Rising disposable incomes, especially, among the middle class, increasing consumer base in urban areas, credit availability, growing number of nuclear families, working women, easy accessibility and convenience and a potentially strong rural consumer market will fuel this growth in the near future. Indeed an exciting time for retailers and marketers.
The rising purchasing power coupled with an increasing propensity to consume has led to the emergence of a new class of consumers. Gone are the days when people felt guilty about spending. Not only are people today indulging in buying more, they are spending significantly on themselves.
As per Ernst & Young analysis, in the last decade the number of upper middle class and high income households has grown by a staggering 270% from 30 million households to 81 million households. A key aspect driving the sector’s growth is favourable population demographics – 50% of the population is less than 25 years.
The power of youth today is evident in its large numbers, tendency to consume and in its ability to influence larger household decisions. India’s population is also urbanising at a rapid pace with the urban Indian population projected to increase from 28% to 40% of the total population by 2020.
A recent Ernst & Young study, YouSumerism, found that the propensity to consume for a developing country accelerates beyond $900 per capita GDP and India will reach that in 2008–2009.
The spending pattern of Indian consumers presents a great paradox to today’s marketers and retailers. On one hand is the increasing discretionary income (Rs 3,800 – Rs 7,000 per month) but on the other hand is the typical Indian need of ‘value for money’.
This spending power has not necessarily translated into higher value of purchases. This brings forth the question of how retailers and marketers should address this great opportunity without losing sight of the mass market that India offers.
Marketers are looking closely at the changing buying behavior of the Indian youth. There are three aspects that influence today’s purchase decisions –– uniqueness, contemporariness and of course, value equation. More and more consumers want products that are unique so that they make a statement of being different. The second aspect is related to the need to change products frequently in order to appear modern or contemporary.
This also ties in with the fact that the new generation is a generation of spendthrifts as against the old generation of ‘thrifts’. At the same time, consumers are also looking at the ‘value’ equation in every purchase. This is probably the reason why they buy products that are well priced but buy them more frequently.
Industry leaders are foxed by the success of some brands that are perpetually on sale. Whilst as marketers, they might fret about brand value erosion due to such schemes, young consumers see it in a completely different light. They see it as being able to buy more than one, never mind if the products do not last as long.
It lets them change their wardrobe more often and this is ‘value’ for them. A recent 40% sale by a garment brand generated 8 times the daily sales in its stores, so much so, that they had to hire extra security to manage the crowds. This phenomenon can not be explained by discounting alone but also due to the fact that it allowed consumers to buy more number of clothes.
So, unlike in the past, consumers are buying keeping their discretionary income in mind rather than the number of units that they need. All this fits into the need to be ‘unique’ and ‘contemporary’ as they can wear different types of clothes and change more often.
A good success story of understanding and leveraging this phenomenon is the Indian mobile handset industry which is well underway to becoming the largest mobile handset market in the world. This could be attributed to handset manufacturers launching more and more ‘right-priced’ models aimed at various segments hence encouraging consumers to buy more mobile phones and change them more often.
They have thus satisfied all the 3 aspects of purchasing. This is also precisely the reason why the gadgets market in India is seeing a 50% plus growth, which is slated to increase in the near future.
We can expect the retailers of tomorrow to keep these changing trends in mind. This will mean specific products that are contemporary with more frequent changes in styles thus making the range more exciting for today’s youth. This will also mean providing ‘value fashion’ products that are within the means of their discretionary spends.
Some large department stores have already started changing their merchandise to make it contemporary & youthful and at the same time offering a broader range. All this is aimed at inviting more shoppers and converting them into frequent buyers.
(Pinakiranjan Mishra, Partner, retail & consumer products practice, Ernst & Young)
Source: http://economictimes.indiatimes.com/articleshow/msid-2681515,prtpage-1.cms
------------------------------------------------------------------------------------
Brand Loyalty; possible?
Saturday, 9 August 2008
For a consumer to be loyal to a brand, the consumer must connect with it at an emotional level. If the response to a brand is driven purely by rational evaluations, loyalty if exhibited, is spurious. A switch is imminent, and will happen as and when a competing brand scores over the present one, on parameters important to the consumer.
An emotional connection is a result of a higher level of involvement on the part of the consumer with the category in question. The intensity of decision making involved could be as a result of a higher level of cognition employed. Once a brand is chosen post evaluations, ie., purchased, and should it 'connect', loyalty in all probability will follow.
Coming to Soft drinks, in India, there could be a set of consumers who connect with the brands available, at an emotional level. Maybe its the GenXers taking to what Pepsi projects itself as. Pepsi's youthful image may resonate well with the youth, which may then translate into purchases. As long as Pepsi reinforces that image, brand loyalty will be sustained.
But then again, there could another set of consumers, me included, who see 'Youngistaan' as the corniest idea there ever is, therefore are unmoved, therefore are not loyal. Also, don't discount the fact there could still be another set who are loyal to a cluster of brands, not just one, that may even include competing brands.
Source:http://www.youthtrendsreport.com/2008/08/brand-loyalty-possible.html
-------------------------------------------------------------------------------------
Survey: Live-in relationships a metro trend
30 Jul 2007, 0230 hrs IST, Neelima Mahajan,TNN
MUMBAI: Kantar Media’s 57-nation survey on family values indicates that India also bucks the worldwide trend of single parenthood. Ashish Karnad, associate vice-president and research services director, IMRB International (a Kantar Media company), says, "It takes a lot of time for values to change. So even if the process has started, the changes haven’t set in yet." He also points out that broken marriages and live-in relationships are largely a metro phenomenon and the rest of India is still traditionally insulated from such life-changing practices.
These findings have significant implications for companies and how they approach branding in India. Companies can use family values in their communication and advertising in order to create an impact, says Karnad.
Source: http://timesofindia.indiatimes.com/India/Survey_Live-in_relationships_a_metro_trend/articleshow/2243123.cms
------------------------------------------------------------------------------------
Indian family values intact
30 Jul 2007, 0036 hrs IST, Neelima Mahajan,TNN
Nearly 84% of the Indians questioned in a survey say spending time with their families is their favourite pastime (TOI Graphics)
MUMBAI: It's all about loving your family, especially if you are an Indian. Defying the grim prognosis of a breakdown in traditional values, Indians are staying together as family, finds a 57-nation survey.
Nearly 84% of the Indians questioned in the survey say spending time with their families is their favourite pastime. Although that is on a par with the universal sentiment, other findings go on to demolish the popular, TV-fed misconception of India being a decadent society with sons and daughters throwing out old, crusty parents and wives and husbands switching partners at the drop of a pallu.
Divorce rate, a mega indicator of the breakdown of old values, is under 1% in India. Sixty-eight per cent of the adult urban population in India is married and less than 1% is divorced or separated. A whopping 82% of Indians believe it's important to have a lasting relationship with their spouses, reinforcing the faith in long-term commitment, says the survey, conducted by global market research firm Kantar Media.
Interestingly, in India, less than 1% of the adult urban population lives alone. The average household size in urban India is 4.8 persons. In all Asian countries in general, the percentage of people living alone is very low. However, there are concerns about expectations from families. More than any of the other countries surveyed, 76% Indians feel that it is important that their families think they are doing well in life. Over half the parents want their children to move ahead in life, even if it means putting a lot of pressure on them, says the survey. The corresponding figures are 63% in China, 51% in the US and 33% in Germany
8 Jan, 2008, 0000 hrs IST,
Source: http://timesofindia.indiatimes.com/India/Indian_family_values_intact_Survey/articleshow/2242893.cms
Source:
No comments:
Post a Comment