We Are Like That Only Understanding The Logic

of Consumer India

Rama Bijapurkar

Project by (e-MBA : Marketing):Zubin Daver (13088)Dipesh Sanspara (13089)

About the Author

• One of India’s most respected thought leaders on market strategy and consumer behavior.

• Acclaimed for her unique 360 degree insight on consumers and creative thinking on new products and new business models for emerging markets.

• Consultant for an impressive list of companies from established Fortune 500 corporations to interesting Indian start-ups.

• Independent director on the boards of some of India’s leading companies and visiting faculty at the Indian Institute of Management, Ahmedabad.

Changing Indian Scenario

• Future growth market in the world

• Change after 1991

• Number of international brands on a rise

• GDP and National Income

• Changing preferences

Lessons for New Entrants

• Study the market very careful

• Existence markets have robust products

• Emerging markets not same as developing markets

Do you know India?

• Marketers’ question

• Truth about India

• Schizophrenic India

• Existence of several sectors

• Strategy in India

Why India then?

• Guaranteed growth in future

• Young people and new markets

• Low country risk

• Strong institutions

• Welcoming the change

• China versus India

Goldman Sachs said

“The world’s largest economies may not be the world’s richest economies. Being individually

poor but collectively rich differentiates emerging market economies from developed

ones.”

Understanding the Indian Market

• There are 3 broad segments in the Indian market - premium, popular and discount.

• Unorganized Market versus Organized Market• Initial Assumption• FMCG Market• Paradigm of premium is for rich, popular is for middle

income group, discount is for poor.• NCAER has clustered Consumer India into 5 types of

consumer groups: the rich, the consuming class, the climbers, the aspirants and the destitute.

Consumer Groups

Purchasing Power of Indian Consumers

Forecast from 2005-6 to 2009-10:• Number of rich households

• Rural Middle Income Group

• Population growth rate

My Target for Schizophrenic India

• Existence of 5 consumer groups: the rich, the consuming class, the climbers, the aspirants and the destitute.

• Urban India versus Rural India• So many states and so many languages• 5 economies: agriculture, manufacturing,

government, services, IT.

“The good news is that there is plenty of choice for creatingcompetitive advantage by defining ‘my target for India’

innovatively.”

Demographics, psychographic determinants of consumption

• SEC A1-Tip of India iceberg

• SEC A,B- Prospering and spending

• SEC C+R1- Middle-income group

• SEC D+E1+R2- Mass market

• SEC E2+R3- Poor but consuming

• The self employed as a distinct consumer class

• Consumer India can be divided into:– The Resigned

– Strivers

– Mainstreamers

– Aspirers

– The Successful

Demographics, psychographic determinants of consumption

Predicting Change in Indian Consumers

DNA of Indian society: this as well as that

Battle between tradition and modernity was buried

Changing Cultural Foundations

• Increased bargaining power of the poor

• Strengthening the poor

• Modernity is nothing but modified tradition

• Range of aspirations are socially legitimate

• Child-centricity

Changes in the Cultural Foundations will impact in the following way:

Indian consumers are far more ok with the ‘do good’ products and it will be some time before

the ‘feel good’ products find their place in his/her purchase priorities.

Three Big Consumer Segments

• Rise of ‘generation next’ - Youth

• ‘The new emerging Indian woman’

• Rural India

‘Bottom of the Pyramid’ Consumers

• Size of the BOP market is 650 million people• Individually earn less than a dollar a day• Collectively account for 30% of the national

income, a little over 33% of consumption expenditure and a little over 20% of India’s savings

• The BOP is rising fast in terms of absolute required amount of income earned

• Hunger for Knowledge and information is extreme

Understanding the ‘bottom ofthe pyramid’ Consumer

• Characteristics of the BOP consumer:• Poor but not backward• They value all kinds of productivity devices

that help them earn more• Poor consumers do complicated value

processing• Poor consumers are technology embracers

So finally what India wants?

India requires the creation of new solutions, rather

than the transplanting of strategies from other markets. It requires companies to use their core

competence to the best limit, and apply it to new markets. This will help to over ‘problems of India’ by

giving ‘solutions made for India’.

Thank you