This article provides an essay on the Indian consumer.
Introduction to Indian Consumer:
As the country is very vast geographically, the consumers of India are scattered over vast territory. As the country is marketed by great diversity in climate, religion, language, literacy level, life style and economic status etc.
Demographic Profile:
India has more than 950 million consumers as on 96-97 data. Life expectancy is 65 years as compared to 30 years in 1947. Improved health standard, lower infant mortality, fall in birth rate and growth of medical facilities have contributed to increased level of life expectancy. According to 1991 census average literacy rate is 52.11%. Among males it was 63.86% while in females it was 39.42%. In 1951 there were 6 crore literates and in 1991 they were 45 crores approximately.
Geographic Profile:
Out of 950 million consumers in 96-97 in the country, the consumers residing in Urban areas were 26% or approximately 247 million and the consumers residing in rural areas were 74% or approximately 703 million.
Social & Cultural Profile:
It can be discussed in the broad three heads:
(a) Religious diversity
(b) Linguistic diversity
(c) Diversity in dress, food habits etc.
(a) Religious Diversity:
950 million people belong to 7’different religion groups as Hindus, Muslims, Christians, Sikhs, Buddhists, Jains, Zoroastrians. Each religion has its own hierarchic structures.
(b) Linguistic Diversity:
In India there are 16 major languages and hundreds of dialects. To the marketing man who has to approach the entire national market of India, the linguistic diversity is a big challenge.
(c) Diversity in Dress, Good Habits etc.:
Every state or religious community has its own traditional styles of dress. As regard to food, rice in a stable food in south while wheat is in north. Certain south Indian dishes are popular in north India also. There are certain communities which are strictly vegetarian while few are 90% non vegetarian. Some use mustard oil as cooking medium, some coconut oil (especially in south) and some ground nut.
Consumption Pattern of Indian Consumer:
Indian consumer as a whole spend about 55% of the total consumption expenditure on food items consisting to Cereal & Cereal substitutes, milk products, sugar, edible oil, meat, eggs and fish.
i. 12% is accounting for clothing and foot wear.
ii. 12% accounted for rent, fuel and power.
iii. 8% on transport and communication.
iv. 13% goes to medical care, appliances and services, recreation and education and miscellaneous goods and services.
According to survey conducted by ORG, the expenditure on non-food items has registered a large growth than the expenditure on food items:
i. The respective share of transport and communication, furniture and appliances and of education and recreation has been steadily growing up.
ii. Analysis show that India is currently witnessing great changes in life styles and buying habits of consumers.
iii. Convenience foods as instant coffee and models are now popular.
iv. Yesterday’s is luxuries are fast becoming necessities.
v. Eating habits are changing—home made meals are replaced by food items brought from outside.
vi. Teenagers are becoming influencers of change in the family’s meal pattern.
vii. TV has changed the life style.
viii. Low income households also have the changed aspirational level.
Indian Major Social Classes:
In contrast to USA where the society is divided in 7 major social classes, in India there are broadly three social class based on economic status namely:
(a) The middle class.
(b) The affluent class.
(c) The Poor class.
(a) The Middle Class:
Today this class constitutes the largest segment of the consumers for the manufactured goods in the country. This class start with those persons who start above the poverty line and below the affluent class. For marketing purpose, this class will be further divided in lower middle class and upper middle class. In lower middle class worker class is there while in upper middle class middle level executives are included.
(b) The Affluent Class:
This group has the almost negligent population and this class can be composed with the upper class of USA social class classification. Though this group can afford conspicuous consumption of a high order, they do not form the demand base large enough for manufacturing and marketing firms to depend exclusively upon them.
(c) The Poor Class:
It also constitute the very large portion in India and mainly those persons can be included who live below the poverty line. This group has very low purchasing power. Now this group is receiving the benefits of several social, educational and economic programmes and over a period of time, a good part of this group may enter into the lower middle class.
Indian Middle Class Consumer:
As stated earlier middle class surveys as the real demand base and they have the maximum consumption. Approximately 50% of Indian population belongs to the middle class. India’s middle class exceeds the total population of Germany and France put together.
The Indian middle class exhibit the following characteristics:
(a) Strong Family ties.
(b) A credit purchase class.
(c) A security seeking class.
(d) Prestige conscious.
(a) Strong family ties:
The middle class consumer is basically a home loving man. He assigns a lot of importance on the well-being of his family. He is not the sole decision maker in the purchases. He is very much influenced by his family especially wife in his buying decisions.
(b) A credit purchase class:
Though India has not yet become a totally credit oriented society as west but the consumer credit is gaining ground in this country. Middle class normally lives on fixed income. He manages such a life style (having furniture, house, refrigerator, TV scooter, modern cooking gadgets etc.) mainly through credit facilities made available to him through different agencies. The very availability of credit facility acts as a temptation to buy. Middle class today avails the bank loans is a big way for buying several products ranging from sewing machines to personal computers.
(c) A security seeking class:
Though average middle class does not dash into new ventures, he is security conscious. He not only want financial security but also emotional security. He will welcome innovations if he feels that they may help him improve his economic position or social relationship.
(d) Prestige conscious:
This class is very particular to maintain a standard of living that his benefiting his class consciousness.
The Middle Class Housewife as a Buyer:
In recent past, the profile and role of the middle class women have under gone significant changes. She is educated and in many cases employed. Today the urban house wife is a active partner in the family even for product category as expensive durables as scooters, holding packages etc. She is the powerful influencer of the decision. Purchases meant for children are mostly decided by her. In buying home decorations and houses hold appliances, she is the decision maker.
Middle class housewife possess the following characteristics:
1. Leisure seeking.
2. Awareness about new developments.
3. Quality conscious as well as cost conscious.
4. Conscious but not averse to change.
5. Sense of grooming (sense of beauty) fashion loving—A combination of new and old is an important aspect of life style.
The Urban Teenager:
Urban teenagers are more modern and adventurous than their elders. Careless for religion and tradition. Value material comforts and physical well being, seek novelties, after a new look, variety interest them, quick in adopting fashion. More receptive to change then their elders. More inclined towards pursuit of pleasure. Interested in spending rather than saving.
Teenagers are becoming a significant and distinct market segment, are becoming new sources of influence on the purchase decision of adults. Many marketers are now compelled to design their products and communication to suit the teenagers target group. Urban children are emerging as a sizeable and distinct market segment.
According to pathfinders (a marketing research agency) urban children receive Rs. 500 crore a year as pocket money. The study based on interviews with 4,400 children, belonging to urban households reveal that most of the children spend their pocket money on food, soft drinks, films and magazines.
The Youth Market:
The youth (18-30 age) now constitute a distinct market the youth market constitutes roughly 1/5 of the country’s population. Business firms have already started targeting this youth market in a big way. Nearly 55% of Cadbury’s ice creams are consumed by youth. P & G, Pepsi, Photo phone, Videocon, Hero Honda are all aiming to this group.
Photo phone has the strategy, we priced our lowest end product at Rs. 95 so that youth who never have a camera before could buy it and use it as a fun product. Today nearly 60% of the company’s sales come from 18-26 year group. Brands like Levis, crocodile, wrangler and reebok are being patronized by the upper strata of this group.