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To be submitted by
GAURAV GARG
DEEPAK ASNORA
Project given by
Prof.Alok anand
2. Segmentation…………………………………………………………………………… 4
3. Logic of segmentation…………………………………………………………………. 4
4. Criteria of segmentation………………………………………………………………. 4
5. Indian consumer……………………………………………………………………….. 5
I. geographic Segmentation……………………………………………………. 7
8. Recommendation……………………………………………………………………… 13
9. Conclusion……………………………………………………………………………… 14
10. Bibliography…………………………………………………………………………… 15
INTRODUCTION
India has the youngest population profile among the numerically significant countries-there are a
lot of young people, in different income segment and location, who are influencing their parents
spending or spending their own money. Indian consumer market has never had its better.
Higher disposable incomes, the development of modern urban life style and increase in
consumer awareness have effected by behavior in cities, towns and even rural areas. According
to a 2007 report by Mckinsey & co., India is set to grow into the fifth largest consumer market in
the world by 2025.
Buying power has also expended to new consumer segments be it the youth or the urban
woman. Urban Consumer Groups have been created using methods similar to methods used
internationally, but India focused accounting for the differences both in terms of the
characteristics of the Indian consumers and the availability of large scale household level raw
data sets.
Indicus Consumer Spectrum has been designed to help marketers understand the essence of
33 Consumer Segments, which together represent the entire urban spectrum of India. It
highlights the key features which make each segment distinctive. The purpose of this work is to
help marketers devise advertising and communications strategies and fine tune their sales
strategies, targeting and execution.
The segments have been derived based on two key dimensions - lifestyle stages of chief wage
earners of households and their skill levels. The first defines their needs and the second defines
their earning abilities.
(1) Segmentation helps the marketer by identifying groups of customers to whom he could
more effectively ‘target’ marketing efforts for the product or services.
(2) Segmentation helps the marketer avoid ‘trial and error’ method of strategy formulation by
providing an understanding of these customers upon which he can tailor the strategy.
(3) In helping the marketer to address and satisfy customer needs more effectively,
segmentation aids in the implementation of the marketing concept.
(4) On going customer analysis and market segmentation provides important data on which
long-range planning can be based.
(1) Segmentation must be internally homogeneous - consumers with in the segment will
be more similar to each other in characteristics and behavior than they are to consumers
in other segment.
(2) Segments must be identifiable – individuals can be ‘placed’ within or outside each
segment based on a measurable and meaningful factor.
(3) Segment must be accessible – can be reached by advertising media as well as
distribution channels. Only then, the segments can be acted upon.
(4) Segment must have an effective demand – the segment consist of a large groups of
consumers and they have the necessary disposable income and ability to purchase the
good or service.
Indian Consumer
India has the youngest population profile among the numerically significant countries-there are a
lot of young people, in different income segment and location, who are influencing their parents
spending or spending their own money. Indian consumer market has never had its better.
Higher disposable incomes, the development of modern urban life style and increase in
consumer awareness have effected by behavior in cities, towns and even rural areas. According
to a 2007 report by Mckinsey & co., India is set to grow into the fifth largest consumer market in
the world by 2025.
India’s consumer market till now was broadly defined as a pyramid; a very small affluent class
with an appetite for luxury and high-end goods and services at the top, a middles-class at the
center and a huge economically disadvantaged class at the bottom. This pyramid structure of
the Indian market is slowly collapsing and being replaced by a diamond – a relatively large
affluent class at the top, a huge middle class at the center and a small economically
disadvantaged class at the lower end. The diamond represents increasing volume and value
across all classes of Indian consumer market
(1) Middle class, defined as households with disposable incomes from Rs 200,000 to
1,000,000 a year comprises about 50 million people, roughly 5% of the population at
present. By 2025 the size of middle class will increase to about 583 million people, or
41% of the population.
Extreme rural poverty has declined from 94% in 1985 to 61% in 2005 and is projected
to drop to 26% by 2025.
(2) Affluent class, defined as earning above Rs 1,000,000 a year will increase from 0.2% of
the population at present to 2% of the population by 2025. Affluent class’s share of
national private consumption will increase from 7% at present to 20% in 2025.
Pro-growth demographics of Indian consumer
The widespread adoption of improved medical care and birth control since the 1970s has
reduced birth rates and increased the proportion of citizens living past their retirement age in
most countries. As these countries have an aging population, they are beginning to face an
acute shortage of working age population, while the proportion of dependent population is
increasing.
India along with a few other countries is an exception to this. In India, the proportion of citizens
of working age is forecast to fall slowly and the overall labor force will continue to grow. India
has a young population, 54% of Indians are under 25 years of age. A rising productive
population fuels growth and drives personal consumption and a lower age dependency ratio
places less strain on public finances. A young, economically empowered population not only
translates into increasing consumer demand but also into a more value-conscious demand.
Thus, pro-growth demographics will expand consumer market in India. The National Council of
Applied Economic Research (NCAER), forecasts that the number of consumers driving growth
Will grow from 46 million households in 2003 to 124 million households in 2012.
1) Geographic Segmentation: -
Potential customers are in a local, state, regional or national marketplace segment. If a firm
selling a product such as farm equipment, geographic location will remain a major factor in
Segmenting your target markets since their customers are located in particular rural areas.
While for retail store, geographic location of the store is one of the most important
considerations, in this case city areas are preferred. Segmentation of customers based on
geographic factors are:-
2) Demographic Segmentation: -
Segmentation of customers based on Demographic factors are:-
Titan created a sub brand, Fastrack. These watches are specifically for young, vibrant, and cool
outgoing young generation. While for older person and professional it has created the steel
series watches and also the famous, Sonata.
) Titan Fastrack ( for the younger segment
For middle segment, Titan offered Exacta range in stainless steel, aimed at
withstanding the rigours of daily life. There were 100 models in the range. Price ranges within
Rs500-700.
For the third segment, Titan offered the Sonata range. The price range was
between Rs.350 to 500.
It is the largest segment in Indian market. Here the entry level starts from Rs 1.5 to 3 lakh.
Maruti 800 and Omni are the dominant players in these segments. With the launch of Tata
Nano with a price range of 1lakh the outlook of this segment has changed. This segment is
sometimes referred to as the small car segment. Competition in this segment is extreme in
Indian market.
It lies between budget car and family car. Preferred price range is between Rs 3 to 4.5 lakh.
Maruti Zen, Fiat Uno, Tata Indica, Santro , Matiz is some of the dominant players in this
segment.
Maruti Zen (Compact car segment)
Buyer in this segment looks for a real super premium segment car. Mercedes Benz E229, E-
250, Rover Montego, Audi 6, BMW are the players in this segment. Obviously, this is a tiny
segment in the Indian context.
India is growing at an average annual rate of 7.6% for the past five years and it is expected to
Continue growing at an equal if not faster rate. The rapid economic growth is increasing and
enhancing employment and business opportunities and in turn increasing disposable incomes.
As the benefits of growth trickle down, an increasing number of people are moving up from the
economically weaker class to join the middle class.
The middle class with its rising numbers and incomes is thus becoming the biggest market
segment. The affluent class too will continue to grow in terms of size and value, albeit, at a
slower pace than the middle class.
The primary idea in buyer behaviour segmentation is that different customer groups expect
different benefits from the same product and accordingly, they will be different in their motives in
owing it and their
behavior in buying it.
Bibliography
(1) www.google.com
(2) www.yahoosearch.com
(3) www.scribd.com
(4) www.quickmba.com
(5) www.projectparadise.com
(6) www.managementparadise.com
(7) www.marketingteacher.com
(8) www.surfindia.com
(9) Consumer behaviour book of pondicherry university
(10) Consumer behaviour by Blackwell and engel
(11) Kotler 13th edition
(12) Marketing management by meenaxi and arun kumar