behavioral pattern and problems faced by indian customers

PROFILE,BEHAVIORAL PATTERN AND PROBLEMS FACED BY INDIAN CUSTOMERS

By

A.K.ANSHUCHINDU

BasheerShamweel

Sahalsuhail

WHAT IS CONSUMER PROFILE

Outline of significant demographic and psychographic details about the user of a particular product.

Knowledge of the consumer profile is very important in the determination of a creative advertising campaign.

CONSUMER PROFILE INCLUDES

Age Category Marital Status Income level Education Occupation Sex Area of residence Purchase behavior Pattern

CONSUMER PROFILE ANSWERS FOLLOWING

Who are the countries Citizen? What are the jobs available for the

people? Who among the people earn less than

the minimum wage? Which area are the poorest and has the

inefficient way of delivering basic service to the people?

What is the crime rate of certain big City?

PROFILE OF THE INDIAN CONSUMER

One of the key reasons for the increased consumption is the impressive growth of the middle class.

Around 70 per cent of the total households in

India reside in the rural areas. The total number of rural household is

expected to rise from 135 million in 2001-02 to 153 million in 2009-10. This presents the largest

potential market in the world.

CONTD.. The Indian rural market has been growing at

3-4% per annum, adding more than 1million new consumers every year and now accounts for close to 50% of the volume consumption of fast-moving consumer goods (FMCG) in India.

The market size of the fast moving consumer goods sector is projected to be more than double to US$ 23.25 billion by 2010 from the present US$ 11.16 billion. As a result, it is becoming an important market place for fast moving consumer goods as well as consumer durables.

DEMOGRAPHICS OF INDIA

Size Of Population Population of India is around 1.15bn people

in which majority of them lived in the Rural areas.

Literacy rate Literacy and education: According to the

Census 2010, the average literacy rate is 70percent. There is a rise in growth of literacy rate since 1951 and it has increased substantially in the last decade.

DIVERSITY, THE HALLMARK

Indian consumers are not a homogeneous lot. They are marked by great diversity. It is this diversity that strikes us first when we look at Indian consumers that is diversity in religion, language, culture, tradition, social customs, and dress and food habits.

RELIGIOUS DIVERSITY

The one billion people of India belong to seven different religious groups" Hindus, Muslims, Christians, Sikhs, Buddhists, Jains and Zoroastrians. In addition, there are other persuasions and there are sects, sub-sects, castes and sub-castes. Each religion has its own hierarchic structure, concretized through centuries of practices. Each caste has its own customs established over generations.

LINGUISTIC DIVERSITY

Sixteen languages have been specified in the Constitution of India as national languages. In addition, there are hundreds of dialects. In several places, many amalgams of languages have been formed as a result of shifting populations.

DIVERSITY IN DRESS AND FOOD HABITS Almost every state, or religious

community, has its own traditional styles of dress.

Food Habits also differs from place to place and from Religion to Religion

INDIA'S INCOME CLASS

1990-00 2005-06

RICH (annual income > US$ 4,700)* Own cars, PCs

3million households 6milliion households

CONSUMING (US$ 1000-4700)* Have bulk of banded consumer goods, 70% of 2-wheelers, refrigerators, washing machines

55 million 75 million

CLIMBERS (US$500-1000)* Have atleast one major durable (mixer, sewing machine/tv)

66million 78 million

ASPIRANTS (US$350-500)* Have bicycles, radios and fans

32million 33 million

DESTITUTES (Less than US$350)* Not buying

24million 17million

Indian consumers

0 20 40 60 80 100

Very rich

Consuming class

Climbers

Aspirants

Destitutes

million households

2006-07

2001-02

1995-96

Indian consumer buying behavior to a large extent has a western influence. Foreign brands have gained wide consumer acceptance in India.

"One household, multiple products“: two cars is no longer a luxury but a practical necessity for working couples; two TVs in the house is recognition of the fact that different family members have different interests

With the availability of low-interest finance schemes, price is increasingly becoming a smaller factor in a purchase decision in a whole range of consumer durables also.

Consumers jump steps as they enter: today the line between entry-level and upgraded products is disappearing. The newer generation is willing to pay more if he/she is convinced or he/she is getting better value for the higher price.

Upgrade is part of life. Today the average life of a mobile is 12 months, that of a TV three years; cars four to five years and soon even homes will be changed more frequently. Clearly durability is no longer the most desirable value.

As Indians have grown richer, they have begun to spend more on vehicles, phones, and restaurants, this is according to recent research on consumption patterns.

SEGMENTS

India has various consuming classes The young and the restless

Teen Riches, Dudes & Dudettes(men who pays too much attention to their clothes.)

Call Centre Boomers The Bold and bountiful(liberal)

The Yeppies (Young Entrepreneurial Professionals) The Yippies (Young International Professionals) The raffles (Rural Affluent Farm-Folk):

The golden Folks in High Spirits

1) THE YOUNG & RESTLESS India has the youngest population

profile in different income segments and locations, who are influencing their parents’ spending.

Some of them are also beginning to earn money through part-time for full-time jobs, arising out of opportunities that did not exist earlier. Some of these segments include

TEEN RICHES, DUDES & DUDETTES

This group mainly comprises young people who are from relatively affluent families. Eating out, movies and occasional clubbing are an integral part of their lifestyle. Dress is invariably modern, and attire must be changed frequently

CALL CENTRE BOOMERS

Formerly located mainly in the IT-savvy cities, call centers and other IT-Enabled Service centers are spreading to other cities and towns as well. Populated largely by youngsters out of school or college, drawing in their first incomes, and at levels unheard of earlier

THE BOLD AND THE BOUNTIFUL

The Yeppies (Young Entrepreneurial Professionals): entrepreneurs who have made it after the good

liberalization The Yippies (Young International Professionals):

work with multi-national companies, who are based in India but travel extensively

The raffles (Rural Affluent Farm-Folk): the farmer with tax-free income spend on a wider

choice of products

THE GOLDEN FOLKS IN HIGH SPIRITS

The retired folk, with kids who are married and living in their nuclear families, or even out of the country

Several of them have led fairly good lifestyles, and have the means to continue to do so

BEHAVIOURAL PATTERN OF INDIAN CONSUMERS

Consumer behavior is the study of how people buy, what

they buy, when they buy and why they buy.

It attempts to understand the buyer decision making

process, both individually and in groups.

It studies characteristics of individual consumers such as

demographics, psychographics and behavioral variables

in an attempt to understand people's wants.

TYPES OF CONSUMER BUYING BEHAVIOR

There are four types of consumer buying

behavior, they are

Routine Response/Programmed Behavior

Limited Decision Making

Extensive Decision Making

Impulse buying

ROUTINE RESPONSE/PROGRAMMED

BEHAVIOUR Buying low involvement, frequently

purchased, low cost items. Examples : Soft drinks, snack foods, milk etc.

LIMITED DECISION MAKING

Buying product occasionally.

That is when you need to obtain information about unfamiliar brand in a familiar product category.

Example: Clothes--know product class but not

the brand.

EXTENSIVE DECISION MAKING

Complex high involvement, unfamiliar, expensive and infrequently bought products.

Spend a lot of time seeking information and deciding. High degree of risk.

Example: Cars, homes, computers, education.

IMPULSE BUYING

No conscious planning.

The purchase of the same product does not always elicit the

same Buying Behavior. Product can shift from one category to the

next.

For example:

Going out for dinner for one person may be extensive decision

making (for someone that does not go out often at all), but limited

decision making for someone else. The reason for the dinner,

whether it is an anniversary celebration, or a meal with a couple

of friends will also determine the extent of the decision making.

INDIAN CONSUMER BEHAVIOURAL PATTERN

The world’s economic centre of gravity is

shifting-away from the established, wealthy

economies of Europe, Japan, and North

America and towards the Asia Pacific

India is one of the fastest-growing large

economies in the world.

The Indian Consumer Is Rapidly Transforming

Outlook– From Traditional to Modernized Traditional

Sudden Shift in almost all aspects of life

Change in lifestyle

From Functional to Lifestyle

Eating habitsFrom traditional meals to “McDonalds Happy Meal”

AVAILABILITY OF FINANCE AND SCHEMES

With the availability of low-interest finance schemes,

price is increasingly becoming a smaller factor in a

purchase decision in a whole range of consumer durables

also.

Consumers jump steps as they enter: today the line

between entry-level and upgraded products is

disappearing. The newer generation is willing to pay more

if he is convinced he is getting better value for the higher

price.

IMPORTANCE OF DURABILITY

Upgrade is part of life. Today the average life of a mobile is 12 months, that of a TV three years; cars four to five years and soon even homes will be changed more frequently. Clearly durability is no longer the most desirable value.

BUYING TV

Early ninetiesOne, availability; two, price; and, three, picture quality

Mid-nineties, the efficacy of an exchange scheme and the number of

channels a company offered

Todaysophistication -one of the fastest growing segments of

the market is high-end flat 3D LEDTVs

BUYING AIR CONDITIONER

In the early nineties, air-conditioner manufacturers focused on

institutional sales, leaving the dodgy unorganized sector, with its

dirt-cheap and poor quality offerings, to service households

By the late nineties, sales to households boomed.

In place of the clunky box that simply

cooled the room came sleek plastic shapes

offering such features as a dust-free

environment, split-room cooling, 5 star rating

and so on.

DRIVERS TO BEHAVIOURAL PATTERN

Demographics

Increased global exposure

Increased discretionary incomes across wider

spectrum of population, across wider geography

PURCHASING POWER OF INDIAN CONSUMERS

India’s GDP (Gross Domestic Product) has touched US$1.25

trillion.

The per capita figures do not reflect the realistic picture of

purchasing abilities of consumer households and market

potential for a foreign business enterprise because of

significant differences in purchase power parities of various

currencies

As a result, India ranks fourth richest nation in the world, on

purchase power parity terms, despite being having low per

capita national income

From just 3 malls in 2000, India is all set to have more than 2000 malls. According to consultancy firm (Technopak), the industry will see $20bn of fresh investments (excluding investments in real estate) and 2,000 hypermarkets coming up within the next five years

PROBLEMS FACED INDIAN CONSUMERS

Adulteration Under weighing and under measurement. High prices. Hoarding Selling sub-standard goods to consumers. False and duplicate items sold. Selling goods, which have reached expiry

date. False or incomplete information. Skipping away from the offers promised.

CONTD…

Rough behaviour from the shopkeepers.

Poor or inadequate after sale service.

Globalization and neo-colonialism.