NM Indian Consumer Market

Indian Consumer Market : 

Indian Consumer Market Separate Discussion

General Features : 

General Features Population : 115 Crores. Density : 324 people /SQ KM in 2001 Census. West Bengal is most populated 904 People. Gender : 52 Male/48 Female. Literacy : 65 % in 2001 Census. 75 % male, 53 % female, increasing fast. Aim to increase it to 80 % in the next 10 years. Paradox : Highest no of illiterates in the world. Second highest no of Literates Third highest no of Professionals Engineers, Scientists, IT Professionals.

Age-mix of the Population : 

Age-mix of the Population Nation of working age People: Stands on the top with 400 Million or 40 % & Growing. Will be 800 million by 2016. Vibrant working population. Nation of Middle Age People: Fatter in the middle. 30 – 50 years is 25 %. Youth Explosion: County of youth. More than 51 % below 25 years. 40 % is below 19 years. Population is becoming younger. Youth trends & Lifestyle will become the main stream. Kids & Senior Citizens: Also is high at 5 million each. Demand for their line of products.

Highlights of Change : 

Highlights of Change Economic Transition is on: GDP Growth & Per Capita income are growing. Rich are getting richer. Poor getting less poor. The BPL no is going down. Consumption is increasing. Shift in attitude in spending: More Spending Power From Need based to Choice based. Cultural Transition is on: Retain the core but flexible to Change. Amalgamation of New & Old.

Highlights of Change : 

Highlights of Change Social Transition: -Education -Urbanization -Nuclear Family -Women Employment. Influence of TV (Cable, Satellite) - lifestyle awareness - Aspirations - 500 Million People - Viewership -75 % Urban India. 2/3 Urban. 1/3 Rural. - Per Capita viewership 100 min. on week days & 150 min. week end. IT/Technology Influence Touches the lives of 75 % Indians.

Many Indias within India : 

Many Indias within India Many Divergent Distinct Demand Segments. - India & Bharat - Rural India & Urban India - Rich India & Poor India. Multitier/Layers each one having its own demand structure. Religious Diversity: -7 Religions: - Subcultures having their own traditions. Language Diversity: - 23 as per the Constitution of India - Every 200 KM own dialect. - Difficult to span across India.

Diversity : 

Diversity Diversity in Density & Growth Rate - Delhi & Mumbai have very high no. of people/KM Arunachal Pradesh 13 People/KM - Delhi & UP are growing fastest and Kerala slowest. Diversity in Literacy: Kerala 91%, Goa 83 %. Bihar & UP less than 50%. Cultural Diversity: Social Customs, Dress & Food Habits. Food Habits: - Rice in South, Wheat in North. - Cooking medium- Coconut oil, Mustard Oil, Ground nut oil. - Costal States have low % of Vegetarians like Kerala, Goa - Hindu Beef is a Taboo, Muslims Pork is a Taboo. Christians both are delicious.

India’s Consumer Market 2005 : 

India’s Consumer Market 2005

Consumption Basket : 

Consumption Basket Food is the Largest spending category Next is Transportation followed by housing Followed by Personal care products & Health care Clothing, Education & Recreation. Good news is the share of food spending is reducing and that of housing, personal & health care is increasing. Also there is competition between categories e.g. P&G.

Classification Based on Income : 

Classification Based on Income Rich (Global Indians)- Rs. 10 Lacs – 50 Lacs Middle Class (Strivers & Seekers)- 2 to10 Lacs Lower Income Level (Aspirers) - 1 to 2 Lacs Poor, BPL (Deprived) Below 90,000

McKinsey’s Fivefold Classification based on Income : 

McKinsey’s Fivefold Classification based on Income Global Indians Strivers Seekers Aspirants Deprived

Rich (and Global Indians) : 

Rich (and Global Indians) Numbers: - Income Bracket Above Rs. 10 Lacs. - % is low but in nos. significant. - High purchasing power & are growing. - Global Indians Rs. 50 Lacs & Above. - Highly connected. New Attitude: - Live life King size. - Live for Today, not for future generation. - Diamonds, Suites, Modern Art, Aircraft, Boats etc.

Rich (and Global Indians) : 

Rich (and Global Indians) Status : Club memberships, Golf Holidays, Foreign tours Close to the West culture Super brands low on functionality high on status. Tier-two Cities: Cars, White Goods, home theatres No. of foreigners & Hotels are significant

Middle Class : 

Middle Class Cant’s be Neglected : -Big consumption, Growing. India is becoming a middle class county. -By 2025, 40 % of population will classify as middleclass. Before Liberalization: -Industrial Engineers & Manager - Government & Bank employees - Professionals - Teachers, Doctors, Traders - Also the farmers because of green revolution & subsidies. Concentrated in Urban Areas: -50 % in top 50 Cities -70 % in top 100 Cities.

Changing Profile of Middle Class : 

Changing Profile of Middle Class Growing in Confidence: - Better educated and well aware of the globe. - New generation business like IT & BPO. - Huge openings. Become rich in no time. - Non ideological (Religion, Cast) and result oriented. Political Clout: - Can’t be ignored. Education, Growth in Nos. - Common Agenda. Powerful lobby. New Values & Orientation: Attitude in the past was having lot of money is not good. Now the focus is on lifestyle living and wealth creation.

Changing Profile of Middle Class : 

Changing Profile of Middle Class India’s Consumption Community: - Higher disposable income - Large job opportunities - Availability of Finance - Nuclear families - Becoming India’s consumption community Possessing expensive cars, DVDs, Trendy House, Digital Cameras. Food Habits. Entertainment etc. like the west.

Spending Pattern Undergoes a major Shift : 

Spending Pattern Undergoes a major Shift Shift in the Spending Pattern: - Share of Grocery has reduced - Consumer Durable – TV, DVD, Plasma, Cars. - Life Style - Clothing, Personal Care & Eating Out. Functional to Life Style living to Flaunting: - New Mobile every 6 months, Car Every 2 years. - Personal grooming, Health Clubs. - CCD, McDonalds, Multiplexes. - Loaded Homes. - Travel, Globe Travel.

Spending Pattern Undergoes a major Shift : 

Spending Pattern Undergoes a major Shift Vote for Premium Products: - Cheaper is better to Premium is the in-thing. - Multinational brands & big names. World Class Shopping Experience: Malls are a common Shopping Places. Go for More: - Multiple TVs, Refrigerators - Scooter for wife, Multiple Cars Fully Loaded homes. Modular Kitchen, 5 * Toilets Wardrobes, Plasma TVs, Library

Young India is on the Move : 

Young India is on the Move Emerging youth market described as Fast Forward. Responsible for much of the Retail Growth. Consumption of Sports Shoes, Apparels, Cell Phones. Already living the life of Rich. Teens (13-19 years) : Garments, Cosmetics, Personal Care, Soft Drinks, Consumer Electronics/IT. Tweens (8-12 years) : Separate Group, Aware of the Brands and influence the purchases of the family.

Lower Income Level : 

Lower Income Level Rs. 1 to 2 Lacs income bracket. 34 % of total house holds in India. Large numbers. Farmers, Peons, Watchmen etc. Climbing up Typical purchase categories are Cooking oil, Tooth Powder/Paste,Tea, Bath soap, Transistor. Low end Mobile Phones, powered by low call rates.

BELLOW POVERTY LINE : 

BELLOW POVERTY LINE Deprived, Bellow Rs. 90,000 PA family earning Though they form a large % of population, no significant consumption. But the next generation is a good hope, due to their aspirations. There is a good scope for high volume low marketing. Multinationals need to look at it as an investment.