In Need Of Service And Food

In need of Service & Food Published: Mint dated 1 st February 2010 This is the seventh 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 take a look at the B3 segment—urban, well-educated families with unmarried children Indicus Consumer Segment

Indicus Consumer Segment With a population of more than 2 million, B3 segment households represent those urban well-educated families, who are settled in life. Almost three-quarters of these families own the house they live in. With the median household income at Rs5.5 lakh, these households would be quite representative of India’s middle-aged urban middle class. Yet, around 20% of the households at the top end of this segment earn more than Rs15 lakh a year. B3 segment households are small households, 69% have just one or two children and less than 20% have senior citizens staying with them. The children are in their late teens or older, almost all would be studying in college. In fact, 8% of the household budget is spent on education services, the second highest share among all consumer segments. B3

Indicus Consumer Segment The chief wage earner in these households is typically around 45 to 54 years of age, has a college degree or diploma and holds a regular salaried job. Most of the chief wage earners are employed in financial services or in public administration, with basic graduate degrees giving them the passport to an executive or managerial post—57% of the households fall in this category. Those with engineering related degrees would be largely in manufacturing sector, which provides employment to 17% of the chief wage earners in this segment. The spouse of the chief wage earner, though fairly well-educated is generally a home-maker. Though 55% of the spouses hold a graduate degree or above, yet 79% stay at home. This is due to a combination of factors. Firstly, spouses also come from educationally weaker backgrounds—while none are illiterate, 3% are educated below primary, 32% have barely finished higher secondary schooling. When the educational profile of spouses is compared with younger B segments, like B2, we see a clear relationship emerging of spouses having higher educational profiles in younger households—an indication of how female education has become more important over the last three decades. Secondly, women who have stayed home to take care of children in their younger days find it more difficult to restart a career in later years. This trend should change in the decades ahead as opportunities open up for self-employment and women get relatively more freedom than before. However, irrespective of the educational levels and of employment profiles, women are taking a larger role in decision making in the households: whether this is in consumption or in investment.

Indicus Consumer Segment B3 households spend more than half their budgets on services, in line with their age and income levels. They spend much less on rent than the other B segments, as home ownership increases with age. Almost a quarter of their expenditure is on transport: personal and public. Households in this segment also spend a larger proportion of their budget on food than younger B segments. In fact, high value and processed food form 13% of their consumption basket, reflecting the teen-plus profile and higher income in these households. The B3 households comprise 2.34 million people in 569,000 households—an average household size of 4.1. B3

Indicus Consumer Segment Let’s take a look at the spread of B3 segment in the top 135 districts of India, which account for two-thirds of the urban population. The top 12 districts with B3 concentration are Delhi, Mumbai, Bangalore, Chennai, Kolkata, Thane, Hyderabad, Pune, North 24 Parganas, Nagpur, Bardhaman and Kanpur Nagar. They account for 35% of the B3 population in the country. Maharashtra accounts for 16.3% of the B3 population. The top 5 states account for 50% of the B3 population. Income Distribution As much as 33% of this segment has household income of over Rs 10 lakh per annum, which makes it an attractive urban segment for a wide variety of products and services in both the premium and mid-market segments.

In Need Of Service And Food

by Indicus Analytics Private Limited on Jan 31, 2010

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