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Webchutney works with leading companies in India by developing
award winning and memorable experiences for brands to conne...
ContentsContents
Introduction ...............................................................................................
2
Introduction
Despite sluggish consumer buying trends witnessed during global recession,
the Indian consumer durables ind...
Executive Summary
The Indian consumer's confidence and demand for durable goods has been
robust as the industry recorded t...
The ‘Connected’
Indian Durable
Owner
Substantial Chunk of Online Indian
Households Own Durables
Ownership of consumer dura...
8
Source: Digital Consumer Durables Survey 2010, Webchutney
6
Federation of Indian Chambers of Commerce and Industry (FICC...
11
Unlike other media forms, online durable owners engage with the internet
more often, with 89% of them accessing it dail...
Search
Online
High Purchase Intent
Durable Owners Harbor
13
The fabric of Indian society has undergone a dramatic change,
...
14
The rise in 'needs' for products and services has been replaced by 'wants'
and 'demands' in the Indian consumer durable...
16 17
Our survey results exhibit that high replacement demand exists for
consumer electronics, even amongst existing owner...
18 19
High demand among current Personal Computer
owners intending to purchase another one (73%) in
next 12 months (71%) i...
20 21
Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 787)
Time Period within which AC Purchase is Intend...
Driving Purchase
Decisions From
The Living Room
Searching for product information and cross-product comparison on the
net ...
24
The strength of an information source is based not just on the magnitude
of information it provides but also on the con...
2726
While friends and family continue to be most popular source for research
on ’performance’ of a durable good, the inte...
28 29
Findings from our survey indicate that post-purchase a majority of 54%
consumers shared experiences about brands on ...
31
Online Buying is Slowly Catching
Pace with Online Product Search
79% of online Indians use the internet for product sea...
3332
Trust in online purchase of durable goods can be strengthened through
enhanced online presence of marketers providing...
34
Inside the Mind of the 'Wired' Consumer Durables' Buyer scopes the usage
and attitude of online durable consumers. The ...
36
Ankita Kapoor is a Research Analyst at
Webchutney.
She has completed her MBA in Marketing from
ICFAI Business School, H...
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Webchutney Consumer Durables Report 2010

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Transcript of "Webchutney Consumer Durables Report 2010"

  1. 1. Webchutney works with leading companies in India by developing award winning and memorable experiences for brands to connect, engage with and build sustained relationships with their consumers online. Our clients include Unilever, P&G, HP, Airtel and Microsoft among others. We work with them in areas of online advertising, website design, mobile marketing and social media. Ranked as India’s Number 1 Digital Agency two years in a row (Brand Equity Agency Reckoner, The Economic Times, 2008 & 2009), Webchutney is committed to leading the interactive marketing industry. We are a team of over 150 digital marketing professionals across New Delhi, Mumbai and Bangalore. Visit us at www.webchutney.com for more information. Follow us on www.twitter.com/webchutney Join us on www.facebook.com/webchutney Delhi 7, Keher Singh Estate, Ground Floor, Westend Marg, Lane 2, Said-ul-Ajaib, New Delhi - 110030 Phone +91 11 32572301 - 04 Fax +91 11 29534136 Mumbai Abhishek 'G', 2nd Floor, Juhu Versova Link Road, Andheri (W), Mumbai - 400053 Phone +91 22 26365364, 26365380, 26365391 Fax +91 22 26364068 Bangalore NewBridge Business Center, 777/D, 100 Feet Road, Indiranagar, Bangalore - 560038 Phone +91 9845096692 Fax +91 80 25211515 ©2010 Webchutney Studio Pvt. Ltd. All rights reserved. Inside the Mind of the ‘Wired’ Consumer Durables’ Buyer Inside the Mind of the ‘Wired’ Consumer Durables’ Buyer
  2. 2. ContentsContents Introduction ............................................................................................. 2 Executive Summary ................................................................................... 4 THE ‘CONNECTED’ INDIAN DURABLE OWNER .......................................... 6 Substantial Chunk of Online Indian Households own Durables................... 7 Internet is the Key Medium for Online Durable Owners.............................. 9 Experience and Prolonged Usage have made them Adept Online............. 10 PURCHASE INTENT OF ONLINE DURABLE OWNERS.................................. 12 Online Durable Owners Harbor High Purchase Intent............................... 13 Intention to Purchase a Durable Good within 6 Months is High ............... 15 Snapshot: Purchase Intent of Television within 12 months ....................... 17 Snapshot: Purchase Intent of Fridge within 12 months ............................ 18 Snapshot: Purchase Intent of Personal Computer within 12 months......... 19 Snapshot: Purchase Intent of Washing Machine within 12 months .......... 20 Snapshot: Purchase Intent of Air Conditioner within 12 months .............. 21 DRIVING PURCHASE DECISIONS FROM THE LIVING ROOM ...................... 22 Internet is the Preferred Medium for Durables Related Search.................. 23 Relevance of Various Information Sources for Purchase Related Research on Durables ................................................... 24 Product Features, Price and Visual Appeal are Searched most Online........ 26 Online Social Spectrum is Buzzing with Consumer Views, Thoughts and Experiences....................................................................... 27 BUILDING BRAND VALUE AND DRIVING CUSTOMER ENGAGEMENT ONLINE........................................... 30 Online Buying is Slowly Catching Pace with Online Product Search........... 31 Online Engagement Enables Brand Differentiation .................................. 33 Methodology.......................................................................................... 34 About the Authors.................................................................................. 35
  3. 3. 2 Introduction Despite sluggish consumer buying trends witnessed during global recession, the Indian consumer durables industry grew at a phenomenal rate of 32% 1 in March 2010. Pegged at Rs 35,000 crores in 2008-09, the industry was 2 earlier dominated by a few players. Since the end of 'license raj' and advent of liberalization, this market has been flooded with a host of domestic and international players. It is not surprising to note the peaking levels of awareness about brand image, prices and features of products among discerning Indian consumers who have become more demanding and cautious with exposure to a variety of options. With change in status of durable goods from ‘luxury’ items to ‘utility’ goods, which have become necessary to maintain a comfortable lifestyle, the lines between ‘consuming’ and ‘aspiring’ classes are increasingly getting blurred. Growth in dual income families leading to higher disposable income, reduction in custom duties and easy access to consumer finance are some of the factors that have facilitated growth of the industry. Cut throat competition amongst players has ensured product availability at lower prices. At the same time, the ensuing battle for product differentiation and price wars has put durable goods’ players in a tight spot. In such a scenario, the challenge to increase brand consideration and preference among relevant audiences through greater visibility has become intense. Mass media like television and print are unable to garner loyalty and establish sustained marketer-consumer relationships, as their efficacy in selective or contextual targeting is limited. In an age of instant gratification where confidence in traditional, one-way marketing messages sans relevant brand interaction has diminished, a large number of consumers now prefer to research such products and review third party opinions/experiences online from the comfort of their home while making purchase decisions. The internet has arisen as a major source of information today. Growth of social networking sites among other online channels has created an inimitable opportunity for brands to identify changing consumer behaviour and create custom-made experiences to suit prospective buyers. Brand names, branded items and brand performance are common topics of discussion on social platforms online. Since consumers are price and brand conscious while looking for functionality, they prefer to independently seek information about the options available. An increasing number of marketers are adopting the online medium to engage this discerning audience through exclusive product launches online and taking robust measures to increase traffic on their websites. Being an industry that thrives on constant technological innovation and product upgradation, dynamic online interaction which supplements offline marketing strategies becomes a key differentiator for durable brands struggling to capture a significant proportion of the large Indian consumer base. With a 50 million strong online audience, the advantage of internet in engaging 'hopeful' and 'life-long' consumers who display high repeat/re- purchase intention for durables is highlighted in our study. Inside the Mind of the ‘Wired’ Consumer Durables’ Buyer - a study of the Indian durable consumers’ usage, attitude and behaviour towards the online medium takes a close look at the growing influence of Internet in driving purchase intention/decisions among them. 3 1 Central Statistical Organization (CSO) 2 Federation of Indian Chambers of Commerce and Industry (FICCI) Note: The study focuses on five consumer electronics (durable) namely TV, AC, Fridge, Washing Machine and Personal Computer
  4. 4. Executive Summary The Indian consumer's confidence and demand for durable goods has been robust as the industry recorded the highest average growth rate of 26.1% 3 from April 2009 to March 2010 among all sectors. 4 3 Central Statistical Organization 4 Source: India Online 2010 Report, JuxtConsult 5 Comparative Growth Rates of Industrial Production based on Use-based Classification (% figures) Source: Central Statistical Organization Concurrent to this is the increase in internet access and usage with as many as 73% online durable owners spending more than one hour online (weekdays), which is the highest across all other mediums. The average number of online activities undertaken is 17, of which, information search and social networking are in the list of top ten most 4 popular online activities. Results from our survey indicate that 76% of existing online durable owners online intend to purchase another durable item, exemplifying a substantial replacement/repurchase demand for durables. Moreover, with 85% online durable intenders referring to the internet as their preferred mode of product search, it is clear that this group is aggressively scouring the net for durables' related research, beating the traditionally popular referral model of influencing purchase decisions by a huge margin of 28%. The online sphere is constantly abuzz with durable goods' related views, opinions and comments shared by existing as well as prospective durable owners, thereby influencing each other's purchase decisions. In such a scenario, the opportunity for marketers to leverage their online presence is increasing exponentially, particularly with Indians becoming increasingly vocal on social media platforms. It is interesting to note that online durable consumers actively share opinions, views and experiences not only on personal blogs, but circulate them across a variety of online platforms including company websites, consumer review websites, social networks and blogs, causing a ripple-effect across online and offline consumers. Rise in popularity of online forums including social networks has given birth to a new model of promotional content creation, with the consumer donning the role of message creator in place of the marketer. Inside the Mind of the 'Wired' Consumer Durables Buyer highlights the impact of online media with consumers becoming brand evangelists sharing positive recommendations or stripping brands naked with negative feedback. Today, they have become a ‘currency’ or a threat to durable brands depending on whether durable marketers are actively listening to and participating with their consumers where they flock to the most, or not. Keeping positive conversations and brand image alive is a function of the ‘viral-ability’ of online engagement, its adoption amongst influencers and a sustained effort to spark personalized, one-on-one interaction. Note: The term 'intender' denotes respondents who are online and intend to purchase a durable good, including existing online durable owners and non-owners. Sector 2008-09 2009-10 2009-10 (Mar 2010) (Apr’09 - Mar’10) Basic Goods 2.6 10.1 7.1 Capital Goods 7.3 27.4 19.2 Intermediate Goods -1.9 12.7 13.6 Consumer Goods 4.7 10.6 7.4 (ii) Consumer Non-Durables 4.8 3.3 1.5 (i) Consumer Durables 4.5 32 26.1
  5. 5. The ‘Connected’ Indian Durable Owner Substantial Chunk of Online Indian Households Own Durables Ownership of consumer durables, especially white and electronic goods, has permeated rapidly across socio- economic classes of people in India today. They are perceived as necessities for leading a comfortable life among urban and rural consumers alike, and have shed the 'luxury' tag for millions. This becomes evident with a whopping 89% online Indian 5 households possessing consumer durables . 7 5 Source: India Online 2010 Report, Juxt Consult Share of Online Households Owning Durable Goods Households without durables Households owning durable 11% 89% Across various product categories, our survey indicates that 96% online Indian households own a TV, 83% own a personal computer and 82% own a fridge. In the post-liberalization era, durable goods in India have gained technological competence and have become considerably more affordable. A case in point is the cost of personal computers which has dropped by almost half in the last decade, just as an evident spike in purchase of CTVs and LCDs (Flat Screen) is observed with a steady decline in prices. For example, the cost of a 14-inch CTV in 2000 was as high as Rs 14,000 but in 2010 a 29-inch CTV is available for Rs 10,000 approximately. An impressive 89% of total online Indian households (23.7 million) own durable goods
  6. 6. 8 Source: Digital Consumer Durables Survey 2010, Webchutney 6 Federation of Indian Chambers of Commerce and Industry (FICCI), 2005 Amongst the 21.5 million online households which own durables, TV ownership is the highest (96%) across all socio-economic classes (SEC A 98.5%, SEC B 83.7%, SEC C 97%) Internet is the Key Medium for Online Durable Owners 73% online durable owners spend more than one hour online (weekdays), which is higher than time spent on any other media. Television trails with 60% usage, followed by substantially lower 38% preference for Radio. The nature of engagement and depth of interaction offered online are obvious reasons for the medium to gain an edge over static, one-way communication based media. 9 Media Usage for more than 1 Hour amongst Online Durable Owners (Weekdays) Source: India Online 2010 Report, Juxt Consult 73% online durable owners use internet for more than one hour on weekdays, higher than any other medium In comparison, ownership of washing machines (61%) and air-conditioners (merely 35%) is not as high. Low figures for AC ownership could be attributed to high running costs and erratic electricity supply in some parts of the country. Rural India accounts for nearly 70% of the total number of households, with 2% penetration in case of refrigerators and 0.5% for washing machines, which offers plenty of scope and opportunities for the white goods industry. The urban consumer durable market for products including TV is growing annually by 7 to 10 % whereas the rural market is zooming ahead at around 25 % annually. The rural market is growing faster than urban India as the 6 urban market is now becoming a replacement and upgradation market. With steady increase in disposable incomes, propelled by a buoyant national economy, the opportunity for widespread increase in consumption of durables across online and offline households in India is sizable. Television Personal Computer Washing machine 83% 96% Air Conditioner 82% 35% 61% Fridge Current Ownership of Durables Among Online Households Internet TV Channel Magazine 60% 73% Newspaper 38% 14% 20% Radio Channel
  7. 7. 11 Unlike other media forms, online durable owners engage with the internet more often, with 89% of them accessing it daily. Online media offers scope for a vast variety of activities, notable amongst which are job search, service/product/information search and social networking. Top 10 Activities Pursued by Online Durable Owners on the Net 10 Experience and Prolonged Usage have made them Adept Online 70% of online durable owners have been using the medium for more than two years exhibiting expertise at accessing information while searching and curating content online. The type of online activities conducted indicate the extent to which an existing durable owner online is connected, at ease with use of internet and participative towards information access, supply and exchange through the medium. Experience in Internet Usage of Online Durable Owners Using for more than 5 years Using for upto 2 years Using between 2-5 years 40% 31% 29% Frequency of Internet Usage amongst Online Durable Owners Over 5 times a day 2-5 times a day Once in 2-3 days 32%33% Once a week 24% 2% 7% Once daily 1% 2% 1-3 times a month Once in more than a month 7 out of 10 online durable owners have been using the medium for over 2 years 89% online durable owners access the internet daily ‘Search’ and ‘Interaction’ feature as prominent online activities. These are avenues where maximum opportunities for selective targeting exist Job Search Instant messaging/chatting Download music Check general news English info search engine Social networking Non-Travel Products & Services Check cricket content/score Joined online community Dating/Friendship 64% 60% 67% 52% 49% 49% 46% 45% 44% 44% Online activities pursued by durable owners are indicative of their preference to procure product related information. These avenues present a great opportunity before marketers to selectively target these audiences. Consumer engagement through unique interactive online executions remains the prerogative of durable marketers. Source: India Online 2010 Report, Juxt Consult Source: India Online 2010 Report, Juxt Consult
  8. 8. Search Online High Purchase Intent Durable Owners Harbor 13 The fabric of Indian society has undergone a dramatic change, significantly in consumer behavior and in their attitude towards consumption of durable goods. Our survey indicates that a majority of existing online durable owners remain relevant target audiences for marketers with high intention to re-purchase new durables. Purchase Intention of Online Durable Owners Source: Digital Consumer Durables' Survey 2010, Webchutney (Base:1995) Owner Non-Intender Current Owner plus Intender 76% 24% 76% of current online durable owners exhibit intention to purchase another consumer durable item With 78% of online durable owners earning upto Rs 25,000 per month, a majority of online Indian durable consumers are well off and have the purchasing power to afford consumer electronics. Moreover, with durable goods being made available on flexible monthly payment options, their link with monthly income of a person has diminished considerably.
  9. 9. 14 The rise in 'needs' for products and services has been replaced by 'wants' and 'demands' in the Indian consumer durables' landscape as a large number of consumers fall in the 'have money, will buy' segment today. In a cluttered durables market flooded with domestic and international brands, the pressure on marketers to capture the large consumer base through product differentiation and increase brand consideration has become greater than ever before. 15 Source: Digital Consumer Durables' Survey 2010, Webchutney (Base: 1510) Monthly Household Income of Online Durable Owners Intending to Purchase A majority of online durable owners intending to purchase another one, earn upto Rs 25,000 per month indicating high purchasing power across ‘classes’ and ‘masses’ Less than Rs 6250 Rs 6250 -Rs 12500 Rs 12500 -Rs 25000 Rs 25000 -Rs 40000 Rs 40000 -Rs 80000 Rs 80000-Rs 100,000 More than 100,000 16% 33% 29% 7% 6% 7% 2% Intention to Purchase a Durable Good within 6 Months is High The replacement period of consumer durables in India is falling at a rapid pace. High rate of repeat/re-purchase has attracted a host of branded and unbranded consumer durables' players to India, inducing cut throat competition in the sector. Increasing affordability of the products, coupled with increase in consumers' disposable incomes has led to greater sales in the category. While longevity of durables is high, the trend of consumerism is fast catching on the imagination of Indian masses. Along with rapid changes and upgradations in technology, a high rate of repeat/re-purchase for durables exists. Current Durable Ownership vs. Intent to Purchase Another Durable Currently own Intend to own Television Personal Computer Washing Machine 83% 96% 31% Fridge 52% 21% 82% 41% 61% Air Conditioner 38%35% High purchase demand exists for most durable products, despite high level of current ownership Note: Figures indicating intention to purchase represent owners across various product categories. Source: Digital Consumer Durables' Survey 2010, Webchutney
  10. 10. 16 17 Our survey results exhibit that high replacement demand exists for consumer electronics, even amongst existing owners. Washing machines are voted as the most desired consumer durable, with 84% of respondents intending to buy it within a year. Strong desire for a washing machine could possibly be attributed to the need to save time and energy. Likelihood of purchase for computers, refrigerators and air conditioners amongst online Indians within a year is fairly high at 79%, 75% and 70% respectively. To cater to this strong demand, the time is ripe for marketers to leverage this undercurrent through creative usage of the online medium to engage audiences and drive sales for their brand/products. Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 642) Time Period within which TV Purchase is Intended It is not surprising to witness high repeat/re- purchase demand (75%) for TV in the next 12 months among current online TV owners (97%), as it is a highly penetrable product. Owner Intender Within 6 months 6-12 months 18-24 months 12-18 months 50% After 24 months Non-Owner Intender 32% 43% 25% 11% 25% 4% 9% 0% 0% Snapshot: Purchase Intent of Television within 12 months Break-up of TV Intenders 3% 97% TV Owner Intender TV Non-Owner Intender TV AC Washing machine Fridge Computer 13% 34% 3% 13% 36% 37% 33% 10% 17% 3% 40% 44% 13% 3% 62% 13% 9% 14% 3% 10% 29% 50% 3% 8% After 24 months 18-24 months 12-18 months 6-12 months Within 6 months Time Period Within which Durable Purchase is Intended For 4 out of 5 durables, maximum intention to purchase is within 6 months Source: Digital Consumer Durables' Survey 2010, Webchutney
  11. 11. 18 19 High demand among current Personal Computer owners intending to purchase another one (73%) in next 12 months (71%) is observed Snapshot: Purchase Intent of Personal Computer within 12 months Break-up of Personal Computer Intenders Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 406) Time Period within which Fridge purchase is Intended Snapshot: Purchase Intent of Fridge within 12 months Break-up of Fridge Intenders 25% 75% Fridge Owner Intender Fridge Non-Owner Intender Owner Intender Within 6 months 6-12 months 18-24 months 12-18 months 52% After 24 months Non-Owner Intender 25% 37% 30% 12% 9% 12% 14% 4% 4% Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 431) Time Period within which Personal Computer Purchase is Intended Owner Intender Within 6 months 6-12 months 18-24 months 12-18 months 35% After 24 months Non-Owner Intender 41% 30% 54% 14% 4% 7% 8% 4% 4% PC Owner Intender PC Non-Owner Intender 27% 73% High demand among current online Fridge owners intending to purchase another one (75%) in next 12 months (62%) is observed
  12. 12. 20 21 Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 787) Time Period within which AC Purchase is Intended Owner Intender Within 6 months 6-12 months 18-24 months 12-18 months 38% After 24 months Non-Owner Intender 30% 48% 30% 9% 20% 3% 9%6% 6% Snapshot: Purchase Intent of Air Conditioner within 12 months Break-up of AC Intenders 33% 67% AC Owner Intender AC Non-Owner Intender Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 486) Time Period within which Washing Machine Purchase Is Intended High demand among non-owners intending to purchase a Washing Machine (55%) in next 12 months (73%) is observed Owner Intender Within 6 months 6-12 months 18-24 months 12-18 months 33% After 24 months Non-Owner Intender 39%39% 40% 11% 22% 7% 4%4% 2% Snapshot: Purchase Intent of Washing Machine within 12 months Break-up of Washing Machine Intenders 55% 45% Washing Machine Owner Intender Washing Machine Non-Owner Intender High demand among non-owners intending to purchase an Air Conditioner (67%) in next 12 months (68%) is observed
  13. 13. Driving Purchase Decisions From The Living Room Searching for product information and cross-product comparison on the net has become predominant among online consumers intending to purchase a durable item. The clear advantage of in-depth research offering third party views as well as ease of accessing and collaborating information from multiple sources at one place free of cost is evident with 85% online durable intenders opting Internet as a reliable and convenient source to help them determine the best choice. In comparison, traditional media and surprisingly, even the conventionally trusted dealer/salesman lag far behind. This suggests a change or disruption in the traditional purchase model where the buyer has greater control in selecting the best brand/product suited to personal need. Internet is the Preferred Medium for Durables Related Search 23 Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 1510) Online Durable Intenders Prefer Internet for Product Research 8 out of 10 durable intenders online prefer the internet to search for durable goods, beating the traditionally popular ‘friends & family’ as the most preferred information source Internet Friends & Family Television 57% 85% Magazine/ Newspaper/ Brochures 48% 45% Dealers 42% Driving Purchase Decisions From The Living Room
  14. 14. 24 The strength of an information source is based not just on the magnitude of information it provides but also on the convenience it offers and the credibility that is attached with it. Our survey shows that consumers find company websites and social networking websites as 'more effective' sources of information. While company websites provide detailed information on product specifications/features, price and design, social networks are used for obtaining friends and relatives' opinions on various attributes of durable goods. Relevance of Various Information Sources for Purchase Related Research on Durables Reliance on consumer review websites could be attributed to unbiased endorsements by a third party. Websites such as naaptol.com have become popular portals offering facilities to view, compare, buy, review and sell consumer electronics. In a world of choices, the facility to compare and read product reviews can help address customers' information needs. Trust in social networking sites stems from faith in peers, friends and relatives for their views, feedback and personal experiences. The same trusted circle of friends and family is now online, making it convenient to take their opinion with a single message posted on the screen. 25 Company Websites and Online Catalotues Consumer Goods Magazines & TV Shows Family/Friends/Relatives .2 .6 .8 DegreeofEffectiveness Resource -.8 -.4 0.0 -1.0 -.8 -.4 -.2 .2 .6 Social Networking Websites Online Consumer Review Websites Equally Effective More Effective Less Effective Salesman at the Dealer’s Outlet .4.0-.6 .4 -.2 -.6 Online channels are considered ‘more effective’ in researching product information for durable goods Note: The closer a resource is to a particular degree of effectiveness, the stronger it associates with it. Perception of Effectiveness Medium Type More Effective Company Websites/Online Catalogues Online Consumer Review Websites Social Networking Websites Equally Effective Friends/Family/Relatives Less Effective Salesman at Dealer’s Outlet Consumer Goods Magazines & TV Shows Online portals (company websites, consumer review websites and social networking websites) are perceived as more effective in enabling search for durables Friends and relatives continue to be a 'relevant' source of information as Indians value the opinions of people close to them for most things, including consumer electronics. The decision to buy a particular consumer durable brand is likely to be made before the customer actually visits the showroom/point of purchase, which could lead to the diminishing role of the salesman/dealer in influencing purchase decisions. While magazines and TV shows seem to be losing their steam as popular information sources, they remain effective in building the brand image of the company.
  15. 15. 2726 While friends and family continue to be most popular source for research on ’performance’ of a durable good, the internet adds significant value to purchase decisions with depth of information available from multiple sources. Product Features, Price and Visual Appeal are Searched most Online Owing to the vast variety available in durable goods, particularly with the rise of multi brand retailers selling consumer electronics such as ezone, Croma and Next among others, product literature as well as salesmen facilitate search for the desired goods only to a limited extent. Vast improvements in technology and consequent innovations in products have brought most durable players at the same level in terms of brand image. The differentiating factor is product functionality, which can be highlighted to a prospective consumer through brand websites. The USP for registering a successful online presence for marketers is to stay ahead of consumer expectations and expand the scale of their online executions to create a unique 'Wow' experience while promoting awareness and recall. The web is emerging as a powerful medium that invites participation from consumers and keeps them interested, engrossed and engaged. The online space is increasingly becoming a popular medium for consumers to express and share their experiences about products and brands. Overall 55% durable owners shared a durable related experience online and a majority shared positive experience(s). Consumer review websites have become the most popular platform for this exchange. Sharing pre and post purchase experiences is common on the net. Survey results show that positive durables' related experiences are more widely shared online as compared to negative brand experiences. Also, owning certain durable models is a matter of pride and such news put as status messages helps generate buzz across social platforms resulting in instant publicity across a cross section of potential consumers. Online Social Spectrum is Buzzing with Consumer Views, Thoughts and Experiences Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 1995) Type of Experience Shared Pre-Purchase Negative experience Not shared an experience51% 4% 45% Positive experience Product Price, Features and Visual Appeal Researched most Online TV shows & ads Dealer Friends & Relatives Consumer Magazines Internet Newspapers Item features Price Brand Image Performance Visual Appeal 5% 9% 47% 4% 29% 7%9% 32% 7% 28% 6% 17% 27% 8% 22% 8% 24% 12% 23% 10% 28% 8% 22% 11% 31% 7% 22% 19% 12% 10% Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 1510)
  16. 16. 28 29 Findings from our survey indicate that post-purchase a majority of 54% consumers shared experiences about brands on the online domain, out of which 48% were positive brand experiences. A presence on the online space translates into tremendous opportunities for marketers to make their brands visible, available and worthy of discussions that go around on social networking sites and other online platforms. What is interesting is that this word of mouth may or may not be initiated by marketers and still reap benefits, as long as the marketer's products are unique and there is sufficient buzz around them on the interactive medium. Preferred Online Channel to Share Pre-purchase Experience Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 1097) Other 43% 28% 21% 8% Consumer goods review website Company/Brand website Social Platforms Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 1995) Type of Experience Shared Post-Purchase Negative experience Not shared an experience48% 6% 46% Positive experience Online campaigns for durable brands can create engaging experiences for potential consumers and trigger word-of-mouth publicity of huge proportions. Of late, consumer review websites have emerged as major platforms where consumers share durables-related experiences that influence prospective buyers in making purchase related decisions. Preferred Online Channel to Share Post-purchase Experiences Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 1077) Other 39% 32% 23% 6% Consumer goods review website Company/Brand website Social Platforms
  17. 17. 31 Online Buying is Slowly Catching Pace with Online Product Search 79% of online Indians use the internet for product search and 21% online 7 Indians purchase products on the net . While penetration of credit/debit cards in the country is on the rise, typically in urban areas, success of e-commerce depends heavily on product quality assurance and security mechanisms put in place to ensure transaction security. Online shopping or e-commerce hasn't taken off the way it was expected in India owing to a dichotomy in Indian consumers' online buying behaviour. With more than 3 lakh daily online railways tickets bookings and 78% of 8 airline tickets booked online , it is clear that Indians like to avail of travel products/services available online. Online Search to Buy Ratio of Various Products in Consumer Durables Category Source: India Online 2010 Report, Juxt Consult Mobiles phone, PDA & Accessories 73% 27% Cameras & Optics 67% 33% CD/VCD/DVDs 56% 44% Computer Hardware 67% 33% Kitchen Appliances 62% 38% Automobiles (booking) 66% 34% Consumer Electronics 56% 44% Search BuyProduct Category 7 India Online 2010, Juxt Consult 8 International Air Transport Association (IATA) Building Brand Value And Driving Customer Engagement Online
  18. 18. 3332 Trust in online purchase of durable goods can be strengthened through enhanced online presence of marketers providing timely information to consumers and maintaining impeccable standards of product delivery. Taking this a step further, building SEO-friendly web commerce sites which enable ease of use and functionality, encourage consumer reviews and exchange of opinions, integrated with advanced features like real life testimonials from customers through online videos, along with the ability to facilitate cross-product comparisons followed up with excellent customer service and security are vital in promoting the medium. For online buying to work well in India, a real incentive for the consumer has to be attached with the offering and be passed on to the discerning Indian consumer. As internet is the primary source of information for prospective durables goods' buyers, the onus of giving e-commerce the much needed push to become a prevalent trend is critical for marketers more than ever before. Online ticketing sells like hotcakes, but online shopping still hasn't hit tipping point in India. Marketers need to build transparent, self-sustained e-commerce 'communities' that empower consumers and induce trust/confidence Product differentiation in consumer durables is limited to technological innovation and to some extent, style and design. However, the key to building an innovative brand experience lies in targeting the right audiences creatively. Tactful engagement that empowers consumers with more value and choice within their comfort zone through meaningful assets is the first step towards encouraging brand evangelism. A consumer talking about a brand using social media is far more reliable than a marketer shouting about it from a rooftop. Growing popularity of social media, particularly, social networking, and the exponential rise in consumer discussions on them are expected to displace credibility of marketers’ push-based messaging to a large extent. Brands across the world monitor consumer conversations about their products in the cyberspace, terming these as positive, negative or neutral conversations using various methodologies. With international brands making a foray into the Indian market space, it is time for similar tactics to be deployed in India as well. Evidently, in a cluttered marketplace, a marketer should be where customers habituate. A population of 50 million Indians is online, alive and buzzing, scouring for information and engaging in social networking. 19.9 9 million Indians on Orkut and 20.9 million on Facebook aren't just figures; they bear testimony to the fact that these young, urban consumers are online and on a constant lookout for information, interaction, entertainment and engagement. Consequently, with multiple choices existing in the market, the final purchase decision is not based on publicity in traditional media alone, but also on performance-related reviews received from friends and relatives. Participating in such conversations, driving engagement with social currency and amplifying buzz by driving word-of-mouth from influencers is not a choice that marketers may or may not exercise; it is now or never for durable brands to increase sales and profitability and to survive the race to capture a billion strong consumer base in India. Online Engagement Enables Brand Differentiation 9 Comscore, July 2010
  19. 19. 34 Inside the Mind of the 'Wired' Consumer Durables' Buyer scopes the usage and attitude of online durable consumers. The primary purpose of our study was to understand and analyze online Indians' durable goods' buying behavior and the impact of internet in influencing and driving their purchase decisions. To this effect, a sample of 2000 respondents was taken from a panel of consumers belonging to different demographics - age groups, socio- economic classes, locations etc. Primary data was collected by means of a questionnaire. The consumer panel was further classified into current and prospective consumer durable owners and intenders and based on different attributes; their attitude towards the use of internet was mapped. The period of the study was July to September 2010. Demographics Our respondent base was classified into four groups, namely, 19-24 years, 25-35 years, 36-45 years and above 45 years. 86% of the respondents were males and 14% were females. Gender Wise Break-up of Respondents Female 14% 86% Male Base: 1995 Age 19-24 Yrs Age 25-35 Yrs Age 36-45 Yrs Above 45 Yrs 11% 4% 16% 69% Age Wise Break-up 35 Methodology About the Authors Sidharth Rao is the Chief Executive Officer and Co-Founder of Webchutney, India’s leading and most awarded web services company. With over 12 years of industry experience, Sidharth has made a significant contribution in shaping the interactive marketing industry in India. Sidharth leads the 150 people strong organization assisted by an excellent management team across New Delhi, Mumbai and Bangalore. He can be reached at sidharth.rao@webchutney.net Sidharth Rao Shweta Bhandari leads the research team at Webchutney, which publishes thought provoking reports on the state of online in India. She carries a diverse business profile including blue-chip companies like American Express and GE. At Webchutney, she has contributed in writing several research publications such as The Digital Vote Bank, Viral Marketing and more recently the Digital Media Outlook 2009. Her passion for discovery and thirst to engage in new challenges lend immense scope and dimension to this field. She can be reached at shweta.bhandari@webchutney.net Shweta Bhandari
  20. 20. 36 Ankita Kapoor is a Research Analyst at Webchutney. She has completed her MBA in Marketing from ICFAI Business School, Hyderabad. Prior to this, she graduated in Journalism from Lady Shri Ram College, Delhi University. She has interned with 'HPCL-Mittal Energy' (HMEL) and 'Business Standard' during her post graduation and graduation respectively. Her strong analytical and communication skills and deep interest in the field have lent new perspectives to the report. She can be reached at ankita.kapoor@webchutney.net Ankita Kapoor A special thanks to for conceptualising and executing the report design. Sushil Kumar
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