Understanding Consumer Segments in a Diverse Market like India

Devangshu Dutta

March 15, 2007

Two separate incidents recently reinforced to me the need to know and understand the customer intimately, and to have the ability to respond to that knowledge with the appropriate product or service.

One was the experience an acquaintance had with the tea-vendor at a Mumbai railway station, who had segmented his tea-concoctions by the train (and its passengers), customizing to their regional tastes.

The second was a music concert sponsored by a well-known motorbike brand. The audience was largely off-target and the event was clearly not successful for the bike brand, though the audience and the band itself had a great time. As the creator of the department store and the American inventor of the price ticket, John Wanamaker’s once said: “I know half of my advertising money is wasted, I just don’t know which half.”

It’s funny, how gut instincts and home-grown wisdom may quote often seem more successful than planning through facts and figures.

This is partly a function of India’s complexity as a country and a market.

Traditional marketing discipline calls for categorizing customers into segments that are similar within themselves, and distinct from each other. It assumes that there are large or at least measurable numbers of distinct groups of customers Within each group, the customers are assumed to behave and buy in similar ways, which are quite distinct from the other groups in the market.

The reality of life, of course, is that in any market, segments are almost always an artificial construct. In fact, it is becoming more difficult to find large segments that are cleanly demarcated – what’s more, in markets worldwide, customer segments have been blurring into each other.

The Indian market takes this complexity to another plane, and savvy marketers know this from personal experience. India as a market is anything but continuous or homogenous. This diversity is brought out by a media-group’s advertisements series on its radio-channel that make the point about India being a country with 145 festivals in a calendar of 365 days. Or as I’ve often heard Kishore Biyani and others say, in India the mix of language, food and culture changes every 80-100 kilometers.

Let’s face it, most mass products that are marketed in the same way across the country, are handled that way due to manufacturing or distribution economics. Some may even be handled uniformly due to the lack of marketing imagination. It is certainly not due to customers across the country being identical.

How well we can understand the dimensions and the differences can mean the difference between success or even survival and abject failure.

Here is an article that describes the benefits and pitfalls of consumer analyses in India. (Slicing The Market)

[Note: With a 6 MB filesize , the download may take a while if you have a slow connection!]