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Paying for Basic Consumer Data

The Economic Times - February 2006

Even as large companies in India loudly proclaim their worship at the altar of consumer centricity, their reluctance to pay for fundamental consumer related, consumer based market structure data bases is low. The market research industry agrees with me– they say that serious analysis of fundamental, consumer data on demographics, living conditions, spend patterns, consumption and ownership, collected on an all India basis, across rich and poor, rural and urban households does not have as much demand as it ought to, given the level of business interest and business speak about consumers. And it isn’t because the price is prohibitive. India has the lowest cost survey data compared to anywhere in the world, and of very high quality.I am not referring to market research budgets, which are showing healthy growth. The fact is that a lot of market research spend is on product and marketer performance related issues like customer satisfaction, brand track, product testing and so on.

Where consumer information is sought, it is again at a very limited level of understanding consumer behaviour rather than on getting a fix on sizing fundamental consumer characteristics which affect market potential. It isn’t about having sound bytes of data from different sources – as in “the per capita consumption of widgets in China is 89 while that of India is 12”, “the proportion of houses in rural India with attached kitchens and toilets are x”, and “ N is the number of farmers with land holding less than 5 acres”.

It is about paying for meaningful survey based answers that exist for, say, the income structure of rural households: how many households have agriculture and non agriculture sources of income, non agriculture further divided into receipts from people outside versus family members in the village, and what is the contribution of each to total income, analysed separately for high medium and low income households. This answer is actually worth a lot – it will point backs to organization structures for rural (do you structure your rural operation by agri / non agri?), it will point tractor companies to what else they could be doing by way of customer franchise leverage and so on. And for those inclined towards the grand theories of life, like I am, it will tell you exactly how rural India is morphing and changing, beyond what a bland GDP number can do. And this answer can be used as a segmentation variable for almost any business to carve interesting strategies around.

Lets take something that every consumer marketer, durable or fmcg, ought to know – something as simple as how many women in each age x income group work outside the home, and how many of them have household help, and children. We hear everyone talking about how the number of working women is increasing and so how the market for everything will explode. However here is the data on working housewifes, from the IRS 2005 study conducted for the Media Research User Council by Hansa Research Group – the IRS, by the way, is one of the nicest syndicated for sale data bases on Consumer India, grossly under utilized for its market structure richness.First, the proportion of working women is dramatically more among the poor than among the rich households. So let’s get a perspective on what the “working woman” opportunity is. Not the one they show in the tea ads or the western wear for women brand ads. Not the one that wants to work for self expression as much as the one who has to work to keep the house running.

In the top about 10 million urban homes, just 20% of the housewifes work outside the home (that is social class A and B). A and B are a favourite target group of many consumer marketers, especially processed food and modern retail, and this number is actually just 2 million households with working housewifes. So I wonder if working outside the home is really a driver of changing house running patterns and lifestyles, or whether there is another main story we should be exploiting i.e. that of well off, smart, educated housewifes who may have worked at some point of their early lives, and are “working women like” in their house running style? As you proceed from the highest social class to the middle ones (SEC C) the proportion of working women goes down, and then climbs up all the way to 38% in social class E2, the 11 million households at the bottom of the urban pyramid. An analysis of working status of housewifes by age and life stage would be extremely revealing; and a number for what proportion of women work in the pre marriage years and “just married’ year would add a lot of richness to our rather simplistic notions of the working woman phenomenon. The same pattern repeats for Rural India, with more % women working and in R4, for 68 million homes, over half the housewife’s work. Except that we don’t seem to be able to offer reasonable quality low price ready made chapattis for those who are not rich enough to have full time household help, when they go to work.

Another piece of data. It really upsets me to hear about our famous youth market or demographic dividend that the young population will yield. IRS analysis shows that the beautiful people, the SEC A youth, that magazines would like us to believe is the face of gen next in India, are a grand total of 4 million 12 to 19 year olds, 2 million of whom are in 10 lakh plus population towns , and about 3 million 20 to 25 year olds. Of the 20 to 25 year old rural youth, who form the overwhelming chunk of gen next, 33% is illiterate, and 43% have studied upto class 9, while just 17% have finished school.

The good news is that like the rest of Indian business, the advertising industry has slashed cost, shed flab, moved from individual entrepreneur driven to professionally managed. But now, the era of bean counting as the main activity of business has got to end, and the era of knowledge and passion driven advertising services that create value, has to begin. Indian advertising has the most amazing world class talent - evident from how Indians are being sought after by agencies and advertising boards the world over. The renaissance therefore probably requires more an infusion of will than of skill.