The recent reports about the unhealthiness of junk food set me thinking. Is packaged junk food a serious threat to Indian consumers? What is the penetration of colas, burgers and packaged chips in the country? What is the per capita consumption of these products? Are these at the same levels as in the West, especially America? Is the Indian diet replete with other foods that are more dangerous for Indian hearts?
This consideration revealed to me that the penetration of many branded products continues to be the biggest challenge for the average Indian marketer. While some categories like toilet soaps, toothpastes and detergents have achieved 60 to 70 per cent penetration, many others languish around 30 per cent. In fact, some penetration figures are deceptive since they reflect response to questions like “ever consumed” or “consumed in the last one month” — often including infrequent consumption in penetration statistics.
As Indian marketing enters the third decade of economic liberalisation, while consumption is an opportunity for consumers at the top of the pyramid, market penetration continues to be a challenge for many categories — from branded tea and biscuits (where “brands” contribute at most 30 per cent of the market) to financial products like insurance and mutual funds (where penetration is single-digit or low double-digit) to automobiles.
- Reduce put-down price. This brings down the risk of entering the category for the first-time buyer and also enables low-income people to access the category. It has helped categories like tea and shampoo penetrate the market through sachets. The detergent powder market opened up when low-price brands came in and changed the basic structure of the market. The growth of mobile telephony has been on the back of low call prices
- Attack the current practice on a real problem and make yourself seem distinctly superior. Exterior emulsion caused large-scale conversion from cement paint by highlighting the limitations of cement paint – flaking, fading and fungus – and thus in a decade made emulsion the way to paint exteriors.
- Add value over current practice. Branded salt provided more over what loose salt did – iodine – in the early nineties to penetrate the market and get people to pay more for something as basic as salt. A “health” soap drove rural penetration by demonstrating that it killed all germs post-hand washing and thus prevented dysentery — a common problem for children in Indian villages.
- Capitalise on a large social trend or concern. Who would have thought two decades ago that people would pay for water? But with growing concern over the quality of running water, packaged water has become a big business, riding purely on health concerns. As more doctors ascribe many common illnesses to water drunk, and restaurants give a choice between normal water and bottled water, penetration of this category has increased. It’s no longer unusual to see people walking with bottled water in hand when out of their homes!
- Create an occasion for consumption. Noodles have become part of Indian households on the back of persistent, decades-long work. Positioned as a light snack between regular meals for children at four o’clock, it created a role for itself in the life of the consumer by locking into a consumption occasion. Wafer-coated chocolate did something similar by positioning itself as an answer to light hunger for teens and young adults.
- Tap into an existing ritual or cultural occasion and increase penetration. Chocolates have done this successfully over the past decades by associating themselves with festivals and everyday sweet moments. This explains India’s zing to a Western food.
- Tap into adjacency. Riding on another category is a smart way to build one’s category. Cement brands are driving penetration by riding on the growth of home-building and ownership; digital direct-to-home boxes are riding on the growth of high-end digital TV business — you can only see the best picture on your TV if you have the right box.
- Enter through kids. Kids are a vulnerable point of entry since parents are willing to go an extra mile for them. Insurance has used children’s plans as a means of driving penetration, a stronger bet than pegging it as what it’s actually designed for — death cover. Computers have persistently attempted to use education as a means of driving purchase for use at home.
- Become a badge for the youth. If kids are a vulnerable point for parents, labels are a soft spot for young people. The growth of colas and mobile handsets has all been on the back of making young Indians desire them by attaching coolness and hipness to the category. Colas are a case in point. Here is a product that is dark-coloured (seemingly unappetising); contains sugared water and is gaseous (so unhealthy); doesn’t quench thirst (hence no tangible benefit); and yet gets young people to pay a premium to drink it. Amazing?
- Experience outside, bring inside. This is an emerging way to drive penetration. As consumers spend more and more time outside and are willing to experiment there, an opportunity for category penetration has been created through driving experience outside and then bringing it home. Colours and textures on walls have come in, among other things, through people’s experience of them in hotels and restaurants outside. Similarly, cafes have democratised coffee as a beverage and brought the category home thereafter.
Finally, the more a category is seen, the more it is bought, as the late majority comes in based on comfort and stimulus from the early majority. Conspicuous consumption categories lend themselves very easily to this — cars, bikes, mobile phones, even air-conditioners. It’s a trick worth not missing while thinking penetration.
India is two economies in one, developed and developing, and there is always an opportunity to reach the developing – “the growing middle class” – with penetration strategies. Ten have been listed; more could emerge. Something worth thinking about.
These views are personal.
madhukar.sabnavis@ogilvy.com