changfacecust

The changing face: 

The changing face Of the Indian consumer

Consumers?: 

Consumers? Targets?

Numbers : 

Numbers Not about easy similarities About celebrating the differences

Real people: 

Real people Question the paradigms

Context: 

Context People live with people People communicate with people

Context: 

Context Culture

Just another example: 

Just another example From “The Chinese negotiation”, John Graham and Mark Lam, HBR, Oct 2003

How we approach relationships: The Oriental Perspective: 

How we approach relationships: The Oriental Perspective Western Individualist Egalitarian Information oriented Reductionist Sequential Seeks the ‘truth’ Argument culture Oriental Collectivist Hierarchical Relationship oriented Holistic Circular Seeks the ‘way’ Haggling culture Basic cultural values and ways of thinking

How we approach relationships: The Oriental Perspective: 

How we approach relationships: The Oriental Perspective Western Task focus Quick meetings Informal Cold calls Information exchange Full authority Direct Proposals first Oriental Task Focus Long lasting process Formal Draw on intermediaries Information Exchange Limited authority Indirect Explanations first

How we approach relationships: The Oriental Perspective: 

How we approach relationships: The Oriental Perspective Western Means of persuasion Aggressive Impatient Terms of agreement Forging a ‘good deal’ Oriental Means of persuasion Questioning Enduring Terms of agreement Forging a ‘long term relationship’

Way we travel today: 

Way we travel today Agenda Geert Hoffstede – Dimensions of culture Power Distance Individualism Masculinity Uncertainty avoidance Long Term Orientation India scores and emerging Indian trends Implications on us

Geert Hoffstede’s study done 20 years back: 

Geert Hoffstede’s study done 20 years back

Power Distance Index (PDI): 

Power Distance Index (PDI)

PDI: Power Distance Index: 

PDI: Power Distance Index Focuses on the degree of equality, or inequality, between people in the country's society A High Power Distance ranking indicates that inequalities of power and wealth have been allowed to grow within the society These societies are more likely to follow a caste system that does not allow significant upward mobility of its citizens A Low Power Distance ranking indicates the society de-emphasizes the differences between citizen's power and wealth In these societies equality and opportunity for everyone is stressed.

PDI: India: 

PDI: India India PDI 77 compared to world average of 56.5 High level of inequality of power and wealth within society Accepted by population as a cultural norm

What are the emerging trends?: 

What are the emerging trends? The Power Distance Index score for India seems to be reducing

Capitalism at the Bottom of the Pyramid: 

Capitalism at the Bottom of the Pyramid A recent book by C.K. Prahlad Speaks about the surge in consumption and disposable income at the bottom of the consumption pyramid

Capitalism at the bottom of the pyramid: 

Capitalism at the bottom of the pyramid Reliance Infocom Basic mobile and basic bike a must even for my driver 50% of soaps, shampoos, detergents, talcum powder direct cool refrigerators, entry level TV sets, entry level bikes, bicycles and many other categories Comes from rural India and hinterlands

Capitalism at the bottom of the pyramid: 

Capitalism at the bottom of the pyramid Some more results of this: Top 4 cities make up a miniscule proportion of total motorcycle sales And where small towns and villages are concerned, only 40% of vehicle purchases are financed

What does this tell us?: 

What does this tell us? With information available, the lowest mass of the population have begun to get influenced Shweta from Indore does not want to feel ‘un-hip’ ‘not in’ when she goes to her cousins in Mumbai or Delhi

And, to blow another myth…: 

And, to blow another myth… The “culture of non-indulgence” and abstinence in consumption is well and truly over

What are the implications?: 

What are the implications? The next step is FIND REAL NEEDS that the mass consumer will pay for India does not buy technologies They will pay for what as people makes life easier

Tell me, what do you think is the next big killer application in mobile telephony after SMS?: 

Tell me, what do you think is the next big killer application in mobile telephony after SMS? Ticketing? Dating?

Don’t think so…: 

Don’t think so… An application that helps people zap out soaps and chips out of a dispenser using a mobile phone! Because people can pull out their purse and pay if they can pull out the mobile phone!

Think People: 

Think People Citibank using SMS to make it convenient to pay mobile phone bills Low tech but people use it Find it easy to use it Ask “what do real people need? What will they pay really pay for?” Don’t ask “Here is an exciting technology – why aren’t people buying it ?”

Changing power equation: 

Changing power equation Parent-children power equations are changing Parents are unable to be authority figures Kids getting better informed Parents increasingly ill-equipped

Implications?: 

Implications? Can you talk to kids? Chances are they’ll understand you better anyway And that they will want your services more In any case, they provide you with a simpler way through to their parents.

Individualism: 

Individualism

Individualism (IDV): 

Individualism (IDV) Focuses on the degree the society reinforces individual or collective achievement and interpersonal relationships High Individualism ranking indicates that individuality and individual rights are paramount within the society Individuals in these societies may tend to form a larger number of looser relationships A Low Individualism ranking typifies societies of a more collectivist nature with close ties between individuals These cultures reinforce extended families and collectives where everyone takes responsibility for fellow members of their group

IDV: India: 

IDV: India India IDV is 48 China is 15 USA is 95!

We are definitely climbing: 

We are definitely climbing up the individualism ladder

The Implications of which: 

The Implications of which are deep on our thinking about products, services

Kotak Bank: 

Kotak Bank Found that, for too long, banking had worked on the segmentation High net worth individuals The masses The new emerging segment – 25-35 years, brand conscious, brand savvy Middle and junior levels with high salaries Need, want, appreciate and willing to pay for “personalized service”

High net worth individual treatment: 

High net worth individual treatment Who doesn’t want it?

Kotak Bank again: 

Kotak Bank again People who have been rejected by other banks are preferred customers Why? They offer them something they couldn’t get And, are therefore, willing to pay a premium Like a higher rate of interest

The new trends in thinking: 

The new trends in thinking Segment of One

How talking to all the same way can affect business: 

How talking to all the same way can affect business

Segment of One: 

Segment of One Businesses need increasingly to have data, trends, habits information Cost effectively At an individual level Can you at least invest in deduping data? And cleaning it up? Ritz Carlton can – why can’t you?

Passion Groups: 

Passion Groups

What are Passion Groups?: 

What are Passion Groups? People find people with similar interests We have to find these “Passion Groups” – I have seen some of these around This existed long before the web Music lovers who exchange and talk about CDs Bike fanatics who discuss, talk and make modifications to their bikes Movie lovers in every office who find out and exchange DVDs U2 lovers who get the “All time best collection” from cousins in Dubai In-office movie club that screens some outstanding ones every Friday evening

Passion Groups: 

Passion Groups Formed by people Formed by people-to-people communication In areas of own, personal, deep self interest

Implications for business: 

Implications for business What if Sugar Free could address only people who are health conscious rather than an amorphous lump of 25-45? What if you could target an alumni get together of IIMA systems grads? What if…

The Pharma industry has started: 

The Pharma industry has started From Medical Reps with gifts and brochures to segments of one Every doctor is treated as an individual Databases created by healthcare agencies and sold Maybe you need to farm out this job?

The Truth is: 

The Truth is Demographics, collations are built for convenience of targeters and planners Interest Groups are tougher to find but high on conversion and far, far more cost effective

Masculinity: 

Masculinity

Masculinity (MAS): 

Masculinity (MAS) Focuses on the degree the society reinforces, or does not reinforce, the traditional masculine work role model of male achievement, control, and power High Masculinity ranking indicates the country experiences a high degree of gender differentiation In these cultures, males dominate a significant portion of the society and power structure, with females being controlled by male domination Low Masculinity ranking indicates the country has a low level of differentiation and discrimination between genders In these cultures, females are treated equally to males in all aspects of the society

MAS: India: 

MAS: India India’s IDV is its third highest ranked dimension At 56 World average slightly lower at 51 China: 55; US:62

Two critical emerging trends: 

Two critical emerging trends Masculinity no longer = macho Brawn is on the way out It is wit, fitness, impression Feminisation of India

Sunny Deol: 

Sunny Deol Irfan Pathan Masculine not = macho

Thums Up: 

Thums Up

Feminisation in organisations: 

Feminisation in organisations Mentoring = mothering Softer people skills are paramount Survival in the rat race dictated by it Product design around us is addressing this globally Shape of cars, phones, colours of luggage, etc.

Men in nurturing roles: 

Men in nurturing roles Household egalitarianism Softer approach Women at work It is okay to be man and yet cry!

A brand that picked this early: 

A brand that picked this early Ariel Detergent

Implications on business: 

Implications on business Organisations and people are becoming less hierarchical You’ll be dealing with a lot more women, so you’d better start treating them as equals Softer issues will also matter Don’t be afraid to use emotion to sell

Uncertainty Avoidance (UAI): 

Uncertainty Avoidance (UAI)

Uncertainty Avoidance Index (UAI): 

Uncertainty Avoidance Index (UAI) Focuses on the level of tolerance for uncertainty and ambiguity within the society - i.e. unstructured situations High Uncertainty Avoidance ranking indicates the country has a low tolerance for uncertainty and ambiguity This creates a rule-oriented society that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty Low Uncertainty Avoidance ranking indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions This is reflected in a society that is less rule-oriented, more readily accepts change, and takes more and greater risks

UAI: India: 

UAI: India India’s Lowest ranking dimension At 40 World average 65 China: 40; US:62

From IAS to MBA: 

From IAS to MBA 20 years after liberalisation started, uncertainty avoidance is not a big thing anymore India is getting more and more entrepreneurial Our banks don’t want to deal with them, do they?

The emerging scenario: 

The emerging scenario Non permanency of traditional employment Booming cope-up industry

Cope Up / Keep Up markets: 

Cope Up / Keep Up markets Training / coaching classes mushrooming everywhere Health / Stress cope up remedies Makes it easy products and services “Let me relieve you of a worry today” approach to customers

Long Term Orientation: 

Long Term Orientation

Long Term Orientation (LTO): 

Long Term Orientation (LTO) Focuses on the degree the society embraces, or does not embrace, long-term devotion to traditional, forward thinking values High Long-Term Orientation ranking indicates the country prescribes to the values of long-term commitments and respect for tradition This is thought to support a strong work ethic where long-term rewards are expected as a result of today's hard work Business may take longer to develop in this society, particularly for an "outsider“ Low Long-Term Orientation ranking indicates the country does not reinforce the concept of long-term, traditional orientation In this culture, change can occur more rapidly as long-term traditions and commitments do not become impediments to change

LTO: India: 

LTO: India India high on LTO at 61 World average 48 China: 114 US:29

The perspectives are shortening: 

The perspectives are shortening Instant gratification Far more liberal sexual and adult content “I want to retire at 40!”

The young and the old: 

The young and the old Young India 56% below 25 Are we getting young enough in our communication with people? Also the Why Not generation Affluent, middle aged Most in need of individualistic support services

Implications for us: 

Implications for us Change the language Like it is happening in advertising Remix music is BIG A whole set of people willing to communicate and share personal data if you are willing to ask

Are we prepared for the Punjabisation of India: 

Are we prepared for the Punjabisation of India Popular culture defined by Punjabi weddings Mehendi ceremony at a Tamil wedding? Sangeet in a Bengali wedding? People are getting more extroverted, expressive and socially oriented Are we geared to take advantage of this?

Some other trends: 

Some other trends Kids trends Youth trends Woman trends Business trends

How tuned are you to kids?: 

How tuned are you to kids? Skills develop early Computers at 5 or 6 Play school at 18 months Seamless integration of cultures Barbie and Batman are cool, Rama and Krishna are cool too Increasing consumption of media Kids watch 4 times as much TV as 6 years back Children’s books are growing at 40%+

Some more…: 

Some more… Kids have changed family eating habits Snack eating culture Indian Chinese, once a week pizza, eating out Guilty parents, indulgent purchases Competition enters a bit too early Kids products are a big business Every adult trend followed by kid’s trend Even in cosmetics

How tuned are you to the youth?: 

How tuned are you to the youth? 5 broad clusters of youth Home bodies: most conservative Two faced: inwardly traditional, outwardly modern Wannabies: largest cluster The rebels: second largest Cool guys: top of the pyramid Source: IMRB/Pepsi/MTV study, 6 metros, ABC

Trends: 

Trends Individualistic and independent You can’t afford to be sensitive – 47% You have to be aggressive to get ahead (most) Money is the biggest thing Drives choice of education, career Speed is in From highway speeding to speed in life Alcohol is not cool Beer alone makes it to top 10 cool drinks

Some more…: 

Some more… Boyfriend/girlfriend are fashion accessories Desi cool is hip: culture fusion Wired youth: internet cafes cool places to hang out Successful rich people are icons Happy to be Indians: remix generation

How tuned are you to the new woman?: 

How tuned are you to the new woman? In her bathroom closet, hair colour She doesn’t leave home without her mobile She prefers to pay by credit card Her paneer mutter comes from an instant mix pack

10 trends: 

10 trends Girl’s just wanna have fun Vanity fair Riding on technology Best friend mommy New toys for the new woman

The balance 5: 

The balance 5 Take my breath away Material girls Its not just about money, honey As good as the next man Mrs. Good Personality

Business trends: 

Business trends All business is service business Even FMCG Engagement quotient of brands Passion marketing Today’s best in class service is tomorrow’s hygiene Market trends shortlived and constantly changing

Some more…: 

Some more… The importance of inspirational leadership Design better or die Product parity is the norm What looks good is a better product And finally, nurture a relevant core competence or perish

Bored? Irritated? Old hat?: 

Bored? Irritated? Old hat? Hopefully not

Any comments? Questions?: 

Any comments? Questions? No?

Well then, thank you.: 

Well then, thank you.