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Consumer Behaviour: Market Segment (Settlers)

Introduction:

India is big country with 28 states, over one billion people and 120dialects/languages.

From the market perspective, people of India comprise different segmentsof consumers, based on class, status, and income.

An important and recent development in Indias consumerism is theemergence of the rural market for several basic consumer goods. Three-fourths of Indias population lives in rural areas, and contribute one-third ofthe national income. This rural population is spread all over India, in closeto 0.6 million villages.

Among the total 164.8 million households in India, 80.7 million households

comes under low income group ( US$

2465).

Characteristics Of The Indian Settlers

In Inidia, the higher income group (>US$2,465) spends more amount

of their income on luxury goods and trendy products than factmoving products.

The middle income group (US$1,162 US$1,190) spends more onconsumer expendables than the rich.

Combined the middle and the lower income group provide 60 percent of the value of the Indian market.

The middle aged middle class market is growing at a neck breakingspeed. They are now more technology conscious and net savvy. Abrand new class called Cyber seniors are emerging, wherein theseniors are no longer left out.

They are now being the target of many marketers and are nowforming new segment wherin hotels, resorts and spas are the newaddition in this genre. Companies like Club Mahindra, SOTC, andother popular tours and travels are targeting this class.

Even hotels offer several packages for a Second honeymoonwherein this segment is being tapped.


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The parent hood and the post parent hood are the two segmentswhich are now buzzing with a lot of activity, and hence forming a newopportunity for marketers too.

Older consumers tend to use television as an important source ofinformation

They favor programs that provide the opportunity to keep up withwhats happening, especially news and public affairs.

Raj (50 years) always had a dream of becoming a crorepati throughout hischildhood. He struggled hard during his teenage years, and got admission

in an engineering college. Throughout his childhood he dabbled between

the things which he wanted and the things which he couldnt buy. Choices

were limited as his father was employed in a government firm while his

mother was a typical housewife. Limited resources had to be shared

between other 2 siblings also. Finally when he got a well payed job in a

reputed software firm the time had arrived to live his dream. Juggling

between 6 jobs and 4 cities now he lives in a posh locatlity in south Mumbai

with his wife simran ( 45 years) and 2 kids Rajeev ( 22 years) and Reema

( 18 years).

The typical life of Raj is now centered around his children Rajeev and

Reema. The priorities now shifting towards Raj planning to study an MBA

from USA and Reema doing her fashion designing course from france. He

has his responsilbitiles of thinking about his old parents ( who live

seperatley in nearby locatlity). Now is the time for redeeming his savings

for his childrens further studies and also their marriage. Meantime Simran

also has a stable job as a lecturer in a local college. That is why they were

able to manage to pay the house EMIs and car loans, as also indulge in

yearly vacations. Now the time has also come to start planning for

retirement and post retirement savings.

He is planning to buy a bigger car for his family needs. The buying

behaviour this time will be influenced by his spouse but more importantly

his children who now influence in most of the family decisions. Raj also

goes ahead and listens to the advice of his children because he


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understands that his children are more advanced in technology and more

aware of the latest developments. Hence the typical upper middle class

consumer in the age group of 40-60 years is termed in this study as a

Settler. The consumer profile is given as follows:-

Analysis of the Settlers

Consumer profile

Profile Middle aged

Demographic- 40-60 years MHI- 4-10 lacs

Marital status- Married

Habits lifestlyle- Like to socialize, attending social meetings, vacation with

kids

Functional need- Place and time to relax, good ambience

Emotional need- social status, need to belong,

Trend- not willing to experiment much, budget conscious spending

Key influence- office colleagues, children, neighbours

The middle class male settler

The middle class of India is for whom most of the advertising is

targeted. Even in the lower middle class, consumer products like

biscuits, talcum powder, hair oil, hair cream, toilet soaps, leather

foot ware, casual foot ware, wrist watches, quartz watches etc.

are purchased. To get a much better understanding of the


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middle class male head of the family, they can be divided into

following characteristics:

Security seeking

The middle class generally consists of security seeking people.

Even though they are receptive to new ideas, they do not very

readily dash into new ventures. The middle class man does not

only want economic security, but he also wants emotional

security.

He will not do something that is likely to upset his emotional

ties. He wants social security. He wants to be part of society. He

does not want to be a rebel or an outcast. Being part of society

he enjoys a degree of protection. He is likely to welcome newinnovations if they satisfy his sense of security. If he feels that a

particular idea will help him improve his economic position or

social relationships he will accept it. Anything that is likely to

upset this balance is going to be discarded by him.

Credit purchases

The middle class Indian normally lives in a fixed income. He hasto manage his finance in a rigid budget. He wife selects

reasonably good furnishings and uses modern cooking gadgets.

He usually has a two-wheeler of this own. He aspires for the

well-to-do lifestyle he sees on TV. So his purchases are generally

materialistic in nature. Because of this he likes to make large

purchases and pay for though the different credit facilities that

are made available to him by the banks and other financial

institutions.

Now days practically everything is made available to him oninstallment payments. The availability of credit facility acts as a

temptation to buy. His desire for bringing home more and more

material comforts is realized by the availability of credit

facilities. The system of "credit cards" is also growing in the

country at a very fast rate. It is expected that in the near future,


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Indians will be the biggest users of credit cards second only to

America.

Prestige conscious

The middle class Indians have manyof their possessions, largely

because they are "status conscious" or "prestige conscious". The

middle class mans finances may be tight and he may even

struggle to meet ends. Still, he looks for more than average

comforts, and plans for more material possessions. These

possessions act as status symbols. By appealing to this prestigea marketer may motivate the middle class man.

S t r o n g F a m i l y T i e s . . . . H o m e l o v i n g

The middle class man is a home loving man. He assigns a lot of

importance to the well being of his family. He spends a good

portion of his income on the education of his children. His

children get priority in his budget. He without much resistance

will adjust to the changing fashions of his college going children

even though these changes may be costly for him. The concept

of "small family more comforts" has gone well with him. The

"family tie" binds him so strongly that anything that appeals to

this "human bond" will find his ready acceptance.

His son's education or his daughters marriage are life long

dreams for him. Any thing that appeals to these dreams willcatch his immediate attention.

However, the middle class man is greatly influenced by his wife

especially on his buying decisions. Tooth-paste, hair oil,

magazines or tape recorders, the purchasing decision is

consented by her. There are certain buying decisions that are


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made by his wife solely so the middle class housewife is another

important person to study from the marketing point of view.

The middle class house wife as settler

The percentage of working women in India is growing at a

steady pace. This is mainly because of the development in

communication systems and growth of educational opportunities

given to women. Because of this growth of working women, the

women now-a-days also have an increased purchasing power.

Due to this, industries that are directly related to women like

cosmetics etc. have seen a major boost. Also, toiletries, food and

beverages etc. have seen a growth.

The middle class house wife is generally educated and is the

purchasing agent for some of the products the family buys. She

is also the "gatekeeper" for many products like new cooking

medium, fast food etc. that cannot enter the house without her

clearance. She also decides purchases meant for children.

To get a much better understanding of the Indian house wife,

consider the following characteristics of her buying decisions:

Cautious but not averse to change

The middle class house wife is generally educated, earns her

own money or has to use money given to her on a fixed budget.

This makes the middle class house wife a discriminating and

cautious buyer. However, she is not averse to new ideas and

things. She is willing to try new things but she will not adopt any

product instantly. She will make a sample purchase, check with

people who use the product, listen for guidance and then finally

she may go in for purchasing the product.

Quatily as well as cost consious


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The middle class house wife is a quality as well as cost cautious

buyer. She will try to purchase products that will last her for a

long time. She will try to get "millage" out of every rupee she

spends. She is less likely to purchase use and throw type of

products. Besides being quality conscious, he also is cost

conscious. Before buying a particular product she will first check

the price with other sellers and will then go in for the lowest

price. Because of being quality and cost conscious, extra

features like re-usable containers will influence her buying

decision. Bonus prizes, coupons, rebates etc. will definitely

attract her attention. Instead of advertising she relies on word-

of-mouth communication. She is interested in knowing what her

neighbor or colleges are using. Even after she purchases a

product she seeks reassurance about making the right purchase

decision.

Leisure seeking:

As time passes the house wife is getting used to more and more

leisure though the use of modern gadgets like washing

machines and other such house hold items. She will be

interested in new innovations that reduce her work time even

more. She may not be able to afford all the modern gadgets that

are available in the market but they still hold her interest

because they are a potential for saving time and avoidingdrudgery.

Sense of grooming:

Sense of beauty is a strong motive force behind several of her

purchases. Soap or shampoo, vanishing cream or cleansing milk,

perfumes or hair oil - selecting her brand is greatly influenced by

her sense of grooming. She is generally fashion loving however

she is not fashion crazy. A strong sense of traditionalism runs

thought her personality. Products or ideas that uproot her basic

personality or values will not find acceptance with her.

Factors influencing the buying decisions of the settlers


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The family decision making process:-

Influencers- The children in the family, the neighbours play a major

influencing role for

a settlers purchase. After watching a new advertisement on

TV or reading

in a magazine can be a major influence.

Gatekeepers- usually the female head of the house plays this role. In the

case of settlers it

may be the wife. She may also come to know about the

product by her

colleagues and social circle about the new car.

Deciders- Family members like the settler male who will be spending,

consuming the

Product along with the children are in this category. They will

evaluate and

Compare the features of the car vis--vis the new model to be

purchased.

Buyers- the male head of the house will be included in this category, after

all he will be

the person responsible for the purchase. The budget will be

made out of the

resources available.

Preparers and Users- in this case they will be the same- the entire family

Maintainers- all the service and the repair can be carried out either by the

head male or

Older child of the house

Disposers- this will include the children who will after some years

discontinue the usage


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Of the product either because they will buy another car or the

non

Performance of the current car.

Consumer behaviour in India:

Even today, only 16 per cent of Indian professionals are women. Therefore,

consumer decision-making in all areas -- ranging from what cars to buy to

what clothes manufacturers to patronize -- is dictated by men when itcomes to the most upscale market segment in India

The research, conducted by market research agency NFO-MBL across six

top metros and profiling 380,000 people, will greatly help media planners,

agencies and advertisers to understand this particular horizon professional.

Life insurance was found to be the biggest financial investment for most

Indians, followed by the stock markets. Washing machines were the most

desirable consumer durable products, followed by cars and desktop

computers. Forty-two per cent of the respondents owned a mobile phone,

of which 52 per cent had a Nokia, and 42 per cent of these subscribed to

AirTel cellular service. For example, more than half of the people surveyed

(56 per cent) felt that it was all right to give or take bribes to get their work

done. A slightly smaller number (40 per cent) thought it perfectly

acceptable 'to make money through underhand means/deals.'

MenSpou

seJoint

Famil

y

Elde

rs

Childre

n

Buying a house 25% 5.8%20.8

%

30.1

%14% 0.4%


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Child's marriage 7.7% 5.9%21.8

%

18.7

%

11.5

%4%

Own marriage20.4

%

2.5% 6.2%22.4

%

29.7

%

0.9%

Child's education15.1

%6.6% 34%

12.5

%5.6% 4.6%

Taking a loan31.4

%5%

24.3

%

18.1

%9.2% 0.6%

Fixing monthly budget24.2

%10.3%

33.3

%

18.5

%

11.2

%0.6%

Buying entertainment

durables, like TVs

21.4

%8.2%

33.4

%

26.7

%7.4% 1.6%

Buying durables like washing

machines

19.3

%10.7%

33.3

%

26.2

%8.2% 1%

Deciding on holiday

destinations

20.6

%6.1%

28.4

%

31.8

%4.5% 5.6%

Alcohol consumption habits indicated that 25 per cent drank alcohol, of

which 72 per cent were beer drinkers. Most executives drank at bars and

pubs, while self-employed professionals drank at friends' homes.

Businessmen preferred parties to have a drink or two at.


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Sixty per cent people take a holiday in India, while 5 per cent take a

holiday abroad. Eighteen per cent travel on business within India, while 8

per cent travel on business abroad at least once in a year.

As for international holidays taken in the last one year, people from

Mumbai (30 per cent), Bangalore (35 per cent) and Hyderabad (26 per

cent) preferred travelling to the United States, while 35 per cent from

Kolkata and 41 per cent from Chennai travelled to Singapore. A quarter of

the respondents from Delhi went to Nepal for a holiday. Among domestic

business travellers, Jet Airways (60 per cent) is the preferred airline,

followed by India Airlines (53 per cent) and Sahara Airlines (20 per cent).

For domestic leisure travel, Jet Airways and Indian Airlines enjoy an equalshare.

Among international leisure destinations, Singapore is the favourite with 23

per cent respondents, followed by 22 per cent opting to visit the US.

International business travellers prefer the US (24 per cent) followed by

Singapore (23 per cent) and the United Kingdom (13 per cent).

Interestingly, people in the six metros surveyed seemed to show entirely

different tastes in watching television. The average number of channels

watched was five and an average of 100 minutes of television is watched a

day, with 30 minutes devoted to news.

News and Sports are the most preferred programme genres, followed by

general entertainment. However, 29 per cent of the respondents in Delhi

preferred News channels, while only 14 per cent of those surveyed in

Bangalore preferred News. Bangaloreans prefer watching Sports with a

high of 34 per cent.

Introduction to the Market Segment selected:


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The segment selected is parents residing in a city with 1 or 2non earning

children.

The family is assumed to be a typical middle class family in society with an

average income of 4.8LPA.

behaviour+ settlers)

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