Want to know what is inside the Indian consumer’s mind and wallet? Go through Dheeraj Sinha’s book ‘Consumer India’ that talks about not just the changing Indian culture but also what implications it has had on marketing strategies of brands and media. Dheeraj Sinha - Regional Planning Director, Bates 141, also points out opportunities in the new segmentation of India and finely reads the growth of small town and rural markets. He speaks with IMPACT’s Dipali Banka about marketing opportunities in current scenario and ways to bring in categories like mass premium products and real youth brands. Excerpts:
Q] In your book ‘Consumer India - Inside the Indian Mind and Wallet’ you have written in depth about the changing Indian consumer, the changing media and marketing practices and the shift in consumer segmentation. Can you broadly share your observations on the changing consumer behaviour and evolution of brands in India?
If we look at broader changes taking shape in India, which the book also talks about is this whole uprising of the rural Indian consumer. Now everybody is talking about the rural India growth but what we have discovered, which is unlike the way people see rural India, is that it is not so much functionality driven. Rural India is not only price and value driven as people think, but it is also status and imagery driven. The desire for lifestyle upgradation, participation in brands and products which not only give value for money but also give a certain sense of imagery, is as sharp in rural India as it is in urban India and therefore products and brands which are devised for that market need to take note of that. Take the example of Tata Nano, the fact that it has been branded as a cheap car has not gone too well because in India when you buy a car, you buy status. Nobody wants to buy a car and say that they have bought the cheapest car.
The other aspect that I have talked about is the segmentation of India in three segments: Partition generation (45-64), Transition generation (25-44), and, No strings generation (15-24). India today is typecasted as being young, big and growing country but we are forgetting the partition generation, which in my mind is a huge market and not many marketers are trying to target them overtly. Most brands in India today want to look young and want to portray a youthful imagery whether it is a bank, insurance or apparel brands. There are a few brands like Kesari Tours that run special tour packages for senior citizens called Second Innings; LIC which is coming up with homes which are made for elderly population with community kitchen, hospitals and campuses around the campus and things like that. So there are some brands that are waking up to this opportunity but to my mind there is a huge opportunity waiting to be tapped in many other categories. I think that is the second missed opportunity in our country.
The third missed opportunity I think is the premium segment in the youth category. There are young people getting jobs, earning fat salaries and starting new ventures. They have enough disposable income and are ready to buy premium products. This is again a very big segment which not too many people have overtly targeted. The entire apparel and clothes market for youth is pretty much limited to Sarojini Nagar in Delhi and Linking Road in Mumbai. There are no pure cool youth brands which are trying to capture this unorganised market.
The other idea is what I call ‘access brands’, which make their category accessible to the consumer segment in the lower markets, for example, Kakaji Namkeen, Balaji Wafers, Action Shoes etc. These brands do not create their own categories but emulate the imagery created by the category leader and are parasitic in that sense. The price-value equation is a critical component of the access brand strategy. It is important not to view these brands as mere rip-offs of their premium counterparts. These brands have all the ingredients of branding like they deliver certain consistency, have applied for a brand name, have certain quality and price value equation but they do not do spend in building their brand imagery.
Apart from these it is important to note that every media in India needs to delivers three things- pleasure, platform and purpose. So even news in India has to be far more interesting than what it was in the times of Doordarshan. At the same time even GECs have to come up with programmes that provide a certain platform to change people’s lives. The third big leg of media is the idea of purpose where lots of national newspapers and television channels have almost done a re-trial of cases that were earlier closed by the Supreme Court. If judiciary, democracy and legislature are seen as three pillars of India, I am sticking my neck out and saying that media is becoming the fourth pillar, pretty much.
Q] You mentioned about rural India being not just about functionality but also about aspirations and creating a new lifestyle. You have also mentioned in the book about the changing shape of Indian market from a pyramid to a potbellied with the middle segment occupying the maximum chunk. Keeping this in mind, can we have a mass brand that has a premium offering?
The argument is that there is a certain zone of credible stretch. Within that zone Indian consumers are willing to have both mass and relatively premium offering from that brand. If you look at brands like Big Bazaar, they have a shirt for Rs 250 which is targeted at the lower segment while they also have exotic pastas or expensive chocolates for premium middleclass housewives. So between the bottom end of the premium class and the top end of the middle class you can seamlessly stretch and have a relatively mass offering and a relatively premium offering. LG has been successful in smaller refrigerators to the completely frost-free refrigerators. When you jump the next level say D segment cars, super premium houses or super premium clothing, the mass brand cannot stretch.
For that you would need newer and different brands and that is the reason, for example, that Big Bazaar can never get into a super premium sort of retail space as a brand. That is where the credible stretch ends but within that range a lot of brands can straddle between being a mass and premium.
Q] Many brands are undergoing a makeover these days and reinventing themselves as a young brand. In such a scenario what about the brands that are already mature or not so young?
I have been saying that in my book and I say it again that India is not only a young country. It almost looks like in the last 15-20 years we have been vengefully working against any shade of grey in the country. If you look at the entire advertising narration in India today, it is all painted in the colours of youthfulness. There is no old protagonist in any advertisement in India, unless he is been lampooned upon or is being made fun of.
I think some brands have become really desperate because if you look at Indian market, there is a significant middle aged population which has the money and are willing to spend. Their mindset is also opening up with all the new stimulus and choices coming in. A brand like Bata would find it very difficult to revive itself as a young brand but they can definitely have a huge equity in the middle-aged plus segment. So there are many categories and segments where brands do not need to follow the trend of looking young.
Q] In your paper on youth marketing you have mentioned that the Indian market is only 10-15 years old and that the entire population is youthful. When every brand is targeting at this youthful India, how can one build real youth brands targeting the 15-20 age group?
I think the first big milestone that marketers need to cover is to be clear of wanting to build a brand for youth or wanting to build a young looking brand. To my mind there are many young looking brands in India but very few youth brands. If you look at the top three telecom brands, they are all young looking but none of them targets youth with any specific features. They are not even speaking the language that the real youth would want to see. If you look at their brand ambassadors, they have people like Shahrukh Khan, Aamir Khan, etc who are all 45 plus. So the whole point is that India being a country of young people is actually run by people who are in the age of 45-50. Most brands have taken the easier way by targeting the mindset of youthfulness which will appeal to 22-year olds as much as it will to 50-year-olds. To my mind that is the biggest enemy of building real youth brands.
Q] But it seems to be working for the brands, right?
It is working for them till the point that there are not any sharp youth brands that are coming and taking shares away from them. If you look at the telecom category, Virgin is the brand which is speaking far more sharply to the youth mindset and once it begins to do that more consistently and has a similar backing in terms of product features and all of that is available in the market, you will see the youth market getting fettered away from larger players. And that can be done in any category.
Some of the brands are realising that they need to back real youth rather than being youthful. That is one change which is already happening in the market, for example, Pepsi, Levi’s etc. For the last fifteen years India has not been in a stage where segmenting would have happened. We are now entering a space where segmentation will begin to happen and marketers who do not decide their fine target segment will be caught in the middle.
Q] By co-creating brands with the youth, does the positioning of the brand get affected? How does the ‘meeting the requirement’ equation work?
If you look at the Indian youth today, they have everything-- right from money, friends, courage and confidence. So in marketing and advertising when you sit down and ask --what is the one single good need that I am fulfilling for this generation-- you will realise that there aren’t any needs that can be fulfilled for them. And liberation and empowerment are favourite points that marketing and advertising people want to include in their plan, but today’s youth has all of them. And a brand needs to look at youth more from their perspective rather than the brand’s side. It is not about what we want to give them, but about what they want and it will only happen when brands and products are built by involving them in the whole process.
The second big difference has to be made in the way you position the brand. We should not position the brand saying that it fulfils a particular need in their lives. For youth, we have to say this is how we’ll become part of their lives and become their partners. Therefore the kind advertising and voice will always have to be from their side rather than the brand side.
Q] Considering that Indian market has seen liberalisation only recently, every other country would have gone through this phase. In such a case, can we compare India’s model with any other market in the world and gauge the next shift?
Unfortunately no, and that makes the job of marketers and advertisers far more challenging. The closest example possible could be China because we are on the similar growth pattern. Not in terms of absolute size but in terms of patterns or the kind of culture that we come from. But having said that, there are lot of areas in which the China-India similarity ends. India story is more people driven whereas China story is policy driven. India is growing because of purchase demand and they are forcing the government to make necessary policy changes while in China it is the other way round.
We have certain similarities within Asian economies. Indonesia for example is on a similar path. It is on a high growth rate and is handling similar issues that India did five to six years back. But unfortunately there is no single role model as to how India will shape up in time to come. The positive point however is that since we have seen the growth pattern since the last twenty years of liberalisation it is not so difficult to project it in future. Ten years back, it would have been rather more difficult to project how it will shape up.
Q] What shift in consumer behaviour will we see in the next five to ten years?
I think one of the big shifts that we will see in the next five years is related to this 200 million population under the age of 30 years. Brands should realise that five-ten years from now marketing and advertising will have to appeal to this mindset. So rather than having one stick in tradition and one in modernity, things will have to be far more modern and discontinuous than what we have seen till now.
The Current middle class market will mature and as the formula for success today is size, scale and visibility, in the next five to ten years the idea of differentiation will begin to play a larger role. Today people do not differentiate between an LG and Samsung or a Vodafone or an Airtel, but going forward people will begin to understand the difference between brand A and B. Thus brands will have to have a sharper segmentation. Thirdly, far more number of people will join the Indian middle class and our growth story will become far more inclusive. It will also mean that a huge chunk of people will be added to the entry level band.
Q] What are the key points that a marketer should keep in mind while putting together a brand strategy?
I think the first and foremost point is that they need to be aware that the Indian market is not a big party where one can launch any product or brand and get market share, especially if you are trying to play a nation-wide game. I think what is important in India is a sense of scale because here scale is decoded as commitment. Take the case of the brand Volkswagen. The fact that they have launched with such a huge advertising budget and so many models, the consumers in some way decode that these guys are here with a certain amount of seriousness. Brands like Tata Docomo toppled the category in a very short span of time with its scale and presence. So, for entering in any category in India you need that kind of energy to be able to play that game. You cannot enter a big category and create a big wave with small budgets or with one or two models and not enough product innovations.
Another thing to keep in mind is that if you do not have the resources to play a nation-wide game, then select your segment. Build a brand or product for a specific market, for example the premium segment and then make your resources optimal.
Second big point is that Indian consumers seek an excellent combination of a product at a surprising price and a good imagery or status brand. It doesn’t matter if it is an international brand or a national brand. They have to build an imagery around the brand and not forget the idea of status around it. Brands like LG, Samsung and Hyundai have done a really good job in India despite the fact that they do not have any background with the Indian consumer.
Third thing which is going to become far more important in few years is the idea of post purchase service. We grew at a tremendous pace very rapidly and sold millions of mobile handsets, television sets, refrigerators, cars, etc. but the infrastructure to service them hasn’t stepped up. For success in tomorrow’s India I would imagine that even before you start selling your product, you need to have a wholesome service support ready because tomorrow’s India will be less forgiving on those fronts than what today’s India is.
Q] From an agency’s perspective, is the rapid pace of consumption and adoption of media outpacing agency’s ability to provide clients with good creative utility and services?
It is always fashionable at conferences and forums to come and put a slide which says that agencies are dead or account management is dead. It just catches a lot of eyeballs. It is far more fashionable than it is real. If you look at the fundamental business of an agency, it is understanding people and creating ideas which appeal to those people. I do not think that in next twenty years at least this is going to go out of fashion. Brands will still need newer ideas and sharper understanding of people. I am not saying consumers, but people because entertainment is becoming a big part of how brands are being constructed.
So, yes, new media is coming up in a big way and consumers are engaging with brands in ways far different than they used to twenty years back. But we will still need fresh ideas, we will still need content whether it is on television in terms of advertising or internet in terms of banner ads. Having said that, mass media in India is not going to go away in the next 10-15 years for sure. A huge population still doesn’t have access to television right now. By the time they have access to television and they start consuming mass media, it will at least be next 10-15 years.
Q] Do you think resources of traditional advertising and that of digital media should be clubbed into one?
I think that is also beginning to happen in the newer media space. If you look at the new media departments, the digital departments, as they are called today, their growth is far more blurred than the traditional agencies. You do not know who is actually a digital planner, who is the digital agency or the digital buyer. So in some way we are seeing them come together. I do not know if that will ever happen in the main stream business because that is more a function of the way advertising business and players are structured. So I do not think that will ever allow that system to come back.
