Indian Market Diversity

Topics: Household income in the United States, Upper middle class, Middle class Pages: 7 (2660 words) Published: August 16, 2009
Indian Market Diversity & Changing Consumer Behaviour
The Indian consumer market is one of the most promising markets in the world, evolving faster than ever across all socioeconomic strata, regions and town classes. Post liberalisation Indians have seen a tremendous increase in incomes, multiple income households, exposure to international lifestyles and media, easier financial credit. In these fast changing times, it becomes imperative for companies reaching out to the Indian market, to catch the pulse of the Indian consumer, to gain a better understanding of the Indian consumer behaviour and to get key insights into issues like: •What does the Indian Consumer’s shopping basket consist of? •What is it that the Indian consumer is buying - Is it Apparel? Books? Music? Or Durables or Grocery? How is she paying for her purchases? •How much is she willing to travel to get one-stop shopping options? •Is she discount driven enough to wait for promotions or markdowns? •How different is the Delhi consumer from the one in Kolkata or Chennai, and how different are they from those in Lucknow or Ludhiana? All these questions have taken a top priority not only to domestic marketers but also for companies like Wal-Mart and Carrefour that are planning to set up retail chains to tap the potential Indian consumer market. Marketing in India is growing through an indefinable phase. Various print, electronic and other media are influencing everyone right from "Karta" of the family to the kid, the consumer‘s making decision and the way in which the new generation Indian consumer behaves is undergoing change at a never before pace. In today's global marketing era, which stresses on customization and localisation, influencing the consumer’s decision has become more important in this changing environment. Many new upcoming trends have been noticed in the last decade. According to the data provided by (NCAER) latest Indian market demographics report 2002 in the period from 1998-99 to 1999-2000, the purchase of white goods rose by 103%, this growth was seen mostly in the Southern India, with North and Western parts of the country still lying untapped. In other words, the potential in the North and the West is truly large. With income levels rising- especially in the post-reforms period the number of upper-medium and high-income households rose from 4.1 % of the total numbers of households in 1989-90 to 11.9% in 1998-99. The pattern of consumption has also undergone a sea change. Similarly, the number of low-income households, that is households with an annual income of less than Rs.35,000 per year, has fallen from 58.2 % in 1992-93 to 39.7 % in 1998-99. Income Levels : From NCEAR, LM – Lower Middle class, M – Middle Class, UM – Upper Middle Class and H – Higher Class. (All figure in %)

Income Class92-9395-9698-99
Low=, Rs 35,00058.248.939.7
LM=Up to Rs 70,00025.430.734.5
M= up to Rs 1,05,00010.411.913.9
UM = up to Rs 1,40,0003.756.2
H =. Rs 1,40,0002.33.55.7

A traditional family in India is different from a western family, the decision making process for the purchasing of consumer durables is quite elaborate, as many members with their diverse view are involved in it. At the same time, the characteristics of Indian families are fast changing. Indian families are presently in a state of flux, shifting from being strictly hierarchical to more egalitarian in character. This is all because of a sea change in the structure of income distribution (as shown in the table) where: •High-income class is expanding very fast.

Middle-income classes bulging in size especially in rural India. •During the post reform period the rate of growth in the upper income categories was much higher, compared to the corresponding decline in the size of the low-income class. The growth of the top most income class after 1995-96 has been of the order of about 19%. •A significant negative growth in the urban low-income class was...
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