Benefiting from mass consumerism

Marketmind

There is distinct evidence to suggest that the Indian consumer, irrespective of her socio "" economic origin, is on a self- appeasement mission.

Consumption is good and she wants more of the best that life has to offer. One hundred and seventy seven million households in India are at various stages of defining their 'self' from the 'common'. And this is the new definition of the Indian Mass Market.

Some important home truths about consumption include (a) the Indian consumer is spending more on apparel, entertainment, eating out, vacations and lifestyle-related activities: According to the latest KSA Consumer Outlook 2003, the aspirations of the Great Indian Consumption class are converging across sectors A & B and also coming closer to global trends wherein entertainment, movies, clothes and eating out are categories which have seen the maximum rise in consumer spending from 2001-2002.

(b) Different sector groups are being exposed to similar media influences owing to rising literacy and increased TV and cable / satellite penetration. (c) People prefer time and convenience to better bargains and are willing to travel lesser and lesser for standard items in their monthly shopping lists. (d) The higher income group in rural India is growing at a phenomenal rate, and (e) In rural India, the concept of brands and quality are very much prevalent.

There is widespread awareness that branded goods are of better quality and agreement that advertising affects choice of brands.

These changes in the current consumption trends are the compelling opportunities for marketers in India to capitalise on the rising mass market in India for almost all product categories. Some have already begun to capitalise on the same.

McDonald's, for example has launched the Rs 10 McSwirl cone and Rs 15 Veg Surprise burger to give the mass Indian consumer the McDonald experience. The success of branded FMCG producers such as Cavincare, Dabur, Priyagold and others indicates that the Indian consumer is indeed becoming more aspirational towards consumption, even though low income limits her ability to consume many of these products at a higher frequency.

How can other Indian companies and entrepreneurs take advantage of this trend towards mass consumerism?

The starting point has to be creation of very specific products and services for this mass market. It is a fact that increased desire to spend will not necessarily lead to increased spending for all categories of goods and services since the latter is a function of availability of disposable income.

Thus, products / services have to be reengineered to either bring down the entry level purchase prices (e.g. Air Deccan which has recently started no-frills airline services in parts of India) or entry level sampling sizes (e.g. ITC's Sunfeast biscuits or Nestle's Polo Mints in small pack sizes).

It would be relatively easy to reengineer the pack sizes for easier sampling, but far more difficult to reengineer the basic product / service itself (and then reengineer the manufacturing supply chain) to drastically bring down the entry level purchase prices without compromising on the minimum acceptable quality / performance standards.

The second step towards capturing the value from the masses is to actually reach out to the masses through a variety of conventional and then some non-conventional (e.g. person to person marketing, kiosks, catalogue etc.) marketing channels across the length and breadth of the country rather than merely focusing on the metros or other major towns.

This will require "" in some cases "" dismantling of traditional sales and marketing organisations and rebuilding new ones that are cost and time effective in reaching out to these masses.

The third crucial step is creating awareness in the minds of these new consumers about the virtue and unique value proposition of these new products and services and then making the consumers aware as to where and how they can try these new offers.

In this context, the role of advertising and promotions will become even more critical than it has been in the past, since the challenge for the marketers and brand managers will be to be able to create the appropriate 'connect' with these new consumers.

The above recipe may sound like the basic Marketing 101 Class, based on the works of Philip Kotler, but then the fundamental tenets of sound business management remain constant. What should change with time are paradigms and processes.

India is changing rapidly, and finally, we are seeing the first signs of an emerging large consuming class. Businesses must therefore adapt to these changes, and benefit from the increasing discretionary spending of this larger consuming class.

Arvind@ksa-technopak.com