Arvind Singhal: The marketer's challenge

MARKETMIND

At the sidelines of a recently concluded "consumer insights" forum in Mumbai, some of the veteran marketers were wistfully reminiscing about the times where it was simpler to segment consumers into relatively clearly demarcated groups based on one or more attributes such as age, socio-economic classification and thereby indirectly their incomes, and urban or rural. Their aspirations and buying behaviour were more predictable in terms of purchase frequency and seasonality. Trying to understand what the consumers want even today, much less predicting what they may desire tomorrow, is increasingly becoming tougher. Classic consumer and market research tools do give some insights but not enough in most situations. What has changed?

I can identify four major change-drivers. Each one of them is not a new phenomenon or discovery. What is less intuitively understood is the impact of these four change-drivers when they come into play concurrently. The first one is the very unique demographic profile of India. Probably never in the past did India have such a big majority of very young Indians "" whichever way we define "young" "" having the prospects (and many cases, the reality) of a brighter and more prosperous present and the future than their parents. It is no surprise that the Indian consumers' confidence about their situation remains among the highest in the world, year after year, in various surveys. The second change- driver is the very rapidly rising literacy rates in the country. While the overall percentage may still be below 65%, the numbers are much more encouraging for the population strata below 35 and could be above 75%. The third change-driver "" an explosive increase in access of all kinds of information and an almost real-time exposure to the hottest national and international developments, trends, lifestyles, fashion, etc. "" is leading to the evolution of a very different kind of an Indian consumer. All these changes are supported by the fourth change-driver: the unprecedented economic growth in the last 15 years, and the prospects for sustaining the momentum for the next 15 years or more, leading to steadily increasing disposable incomes for at least the top two-thirds of the population or over 700 million Indians.

It is, therefore, no surprise that the combined impact of these four key change-drivers is leading to a highly discernible change in consumers' aspirations and expectations. This is also creating a dynamic shift in buying patterns and the overall shopping/spending basket. Comparatively raw sales data and a deeper analysis of the same data across a wide range of consumer product categories, be it automobiles (and among the automobiles between four- and two-wheelers, and within four-wheelers across different offerings), consumer electronics, mobile telephony, food and grocery, personal care, or apparel and footwear. The same middle-income consumer is behaving like an affluent one when it comes to major capital expenditure items like mobile phones or entry-level automobiles, and a strongly value-conscious one when it comes to groceries or eating out. The same consumer behaves time stressed when shopping for basic daily or weekly needs, but then does not mind spending many more minutes at a coffee shop with or without a group of friends or fellow shoppers. The consumer price-compares and bargains down almost to the nearest rupee when in the market to shop for durables or electronics, but then blows up all these savings and then some more on a single holiday within or outside India.

The challenge for marketers of consumer products and services, or retailers for that matter, is to develop a robust methodology that can continuously anticipate and meet or exceed these rapidly changing consumer expectations relating to products and services (which products or services, and what functional attributes), product design (the emotional attributes), product (or business) branding (to create differentiation and help the consumers in taking purchase decisions), and finally which channels (from where to reach out to the consumers, and then how to sell it from there).

Since this demographic, economic, and socio-cultural environment is so unique to India, it is highly unlikely that there would be too many applicable insights anymore from what would be happening outside India in developed or developing markets. I personally find it very amusing when international market research agencies spend time and money in conducting and publishing findings from a plethora of global consumer insight studies that try to compare consumer behaviour across different countries since such information has practically no applicability value to the marketer in India, who is trying fight unprecedented competition not only from her direct competitors but also from an ever-increasing range of new consumption categories (e.g. leisure, socialising, hobbies and self improvement efforts, etc.) that are almost unique to India. Instead, my suggestion to the marketers and retailers would be to spend more personal time in the market, visiting not only their own outlets but almost every other channel where consumers are spending time and money, and then regularly track / compare consumption and consumer information across different sectors rather than just within their own sector and their direct competitors.

arvind.singhal@technopak.com