News APP

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  gplay

Rediff.com  » Business » Indian consumers changing, and how

Indian consumers changing, and how

By Madhukar Sabnavis
December 02, 2005 15:35 IST
Get Rediff News in your Inbox:
  • Mrs Sharma buys the same brand of tea and shampoo month after month out of sheer habit.
  • Mr Kulkarni looks for durability in a television when he buys one for his family. It is a long-term asset to be replaced only when it drops dead.
  • Mr Venkataraman buys branded distemper when he wants to move from chuna to a better-quality branded paint. It is his first step into brands.
  • Mrs Ganguly has one refrigerator in her house. And that is more than enough for her family.

These are consumer behavioural norms of the past. These are the behavioural patterns of the generation pre-liberalisation.

However, just as consumer mindsets and attitudes have taken a step change since the opening up of the economy and the advent of consumerism, so too have consumer behaviours seen a 'sea change' during the same period.

What's particularly interesting is that behaviours shaped by a few categories -- largely technology products -- have perhaps changed consumer mindsets so dramatically across all other categories that marketers need to re-orient themselves to optimally milk opportunities in the market place.

While some of these trends may seem niche today, they will perhaps drive the consuming class -- i.e. the 300 million Indians with growing purchasing power -- tomorrow and hence define marketing and communication tasks in the future.

Pulling back it may be worthwhile to first identify the four macro-behavioural trends emerging in consumer markets today.

  • Consumers jump steps as they enter: In the past, consumers entering a new category -- especially consumer durables -- tended to enter quite gingerly. This created a market for "price-conscious" brands. However, today the line between entry-level and upgraded products is disappearing. The newer generation is willing to pay more if she is convinced she is getting better value for the higher price. This is perhaps due to many younger consumers, even though being first-time buyers, are not necessarily first time experiencers -- and prices of many durables are no longer defined by list price but by EMI instalments! So a Maruti 800 is not necessarily an entry-level car, the Ford Ikon too is an entry-level vehicle. Similarly, a consumer is willing to pay for a premium emulsion once he decides to go into the branded category!
  • Upgrade is part of life: In the past many products -- especially durables -- were bought as lifelong possessions. Once in, consumers stayed at one place for long. This is no longer true. Change is part and parcel of life. Today the average life of a mobile is 12 months, that of a TV three years; cars four to five years and soon even homes will be changed more frequently. Clearly durability is no longer the most desirable value.
  • "One household, multiple products" is coming in. With growing individualism, Indian society has learnt to accept the need for individuals to have their own independent spaces within the framework of the family. So, two cars is no longer a luxury but a practical necessity for working couples; two TVs in the house is recognition of the fact that different family members have different interests and so each can have his own private "tube-to-view". This provides marketers -- whether FMCGs or durables or services -- to start looking for opportunities to market products to individual members of the family -- even in categories that conventionally were seen to be for a household.
  • Mindless behaviour will be by consumer choice rather than physical habit: Shopping behaviour is changing from shopping lists the women brought from home to a list evolving as she walks through the aisles of a supermarket. And with the commoditisation of brands in many categories, what catches the eye or the fancy of the shopper at that point of time is more likely to be picked rather than be driven by any deep loyalty to a particular brand. This clearly says that the "habit-driven" consumer, who was the bedrock of many "iconic, heritage" brands, will soon be an extinct segment. She will flirt at will and so brand loyalty will be low. This will also create an interesting paradox -- in some categories like durables e.g. mobiles, televisions, cars -- the first sale will not ensure the upgrade will be the same brand; and in the FMCG category, the last purchase could strongly influence the next purchase too -- especially when the consumer doesn't want to take the trouble of re-evaluating her choice every time she makes a purchase.

What are the key implications of all these to the average marketer and communicator?

Given these macro-behavioural trends, there is perhaps a need for marketers to go beyond:

  • "Volume-based" marketing into "value-based" marketing. Higher-entry points, multiple ownership and upgraded segments offer the opportunity for higher value extraction from customers willing to pay more for higher order features and benefits.
  • "Acquisition-led" programmes into "retention and growth-led" programmes. Clearly, the first sale is not a destination, only a station. The closure of a sale is an opportunity to start the next one!
  • "Meeting" consumer expectations into "setting" consumer standards. There is a need to constantly innovate to get consumers to "want more" by delivering more. Desire for more exists; it only needs to be ignited!
  • Communication that shapes "perceptions and attitudes" into that which "seeds and drives new behaviours", thus driving greater sales and consumption. The consumer mind is already willing to do many things -- it just needs to be triggered and channelled in the right direction with the right offerings by brand communication. In many categories, consumption could shape preference rather than the other way around!

There is no doubt that India is a dream to a mass, volume marketer. However, there is an equal dream opportunity for the niche, premium marketer if he is willing to adapt to it. The junior Sharmas, Kulkarnis, Venkataramans and Gangulys behave differently from their seniors and offer a step change to marketers.

Peter Drucker said, "The purpose of business is to find a customer." Theodore Levitt elaborated that "the purpose of business is to create and keep a customer". However, today business is moving towards what Jason Jennings and Laurence Houghton said, "The purpose of business is to find, keep and grow the right customer."

Something worth thinking about.

Madhukar Sabnavis is Ogilvy and Mather India Board Partner (Discovery and Strategy).

Get Rediff News in your Inbox:
Madhukar Sabnavis
Source: source
 

Moneywiz Live!