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Special Columns
Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Chief Consulting Editor's Desk
Rajita Chaudhuri
Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Editor-in-Chief
Arindam Chaudhuri
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PRODUCT PRICE PLACE PROMOTION
Binding the 4Cs
A lot of multinationals have come into India but failed – not because their products were not good, but because they failed to understand India’s culture and its consumers. as a marketer, you need to be sensitive to each culture’s identities and its unique regional preferences and customise your product offerings
 
India is one country where all the laws of marketing perhaps fail. The reason is simple – it’s so diverse. If you have just one theory, then it will not take you anywhere. India changes every 200 kilometers. Yes, a few basics remain the same across India, but a lot changes too. For starters, language changes (we have 192 official languages & dialects), culture changes, traditions and festivals change, food habits change. If this is not enough, think about it – even the geography and political views change. Yes, it is vast, but it is not an easy market. Only the hardy marketers will be able to survive and thrive here.

While extreme, this opinion is not without basis! Some research into consumer buying habits also brings out some vital differences across India. For instance, the benchmark J.D. Power Asia Pacific India Escaped Shopper Study talks about how regional patterns affect purchases of vehicles across India. While exterior designing and style dominates in the North, the West looks for acquisition costs as well as total running costs. The South in comparison looks for utility is extremely sensitive on price and even considers opinions of friends and family before taking a purchase decision.

An eBay India study showed that South Indians were the most active buyers at the site at 41% followed by West at 27%. North seems more skewed towards offline buying. Divisions in the zones also reflect in reading habits. The National Youth Readership Survey reveals that the southern region leads with 24% youth readers, followed by the West and East with 22%, the North with 13%, Central with 12% and North East with 7% readers. Besides, there is a definite distinction in terms of the kind of advertising. Milward Brown studied nearly a thousand advertisements across markets in India and concluded that only one in seven had a pan-Indian appeal.

Even a recent study titled Cross cultural comparison of buying behaviour in India, specifically maps culture to consumer behaviour in India. The study compares regional cultures of India by applying Hofstede’s model of cultural dimensions. The research considered states of Gujarat, Tamil Nadu, West Bengal and Punjab as West, South, East and North India respectively and found some significant differences in consumption patterns. Moreover, when it comes to a country like India “the estimated marginal budget shares, income and price elasticities show marked differences in consumption patterns of rural and urban consumers in the country” (Consumer behaviour in India: An application of the Rotterdam demand system by K. N. Murty). This clearly indicates that multinational looking to successfully capitalize on India’s impressive growth need to understand several driving attributes such as strong and distinct culture, population distribution, and local conditions, and risks that are indeed unique to this country.

 
Even greater today, when more marketers – both Indian and global – want a generous pie of India’s domestic consumption base of over $830 billion, which translated into 44.8% of the nation’s total GDP of $1.85 trillion at the end of 2012 (even ahead in percentage terms of China’s 32% consumption share out of a total GDP of $7.32 trillion). An exhaustive report by McKinsey also gives some important indications of where India could potentially be in the near future. It projects, with an assumed CAGR of 7.3%, that India would triple its income levels by 2025. That will bring around 291 million people out of poverty and the middle class will rise by 10 times over the period to around 500 million. What’s more, 23 million people would count among the wealthy, which would be more than Australia’s current population (around 22.7 million, Australian Bureau of Statistics). And the most exciting part, of course, is that the country has a combined young and working age population (14-60 years of age) that comprises nearly 54% of the total (UN figures). Another 31.3% are in the wings to enter this group (age 0-14 years). India’s working age population is expected to edge out China by 2028.

A lot of multinationals have come into India but failed – not because their products were not good, but because they failed to understand India’s culture and its consumers. Globalisation has been the new trend, but ‘standardisation’ will not work always. Thus, as a marketer, you need to be sensitive to each culture’s identities and its unique regional preferences and customise your product offerings. Besides, the post-1991 generation, which accounts for over 50% of India, is confronting traditional values as well as getting exposed to modern, global ways of living. However, not much research has been done on what kind of cultural orientations this youth market will display in the coming time and whether the diversity of previous generations will diminish or get stronger.

Thus, I have put in an effort towards understanding the Indian consumer’s (particularly the Indian youth) mindset, figuring out his buying motives and also getting a handle on what he/she is contemplating next and why. The next few pages following this cover lead attempt to collate and communicate some big takeaways on youth attitudes and behaviour from the survey spanning the 4Cs – Cars, Cellphones, Creams, and of course, Consumers.

Cars: too fast, too furious

According to India Brand Equity Foundation (IBEF), “the Indian automotive industry has emerged as a ‘sunrise sector’ in the Indian economy.” With a CAGR of over of 15% during the last 5-7 years, the Indian automotive sector is being deemed as one of the fastest growing passenger car markets in the world. In fact, the contribution of this sector to India’s GDP has risen from 2.77% in 1992-93 to about 6% now, and it provides direct and indirect employment to over 13.1 million people (Government of India data, 2012).

          
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