buying.
The country is growing, and is a place where business will thrive in the near future. To understand this better consider the following favorable shifts that have taken place in the consumer patters of buying.
Analysis shows that over the years, the expenditure on non-food items has grown faster that the expenditure on food items. India is witnessing a great change in the lifestyles and buying patterns of consumers. Convenience foods like instant coffee and noodles are now very popular. The number of modern gadgets like washing machines in the number of house holds is now on the increase. As we have mentioned before, yesterday’s luxuries are now becoming today’s necessities.
The Indian consumer has more money and is now using it more liberally than ever before. Food and drink have acquired a greater "fun" image for him than ever before.
Because of the TV and the booming media, even the economically lower class of the Indian population craves for a lifestyle like the well-to-do people they see on the TV.
The percentage of working women in India is growing at a steady pace. This is mainly because of the development in communication systems and growth of educational opportunities given to women. Because of this growth of working women, the women now-a-days also have an increased purchasing power. Due to this, industries that are directly related to women like cosmetics etc. have seen a major boost. Also, toiletries, food and beverages etc. have seen a growth.
The middle class house wife is generally educated and is the purchasing agent for some of the products the family buys. She is also the "gatekeeper" for many products like new cooking medium, fast food etc. that cannot enter the house without her clearance. She also decides purchases meant for children.
To get a much better understanding of the Indian house wife, consider the following characteristics of her buying decisions:
The middle class house wife is generally educated, earns her own money or has to use money given to her on a fixed budget. This makes the middle class house wife a discriminating and cautious buyer. However, she is not averse to new ideas and things. She is willing to try new things but she will not adopt any product instantly. She will make a sample purchase, check with people who use the product, listen for guidance and then finally she may go in for purchasing the product.
The middle class house wife is a quality as well as cost cautious buyer. She will try to purchase products that will last her for a long time. She will try to get "millage" out of every rupee she spends. She is less likely to purchase “use and throw” type of products. Besides being quality conscious, he also is cost conscious. Before buying a particular product she will first check the price with other sellers and will then go in for the lowest price.
Because of being quality and cost conscious, extra features like re-usable containers will influence her buying decision. Bonus prizes, coupons, rebates etc. will definitely attract her attention.
Instead of advertising she relies on word-of-mouth communication. She is interested in knowing what her neighbor or colleges are using. Even after she purchases a product she seeks reassurance about making the right purchase decision.
As time passes the house wife is getting used to more and more leisure though the use of modern gadgets like washing machines and other such house hold items. She will be interested in new innovations that reduce her work time even more. She may not be able to afford all the modern gadgets that are available in the market but they still hold her interest because they are a potential for saving time and avoiding drudgery.
Sense of beauty is a strong motive force behind several of her purchases. Soap or shampoo, vanishing cream or cleansing milk, perfumes or hair oil - selecting her brand is greatly influenced by her sense of grooming. She is generally fashion loving however she is not fashion crazy. A strong sense of traditionalism runs thought her personality. Products or ideas that uproot her basic personality or values will not find acceptance with her.
They are more adventurous than their elders and they care less for tradition and religion. The often are after a "New Look" and they seek novelties. They are quick to adopt new fashions that emerge.
They are generally more receptive to change. They believe more in spending money in the pursuit of pleasure than saving for the future. It is not easy to dupe them but it is quite easy to motivate them. Teenagers are becoming quite a distinct market segment.
They not only have products and services that been designed to cater their needs but also they are an influence on the decisions taken by adults. Some estimates show that around Rs.500 crore a year is the amount of money given to children as pocket money.
That covers a general understanding of the Indian market on the whole and the middle class of the market (which is the biggest consumer base for industries) in specific. Now let us go into a detailed understanding of how the process of marketing is done.
India has a population of 1.095 billion people, comprising of 1/6th of the world population. India's population can be divided into 5 groups on the basis of annual household income. These groups are:
1. Higher income
2. Upper middle income
3. Middle middle income
4. Lower middle income
5. Lower income
The income classification does not represent a real scenario for an international business because the purchasing power of currencies differs significantly. The real purchasing power of Indian rupee is higher than the international exchange value.
In addition to that, income classification is not an effective tool to ascertain consumption and ownership trends in the economy.
Consumer Classification
According to National Council of Applied Economic Research (NCAER) there are 5 consumer classes that differ in their ownership patterns and consumption behavior across various segments of goods.
Source: NCAER
The 5 classes of consumer households (consumer classification) show the economic development across the country based on consumption trends.
India is a very young nation, if compared with some advanced and developed countries. Nearly two- thirds of its population is below the age of 35, and nearly 50 % is below 25.
Marketers explain that the boom in the consumption level and leisure related expenditure is because of this young population. It will have a significant impact over the consumer goods market. In addition to that, it is expected that this will generate trade opportunities and continuous investment in the economy. There is huge potential for further consumption of goods and services due to the increased level of disposable income. The expenditure on essential goods and services has a higher share in developing countries as compared with that of developed countries.
2.4
934.2
tial Services (water, power, rent, and fuels) 10.1%
Clothing 4.9%
Footwear 0.63%
Medicare 4.25%
Transport & Communication 14.51%
Recreation, Education, and Culture Less than 4%
Home Goods 3.25%
India is a land of a billion people, speaking 151 languages. It offers employment opportunities ranging from doctors, IT professionals, businessmen, snake charmers, yogis, farmers to bonded laborers. With a per capita income of $950 per year, among world’s fastest growing economies; the country that has every major auto giant pitching their tents; still has over 70% of its people earning less than a dollar a day.
The one word that summarizes Indian consumer is “Diversity” with D capital of languages, climate, color, religion, caste and economic class. It offers a perfect googly for a conventional marketer.
One approach though, adopted by some of the leading FMCG majors, manages to cut across the clutter. It is to divide the Indian Consumer into three broad stereotypes based on a) their size of wallet, occupation and education and b) the sort of town/village or city they live in.
Consumers living in top 30 cities of the country; with household income exceeding Rs. 35000 per month ($ 700). Post graduates or professional graduates; businessmen, self employed (CAs, doctors, architects etc.), executives; owning major white goods like refrigerator, washing machines, TV and a Car. They are at par with the developed world’s consumers in terms of tastes, preferences and propensity to spend.
Their needs, aspiration levels, lifestyle, media habits, shopping environment would offer a pretty uniform answer to the following-
· Who to market to (consumer profiling)
· What to market (needs and benefits)
· How to market (media and distribution)
Consumers living in Indian towns having a population of 20,000 and above; with a household income between Rs. 15000 and Rs. 35000 per month ($200 to 600); graduates; white/blue collared workers; small businessmen, traders, self employed. They would own any two of the three surrogate white goods – refrigerator, washing machine and TV.
They would offer a uniform answer to the three basic marketing questions above. They are typically very focused on their child’s education.
Predominantly Rural/ First generation migratory Urban workers earning up to $200 to $500/month; Semi educated to uneducated/semi skilled laborers – carpenters, masons, farmers, drivers and migratory workers.
They would be poor but with an employment, have aspirations and hope for their children having a better life.
Emergence of the new consumer
Understanding the Indian consumer market means understanding its individual segments. Pertinent questions facing Indian marketers today include:
“Who are the new consumers? What are they spending their money on?” The
roundtable provided interesting insights into these emerging consumer seg ments and their buying behaviour.
“From pester power, kids have changed their role to becoming influencers. In the older age
group, they have actually become consultants, whom parents turn to for advice during the
decision-making process.” — Rajat Jain, Mobile2Win
Three major emerging segments were identified: Kids, the Youth (including
the young working singles) and the Urban Indian Woman. These segments
have shown a tremendous increase in influencing and driving purchase
decisions and hence are huge drivers of change in the consumer market.
More interestingly, purchases are being driven not by necessity, but to satisfy
individual needs. A high-potential emerging market is also the vast rural
hinterland, which has its own unique characteristics.
Kids: Getting older younger
There are 300 million children aged between 4–14 years in India — a vast
market by any standards. The role that children play in purchase decisions
has changed dramatically in the past 4–5 years. As Rajat Jain, Mobile2Win
described: “From pester power, kids have changed their role to becoming
influencers.” And this is not only in product categories like confectionary
and toys, but in larger long-term-use categories such as cars, electronics and
even consumer durables like refrigerators and air conditioners, which were,
traditionally, decisions taken by parents. Today the roles are reversed, with kids
pointing out the pros and cons of purchase decisions to their parents. “In fact,
in the older age group, kids have actually become consultants, whom parents
turn to for advice during the decision-making process,” said Rajat Jain.
One aspect that has contributed to this change is the fact that kids seem to be
growing older younger — a 12-year-old’s state of mind today is similar to what
a 14-year old’s would have been 10 years ago. Due to a higher degree of exposure to the outside world, their awareness levels are rising and as a result, they
are clearer about what they want. Another driver is their mastery of technology,
which is a primary component of a high proportion of new products in the
market. The relative ease with which they are able to grasp technicalities and
understand product features and usability (or lack of) has made them experts
in the eyes of their parents.
“Parents are also becoming more indulgent. The relationship between parents and children
has changed, moving from a hierarchical system to one driven by respect for children’s views
The middle class male consumer
The middle class of India is for whom most of the advertising is targeted. Even in the lower middle class, consumer products like biscuits, talcum powder, hair oil, hair cream, toilet soaps, leather foot ware, casual foot ware, wrist watches, quartz watches etc. are purchased.
To get a much better understanding of the middle class “male” head of the family, consider the following characteristics:
Security Seeking:
The middle class generally consists of security seeking people. Even though they are receptive to new ideas, they do not very readily dash into new ventures. The middle class man does not only want economic security, but he also wants emotional security.
He will not do something that is likely to upset his emotional ties. He wants social security. He wants to be part of society. He does not want to be a rebel or an outcast. Being part of society he enjoys a degree of protection. He is likely to welcome new innovations is they satisfy his sense of security. If he feels that a particular idea will help him improve his economic position or social relationships he will accept it. Anything that is likely to upset this balance is going to be discarded by him.
Credit purchases:
The middle class Indian normally lives in a fixed income. He has to manage his finance in a rigid budget. He wife selects reasonably good furnishings and uses modern cooking gadgets. He usually has a two-wheeler of this own. He aspires for the well-to-do lifestyle he sees on TV. So his purchases are generally materialistic in nature. Because of this he likes to make large purchases and pay for though the different credit facilities that are made available to him by the banks and other financial institutions.
Now days practically everything is made available to him on installment payments. The availability of credit facility acts as a temptation to buy. His desire for bringing home more and more material comforts is realized by the availability of credit facilities.
The State Bank Of India campaign of a few years ago, "Be a big shoppers! Make a big buy! Take home a car, a VCR or a sewing machine today! You can do it now with the big buy scheme..." appealed to many Indians.
The system of "credit cards" is also growing in the country at a very fast rate. It is expected that in the near future, Indians will be the biggest users of credit cards second only to America.
Prestige Conscious:
The middle class Indians have many of their possessions, largely because they are "status conscious" or "prestige conscious". The middle class man’s finances may be tight and he may even struggle to meet ends. Still, he looks for more than average comforts, and plans for more material possessions. These possessions act as status symbols. By appealing to this prestige a marketer may motivate the middle class man.
Strong Family Ties....Home loving:
The middle class man is a home loving man. He assigns a lot of importance to the well being of his family. He spends a good portion of his income on the education of his children. His children get priority in his budget. He without much resistance will adjust to the changing fashions of his college going children even though these changes may be costly for him. The concept of "small family more comforts" has gone well with him. The "family tie" binds him so strongly that anything that appeals to this "human bond" will find his ready acceptance.
His son's education or his daughter’s marriage are life long dreams for him. Any thing that appeals to these dreams will catch his immediate attention.
However, the middle class man is greatly influenced by his wife especially on his buying decisions. Tooth-paste, hair oil, magazines or tape recorders, the purchasing decision is consented by her. There are certain buying decisions that are made by his wife solely so the middle class housewife is another important person to study from the marketing point of view.
It is important to consider the literacy of the Indian consumer.
For Example: When launching a marketing campaign, if all the advertising is done though a non-visual/non-audio media like the newspaper, the marketer must know whether his target consumer is in a position to read the advertisement i.e. is the target consumer literate.
Literacy Scenario in India (As per 2001 Census)
Literacy in India has made remarkable progress since Independence. This has been further confirmed by the results of the Census 2001. The literacy rate has increased from “18.33%” in 1951 to “65.38%” in 2001. This is despite the fact that during the major part of the last five decades there has been exponential growth of the population at nearly 2% per annum.
Some of the important highlights of Census 2001:
The male literacy rate has increased to 75.85%, which shows an increase of 11.72%.
On the other hand, the female literacy of 54.16% has increased at a much faster rate of 14.87%.
The male-female literacy gap has reduced from “24.84%” in 1991 to “21.70%” in 2001. Mizoram has the smallest gap (4.56%) followed by Kerala (7.45%) and Meghalaya (8.27%).
All States and Union Territories without exception have shown increase in literacy rates during 1991-2001.
In all the States and Union Territories the male literacy is now over 60%.
For the first time since independence there has been a decline in the absolute number of illiterates during the decade. In the previous decades, there has been a continuous increase in the number of illiterates, despite the increase in the literacy rates, but now for the first time the total number of illiterates has come down by 31.96 million.
The number of literate persons has increased to 562.01 million in 2001 thus adding an additional 203.61 million literates in the country.
Rajasthan has recorded the highest increase in the literacy rate among the States/Union Territories of India. The state also recorded very good increase in the female literacy. It was 20.44% in 1991 which has increased to 44.34% in 2001.
Madhya Pradesh also recorded a good increase in female literacy rate. In 1991 the literacy rate of females was 29.35% which has increased to 50.28% in 2001.
It is important to consider the literacy of the Indian consumer.
For Example: When launching a marketing campaign, if all the advertising is done though a non-visual/non-audio media like the newspaper, the marketer must know whether his target consumer is in a position to read the advertisement i.e. is the target consumer literate.
Literacy Scenario in India (As per 2001 Census)
Literacy in India has made remarkable progress since Independence. This has been further confirmed by the results of the Census 2001. The literacy rate has increased from “18.33%” in 1951 to “65.38%” in 2001. This is despite the fact that during the major part of the last five decades there has been exponential growth of the population at nearly 2% per annum.
Some of the important highlights of Census 2001:
The male literacy rate has increased to 75.85%, which shows an increase of 11.72%.
On the other hand, the female literacy of 54.16% has increased at a much faster rate of 14.87%.
The male-female literacy gap has reduced from “24.84%” in 1991 to “21.70%” in 2001. Mizoram has the smallest gap (4.56%) followed by Kerala (7.45%) and Meghalaya (8.27%).
All States and Union Territories without exception have shown increase in literacy rates during 1991-2001.
In all the States and Union Territories the male literacy is now over 60%.
For the first time since independence there has been a decline in the absolute number of illiterates during the decade. In the previous decades, there has been a continuous increase in the number of illiterates, despite the increase in the literacy rates, but now for the first time the total number of illiterates has come down by 31.96 million.
The number of literate persons has increased to 562.01 million in 2001 thus adding an additional 203.61 million literates in the country.
Rajasthan has recorded the highest increase in the literacy rate among the States/Union Territories of India. The state also recorded very good increase in the female literacy. It was 20.44% in 1991 which has increased to 44.34% in 2001.
Madhya Pradesh also recorded a good increase in female literacy rate. In 1991 the literacy rate of females was 29.35% which has increased to 50.28% in 2001.
Up until recently, large part of the marketing that was done in this country was done, targeting the urban population of the country. Now the marketing potential of the rural part of the country is rapidly growing. Let us get an understanding of the urban and rural break up of the country.
26% of the population lives in the cities or in urban India. The remaining 74% lives in the villages or in rural India. The population of the country is spread over the villages but is very concentrated in the cities. India has six of the largest cities in the world. These are - Calcutta, Bombay, Delhi, Madras, Bangalore and Hyderabad.
Besides these cities, there are six other cities that are growing at a very rapid rate and have a huge concentration of the population. These are - Ahmedabad, Kanpur, Pune, Nagpur, Lucknow and Jaipur. In addition to these cities, there are around 4000 towns that have concentrations of the population.
In the cities, there are a lot of jobs available now-a-days due to call centers and BPO's. This has given many more people purchasing power. Items that were luxury items a few years a go are seen in every house in the cities.
Besides the cities 74% of Indian population lives in the villages. As the standard of living in the villages also improves, many modern facilities are available in almost every house hold in the villages too.
Now a days the TV is there in most of the houses in the villages too. This has exposed them to a lot of advertising lifestyles and products. The villages have become a huge market that will be of great consequence in the near future. In the future, companies with a strong product distribution system reaching all the villages will have a very strong advantage over the rest.
The country is growing, and is a place where business will thrive in the near future. To understand this better consider the following favorable shifts that have taken place in the consumer patters of buying.
The country is growing, and is a place where business will thrive in the near future. To understand this better consider the following favorable shifts that have taken place in the consumer patters of buying.
Favorable shifts in consumption pattern:
Analysis shows that over the years, the expenditure on non-food items has grown faster that the expenditure on food items. India is witnessing a great change in the lifestyles and buying patterns of consumers. Convenience foods like instant coffee and noodles are now very popular. The number of modern gadgets like washing machines in the number of house holds is now on the increase. As we have mentioned before, yesterday’s luxuries are now becoming today’s necessities.
The Indian consumer has more money and is now using it more liberally than ever before. Food and drink have acquired a greater "fun" image for him than ever before.
Because of the TV and the booming media, even the economically lower class of the Indian population craves for a lifestyle like the well-to-do people they see on the TV.
The percentage of working women in India is growing at a steady pace. This is mainly because of the development in communication systems and growth of educational opportunities given to women. Because of this growth of working women, the women now-a-days also have an increased purchasing power. Due to this, industries that are directly related to women like cosmetics etc. have seen a major boost. Also, toiletries, food and beverages etc. have seen a growth.
The middle class house wife is generally educated and is the purchasing agent for some of the products the family buys. She is also the "gatekeeper" for many products like new cooking medium, fast food etc. that cannot enter the house without her clearance. She also decides purchases meant for children.
To get a much better understanding of the Indian house wife, consider the following characteristics of her buying decisions:
Cautious, but not averse to change:
The middle class house wife is generally educated, earns her own money or has to use money given to her on a fixed budget. This makes the middle class house wife a discriminating and cautious buyer. However, she is not averse to new ideas and things. She is willing to try new things but she will not adopt any product instantly. She will make a sample purchase, check with people who use the product, listen for guidance and then finally she may go in for purchasing the product.
Quality as well as cost cautious:
The middle class house wife is a quality as well as cost cautious buyer. She will try to purchase products that will last her for a long time. She will try to get "millage" out of every rupee she spends. She is less likely to purchase “use and throw” type of products. Besides being quality conscious, he also is cost conscious. Before buying a particular product she will first check the price with other sellers and will then go in for the lowest price.
Because of being quality and cost conscious, extra features like re-usable containers will influence her buying decision. Bonus prizes, coupons, rebates etc. will definitely attract her attention.
Instead of advertising she relies on word-of-mouth communication. She is interested in knowing what her neighbor or colleges are using. Even after she purchases a product she seeks reassurance about making the right purchase decision.
Leisure seeking:
As time passes the house wife is getting used to more and more leisure though the use of modern gadgets like washing machines and other such house hold items. She will be interested in new innovations that reduce her work time even more. She may not be able to afford all the modern gadgets that are available in the market but they still hold her interest because they are a potential for saving time and avoiding drudgery.
Sense of grooming:
Sense of beauty is a strong motive force behind several of her purchases. Soap or shampoo, vanishing cream or cleansing milk, perfumes or hair oil - selecting her brand is greatly influenced by her sense of grooming. She is generally fashion loving however she is not fashion crazy. A strong sense of traditionalism runs thought her personality. Products or ideas that uproot her basic personality or values will not find acceptance with her.
They are more adventurous than their elders and they care less for tradition and religion. The often are after a "New Look" and they seek novelties. They are quick to adopt new fashions that emerge.
They are generally more receptive to change. They believe more in spending money in the pursuit of pleasure than saving for the future. It is not easy to dupe them but it is quite easy to motivate them. Teenagers are becoming quite a distinct market segment.
They not only have products and services that been designed to cater their needs but also they are an influence on the decisions taken by adults. Some estimates show that around Rs.500 crore a year is the amount of money given to children as pocket money.
That covers a general understanding of the Indian market on the whole and the middle class of the market (which is the biggest consumer base for industries) in specific. Now let us go into a detailed understanding of how the process of marketing is done.
Income Based Classification
India has a population of 1.095 billion people, comprising of 1/6th of the world population. India's population can be divided into 5 groups on the basis of annual household income. These groups are:
1. Higher income
2. Upper middle income
3. Middle middle income
4. Lower middle income
5. Lower income
The income classification does not represent a real scenario for an international business because the purchasing power of currencies differs significantly. The real purchasing power of Indian rupee is higher than the international exchange value.
In addition to that, income classification is not an effective tool to ascertain consumption and ownership trends in the economy.
Consumer Classification
According to National Council of Applied Economic Research (NCAER) there are 5 consumer classes that differ in their ownership patterns and consumption behavior across various segments of goods.
Source: NCAER
The 5 classes of consumer households (consumer classification) show the economic development across the country based on consumption trends.
Age Demographics
India is a very young nation, if compared with some advanced and developed countries. Nearly two- thirds of its population is below the age of 35, and nearly 50 % is below 25.
Marketers explain that the boom in the consumption level and leisure related expenditure is because of this young population. It will have a significant impact over the consumer goods market. In addition to that, it is expected that this will generate trade opportunities and continuous investment in the economy. There is huge potential for further consumption of goods and services due to the increased level of disposable income. The expenditure on essential goods and services has a higher share in developing countries as compared with that of developed countries.
2.4
934.2
tial Services (water, power, rent, and fuels) 10.1%
Clothing 4.9%
Footwear 0.63%
Medicare 4.25%
Transport & Communication 14.51%
Recreation, Education, and Culture Less than 4%
Home Goods 3.25%
India is a land of a billion people, speaking 151 languages. It offers employment opportunities ranging from doctors, IT professionals, businessmen, snake charmers, yogis, farmers to bonded laborers. With a per capita income of $950 per year, among world’s fastest growing economies; the country that has every major auto giant pitching their tents; still has over 70% of its people earning less than a dollar a day.
The one word that summarizes Indian consumer is “Diversity” with D capital of languages, climate, color, religion, caste and economic class. It offers a perfect googly for a conventional marketer.
One approach though, adopted by some of the leading FMCG majors, manages to cut across the clutter. It is to divide the Indian Consumer into three broad stereotypes based on a) their size of wallet, occupation and education and b) the sort of town/village or city they live in.
India 1 (Consumers) – Largest Value Consumer base
Consumers living in top 30 cities of the country; with household income exceeding Rs. 35000 per month ($ 700). Post graduates or professional graduates; businessmen, self employed (CAs, doctors, architects etc.), executives; owning major white goods like refrigerator, washing machines, TV and a Car. They are at par with the developed world’s consumers in terms of tastes, preferences and propensity to spend.
Their needs, aspiration levels, lifestyle, media habits, shopping environment would offer a pretty uniform answer to the following-
· Who to market to (consumer profiling)
· What to market (needs and benefits)
· How to market (media and distribution)
India 2 (Climbers) – Largest Volume Consumer base
Consumers living in Indian towns having a population of 20,000 and above; with a household income between Rs. 15000 and Rs. 35000 per month ($200 to 600); graduates; white/blue collared workers; small businessmen, traders, self employed. They would own any two of the three surrogate white goods – refrigerator, washing machine and TV.
They would offer a uniform answer to the three basic marketing questions above. They are typically very focused on their child’s education.
India 3 (Aspirants) – Largest Growth Driving Consumer base
Predominantly Rural/ First generation migratory Urban workers earning up to $200 to $500/month; Semi educated to uneducated/semi skilled laborers – carpenters, masons, farmers, drivers and migratory workers.
They would be poor but with an employment, have aspirations and hope for their children having a better life.
Emergence of the new consumer
Understanding the Indian consumer market means understanding its individual segments. Pertinent questions facing Indian marketers today include:
“Who are the new consumers? What are they spending their money on?” The
roundtable provided interesting insights into these emerging consumer seg ments and their buying behaviour.
“From pester power, kids have changed their role to becoming influencers. In the older age
group, they have actually become consultants, whom parents turn to for advice during the
decision-making process.” — Rajat Jain, Mobile2Win
Three major emerging segments were identified: Kids, the Youth (including
the young working singles) and the Urban Indian Woman. These segments
have shown a tremendous increase in influencing and driving purchase
decisions and hence are huge drivers of change in the consumer market.
More interestingly, purchases are being driven not by necessity, but to satisfy
individual needs. A high-potential emerging market is also the vast rural
hinterland, which has its own unique characteristics.
Kids: Getting older younger
There are 300 million children aged between 4–14 years in India — a vast
market by any standards. The role that children play in purchase decisions
has changed dramatically in the past 4–5 years. As Rajat Jain, Mobile2Win
described: “From pester power, kids have changed their role to becoming
influencers.” And this is not only in product categories like confectionary
and toys, but in larger long-term-use categories such as cars, electronics and
even consumer durables like refrigerators and air conditioners, which were,
traditionally, decisions taken by parents. Today the roles are reversed, with kids
pointing out the pros and cons of purchase decisions to their parents. “In fact,
in the older age group, kids have actually become consultants, whom parents
turn to for advice during the decision-making process,” said Rajat Jain.
One aspect that has contributed to this change is the fact that kids seem to be
growing older younger — a 12-year-old’s state of mind today is similar to what
a 14-year old’s would have been 10 years ago. Due to a higher degree of exposure to the outside world, their awareness levels are rising and as a result, they
are clearer about what they want. Another driver is their mastery of technology,
which is a primary component of a high proportion of new products in the
market. The relative ease with which they are able to grasp technicalities and
understand product features and usability (or lack of) has made them experts
in the eyes of their parents.
“Parents are also becoming more indulgent. The relationship between parents and children
has changed, moving from a hierarchical system to one driven by respect for children’s views