MUMBAI. MAY 3, 2011 SOCIO-ECONOMIC CLASSIFICATION-2011 The New SEC systemTHE NEW SEC SYSTEM
What is the                     new SEC system?              01                     How do we classify                    ...
01    What is the new    SEC system?3   THE NEW SEC SYSTEM
THE NEW SEC SYSTEM         The new SEC system is used to classify households in India.         It’s based on two variables...
DISTRIBUTION OF HOUSEHOLDSIndia ( urban + rural )     New SEC System                                                      ...
DISTRIBUTION OF HOUSEHOLDSUrban     New SEC System                                                12.9              13.2  ...
DISTRIBUTION OF HOUSEHOLDSRural    New SEC System                                                                         ...
02    How do we classify    a household    in the new SEC system?8   THE NEW SEC SYSTEM
Just two questionsTHAT NEED TO BE ASKED          SHOW CARD/READ OUT    Q1a Please take a look at this list and tell me whi...
RECORDINGThe grid     01                  Items owned / have access at home   Circle   Tick                  Electricity C...
RECORDINGThe grid                                                      Chief Earner: Education (Q2)     02                ...
03What arethe advantagesof the new SEC system?THE NEW SEC SYSTEM
Advantages OF THE NEW SEC SYSTEM              More discrimination as compared with current systems              A single s...
03Are there anydrawbacksto the new SEC system?THE NEW SEC SYSTEM
There are no serious problems. But…             We need to be better prepared to handle minor changes             to the s...
04How did we go aboutcreating the new system?THE NEW SEC SYSTEM
How we created the new system             Extensive analysis based on data drawn from the IRS,             made available ...
The building blocks that were available to us             ‘Demographic’ variables: e.g. occupation of chief earner,       ...
How we arrange the blocks                                  ‘A scoring system called LIFE; which takes                     ...
The basis of measuring the discrimination     We used the Lorenz curve, and the associated Gini coefficient,     as a basi...
05What were theother systemsthat we considered?THE NEW SEC SYSTEM
We’ve evaluated many options             Point based system using          education of highest educated           individ...
06Performanceof the new SEC systemTHE NEW SEC SYSTEM
PENETRATIONNew vs Current system (urban)                           New SEC system                                         ...
PENETRATIONNew vs Current system (urban) (CONTD.)                                     New SEC system                      ...
PERFORMANCE ON DISCRIMINATIONIndia ( u + r )Gini coefficients for New SEC system compared with benchmark                  ...
PERFORMANCE ON DISCRIMINATIONIndia ( u + r ) (CONTD.)Gini coefficients for New SEC system compared with benchmark         ...
GINI CO-EFFICIENTSUrbanGini coefficients for New SEC system compared with benchmark                                       ...
GINI CO-EFFICIENTSUrban (CONTD.)Gini coefficients for New SEC system compared with benchmark                              ...
GINI CO-EFFICIENTSRuralGini coefficients for New SEC system compared with benchmark                                       ...
GINI CO-EFFICIENTSRural (CONTD.)Gini coefficients for New SEC system compared with benchmark                              ...
PERFORMANCE ON DISCRIMINATIONConclusion            The new SEC system is better than the current            urban system ,...
PERFORMANCE OF THE SYSTEMHomogeneity within the grade : India (u + r)           MHI System                                ...
PERFORMANCE OF THE SYSTEMHomogeneity within the grade : Urban India              Current SEC System                       ...
PERFORMANCE ON HOMOGENEITYConclusion            The new SEC system is able to reduce            heterogeneity within socia...
07ConclusionTHE NEW SEC SYSTEM
In Conclusion            We have a system that is simple, easy to administer. It            gives us good discrimination; ...
Thank You38   THE NEW SEC SYSTEM
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New SEC System in India

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With a view to keep pace with the fast-evolving economic outlook, consumer attitudes and preferences in the country, the Media Research Users' Council (MRUC) and Market Research Society of India (MRSI) have jointly launched a new socio-economic classification system.

The new SEC will help marketers understand the Indian consuming class and also identify segments that have high consuming potential.

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New SEC System in India

  1. MUMBAI. MAY 3, 2011 SOCIO-ECONOMIC CLASSIFICATION-2011 The New SEC systemTHE NEW SEC SYSTEM
  2. What is the new SEC system? 01 How do we classify a household in the new SEC system? 02 What are the advantages/ drawbacks of the new SEC system? 03 How was the new SEC system created? 04 What are the other systems that we considered? 05 What is the performance of the new SEC system? 06 Conclusion 07THE NEW SEC SYSTEM
  3. 01 What is the new SEC system?3 THE NEW SEC SYSTEM
  4. THE NEW SEC SYSTEM The new SEC system is used to classify households in India. It’s based on two variables: • Education of chief earner • Number of “consumer durables” ( from a predefined list)- owned by the family. The list has 11 items, ranging from ‘electricity connection’ and ‘agricultural land’- to cars and air conditioners We have 12 grades in the new SEC system, ranging from A1 to E34 THE NEW SEC SYSTEM
  5. DISTRIBUTION OF HOUSEHOLDSIndia ( urban + rural ) New SEC System 18.4 14.7 15.4 11.4 9.7 7.5 7.9 5.3 4.3 3.2 1.8 0.4 A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3 *Figures in percentage This round of analysis has been conducted using data from IRS 2008 (round 20)*. We have drawn a sub-sample of 39,4415 THE NEW SEC SYSTEM
  6. DISTRIBUTION OF HOUSEHOLDSUrban New SEC System 12.9 13.2 12.6 11.6 10.2 9.8 8.6 7.6 5.1 4.7 2.6 1.1 A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3 Current Urban SEC system The current urban SEC system has 8 grades, 24 and is based on occupation and education of 20.5 chief earner 18.2 11.9 7.9 8 6.6 2.8 A1 A2 B1 B2 C D E1 E26 THE NEW SEC SYSTEM
  7. DISTRIBUTION OF HOUSEHOLDSRural New SEC System 22.2 20.1 15.6 12.8 10.7 6.2 5.1 2.3 3.2 0.4 1.3 0.04 A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3 Current Rural SEC system 43 The current rural SEC system has 4 grades, 40.3 and is based on education of chief earner and material used in construction of dwelling 12.3 4.3 R1 R2 R3 R4 THE NEW SEC SYSTEM 7
  8. 02 How do we classify a household in the new SEC system?8 THE NEW SEC SYSTEM
  9. Just two questionsTHAT NEED TO BE ASKED SHOW CARD/READ OUT Q1a Please take a look at this list and tell me which of these items do you have at home? (It could be owned by you, your family, or provided by the employer or it could be available in the house you live in; but it should be for the use of just you or your family) EXPLAIN, IF NECESSARY: We have a standard list of items that we use in all kinds of cities and villages. So don’t worry if an item appears irrelevant for you, or too ordinary- just go ahead and tell me which items you do have. We need this information just for survey purpose only. Do you have a…(ITEM) in your home (which is in working condition)? CIRCLE ITEMS OWNED/HAVE AT HOME. TICK THE ITEM IF OWNED. ADD THE NO. OF TICKS IN THE BOX. Q1b Does your family own any agricultural land, by agricultural land I mean land that is currently under cultivation or plantation? SHOW CARD/READ OUT Q2 Could you tell me something about the person who makes the biggest contribution to the running of the household. To what level has he studied? RECORD IN GRID. USE GRID TO DETERMINE NEW SEC.9 THE NEW SEC SYSTEM
  10. RECORDINGThe grid 01 Items owned / have access at home Circle Tick Electricity Connection 01 √ Ceiling Fan 02 √ LPG Stove 03 √ Two Wheeler 04 √ Colour TV 05 √ 1a Refrigerator 06 √ Washing Machine 07 Personal Computer/ Laptop 08 Car/Jeep/Van 09 √ Air Conditioner 10 1b Agricultural Land 11 √ NUMBER OF STANDARD 11 OWNED 810 THE NEW SEC SYSTEM
  11. RECORDINGThe grid Chief Earner: Education (Q2) 02 Literate Some but no Graduate/ College Graduate/ No. of formal Post School- 5 (incl a Post Illiterate schooling/ SSC/ HSC Graduate: Durables to 9 years Diploma) Graduate: School- Profession (TRANSFER but not General Upto 4 al FROM Q1) Grad years 1 2 3 4 5 6 7 None E3 E2 E2 E2 E2 E1 D2 1 E2 E1 E1 E1 D2 D2 D2 2 E1 E1 D2 D2 D1 D1 D1 3 D2 D2 D1 D1 C2 C2 C2 4 D1 C2 C2 C1 C1 B2 B2 5 C2 C1 C1 B2 B1 B1 B1 6 C1 B2 B2 B1 A3 A3 A3 7 C1 B1 B1 A3 A3 A2 A2 8 B1 A3 A3 A3 A2 A2 A2 9+ B1 A3 A3 A2 A2 A1 A111 THE NEW SEC SYSTEM
  12. 03What arethe advantagesof the new SEC system?THE NEW SEC SYSTEM
  13. Advantages OF THE NEW SEC SYSTEM More discrimination as compared with current systems A single system for urban and and rural India Less subjectivity- as we no longer use occupation It’s simple - easy to answer, not very time consuming, easy to classify13 THE NEW SEC SYSTEM
  14. 03Are there anydrawbacksto the new SEC system?THE NEW SEC SYSTEM
  15. There are no serious problems. But… We need to be better prepared to handle minor changes to the system, because “consumer durables” penetration will change faster than education or occupation The questioning can appear intrusive to people who are unaccustomed to market research. It’s not a problem elsewhere15 THE NEW SEC SYSTEM
  16. 04How did we go aboutcreating the new system?THE NEW SEC SYSTEM
  17. How we created the new system Extensive analysis based on data drawn from the IRS, made available by the MRUC- various rounds, from 2005 to 2008 Have also drawn on data from MarketPulse, IMRB’s Household panel, supplemented by a special survey17 THE NEW SEC SYSTEM
  18. The building blocks that were available to us ‘Demographic’ variables: e.g. occupation of chief earner, education of chief earner, education of housewife, claimed monthly household income Dwelling type and amenities: e.g. construction material, tap, bathroom, number of rooms Ownership of consumer durables18 THE NEW SEC SYSTEM
  19. How we arrange the blocks ‘A scoring system called LIFE; which takes into account whether a household owns or uses a wide-ranging products ranging from material of wall, roof, mode of transportation, use of toilet soap, use of ghee, biscuits, etc. The LIFE score is used to decide the order of groups defined by two or more In all we used 34 items: giving weights in variables inverse proportion to usage/ownership19 THE NEW SEC SYSTEM
  20. The basis of measuring the discrimination We used the Lorenz curve, and the associated Gini coefficient, as a basis for measuring discrimination or inequality We assume that the system that throws up more inequality is more discriminating. In other words, the system that shows a bigger difference in ownership/consumption between the top half and the bottom half is the better one20 THE NEW SEC SYSTEM
  21. 05What were theother systemsthat we considered?THE NEW SEC SYSTEM
  22. We’ve evaluated many options Point based system using education of highest educated individual, press exposure of A system based on housewife, and ownership of occupation and education of durables plus other aspects chief earner and the number of consumer durables owned A system based on and education of chief earner and the “best type” of consumer durables owned22 THE NEW SEC SYSTEM
  23. 06Performanceof the new SEC systemTHE NEW SEC SYSTEM
  24. PENETRATIONNew vs Current system (urban) New SEC system Current urban SEC system Have internet access at home Have internet access at home 60 54 60 50 50 40 40 30 30 19 20 20 13 9 10 5 10 4 2 0 0 0 0 0 0 0 0 2 1 0 0 0 0 0 A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3 A1 A2 B1 B2 C D E1 E2 Household subscribe any Newspaper Household subscribe any Newspaper 100 96 100 90 82 90 84 80 80 71 68 70 70 60 54 60 56 50 50 43 38 40 40 30 30 23 30 20 15 12 20 13 10 10 5 2 3 10 3 1 0 0 A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3 A1 A2 B1 B2 C D E1 E224 THE NEW SEC SYSTEM MRUC/Hansa Research –IRS 2008 (round 20)
  25. PENETRATIONNew vs Current system (urban) (CONTD.) New SEC system Current urban SEC system Receive Cable & Satellite Receive Cable & Satellite 98 100 92 90 100 90 85 83 90 86 84 80 80 80 74 80 76 69 70 70 58 60 49 60 49 50 50 40 35 40 33 30 30 16 20 20 10 5 10 1 0 0 A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3 A1 A2 B1 B2 C D E1 E2 Purchased in Past 6 Months - Ketchup / Sauces Purchased in Past 6 Months - Ketchup / Sauces 80 72 80 70 70 60 53 60 55 50 50 37 40 40 40 28 30 23 30 19 19 16 20 13 20 9 7 9 7 10 5 5 3 10 5 2 0 0 A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3 A1 A2 B1 B2 C D E1 E225 THE NEW SEC SYSTEM MRUC/Hansa Research –IRS 2008 (round 20)
  26. PERFORMANCE ON DISCRIMINATIONIndia ( u + r )Gini coefficients for New SEC system compared with benchmark PenetrationOwn Microwave oven 0.4Own Internet access at home - Through PC / TV 0.7Own PC at home 1.6Own Camera (still/ digital) 3.5Housewife have read a magazine in the last 7 5.8daysOwn DVD player 6.8Own Kitchen Sink 8.2Own - Mobile / Cellular Phone 12.4Own Telephone 12.6Receive Cable & Satellite 31.2Own Pressure cooker 37.0 0 0.2 0.4 0.6 0.8 1 New System Gini Values Benchmark System (MHI) Data Source: MRUC/ Hansa Research - IRS 2008 (Round 20)26 THE NEW SEC SYSTEM
  27. PERFORMANCE ON DISCRIMINATIONIndia ( u + r ) (CONTD.)Gini coefficients for New SEC system compared with benchmark Penetration Jam 3.3 Ketchup / Sauces 5.3 Chocolates 6.6 Instant Noodles 6.7 Floor Cleaners 11.6 Toilet Cleaners 14.1 Soft drinks/Fruit Juices 15.8 Skin Creams/Lotions 21.4 Utensil cleaners 29.7 Fabric whiteners / blues 49.8 Toothpaste 57.7 Shampoo 75.1 Bathing Soaps / Liquid Soaps 95.8 0 0.2 0.4 0.6 0.8 1 New System Gini Values Benchmark System (MHI) *Purchased in the last 6 months except soft drinks, skin creams and chocolates Data Source: MRUC/ Hansa Research - IRS 2008 (Round 20)27 THE NEW SEC SYSTEM 27
  28. GINI CO-EFFICIENTSUrbanGini coefficients for New SEC system compared with benchmark Penetration Own Microwave oven 1.0 Own Internet access at home - Through PC / TV 1.9 Own PC at home 4.5 Own Camera (still/ digital) 8.5 Housewife have read a magazine in the last 7 days 12.7 Own DVD player 15.7 Own Kitchen Sink 20.9 Own Telephone 23.8 Own - Mobile / Cellular Phone 25.9 Receive Cable & Satellite 60.0 Own Pressure cooker 69.6 0 0.2 0.4 0.6 0.8 1 Gini Values New System Current System Data Source: MRUC/ Hansa Research - IRS 2008 (Round 20)28 THE NEW SEC SYSTEM 28
  29. GINI CO-EFFICIENTSUrban (CONTD.)Gini coefficients for New SEC system compared with benchmark Penetration Processed Cheese/Cheese Products 4.1 Jam 8.9 Ketchup / Sauces 15.2 Chocolates 15.4 Instant Noodles 17.4 Soft drinks/Fruit Juices 28.3 Floor Cleaners 30.2 Skin Creams/Lotions 30.6 Toilet Cleaners 32.0 Utensil cleaners 59.9 Fabric whiteners / blues 60.1 Toothpaste 80.8 Shampoo 84.9 0 0.2 0.4 0.6 0.8 1 New System Gini Values *Purchased in the last 6 months except soft drinks, skin creams and chocolates Current System Data Source: MRUC/ Hansa Research - IRS 2008 (Round 20)29 THE NEW SEC SYSTEM 29
  30. GINI CO-EFFICIENTSRuralGini coefficients for New SEC system compared with benchmark Penetration Own Microwave oven 0.1 Own Internet access at home - Through PC / TV 0.1 Own PC at home 0.3 Own Camera (still/ digital) 1.3 Own Kitchen Sink 2.7 Housewife have read a magazine in the last 7 days 2.8 Own DVD player 2.8 Own - Mobile / Cellular Phone 6.6 Own Telephone 7.6 Rural Assets - Table Fan 13.4 Receive Cable & Satellite 18.6 Own Pressure cooker 22.8 Rural Assets - In-house toilet 30.9 0 0.2 0.4 0.6 0.8 1 New System Gini Values Current System Data Source: MRUC/ Hansa Research - IRS 2008 (Round 20)30 THE NEW SEC SYSTEM 30
  31. GINI CO-EFFICIENTSRural (CONTD.)Gini coefficients for New SEC system compared with benchmark Penetration Instant Noodles 2.1 Chocolates 2.8 Floor Cleaners 3.5 Toilet Cleaners 6.2 Soft drinks/Fruit Juices 10.4 Utensil cleaners 16.5 Skin Creams/Lotions 17.4 Fabric whiteners / blues 45.3 Toothpaste 47.6 Shampoo 70.8 Biscuits 73.2 0 0.2 0.4 0.6 0.8 1 Gini Values New System *Purchased in the last 6 months except soft drinks, skin creams and chocolates Current System Data Source: MRUC/ Hansa Research - IRS 2008 (Round 20)31 THE NEW SEC SYSTEM
  32. PERFORMANCE ON DISCRIMINATIONConclusion The new SEC system is better than the current urban system , and much better than the current rural system32 THE NEW SEC SYSTEM
  33. PERFORMANCE OF THE SYSTEMHomogeneity within the grade : India (u + r) MHI System New SEC System Distribution of Inter Quartile Distribution of Inter Quartile Level Median LIFE Level Median LIFE Households % Range (IQR) Households % Range (IQR) 1 0.5 702 186 A1 0.4 804 116 2 1.5 618 236 A2 1.8 687 150 3 4.2 514 243 A3 3.2 590 173 4 3.5 455 236 B1 4.3 494 172 5 4.7 391 227 B2 5.3 430 164 6 7.1 347 207 C1 7.5 369 142 7 11.7 289 178 C2 7.9 319 124 8 19.3 232 155 D1 11.4 270 117 9 19.2 181 139 D2 14.7 222 106 10 13.5 136 110 E1 18.4 164 90 11 12.9 125 111 E2 15.4 117 75 12 2.1 95 101 E3 9.7 80 65 THE NEW SEC SYSTEM Median LIFE (Urban + Rural): 220
  34. PERFORMANCE OF THE SYSTEMHomogeneity within the grade : Urban India Current SEC System New SEC System Distribution of Inter Quartile Distribution of Inter Quartile Level Median LIFE Level Median LIFE Households % Range (IQR) Households % Range (IQR) SEC A1 2.8 702 189 A1 1.1 807 106 SEC A2 6.6 616 225 A2 5.1 704 132 SEC B1 A3 7.6 610 147 7.9 539 215 B1 8.6 532 158 SEC B2 8.0 467 221 B2 10.2 463 158 SEC C 20.5 408 210 C1 12.9 399 136 SEC D 24.0 320 167 C2 11.6 347 118 SEC E1 11.9 280 155 D1 13.2 300 113 SEC E2 18.2 212 137 D2 12.6 251 100 E1 9.8 194 92 E2 4.7 148 93 E3 2.6 112 8034 THE NEW SEC SYSTEM Median LIFE (Urban India): 354
  35. PERFORMANCE ON HOMOGENEITYConclusion The new SEC system is able to reduce heterogeneity within social grade- and stretch the differences by grade35 THE NEW SEC SYSTEM
  36. 07ConclusionTHE NEW SEC SYSTEM
  37. In Conclusion We have a system that is simple, easy to administer. It gives us good discrimination; the social grades created are more homogenous But we do need to revisit the system at least once every two years; and make sure that when a change is needed, this is a smooth process It’s easy to begin using the new system. For those who need to keep track of the old SEC for reasons of comparability, the new system means just one more question- which can be tagged on right at the end.37 THE NEW SEC SYSTEM
  38. Thank You38 THE NEW SEC SYSTEM

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