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In current markets, the importance of establishing a dialogue between the brands and its customers has received increased response. Any firm tries to target marketing communication to specific households within the predefined segments. In this approach, apparent consumer demographic information is used to establish homogeneous segments. But typically, the conditions for successful brand building are not identical across categories. It depends on more than a few factors such as customers’ predispositions toward brands, the firm’s own management capabilities, and activities by competitors. Customers’ inclination toward brands is particularly important. Comprehending more about a brand’s customer-mix and how that mix changes in response to the environment is imperative for marketers.
India’s being the second fastest growing economy with a huge consumer class has resulted in the high growth of consumer durables industry. With stimulating income levels, easy terms of finance, increasing consumer awareness and introduction of new products and models, the demand for consumer durables has been steadfast and is expected to be the same for the ensuing decades. According to a report by McKinsey (2007), the total consumption in India is likely to quadruple by 2025. India ranks first with 131 index points in the global consumer confidence survey (Nielsen, 2011). India has the youngest population in different income clusters. Around two-thirds of its population are below the age of 35, and nearly 50% are below 25. There are 56 million people in the middle class who are earning $4,400-$21,800 a year. Besides the steady growth, changing lifestyles and disposable income resulting in greater affordability have been causing a fundamental change in the Indian consumer behavior. A study by PricewaterhouseCoopers (PwC) and Federation of Indian Chambers of Commerce and Industry (FICCI), for the National Manufacturing Competitiveness Council (NMCC), points out that with its favorable demographics and untapped market potential, India is emerging as an attractive market for consumer durables (NMCC, 2009). The quarterly report provides sectoral insights based on the financial performance of the Indian economy. The financial pulse study, published by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) Research Bureau during 2010 forecasted that the Indian rural markets would witness a 40% growth in the fiscal 2011-12 as against 30% during 2010-11. The study further revealed that around 35% of the total sales of consumer durables come from rural and semi-urban markets, which is expected to grow by 40% to 45% in the near future. The progressively growing market for consumer durables was estimated at 300 bn at present and will reach 500 bn by 2015. The urban consumer durables market is growing at an annual rate in the range of 9% to 12%. About 70% of the large consumer class resides in the rural and semi-urban areas. This will lead to an explosion in the demand, the way it happened in the urban markets in the mid-1990s (Ravish, 2010).
Despite the high growth rate, the penetration level of consumer durable categories is still very low relative to the size of the Indian market. The report by RNCOS (2010) finds that the penetration level of many appliances was very low. For example, the usage of refrigerator stands at around 18%; washing machine 6%; microwave oven about 1% and air-conditioner less than 2%. The low penetration of these products unveils a rewarding untapped market. Further, established brands account for a meager 10% of the total consumer goods market in India, while organized retailing is only around 2% of the total industry. Though branded products are perceived to be costlier than the non-branded products, the penetration of branded products is increasing (KPMG, 2008). This enumerated shift makes it imperative that sound understanding of the consumer profile is an urgent need for the marketers. With rising input costs and other environmental factors continuously putting pressure on margins, the competition among the consumer durable brands is building up in India. Effective marketing not only creates new and bigger markets, but also enables the firms to reduce cost, enhance demand and eventually achieve economies of face. Therefore, it is essential for marketers to keep an invariable watch on markets to face new challenges and convert them into gainful opportunities.
In fact, the Indian market is a compilation of unique little markets, each with its own set of standards. Therefore, the problem that businesses need to respond to is: ‘What is my target India?’ Understanding change in India and making sense of it is pretty complex because of the way India changes. It morphs almost like a huge mass moving with a small acceleration. Rama (2010) quibbles that consumer demand in India was like the curate’s egg—always good, but only in parts. It is a complex aggregation of the demand of the many ‘mini-Indias’ each of which blossoms and withers according to its own seasons and reasons. S L Rao, the former head of National Council for Applied Economic Research (NCAER) described the consumer demand in India as the walk of a drunken man. Businesses need to invest according to the pattern of the walk, which actually is not impractical, if one were to take a more coarse approach to understanding it as the sum of its many parts. Companies must be ready to digest the reality that their contributing consumer segment would shift recurrently (Rama, 2010).
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