Saturday, March 08, 2008


The Promiscuous Indian Consumer

Of Bellies and bladders

Q: What are the major changes that you have seen in the rural markets in the last decade in terms of size of market?

-Pobbathi Rajshekar, Hyderabad

A: Dear Raj, the rural market has always been a big one for India. Three-fourths of all consumption lies here in sheer population terms. Only less than a quarter of the population lives in urban areas.

The population numbers occupying rural spaces have however shrunk over the last several decades. This is what I call “Creeping urbanization” affecting rural masses in a state of market and habit transition. The rural population, over the decades, has shown a trend wanting to move into a state of gradual urbanization in terms of exposure, habits, life-styles and lastly consumption patterns of goods and services.

In rural areas, we have key issues with the populations that live on and off the land. As the generations go by, land holdings are splintering, with successive generations getting less and less land to farm upon and live off. This is causing for a gradual urge for better life-styles, as seen happening in urban centers. This movement and aspiration is further accentuated by mass media, which today penetrates 98.9% of all areas Urban and rural. This media is not segregated media for urban and rural. This media’s dominant visual, tone and tenor is the urban lifestyle. This is actually making for a salivating generation in rural India that wants to migrate physically, emotionally and aspirationally for sure to the urban mode of living.

Back to the size of the market then. The market size has always been large. The largest numbers of bellies and bladders and indeed every organ part that requires marketing satiation lies in rural India. The size of this market is well over 700 million! All these individuals have needs, wants, desires and aspirations that anyone in Urban India has. The fulfillment of these needs hitherto was on an un-branded commodity format thus far. Today however, there is a rampant craving for the brand offering for a host of needs. This craving is suddenly giving the market a boost as brands find takers in markets that hitherto frowned on the branded produce that lacked value differentiation in their minds.

The size of the market for branded goods and services therefore looks suddenly big.

In sheer comparative terms, the rural market size is exciting by a factor of 1:3 for sure. For every color television set that is demanded in Urban India, three will be demanded in rural India.

The market is a very involved market as well. Not as cynical a market as most modern urban economies where brands are suddenly being seen as entities that do not necessarily pack value. Brands in these urban markets are seen to pack premium, and not necessarily value. Not so in the nascent emerging rural markets of India. Therefore the market size is large, involved and has the potential of packing great marketer premiums for a while to come.

Q: in the recent past, there have been a lot of logo changes. Why do companies change their logos?

-Rajeev Sikka, New Delhi

Rajeev, many, many reasons really. Here are five for a start.

1) One is certainly the need felt to re-define corporate culture within and
without the organization. In such a case, companies suddenly find their
existing logo to be a burden it is carrying. A part of the old heritage of
organization. Something that was thrust on it by a very old founding
management that believed in a different credo altogether.

In such cases, the company believes it must change tack and move away from
the definitions of organizational purpose and reinvent itself. As it
reinvents, it wants to shed the old logo and adopt a new one.

2) Yet another reason is when a company finds a logo too frivolous for the
intent of organization. We must realize that when most old logos were
created (ones that have been around for more than 50 years), the fonts
available were basic and so were the colors. Half tones were not
encouraged, leave alone quarter tones. In the bargain most logos did not
look solid enough and some even had a basic frivolity around them. Companies
therefore want change.

3) And then there are companies which want logos changed when there is a
split of business. This happens mostly in family run businesses. Take
Reliance for instance. The Anil Dhirubhai Ambani Group versus the Mukesh
Dhirubhai Ambani Group. Both need different logos. One inherits it, and
another creates it anew.

4) Companies further want to look contemporary. The Wolf Olins re-creation
for the Tata group was one such effort.

5) Name changes of companies necessitate logo changes as well. A company
that goes for a drastic name change, where it moves away from a generic
sounding name, might call for a logo change as well. Take for instance the
rather hot InfoTech Enterprises based out of Hyderabad. Despite its very
varied and prosperous lines of business, it remains in generic name space
and hence gets reasonably lost in recognition space. If it changes its name
in the near future, it will undergo a logo change as well.

Q: Would you agree that the Indian consumer is more
promiscuous today than ever before?

-JS Manian, Chennai

A: Manian, I think the Indian consumer is certainly more promiscuous than ever before.

In any society promiscuity is essentially polarized between the two
ends. The higher income group at one end, which can afford the best of
brands, and at the other end to the lower income group, which quite doesn't
care as much about brands. The middle income group (the large middle class)
is the most loyal of the lot.

The reason for this promiscuity is the fact that the Indian at large is more
and more exposed to media of every kind that offers the best of range and
variety. The Indian is getting very range-conscious and is getting rather
impatient with brands. The brand experience one wants to secure from brands
is also getting broad-spectrum in appeal. Brands that offer narrow solutions
are getting the raw end of the consumer action that results in dumping of
the said brand.

Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.

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