I have been reading a number of books on marketing in India, and noticed a consistent theme in the analysis. I am referring to a body of published and unpublished literature, research reports commissioned for specific purposes and sociological studies. While these agree/ disagree on a number of issues, all these research agree on the peculiar position of brands in the Indian marketplace.
India is supposed to be an attractive marketplace. Supposed to be, as the numbers are huge and a bit of money is supposed to be floating around. So, there is talk about an Indian middle class, the size of which is hotly debated and put anywhere in between 40 to 400 million. The variance is based on what one will call the middle class. The bottom three-fourth of this populace will not qualify as middle class by any rich country standards; but, of course, the new fortune-at-the-bottom-of-the-pyramid thinking has certainly brought them into the party. This is the figure which George Bush famously quoted when he was in India, and one would assume that this is what most policy-makers will see when they see India from outside.
I remember saying this when I first joined Rutledge and was asked to brief the managers on how big the opportunity in India is. I paraphrased James Kynge [from his award-winning China Shakes The World] to say that, from outside, India looks huge, a market for one billion people; but from inside, India is a million country itself, differentiated by language, culture, history, religion and education - an uniquely diverse country within a political union. I urged a balanced view of the challenges as well as the opportunities.
Interestingly, that is the key point made in an excellent recent book - The Indian Consumer : One Billion Myths, One Billion Realities, by Alam Srinivas - wherein he looks at the emerging consuming class of the Indians. While attempts have been made to classify the Indian middle-class as one segment, Mr. Srinivas maintains, the consumption pattern and preferences are hugely diverse within this segment. Of course, he talks about different economies, as did Rama Bijapurkar, in her Winning in The Indian Market: Understanding the transformation of consumer India, and classifies the middle class on the basis of its origin - the bureaucracy of state and union level, the railways, the public sector, the private sector, the self-employed, etc [Ms. Bijapurkar talked about a 'government economy', comprising of the first three segments] and asserts how the spending pattern and consumption preferences actually vary between these different 'middle classes'.
I think this is a very interesting point, one that can be of crucial importance to all marketers approaching the Indian market. It is not good enough to think about a huge Indian consuming class. It is important to take this sociological perspective into the account, and decide whether the market is big enough and if there is enough incentive built into the product to attract the target segment.
I shall give an example from our own experience. We are trying to sell English language training to India. Our broad definition of the target market was those who 'has English locked inside', roughly meaning those people who have received tertiary education but can not speak in English. However, what we did not take into account is the sociological root of this segment - these people will mostly come from 'government' families, where the main breadwinner of the family would have been employed in a government job.
I say this because such families actually sustained the private education sector in India for last two decades. These are the families where getting a job is important, but with the decline in intake in the government jobs, the known routes of employability are all closed. While it is far more likely for a Private sector employee to open doors for his/her children through networking, this has increasingly become difficult for a government employee, due to various restrictions and affirmative action programmes in the government sector. So, this generation flocked the Engineering/ Medical entrance examinations and later in the private training schools.
The peculiarity of this segment will be in terms of (a) price sensitivity, even if they can afford, they would not want to spend more; (b) outcome orientation, they would want a certificate, a proof of credentials; (c) product-over-brand mentality, wherein the actual product features and deliverable will matter more than the brand perception.
Since we, and our partners, so far looked at a straight-forward Indian middle class segmentation, we ended up building a posh centre in a big city offering a premium English course, without a certification. We got what we did not ask for - expats trying to learn English, companies trying to educate their employees and rich housewives preparing for next trip abroad - but did not get the 'mass' that we hoped for.
My takeaway from this new set of research is the perspective I mentioned here. What's needed is a product for the 'government' middle class - value-for-money, outcome orientated and easily accessible - and our future business strategies will surely be deeply influenced by this thinking.
Popular posts from this blog
A friend has recently forwarded me a quote from Lord Macaulay's speech in the British Parliament on 2nd February 1835. I reproduce the quote below: "I have traveled across the length and breadth of India and I have not seen one person who is a beggar, who is a thief. Such wealth I have seen in this country, such high moral values, people of such calibre, that I do not think we would ever conquer this country, unless we break the very backbone of this nation, which is her spiritual and cultural heritage, and, therefore, I propose that we replace her old and ancient education system, her culture, for if the Indians think that all that is foreign and English is good and greater than their own, they will lose their self-esteem, their native self-culture and they will become what we want them, a truly dominated nation." The email requested me to forward me to every indian I know. I was tempted, but there were two oddities about this quote. First, the language, which
Introduction : The Business of Gift Giving Business gift giving has always been common and contentious at the same time. Business gifts are usually seen as an ‘advertising, sales promotion and marketing communication medium’ (Cooper et al , 1991). Arunthanes et al (1994) points out that such gifting is practised usually for three reasons: (a) in appreciation for past client relationships, placing a new order, referrals to other clients, etc.; (b) in the hopes of creating a positive, first impression which might help to establish an initial business relationship; and (c) giving may be perceived as a quid Pro quo (i.e. returning a favour or expecting a favour in return for something). The practitioners of gift-giving generally argue that doing business is often an aggregation of personal interactions and relationships, and gift-giving should be seen as a natural way of maintaining and enhancing these relationships. ‘Business gifts, especially one given in the course of the festive s
In most societies today, making profits are accepted as moral, if not especially praiseworthy. This was not as obvious as it appears today – people used to be embarrassed about making a profit not so long ago. Crazy as it seems today, it is worth thinking why it was so. Profits, as economists will put it, is the reward for risk-taking, for putting a business enterprise together in the pursuit of an objective. In this definition, remember, profits are not what it is commonly understood to be – the gross middle-line towards the bottom – but a figure net of entrepreneur’s earning [wages for his labour], dividends and interests on borrowed capital, and provisions for building and other physical assets [a sort of rent, offsetting what these assets could have earned if leased out]. This pure profit – surplus – accrues to a business as a reward to its organisation, for the act of entrepreneurship itself. Economists were divided on how this surplus comes about. The conventional wisdom was,
Buzzwords have disadvantages. Right now, experiential learning is one, and that means we put the label on everything and it stops to mean anything. Also, this means reasonable conversation about experiential learning becomes difficult - at times such as this, either you preach experiential learning or you are traditional, antiquarian and hopelessly out of touch. But, overlooking the limitations of experiential learning can cause big problems. Experiential Learning does many things - putting practice at the heart of learning is an important paradigm shift - but not everything, and it is important to be aware what it does not do. Usually, we equate the terms Project-based Learning (the method) with Experiential Learning (the idea) and Learning from Experience (the ideal), treating them as one and the same and using the terms interchangeably. Any talk about distinctive meaning of these terms is usually seen as pedantic, but really represent very different ideas about education.
Introduction Erna Petri née Kürbs, a farmer’s daughter from Herressen in Thuringia, arrived in Ukraine with her three year old son to join her husband Horst in June 1942. Horst, an SS leader inspired by Nazi ideologue Dr Richard Walter Darré, settled in the plantation of Grzenda, just outside today’s Lviv, to become a German Gentleman-Farmer. Erna saw Horst beating and abusing the workers in the plantation within two days of arriving there, which was, as Horst explained, necessary for establishing authority. Erna joined in enthusiastically, settling into a combination of roles of ‘plantation mistress, prairie Madonna in apron-covered dress lording over slave labourers, infant-carrying, gun-wielding Hausfrau.’  However, there were clear rules in the plantation, and Erna was very much expected to play the woman’s role of being a Cake-and-Coffee hostess. When four Jews were caught in the estate while trying to escape from a transport to a death camp, Horst told Erna and her female
Today, Helen Goddard, 26, a highly popular music teacher of a City School for Girls, has been sentenced to 15 months in prison. Her crime was to carry out a year long lesbian affair with one of her pupils, who appeared in the court and admitted that the affair was consensual and it was she who pressured Helen into the affair. For Helen, a bright musician and a devout Chistian, this is an extraordinary lapse of judgement. Also, she was teaching in the £13,000 private girls only school in London. She was surely aware what the consequences of her action will be. The fact that she still could not stop herself tells us that lovers do not always act rationally, something we always knew. There is more in this affair than personal tragedies. For a start, this has all the dramatic elements: a bright, beautiful teacher more in Julia Roberts mould [as in Mona Lisa Smile], a stiff upper lip school [not unlike Wellesley] and a story like Notes On A Scandal with an added twist. Indeed, Helen
A week into lockdown and things are beginning to change. Mornings are late, afternoons are lazier and evenings never end; meditations are filling out the time for Yoga routines and Netflix profiles are strewn with half-finished movies. This state-mandated, state-funded period of idleness is being likened to being called up to serve, but is nothing like that: Such a comparison is really an affront to the idea of service. Instead, this is just one long streak of panic; of the centre not holding and life not going on as usual. With the usual patterns and rules in suspended animation and business talk - and business - being rendered meaningless, space is opening up for unusual questions: Is Capitalism about to end? Is this the death of globalisation? Does it get uglier from here? My grandfather's generation would have scoffed at us. They saw through wars and pandemics. But, in fairness, we haven't had a life-ending crisis of our own. Notwithstanding the experiences of th
The ‘Why’ Question? Adolf Hitler was appointed the German Chancellor by President Von Hindenburg on 30th January 1933. This was an extraordinary turn of events. Previously, President Von Hindenburg consistently refused to appoint Hitler the Chancellor, despite the impressive electoral performance of NSDAP in July 1932, Hitler’s uncompromising demand of the Chancellor’s post and a repeat election in November 1932 which failed to break the deadlock. Explaining his refusal, Hindenburg wrote in a letter on 24th November, “a presidential cabinet led by you would develop necessarily into a party dictatorship with all its consequences for an extraordinary accentuation of the conflicts in the German people.” The question ‘why’ Hitler was appointed Chancellor, despite the President being acutely aware of what might follow, is therefore a significant one. The NSDAP had election successes throughout 1932, and was already the biggest single party in the Reichstag and various Landtags acros
I wrote a note on Kolkata, the city I come from and would always belong to, in July 2010. Since then, the post attracted many visitors and comments, mostly critical, as most people, including those from Kolkata, couldn't see any future for the city. My current effort, some 18 months down the line, is also prompted by a recent article in The Economist, The City That Got Left Behind , which echo the pessimism somewhat. I, at least emotionally, disagree to all the pessimism: After all Kolkata is home and I live in the hope of an eventual return. Indeed, some change has happened since I wrote my earlier post: The geriatric Leftist government that ruled the state for more than 30 years was summarily dispatched, and was replaced by a lumpen-capitalist populist government. Kolkata looked without a future with the clueless leftists at the helm; it now looks without hope. However, apart from bad governance, there is no reason why Kolkata had to be poor and hopeless. It sits right
The Creativity Imperative Businesses today consider creativity of their staff as a critical, possibly the most critical, factor for their ongoing survival. This is because the environment, political, social and commercial, has become so fluid; as Yogi Berra put it, “the future isn’t what it used to be”. Constant change, demanding and more aware customers and citizens, rapid information dissemination through new technologies of information and communication, and intense competitive and regulatory pressures, are pushing companies and people who work for them to innovate and adapt continuously. Set in this context, employee creativity has a whole new meaning. It is traditionally understood as people thinking about products and services, which did not exist before, or tweaking and improving the existing ones. Competitive pressures add to this creativity imperative. Information is fast and cheap, and communication technology is driving the costs of production and distribution
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.