Demographic and Psychographic Segmentation in India

DEMOGRAPHIC AND PSYCHOGRAPHIC
SEGMENTATION IN INDIA
Sameer Mathur, PhD (http://smathur.com)

FREE TEACHING
RESOURCES
ON MARKETING
MANAGEMENTATWWW.SMATHUR.COM
OVER 130,000 VIEWS
FROM 96DIFFERENT COUNTRIES
These presentations are part of Sameer Mathur's teaching portfolio.
They are free to view or download for non-profit, academic use.
Disclaimer: These teaching materials have been compiled from multiple, non-creditedsources for non-profit, academic use. Copyright is retained by the original content creators.
SameerMathur, Ph.D.
Assistant Professor (Marketing)
Web: www.smathur.com
Email:sameer.mathur@mcgill.ca
Twitter: @ProfessorMathur
Facebook:Click Here

Factors influencing consumption
Social class (as opposed to caste) , ethnic diversity (ranging from world-views to food habits) and psychographic diversity
Caste system only impacts voting behavior, not consumption behavior
Products and services that are consumed allow for self-expression

Further division of India
Recap: India is not one entity but a collection of many different mini-Indias, acted upon by varying forces
Segments exist within mini-Indias, determined by sociocultural-ethnic-”life mindset” variables leading to varying consumption

Demographic Segmentation
The Socio Economic Classification (SEC) system :
Urban System  uses occupation and education of the CWE as variables
Rural System  uses education of the CWE and the type of dwelling that the household lives in as variables
Chief Wage Earner (CWE)  Head of the household
Developed in 1980s by Market Research Society of India

The SEC System
Benefits:
Helps in consumer segmentation -- identifies what consumers prefer and how much they consume
Closely correlated to income
Like income, intuitively easy to understand yet has much greater predictive power
Can be used for all consumer goods and services, including financial services

The Urban SEC System
Ordinal scale ranging from A (highest social class) to E, with shades in between of A1, A2, B1, B2, E1, and E2.
Details of classification:

The Urban SEC System

The Rural SEC System
Scale ranging from R1 to R4
R1 and R2 are major consuming classes in rural India, R3 and R4 are still very poor
R1 ~ 5% of rural households, R2  ~ 10%, R3~35%, R4  ~ 50%
60% of R1 and R2 have a television , compared to 25% of R4

SEC: Consumption patterns
SEC A1: Luxury brands, global products
SEC A and B: High-end Indian brands, upper-end international brands producing locally
SEC C and R1: Budget brands and value stores
SEC D, E1 and R2: “Mass market” India Eg: Two wheelers
SEC E2 and R3: Micro-pack offerings, FMCGs

The Self-Employed
Have distinctive needs that drive consumption behaviour
Formal support systems like healthcare, pensions and rented apartments are typically built around employers– self-employed have no access
Demand kicker for popular FMCGs and durables, cell phones, sturdy motorcycles and low-end vans

Indian cities - Mindsets
“Arrived” mindset: Bangalore – India’s silicon valley, balance between cultural capital and economic capital
“Striving” mindset: Nagpur, Ludhiana, Madurai, Surat – focus on bettering lifestyle, maximizing earning and fun
“Escapist” mindset: Varanasi, Vijayawada, Bareilly – weighted down with problems, not knowledgeable or energetic enough to improve situation

Age cohorts

Ethnicity
Analogous to European Union: Each state (country) is very different, yet a clear shared Indian (European) ethnicity exists
Varying distribution strategies (Eg: Water purifier) and product strategies (Eg: Cooking oil) are required
Media and Entertainment: Creating successful programs around different ethnic groups.

Summary
The Socio Economic Classification (SEC) system :
Urban System  uses occupation and education of the CWE as variables
Rural System  uses education of the CWE and the type of dwelling that the household lives in as variables
Chief Wage Earner (CWE)  Head of the household
Developed in 1980s by Market Research Society of India

Summary
Source: IRS 2005

Summary
The “Resigned” : Really poor, struggling for survival
The “Strivers”: Goal is to improve and escape hardship
Discount brand FMCGs, Send children to English-medium school
The “Mainstreamers”: Security, social acceptance
Brands are bought to belong to a group, not for self-expression
The “Aspirers”: Status, envy and success is important
Products that claim they are superior or the best
The “ Successful”: Achievement, recognition
Most modern retail and high-functionality premium brands

Background Reading

FREE TEACHING
RESOURCES
ON MARKETING
MANAGEMENTATWWW.SMATHUR.COM
OVER 130,000 VIEWS
FROM 96DIFFERENT COUNTRIES
These presentations are part of Sameer Mathur's teaching portfolio.
They are free to view or download for non-profit, academic use.
Disclaimer: These teaching materials have been compiled from multiple, non-creditedsources for non-profit, academic use. Copyright is retained by the original content creators.
SameerMathur, Ph.D.
Assistant Professor (Marketing)
Web: www.smathur.com
Email:sameer.mathur@mcgill.ca
Twitter: @ProfessorMathur
Facebook:Click Here

http://www.smathur.com	310
http://smathur.com	108
http://translate.googleusercontent.com	3

Demographic and Psychographic Segmentation in India

by Sameer Mathur on Jul 29, 2011

Accessibility

Categories

Tags

Upload Details

Usage Rights

3 Embeds 421

Statistics

Demographic and Psychographic Segmentation in India — Presentation Transcript