The Indian Consumer: What do we know?

S. Ramachander

Indianness is too diffuse and goes deep down for it to be a dominant

commonality. Most marketers are not very well educated in this country's history
to appreciate regional differences and preferences.

India's diverse peoples present a real challenge to the marketer

A CONFERENCE in Bangalore last week took as its theme the understanding of "a
billion minds" that constitute this entity we have created in our mind called the
Indian Consumer. Underlying this is the theory that we as managers can and
ought to somehow be able to direct and manage marketing outcomes: that is to
say, predict them, plan them, moderate them or make them happen. Further
underlying this thought is the belief that what we therefore need chiefly is the
exact location, scale and scope of the consumer market in terms of purchasing
power. We should then be able to pick segments of it that we consider profitable
to address, and like a skilful shot, pick them off one by one. It is, of course, true
that no manager has the power, the ability or the knowledge to measure and
tweak everything he does in order to make the consumer dance to his tunes, yet
this is something the average manager finds difficult to admit. One should at
least be aware of this control trap.

Even though we cannot know everything that is to be known, we do need some

in-depth knowledge about the consumer, starting with who she is. Is there a real
Indian consumer or is there a set of stereotypes? All conventional wisdom in
market research tends to favour the view that there are distinct types, and we
need to isolate them according to some parameter and label them. The general
tendency has been to develop classifications and analytical partitioning of a
product's target consumer group, either according to their socio-demo types or
according to psychological typing; for instance, the pleasure seekers, the value
seekers, the novelty seekers, the bargain hunters or whatever. Essentially, this
method is one of division and hinges mainly on finding the most appropriate
basis for dividing up the mass of customers — and sorting them into more
manageable groups. Yet, how useful is it to have such a structural knowledge of
the market? How do we move from there to a strategic phase of brand building if
it is not supported by an understanding of the behavioural processes that the
consumer (or customer) undergoes in coming to the purchase, use and post-
purchase follow up relating to any category?

In the ultimate analysis, the profession of marketing seems to be agreed on one

basic desirable goal, namely, that of creating a lasting or at least strong
preference amongst selected consumers, and moving them to some action. Of
course, to think of marketing as the task of finding them and doing something to
them is the height of managerialist attitude and corporate arrogance, and yet
another mental trap. It is by no means enough to impinge upon the perceptions
of the consumer through powerful persuasion and hi-tech communication.
Participating with them in a co-evolution of the product — to use the more
current thinking on the subject — there is a need to bridge the current chasm or
disconnect that exists between management understanding or mental models
and consequent actions.

My recent thinking and research into this area has veered me round to the view
that such a mental picture, however rough, is a necessary first step for any
marketer. In the absence of such a working hypothesis or theory, however
tentative and subject to modification, it is difficult to justify the steadily growing
spending of marketing funds year after year. Nor is it possible to bring anything
like the degree of precision and accuracy we are used to in other functions into
the marketing discipline. So this step is essential at least from a productivity
point of view. How do we acquire a more fundamental understanding of why the
pie (or pyramid or any other) is shaped the way it is — in other words, why do
consumers in the category behave the way they do? What is their stance or
mental attitude towards the category itself? What motivations, expectations and
behaviours are seen in particular with respect to the category (soap, cars,
diapers, chocolates or razor blades) by the relevant sub-groups? Here the
emphasis on building numbers is very little. My suggestions regarding a
proposed method follow.

Shifting focus

Once the appropriate sub-group for study, say, the affluent urban school leavers
or cash-crop farmers, or whoever, is taken up, all quantitative study is
abandoned. The focus then shifts entirely to what actually happens at the point
of action. How does the 18-20 year old choose his music, his café, his two-
wheeler, and his brand of soft drink or readymade clothes? Where does his initial
thrust towards the purchase come from? Who matters most to him as a source
of information? Who are his reference groups? How does he test out the product?
How much does a brand matter in this category to him?

To put it differently, one wishes to decode and understand what space or role the
category occupies in the life of the average person in the chosen group. This
could apply just as well to the so-called industrial products or `rationally' bought
purchases. The criticality of the value is a common issue across all situations,
and applies, mutatis mutandis, to services just as well. On this depends the
degree of importance that he or she would place on the product, the involvement
in the decision as well as the seriousness and deliberateness brought into
deciding what and when to buy. For example, clearly the decision to buy a ticket
and take off on a holiday to the seaside would seem equally attractive to most
stressed out executives but the degree to which it would cause agonising over
costs and budgets varies a great deal depending on whether you pay for the
ticket yourself or someone writes the cheque.

Understanding buyers' greater role

A second and equally critical step is, we need to understand not just the person
as a buyer and user of a particular category, but as a member of society. All of
us are much the same internally regardless of what role (manager, consumer,
voter, parent) we are playing. So one has to discover, "how does the chosen
consumer think differently from other groups? What are his social mores and
beliefs? Who are his idols and models in life? Who are his heroes?" The end
result is to get a multi-dimensional and dynamic picture of a moving parade of
consumers, and not a standing army. In doing this, it is fascinating to look at
other aspects of life beyond what would be thought of as the arena of marketing.
These include things such as the content of the pulp fiction that he or she reads,
the forms of entertainment (movies, soap operas, sport) that they are exposed
to and favour, the political awareness or the lack of it, the religious attitudes, the
media they prefer to see, who and where they hang out with and so on.

Regional distinctions

A third aspect to keep in mind is that in studying the Indian consumer in this
fashion, one comes up with some fairly sharp regional distinctions. Despite the
trend to some pan-Indian fashions of thought, speech and behaviour, such as the
spread of the salwar kameez or spoken and written Hinglish, we are not one
country or one people. Unlike say in the case of the Chinese or the Irish, the
Indianness is too diffuse and deep down for it to be a dominant commonality.
When you look at behaviour in most life situations, it seems to be more directly
coloured by the historical differences that were pronounced till as recently as the
late '50s.

The maps of India of the past few centuries show some intriguing trends in that
they mirror the brand and product preference maps of many products today.
Sadly, few marketers are well enough educated in the history of this country to
appreciate why, for example, the central and northern areas of the country have
historically been very different from peninsular and coastal India. The reason to
my mind is simple. They were ruled at the district level of today very differently,
and by a feudal chieftain till a generation ago. And attitudes in such an ancient
culture as ours are too deeply etched to go away so soon. Nor is it simply a
matter of linguistic States either since contiguous regions exhibit similar
behaviour. I have tested these assumptions with some categories such as
bicycles, fertilisers, toilet soaps, talcum powder and so on — and the
generalisations seem to hold good. In category after category, the region
comprising roughly the old princely States and the feudal areas of the Hindi
heartland exhibit distinctive consumer, and even dealer, attitudes and behaviour
when compared to the erstwhile presidencies of Madras, Calcutta and Bombay.
Brands of HLL, ITC and many consumer durables have differential strengths in
these two broad regions. This difference shows markedly in attitudes and values
relating to such things as durability, punctuality, value-for-money, breaking or
bending rules, long-term versus short-term, responsiveness to bureaucracy and
procedure, trustworthiness, attitude to credit, savings and investments and so on
and on.

This to my mind is a rich vein of research for someone inclined to combine an

anthropological and historical approach in discovering the truth about markets.
The beneficiaries of this approach would be many. The brand manager can thus
understand the likely relative importance of the various elements of the mix
under his influence (pricing, packaging display, in-store production, celebrity
endorsements, personality promotions, price-offs or whatever) in driving the
consumer to the category per se and to choose his brand in particular. The
copywriter, media and account planners in the agency too would be able to
sharpen their tools of persuasion to clearly extract maximum value by focusing
on the right appeal, tone of voice and so on. The designer and R&D person can
translate the actual experience back into the elements of product or service
design that create the best experience for the consumer. Such a model could
perhaps be captured best in narratives and anecdotes and verbatim transcripts
of actual conversations with users and buyers. It is not a statistical model. It
might in many cases be amenable to the `boxes-and-arrows' format of a
relationship diagram. If it were to become a flow chart one will soon find there is
no strict linearity of progression and many causal interplays such as between
experience and perception. One could derive a pen portrait of a typical user such
as `A day in the life of the Buyer' and look for continuous updates of this by
periodically re-visiting the observations.

How does one do such research? By a number of methods, both creative and
elective, and a good starting point would be to actually videograph the usage of
the products and the process purchasing it. Focus groups can be used both pre-
and post-purchase. Dealers and sales force are an excellent source of verbatim
quotes, stories and anecdotes in customer language. What we aim here is to get
as near the words and speech patterns of the user as we can and not corrupt
them with the professional jargon of the marketing manager. We then use this
model to test the validity of the decisions we make on, say, promotions or pricing
or brand extensions by stopping to ask two fundamental questions:

What does this `initiative' imply? What theory is it based on?

Does it fit in with our current working model regarding the behaviour of "our"
customer?

In the end, all theories about Indian - or any other - consumers are merely
strong working hypotheses or currently useful generalisations. They can never be
rigid or infallible `laws', as in Physics.
products get accepted by the target segment over a period of time would be of
interest to any marketer in today's competitive context of new product proliferations.
New products in this context do not refer to products which have created
discontinuity in terms of consumer behaviour and lifestyle (such as Walkman, fully
automatic washing machines or mobile telephones), they also include a number of
product variants launched in several categories with incremental value addition in
terms of cost aspects, usage aspects or just in terms of sensual gratification which
may involve tastes and experiences. What is to be noted is that consumers should
perceive the newness in a product as a consequence of marketing efforts to market
the new product.

Dimensions of newness in a product

It may be worthwhile to analyse what kind of newness can be associated with

various products and apply psychological factors to convey the newness involved.
Product attributes could create a feeling of unique offering, especially in a category
which is highly competitive (from toothpastes to durables such as TV or washing
machines). It should be noted that though marketers always feel benefits are more
important than features, consumers are also drawn towards features. A brand should
ensure that the novelty of the feature gets translated into functional benefits and
also emphasise the benefits in its communication (advertisements or personal
selling). The diagram on top explains the process of making use of the novelty-
functional combination.

In the case of consumables, there is a need to introduce variants after careful

research or introduce a feature which could be an outcome of technology. Internal
costs and profitability aspects are required to be studied in depth before a brand
plans the variants, especially in a crowded market. Little Hearts from Britannia, Polo
from Nestle, the initial launch of compact detergent by Ariel, the concept of fairness
creams from Fair and Lovely and the variants in the product line of soaps by Nirma,
even under intense competition, are interesting examples of new brands which have
gained acceptance by making use of either technology or product variants.

The newness in durables could be the novel feature and accompanying benefit which
may appeal to a cross-section of consumers (in the TV example given in the
diagram, the target segment is at the higher end of the TV market). In case of
consumables (based on the examples discussed), it could be

i) Taste/shape being unique because of technology

ii) Innovative strategies with a value orientation - Nirma's variants are priced much
below the competitive brands but offer the same experience as projected by the
visuals of the brand.

iii) Creation of a concept which is acceptable to the consumers based on cultural

beliefs. Fair skin has always been perceived to be superior and beautiful in the Indian
context (general perception based on cultural beliefs) and Fair and Lovely is a
dominant brand in the fairness cream market. The brand has also triggered a market
which has been rapidly growing in the last few years. Though a number of brands
have entered the market in recent times (and perhaps made inroads into the
monopoly enjoyed by the pioneering brand), Fair and Lovely continues to be
associated with the top of the mind brand associated with the category.

When a brand successfully introduces a concept acceptable to the consumer, brand-

building efforts would enable the brand to be perceived favourably among the
consumers. Creating a brand image with relevant brand associations is vital for a
brand which attempts to diffuse a new concept. If this aspect of consumer behaviour
is not employed, the brand would just end up conveying the concept and the
`follower' brands may capitalise on the category awareness created by the
pioneering brand. Taj is a brand of the tea bag which has not just created awareness
about the new product category of tea bags (through a niche in the tea market); it
has also created brand associations which would be of immense strength to the
brand once the market takes off with a number of other brands (there are already a
few launched in urban markets).

Value in durables

Like Nirma, a brand of durables could also create newness with a value proposition.
Akai, which almost formalised the second-hand market for televisions through retail
outlets, is a good example for creating value in durables for expanding the market
and diffusing the brand. What is vital for such brands is the ability to sustain value in
the long run, to ensure that diffusion of the brand is sustainable when competitive
brands follow suit - a common problem associated with incremental newness
introduced by brands in a crowded market. Akai in recent times has been under
pressure from TCL and Konka. Some of such brands may have devised a long-term
strategy based on value (as evident from some of the communication strategies of
TCL which has also made it a point to explain its quality through comparison
advertisements which include well-known brands in the category). A brand has to
commit itself to a proposition (especially if it is value for the lower-end markets) to
ensure that it continues to get diffused.

Symbolism as newness

Symbolism also could be made use of in durables (as in the case of cosmetics,
apparels and so on). Onida is an excellent example of using symbolism in a TV
market which was just developing during the mid-eighties. `Neighbour's envy,
owner's pride' pushed the price to the background and created a higher-end segment
which was able to associate the symbolic appeal with a socially conspicuous product
such as television which was displayed in the drawing hall of the house. However
(like in the case of value), a brand to sustain itself on the platform of symbolism has
to launch innovative products which would appeal to the innovators (in a category)
by combining symbolism with innovative features which would enhance the
psychological feeling of possessing the brand (this is different from the novelty
appeal discussed earlier which appeals to the curiosity of consumers psyche).

It is to be noted that in-depth research is required to find the feasibility of such

products for a niche which comprises innovators. The failure of the initial version of
picture telephones by AT&T (by which telephone users could view the pictures of
each other) and TV-watches by some Japanese brands could be attributed to such
reasons. Innovators in the cycle of innovation, especially in durables, are extremely
important because of the word of mouth involved in the diffusion of products. Service
provided during the launch of the new product is vital, as, apart from the novelty of
the product, the service provided also influences word of mouth which has an impact
on prospective consumers. WorldSpace Music (`Anytime, any type of music') is an
interesting concept developed by Hitachi, Sanyo, National and Samsung. In a
lifestyle which is full of time-pressure, a consumer may prefer this product to an
alternative of CDs or cassettes (not a serious music collector). But the success of the
products depends on word of mouth, clarity of music, variety offered within a type of
music and after-sales service.

The power of trialability

While test drives have been adopted by marketers of automobiles and two-wheelers
as a method to give a feel of the brand to the consumer, trialability could be used
very powerfully even for the diffusion of a common product like a dish washing bar.
This is a market which has a no-cost alternative in the form of ash, sand and so on,
and research has also shown that most households do not have a budget for such
products. Vim Bar with an improved version adopted an effective sales promotion
scheme along with a challenge-based promotion to enhance the trialability of the
brand in a market full of unorganised offerings and no-cost substitutes. Rin Supreme
(also marketed by the same company), which has a high level of penetration, roped
in Vim Bar in a sales promotional scheme. The brand also also had the target
segment sample the product with an assurance of providing a year's supply of the
product if the consumer was not satisfied with the sample. The offer was filmed and
an advertising campaign created from these aspects enhanced the visibility of the
brand apart from enhancing the positive word of mouth.

In the case of durables like washing machines, a brand could combine demonstration
with trialability to increase the credibility of the proposition of the brand (saving
electricity, water, removal of dirt though a specific action and the effects of a hot
wash, to name a few propositions which are currently being advertised by various
brands). It is surprising that even among such intense competition (full of exchange
offers and freebies) the demonstration and trialability at the point of purchase (retail
outlet) is not adopted as a brand strategy.

Functional utility

While value brings in the worthiness of a product for a specific price point, functional
utility has to be analysed from the viewpoint of convenience, ease of use or the
manner in which the product benefits the consumer in an intrinsic manner. Though
value is important (as discussed), such an analysis of the functional benefit would
help a brand capture the perception of consumers on the newness involved.
Consumers have readily paid a premium for shampoo sachets even at the lower end
of the unique market because of the convenience involved and lower unit cost.

Click here for Chart

The premium is reflected in the fact that sachets cost more than regular sizes in
terms of per ml cost. Weighing the functional utility against the novelty appeal of the
feature may be important in certain categories. Four-stroke by itself is a favourable
feature in two-wheelers. But consumers may weigh the feature against the utility of
the feature. Spectra and Legend, brands of four-stroke scooters, have not captured a
significant share of the market, probably because consumers expected the feature to
provide substantial fuel economy over the existing offerings.

A combination of factors ranging from the basic offering to complex psychological

factors may have to be considered while formulating strategies for the diffusion of
products and brands. Consumers in the lower strata buy low unit cost packs to exert
expenditure control - whether it is detergents, shampoo or food categories, the
consumers attempt to consume less of the category by buying low unit cost packs
and this kind of buying is likely to result in an overall saving on the category under
consideration (though low unit cost packs have a premium on them). Marketing
communication should emphasise the product application costs (wherever applicable)
to ensure faster diffusion of the brand.