Today's consumers have many choices, we've to reach out to them differently: Marketers

The current Socio-economic Classification (SEC) being followed in India is based on ownership of consumer durables and vehicles. 

Perhaps, the growth in GDP and income, penetration of consumer durables, and ownership of vehicles have witnessed a significant increase, leading to the current socio-economic classification becoming less discriminatory and more volatile. The need to redefine the key variables led to the formation of a more stable, and more robust construct - ISEC (Indian Socio-Economic Classification).

Unlike the earlier new consumer classification system (NCCS), which only factored in the education of the chief earner and the presence of certain consumer durables in the household, ISEC will factor in the occupation of the chief earner, and the education levels of the most highly educated adult male and adult female, as per the Market Research Society of India (MRSI). 

MRSI held a panel discussion on Wednesday, February 21. Shuvadip Banerjee, Chief Digital Marketing Officer, ITC Ltd, and General Secretary of MRSI, moderated the conversation with ⁠Amit Adarkar, CEO, IPSOS India; ⁠Jasmine Sachdeva, Managing Partner, Wavemaker India; Muralidhar Salvateeswaran, Chief Operations Officer, Insights APAC, Kantar; Rajiv Dubey, Head of Media, Dabur India; Vivek Malhotra, Group CMO, India Today Group, and Vinay Virwani, Head - Consumer Insights, Dabur India, to discuss the importance of a stable and representative SEC system, the challenges with NCCS, and the transition to ISEC.

According to Sachdeva said, “The parameters, the growth, consumer’s media consumption and advertising receptiveness have changed so much. We are dealing with a consumer who has so many choices today and hence, we have to reach out to them differently”.

Adarkar said he believes in the last five years, the country has been undergoing a huge demographic change.

“Today, when you think you've sort of cracked the consumption pattern on YouTube, you suddenly have something which is a WhatsApp channel and people start following it. Then you realise that having one view of the customer omnichannel is still a far-fetched dream. I don't even have one view of the customer only on the digital. That to me is the biggest complexity,” said the Kantar executive on the challenges that come along with changing consumer patterns.

Virwani added, “There is the complexity of the consumer itself to start with. Complexity in terms of the way they make decisions today; it's no longer linear. And the way they make choices for one category versus the other could be completely different. 

"So you can't bucket them into being a premium customer or a mass customer. They can be premium for some category, which is of relevance to them. It could be mass for something else," he said.

Additionally, Dubey shared that 60 per cent penetration is now 99 per cent. So how do brands arrive at segments of profitable growth within that becomes a challenge? How do they speak to them? What language do they use to convince them to buy their categories?

When it comes to large segmentation processes and identification of consumer pockets, the classical system that Dabur follows is on affluence, then the propensity to buy, and how much they can afford, which is a very classical way of segmenting. 

But apart from that, segmentation or behaviour targeting is something that Dabur has found works well, especially when it comes to healthcare categories, where they operate quite a bit. “So if they're inclined towards more health activities, we know they are likely consumers for a health supplement brand like Chyawanprash,” explained Virwani. 

But what next? 

Once the demographic and psychographic basis is done, it's very important to see where a source of growth is going to come from. Whether it will be increased consumption or increase in penetration that new age brands need. And that's the brilliance of digital data today, Sachdeva underlined.

The next point to focus on is, looking at India Alpha which is around roughly 1.8 per cent of India's population, and they are accounting for roughly 64,000 crore of FMCG buys (Around 50 million). Goldman Sachs talks about this moving to around 100 million by 2027. So how do marketers identify this two-three crore audience?

Dubey thinks most of the companies are working in the same direction. “Getting your own stack of first-party data and trying to create your own cohorts and to collect as much data as possible.”

In this current perspective, the role of media becomes crucial, as per Malhotra, purely because of the amount of data they hold from the various verticals they operate in.

“When I look at the data now, there are three problems that I have. Sometimes I have very little data, sometimes I have too much data and sometimes I have data in silos. So therefore, if I were to solve the problem for all, what I really have to do is have a far deeper engagement with the consumer. It just doesn't end at getting his email id or his mobile number so that I have a single sign-on across all my properties and I have a full view of his journey. It goes much deeper. So I really need to know, what is he actually reading, what is he actually consuming,” he added.

Therefore, the industry needs to keep a dynamic cohort and not a stable, static cohort for them. So besides just having a CDP, there can actually be partnerships that go further.

The Ipsos executive highlighted, “We are in a world where we always assume the consumer is a toothpaste consumer or an automotive consumer but that's a human being you're talking to. And one of the dangers of over-reliance on first-party data is that you're creating these walled gardens, but you don't have visibility outside your immediate garden.”

Sachdeva highlighted that marketers also forget that there may be a propensity to buy, but what is the disposable income in the propensity to buy?

“I may have the capacity to buy the latest iPhone, but do I have the inclination to spend that money? IPhone may be targeting me all the time, but is there an inclination to spend that kind of money even if my pocket has that money?” she questioned.

By the end, all panellists agreed that focussing just on the economy part and segmenting consumers on that parameter won’t help brands. The social capital part shall be captured too to have an impact on all categories of consumers.