SOCIO ECONOMIC CLASSIFICATION-INDIAN POPULATION-” The Tiger Roars”

PRESENTED BY:ROLL-03,09,16,17,22,35,44,48,55,56,70,78,91,99KIRLOSKAR INSTITUTE OF ADVANCED MANAGEMENT

4 STEPS

4.Capturing the Prize

2.Understanding the Prize

1.The size of the Prize

3.Finding the Prize

1.The size of the Prize:

India’s consumer market is poised to grow 3.6 times between 2010 and 2020, faster than most other emerging markets.

2.Understanding the Prize:

1.Household income:

India’s income pyramid has typically had a wide base of “struggler” households and increasingly smaller layers as incomes rise.

This Pyramid is quickly becoming a diamond, as household incomes grow. More than one-third of the population is likely to reach the “aspirer” class by 2020,

compared with 20 % in 2010 and 9 % in 2000. At the same Time, the share of households classified as strugglers earning less than

$3,300 Today will likely fall from 51 % in 2010 to 28 % by 2020.

2.Urbanization:

In 2010, 31% of India’s population lived in cities. By 2020, that % will rise to 35 percent. As people move from rural

areas to cities, they tend both to increase their purchases and to spend on different items.

Urban dwellers have better access to goods and are exposed to greater consumerism.

For example, 80 % of urban households own a television, while only 39 % of rural households do, and 25 % of urban residents consume packaged instant noodles, compared with just 3 % of rural residents.

3.The Nuclear Family:

Defined as a couple or a single person, with or without children rose from 61 % in 2006 to 66 % in 2010.

The per capita spending of nuclear families is between 20%-50 % higher than it is for traditional joint families.

While per capita spending on food and health is comparable in nuclear and joint families, nuclear families spend much more on clothing, housing, education, and leisure activities.

In research, we met several joint families that buy the cheapest possible option for regularly used household products and avoid paying widely varying prices for products that are individually consumed. 

4. Gen I:  

Economic liberalization in 1991 marked a turning point in India’s ascendance.

Members of Gen I were in their early teens at that time, so they have witnessed firsthand  the opening of markets, the influx of foreign brands, and the creation of wealth.

They have different beliefs and have made different choices than their parents.

Contnd…

Members of Gen I believe in living in the present and indulging themselves more than their parents do.

Thus, the beauty and personal-care market has grown almost 20 times over the past 20 years.

The Gen I have far greater choice than prior generations. The number of car models, for example, has jumped from about 5 in 1990 to more than 160 today.

At home, members of Gen I feel less constrained by scarcity and the limitations of the nation’s infrastructure. Two-thirds of all households have electricity, compared with just 42 % before liberalization.

3.Finding the Prize:

AffluentsAAspirers

N Next BillionsStrugglersS

Professional Affluent Traditional Affluent

Urban Aspirers

Rural Aspirers

Large Town Next Billions

Small Town Next Billions

4 Key segments define the consumer landscape in India on the basis of income, location, education, and occupation.

A

Affluent:

Annual household income > US$ 18500 These consumers are typically well educated, have mid to large

businesses or good jobs with sufficient income to allow significant indulgence.

This segment constitutes six percent of households in India.

Aspirers:

Annual household income between US$7400 - US$ 18,500. These consumers are educated,have mid–sized businesses or

stable jobs with income sufficient to live comfortably as well as indulge a little.

Constitutes 14 % of households in India.

Next Billion:

Annual household income between US$ 3,300 and US$ 7,400. Basic education and have small businesses or hold low paying jobs. Their income levels allow them to sustain a basic lifestyle. It constitutes 30 % of households in India.

Strugglers:

Annual household income < US$ 3,300. Typically illiterate with limited education, These consumers have jobs that are manual labour Based with very low income, generally daily wage

Consumption Pattern in 2010

4.Capturing the Prize: For Companies,to invest in India they need to develop a deep understanding of

the nation in order to win it.They need the following 2 Mantras for achieving the same:

1.Follow an Indian Market Approach>Consumption Pattern>Lifestyle>Attitudes & Behavior> Financial Maturity

2.Understanding the evolution of consumption trend:

>Children: Driving consumption growth>Internet wave>Trading up>Brand: Strong recognition, weak loyalty>Healthy Living

Households & Consumption Growth (2010-2020)

Inference:

The Resonant Roar Of the Bengal Tiger is a fitting metaphor for consumer spending in India. Only a few patient and persistent people actually succeed in seeing it. Consumer spending in India will continue to roar, but the companies that try to capture it without adequate preparation will likely short. India’s is a big and growing consumer market, but not an easy one. Understanding the size and shape of the prize and where it is hidden in the crazy quilt fabric of India are the first steps to capturing it.

Click icon to add picture

Queries??