New Delhi, Aug 1, 2013: The surprising increase in the number of modern toilets in small towns, even villages, across India, is forcing a change in one of India’s earliest measures of the consumer economy.
A decade’s economic growth (which is now slowing), reduction in poverty levels (no matter where the line is drawn), the latest census’s (2011) identification of new urban areas, and a new consumer classification by the Market Research Society of India (MRSI) have all necessitated a change in IMRB International’s household consumer panel.For instance, in the two years between 2011 and 2013, the proportion of rural households using dishwash bars increased from 30% to 42%, according to IMRB research.
Launched in 1981, when IMRB was still the Indian Market Research Bureau, the agency’s panel served as a barometer of changing purchase behaviour and habits in a country that was just waking up to the consumer economy. Data from the panel (which eventually grew to 75,000 households), sold to companies, big and small, served as an authoritative source of information on the purchases of products from at least 60 categories. Brands, variants, product sizes, and place of purchase—the panel provided pretty much all the information marketers wanted. Since then, though, consumers have evolved and become more sophisticated; new products and consumers have entered the market; and the information requirements of marketers have become more complex. Back then, deodorants were unheard of; they constitute a Rs.1,300 crore category growing at 30% now, and are popular even in rural areas.
To keep pace with the change, IMRB, part of the Kantar Group, which in turn is part of marketing conglomerate WPP Plc., is increasing the size of its panel, covering new regions, and switching from Census 2001 to Census 2011. Research from the new panel, branded MarketPulse 2.0, will be launched in 2014, said Hemant Mehta, senior vice-president at IMRB.Marketers said they’d love to get their hands on better data.
“Any change (in research) which brings more stability and granularity is welcome as it helps us make better decisions,” said Sameer Satpathy, executive vice-president and head (marketing, consumer product business) at Marico Ltd. For its consumer products portfolio, Marico subscribes to data both from IMRB as well as rival research and information company Nielsen.The changes:
One change IMRB is making is in terms of scale—it plans to add 10,000 households to the panel, cover new states such as Jharkhand and Chhattisgarh (where it will add 3,000 households), and include both wealthy households (3,000 of what the agency terms “super elite” households will be added to the panel) and sales from modern format retail stores.The data will be analysed against the backdrop of Census 2011.
“We know that so much more of India is urban now. Nearly 2,800 new census towns have been added. Any research needs to recognize that,” said IMRB’s Mehta, who also explained that urbanization would result in larger markets for most products. Census towns is the census department’s term for villages where agriculture is no longer the main occupation, and where consumers behave more like their urban counterparts than their rural brethren in other villages.
The agency will also start using the new consumer classification popularly known as the socio-economic category (SEC) released by MRSI in 2011. The earlier SEC focused on the education and occupation of the chief wage earner. The new system classifies Indian households by using two parameters—educational qualifications of the chief wage earner in the household; and the number of assets owned (out of a pre-specified list of 11 assets). The new classification is believed to be more accurate, and more contemporary. MRSI is a non-profit autonomous market research body formed by a fraternity of research suppliers and users in India.
The focus on “super elite” households is timely. Consumer product companies are increasing their focus on such households through premium offerings. What these don’t have in terms of volume, they make up for through high profit margins. IMRB’s definition of “super elite” households are those that own a car and a laptop in upmarket localities, and where at least one person has travelled abroad in the past year.
“Some of these segments may be small, but they are doing well. For instance, premium under-eye creams are selling. Even the fairness (cream) game is now premium,” said Mehta.
Many premium offerings are sold through organized retail (or modern retail) outlets and IMRB is also adding 1,000 households to the panel in what it terms “modern trade zones”. These households will be across 12 cities. India recently relaxed laws for foreign retailers and while large supermarket chains such as Tesco Plc., Carrefour SA and Wal-Mart Stores Inc. are either grappling with the fluid regulatory regime, or waiting for clarifications, experts believe that it is only a matter of time before they make their presence felt in India.
Mohit Kampani, president and chief executive at Spencer’s Retail Ltd which operates large-format modern trade stores, believes that modern trade is yet to reach critical mass in India. Data “from modern retailers will be much more comprehensive because these stock 10,000 to 12,000 stock keeping units”, he said.
While research firms are widening the base and setting up new panels, they need to provide sufficient value-addition to consumer companies, more than what they can derive in-house.
Over the past three-four years, a clutch of consumer firms have shifted from data collected from primary sales (distributor level) to secondary sales basis (i.e. the mom and pop or kirana store level), said Debashish Mukherjee, partner at consulting firm AT Kearney. “This has resulted in a significant increase in the volume of data generated within a company at a retail outlet level,” he said. (Source: LiveMint)