This week we focus on the D2 segment, which is identical to last week’s C6 in terms of stage of life, but whose chief wage earner is a skilled worker, and not a professional. D2 households form the sixth largest segment among urban household profiles in India. This segment includes those households in which the chief wage earner is married, has children above 12 years of age, and who is relatively well qualified, working as a skilled worker. This includes both nuclear and joint families, and 40% of households have five or more members. The D2 segment has 14.1 million people and the median household income stands at Rs2.63 lakh. Not only is the median income lower than that of the C6 segment, but income distribution is also weighted more in the lower income groups—nearly half the households fall in the lowest income bracket, earning less than Rs3 lakh per year. This is a clear reflection of the lower educational qualifications in this segment, compared with the C6 segment which is comprised of only professionals. One feature that stands out for the D2 segment is that expenses on education take up 10% of the budget, the highest share among all urban households. Clearly, this segment values education and wants to ensure higher income and better careers for the children through education, and is willing to spend to achieve this end. There has been a phenomenal rise across the country in the number of private institutes to meet this demand. This includes not just professional courses, but also coaching for every subject and entrance examination, and skill-enhancing courses in computer training, English conversation, etc. Unfortunately, the private coaching class market has turned into a virtual racket. The recent chaos in Bihar where students went on the rampage against the “fleecing” by classes has now brought about a radical change: For the first time in the country a law is being enacted, in Bihar, to regulate private coaching centres. Also, the Centre has formulated the Malpractices Bill to curb such happenings in professional education institutes. In D2 households, the major sector of employment for the chief wage earner is public administration, which takes up 21% of this segment, followed by education, health and social work. Wholesale and retail trade comes in third. With government jobs providing ample opportunities for those with a basic graduate degree, this becomes the preferred sector as it offers stable and secure income. Nearly 70% of the chief wage earners have a graduate degree and—as the majority in India do—these would be in the arts or commerce faculties; teaching, therefore, is an obvious choice of career. Trade is another sector that has seen rapid growth in recent years, as it offers the chance to be self-employed or run small businesses and satisfy the urge for entrepreneurship. The cities that top the numbers in this segment are Delhi, Mumbai, Thane, Chennai and Kolkata, in contrast to the C6 segment, which had Pune and Bangalore among the leading cities for professionals. Most families in the D2 and C6 segments, sharing the same life stage characteristics, own the homes they live in, while around 30% live in rented premises. However, given the wide difference in income distribution and qualifications, the two segments would be living in very different neighbourhoods and also have significant differences in size. D2 households are predominantly lower-middle class; given their education and life stage profile, they are not set to move up much further. Their aspirations, hence, are focused on the next generation.

1. Aspiring for the Next Generation Published: Mint dated 22 nd March 2010 This is the 14th in a 33-part series on distinct consumer segments, based on a categorization of stage of life and occupation, expenditure and savings propensity, family structure and psychographics. This week we look at the D2 segment--married with grown-up children, a graduate or postgraduate skilled worker. Indicus Consumer Segment

2. Indicus Consumer Segment This week we focus on the D2 segment, which is identical to last week’s C6 in terms of stage of life, but whose chief wage earner is a skilled worker, and not a professional. D2 households form the sixth largest segment among urban household profiles in India. This segment includes those households in which the chief wage earner is married, has children above 12 years of age, and who is relatively well qualified, working as a skilled worker. This includes both nuclear and joint families, and 40% of households have five or more members. The D2 segment has 14.1 million people and the median household income stands at Rs2.63 lakh. Not only is the median income lower than that of the C6 segment, but income distribution is also weighted more in the lower income groups—nearly half the households fall in the lowest income bracket, earning less than Rs3 lakh per year. This is a clear reflection of the lower educational qualifications in this segment, compared with the C6 segment which is comprised of only professionals. D2

3. Indicus Consumer Segment One feature that stands out for the D2 segment is that expenses on education take up 10% of the budget, the highest share among all urban households. Clearly, this segment values education and wants to ensure higher income and better careers for the children through education, and is willing to spend to achieve this end. There has been a phenomenal rise across the country in the number of private institutes to meet this demand. This includes not just professional courses, but also coaching for every subject and entrance examination, and skill-enhancing courses in computer training, English conversation, etc. Unfortunately, the private coaching class market has turned into a virtual racket. The recent chaos in Bihar where students went on the rampage against the “fleecing” by classes has now brought about a radical change: For the first time in the country a law is being enacted, in Bihar, to regulate private coaching centres. Also, the Centre has formulated the Malpractices Bill to curb such happenings in professional education institutes.

4. Indicus Consumer Segment In D2 households, the major sector of employment for the chief wage earner is public administration, which takes up 21% of this segment, followed by education, health and social work. Wholesale and retail trade comes in third. With government jobs providing ample opportunities for those with a basic graduate degree, this becomes the preferred sector as it offers stable and secure income. Nearly 70% of the chief wage earners have a graduate degree and—as the majority in India do—these would be in the arts or commerce faculties; teaching, therefore, is an obvious choice of career. Trade is another sector that has seen rapid growth in recent years, as it offers the chance to be self-employed or run small businesses and satisfy the urge for entrepreneurship. The cities that top the numbers in this segment are Delhi, Mumbai, Thane, Chennai and Kolkata, in contrast to the C6 segment, which had Pune and Bangalore among the leading cities for professionals.

5. Indicus Consumer Segment Most families in the D2 and C6 segments, sharing the same life stage characteristics, own the homes they live in, while around 30% live in rented premises. However, given the wide difference in income distribution and qualifications, the two segments would be living in very different neighbourhoods and also have significant differences in size. D2 households are predominantly lower-middle class; given their education and life stage profile, they are not set to move up much further. Their aspirations, hence, are focused on the next generation.