Posts filed under ‘Consumer behavior’

The Great Indian Khana Khazana

Food. One of India’s greatest passions. ‘Aaj Khane me kya bana hai?[what's on for food today?]is the most important question asked in every household, almost every day. No surprise then ,that it is also the sunshine industry of India. Estimated at over US 100 Bn dollars, it is almost 2/3rds of the total Indian retail market. The food and grocery segment is growing at an incredibly fast pace too.

The history of Indian food is as diverse as this country itself. Apart from the geographical and cultural specialities,like idli-sambhar in the south, macher jhol in the east, makki ki roti sarson ka saag in the north and sol kadhi, masale bhaat in the west, there is also the influence of the Portugese[pork vindaloo], the Moghuls [dum pukhtetc.] and not to forget our very own invention of Indian Chinese cuisine[gobi manchurian!].

Much later, in independent India, multinational brands such as Nestle,Unilever etc have been forced to recognize and acknowledge the Indian palate in order to get wider acceptance for their offerings. Right from the ‘Meri masala Maggi dumdaar noodles’ to the ‘Masala Penne Pasta’[made from suji], their Nestle’s ‘Taste bhi Health Bhi’ offerings have had to bend to the Indian tastes.Their health platform has taken into account the Indian’s healthy respect for atta and sooji vs maida.

Giants like Pepsico have recently introduced Homestyle Masala and Lemony Veggie flavoured Quaker oats alongside recipes for oats upma and poha in order to cater to the Indian penchant for mom style breakfast. Unilever has introduced Knorr ready to cook Hyderabadi Biryani, Chana masala etc.  to bolster the Knorr brand’s traditional offering of soups. Nestle’s Maggi has enhanced its soup range with Maggi Souper roni[which has suji,vegetables and macaroni]to cater to the old Indian habit of a bit of this and a bit of that. Its traditional  sauce range now also includes the Maggi imli sauce[a home style tamarind sauce] available in a Pichkoo[local lingo for a squeeze pack].

Our very own home grown Indian companies realised the scope for growth in this arena long ago. ITC has taken its legendary Dal Bhukara and Biryani to the customer in the ready to eat market through its Kitchens of India brand. Its Ashirvaad branded rava idli mix etc are following the lead of MTR’s[Mavalli Tiffin Room] multifaceted offerings in the ready to cook range. In fact MTR’s traditional fare which included tomato rasam powder and Puliyogare [tamarind rice] mix, has seen a healthy facelift with the additions of Ragi Rava idli/Ragi dosa/Oats idli/ Multigrain dosa offerings. Britannia has entered the healthy eating market with its breakfast range of poha and upma available in broken wheat[dhalia] and tomato spinach.

These examples are just a snapshot of the big picture. No downturn for this industry then; the Indian continues to feast in both good and bad times. And, the great Indian taste buds are ready for the’ branded home style offerings’. If it has to be international cuisine, it better be an Indianised version[remember how the good ol' Big Mac had to do a chikken Mc tikka to woo the Indian consumer]. And so, while India is waking up to the global phenomenon of Eating Healthy – it better be’ Taste bhi, Health bhi’,  and in that order, necessarily.

By,

Sita Lakshmi

November 21, 2012 at 6:59 am Leave a comment

Solving a driver’s investment dilemma – part 2

(Continued from last week’s post)

Mahesh’ employers were really intrigued with this riddle and decided that there had to be a solution out there – after all, this was a situation faced by many people in the same income band as Mahesh. They decided to do a little research of their own and understand the solutions adopted by others – spoke to their maids, the neighbour’s maids, a few colleague’s drivers etc., they also spoke to a jeweler that they knew. They finally came up with a few interesting solutions.

The first suggestion was that Mahesh invest in a gold coin with a small hook on top, one that could be used as the second pendant on any necklace. This would solve the usability problem and ensure that it could be used as jewelry on social occasions. Mahesh’ wife shot down this idea though – she’d seen her mother and grandmother wear such pendants, and felt that such jewelry would look old-fashioned and signal that they lacked the money for buying a prettier pendant.

The second solution, suggested after much research and discussion, was to invest in buying a thin plain gold bangle. As they found out, the least amount of gold is wasted during making a plain gold bangle and the labour charges / making charges are proportionately lower than that for other forms of jewelry, hence the price charged is mostly the price of the gold. Thus you get good value for the money you pay, and the bangle is a piece of jewelry that can be proudly worn at social occasions, multiple bangles neither detract from beauty nor from social status. Also, if you decide to remake a plain gold bangle at a later stage, you don’t lose much since making charges were low and most of the value of the gold is retained.

While this solution sounded attractive, they realized that it was workable only for a much higher income group. With Mahesh’ savings, a gold bangle that he could afford would be such a thin strand of gold that it would not retain its shape and would get deformed easily, and then it’s utility as jewelry would drop drastically. So that sounded the death knell for the gold bangle option.

A solution was finally discovered via Suganthi, a neighbour’s maid. Suganthi’s household income was the same as that of Mahesh, and Suganthi’s family lived in a chawl quite close to the one in which Mahesh lived. Every year, Suganthi bought a 1 gm plain gold ring from a small jeweler nearby – the ring was small and affordable, and could be used as jewelry. After buying such rings for a few years, Suganthi would return to the same jeweler and use the rings to get a pair of bangles or some other jewelry made. She had no worries about the purity of the gold in the rings as she would be returning to the same jeweler to get the bangles made.

Viola ! A neat solution indeed.

 

  • Zenobia Driver

 

 

 

October 16, 2012 at 5:56 am 2 comments

Solving a driver’s investment dilemma – part 1

A friend’s driver, let’s call him Mahesh, was thinking seriously about how to invest his limited monthly savings wisely. Among the options he was considering were fixed deposits in banks, savings deposits in banks, a local chit fund, an insurance policy, and like all Indians, purchase of gold. He was quite firm that at least a part of his savings, if not most of it, would go into buying gold each year; he had a young daughter and was already thinking ahead to her marriage and the jewelry required, plus he knew that gold prices only went up over time and it was a good safeguard against inflation. His parents, his neighbours, his friends, all said so, and community wisdom accumulated over several years couldn’t be wrong.

As Dhanteras was approaching, he’d started thinking seriously of purchasing some gold this year. He had some concerns about buying gold though, primary among these the fear of being cheated on the promised gold quality by the shop he bought it from. For this reason, his wife and he had both spoken to neighbours and family members that had bought jewelry over the last few years to find out which jewelry shops could be trusted.

Secondly, he didn’t want to buy jewelry that would be out of fashion when his precious daughter grew up and have to be melted down and remade with all the attendant tension of low quality gold – or worse still, copper – being added to it. To add to these, gold necklaces were not cheap and he wasn’t sure that even his annual savings would add up to one. Most of the jewelry shops that allowed a customer to pay for jewelry in monthly installments offered schemes of 3-6 months, wherein the monthly EMI would be Rs. 1000-Rs. 1500 for just simple earrings, even this was too much for him to bear.

Stuck in a quandary, he decided to discuss this matter with his employers – perhaps he was even hoping for a small loan in addition to their advice. His employers felt that the chit fund option was the worst among those that he was considering and wanted to ensure that he stayed away from that; they understood his hunger for gold and all it represented – a hedge against inflation, a signifier of status, prosperity etc. They were against giving him a loan too often; finally they mentioned to him the option of buying gold coins; he could buy a coin of whatever weight suited his budget, 2gm, 5 gm, 10 gm etc. If he bought ones with the BIS stamp on them, he could be assured of quality. And they’d appreciate in price like gold jewelry, could be sold or pawned in emergencies if need be, and could be melted down to make jewelry for his daughter when the appropriate time came. They were quite sure that this would be a good solution to his dilemma. But little did they know the intricacies of human behavior and all the attitudes, beliefs, and environmental factors – often tangential ones – that influence it.

Though this seemed a solution to his problems, he baulked at the idea.

“I will buy gold coins once I’ve bought enough jewelry; kuchh pehenne ke liye bhi hona chahiye naa (there should be something to wear too)”

To him the utility of gold coins was much lower than that of gold jewelry, as jewelry could be worn by his wife and daughter at various social functions over the years and hence had a utility value – in terms of adornment as well as signaling status – and an investment value. And he couldn’t think of what to do with the gold coins until it was time to sell them or melt them and remake into jewelry ? And wasn’t the latter a huge headache that was better avoided ?

How did his employers help him find a solution to his problems ? And they did find a really neat solution – one that addressed all his concerns and was affordable. We’ll reveal their solution to you next week; until then, do let us know if you have any thoughts or ideas that we could pass on to Mahesh.

  • Zenobia Driver

October 9, 2012 at 8:09 am 4 comments

Update

Sometime last year, we’d run a series of posts on the topic on dealing with the challenge of ‘need, but don’t want’ in the health and wellness domain – you can read the posts in the series here, here, here and here. These discussed the problem of physiological (and often, medical) need for the product, but no desire to buy from the consumer; it’s a topic that we keep thinking about and researching ourselves, while keeping our eyes peeled for information on this topic from other sources.

As we mentioned in one of these posts :

In the healthcare space, while it’s tempting to say that there is the tangible benefit of getting better and that should matter to patients, the basic issue is that all the ill-effects of ailments such as diabetes, high cholesterol or BP are typically not evident immediately, thus, the benefit of taking medication regularly and of making other lifestyle modifications is unclear to many patients. Habit change is always hard, when the reward for it is nebulous and indeterminate, it only becomes more so.

Recently, thanks to my friends R & G, I came across this TED Talk that threw more light on this subject and I just had to share it with readers of this blog. In a nutshell, the speaker says that giving people medical information in a form that they can comprehend and that helps them see the way ahead to better outcomes, can actually boost their motivation to do something to achieve those outcomes.

A few sentences from the transcript of the talk are reproduced below to whet your appetite, hope you actually watch the entire video after reading these.

You’re looking at things where people are actually given information, and they’re not following through with it. It’s a problem that manifests itself in diabetes, obesity, many forms of heart disease, even some forms of cancer- when you think of smoking. Those are all behaviours where people know what they’re supposed to do. They know what they’re supposed to be doing, but they’re not doing it.

……

But for as much as clinical medicine agonises over behaviour change, there’s not a lot of work done in terms of trying to fix that problem. So the crux of it comes down to this notion of decision-making – giving people information in a form that doesn’t just educate them or inform them, but actually leads them to make better decisions, better choices in their lives. 

  • Zenobia Driver

September 7, 2012 at 10:41 am 2 comments

Café Terra and the effect of PR

Product managers and brand managers from FMCG businesses will sigh wistfully when they read of the response rates to ads and promotions in the Foods and Hospitality business!

Unlike FMCG categories, where conversion rates for promotional events, ads in newspapers with discount coupons, etc. are typically in the single digits, and PR also has low conversions in the short term, for restaurants the conversion rate is much higher and the results show almost immediately.

Consider the example of Café Terra, a small eatery in Koramangala in Bangalore that specializes in continental breakfasts, especially waffles. Soon after they had opened, they were visited by a reviewer from TOI, both the food and the ambience made a positive impression on him. The review was due to run on a Sunday morning and expecting an increased number of customers, they decided to order extra provisions. Their optimistic best-case forecast was to expect 50% more customers than usual on Sunday morning, and they ordered provisions to cater for the same.

Come Sunday morning, there was a crowd at the door, business more than doubled and they ran out of food by lunch-time; their estimate is that they could have done more than triple the regular Sunday business had they had sufficient stock.

That’s how quickly and how strongly PR impacts sales in the Foods sector.

Don’t you wish there were separate detergent and skincare review sections in the newspaper that you could avail of! And that detergents and skincare products were as much of an impulse purchase as foods are.

 

  • Zenobia Driver

(Disclaimer : The author is a friend of the owners of Café Terra and likes to eat there whenever she visits Bangalore)

August 17, 2012 at 5:35 am Leave a comment

Jagriti, Boyie and PiggyMojo

I recently heard about an interesting example of an innovative communication vehicle used to convey social messages to an audience. The messages were of the sort that could be boring for the audience but were important for them, and needed not just to be understood, but to spur them on from understanding to action; hence the communication needed to generate a high degree of involvement and engagement with the audience.

The solution adopted by Phicus in their work with Grameen Financial Services – a South India based MFI, was the creation of a character that the audience of ladies from low income households could easily identify with – a woman called Jagriti. Jagriti is a member of an MFI and writes letters about her experiences which cover topics related to financial education such as opening a bank account, various government schemes and how they are useful to her etc., to social topics such as the evils of drinking or not allowing children to defecate in the open. These letters are read in the MFI members’ meetings and the women have come to associate themselves closely with this character. Phicus found out that this was a great way of teaching and the recall rate of the concepts by the member women was very high. This link connects to a video about this program and its results, watch from 3:00 minutes onwards if you only have time to see the snippets from the meetings.

In case you found this example interesting, you can read about another such example in this article, this example is from Kenya and describes a cartoon character called Boyie created in order to reach out to young adults. This article gives several examples of efforts towards financial education, one of which is a program called PiggyMojo. No, I’m not going to describe this one at all, I’m confident the name is enough to make you click on the link and read the article.

    • Zenobia Driver

 

June 11, 2012 at 7:09 am Leave a comment

Direct Selling

Although direct selling isn’t a very commonly discussed business model in India, it is a force to be reckoned with. It is now a Rs.4200 crore industry and about 3 million Indians are engaged in direct selling; of this, 2.1 million are women, mainly because it offers an additional income and flexible hours. Several brands sold through this model are now at par or beginning to overtake the more mainstream FMCG and OTC brands which are backed with aggressive marketing and extensive distribution networks.

Take for example Amway’s Nutrilite protein powder – It is now a Rs. 250 crore brand far ahead of its competitors like Wockhardt’s ProtineX. Amway’s supplement pill Nutrilite Daily is close on the heels of Ranbaxy’s heavily advertised Revital having grown 34% last year. Glister toothpaste from Amway is also a over Rs.100 crore brand now, and is fast closing in on Dabur Red Toothpaste which has been around in the market since decades.

As a company too, Amway has outgrown multinationals like L’Oreal, Nivea and Kellogg’s in India by reporting Rs.2130 crore in sales for calendar year 2010-11. The US-based company, which started operations in India 14 years ago, attributes its success to 5.5 lakh active distributors, aggressive pricing and advertising. It has ambitious plans for this year too – it plans to double its advertising spends this year from Rs.30 crore in 2011 to Rs.58 crore, as it targets double-digit growth to follow 19% rise in sales last year.

Tupperware India Pvt. Ltd., which sells food storage, preparation and serving dishes, is expanding its distribution by appointing more consultants in the 50 cities and towns it operates in. The company is also developing new product offerings to suit the need of Indians. Asha Gupta, MD-Tupperware India, points out that non-metros are seeing brisk member addition and sales, revenue contribution of non-tier I cities stood at 38% in 2009-10, against 14% in 2008-09.

Oriflame has now been in India for over 15 years and has been registering a CAGR of 40% over the past five years. Its key markets include East and North-East region – which contributes around 40% to its total sales in India. That said, they have been growing the fastest in the southern four states and plan to focus expansion efforts here. They already have a product basket of 650 products and plan to introduce 300-350 new ones this year to keep up with the latest trends. The company is targeting to appoint 1.25 lakh new sales consultants to take the figure to 3 lakh by the end of this year, and have 500 service points from the current 350.

Modicare, the first India-based direct selling company, which sells cosmetics, foods and beverages, health and wellness and agriculture, personal, home, fabric and automobile care products, has grown significantly in the last 4 years. It has a network of over 1 lakh consultants with 40 centers serving 2700 cities across India and targeting sales of Rs.200 crore this year.

The latest addition to the list of companies working on the direct selling method is Qi – but it does so on with a difference. One, it operates only on an e-commerce platform and two, in addition to products in the nutrition, health, home and personal care space, it sells a range of luxury products and services too – such as branded watches, gold and silver jewelry, holiday packages, e-learning packages. It has over 40 lakh members operating globally and has now made its entry into India.

While some companies like Amway, Tupperware and Eureka Forbes have been advertising on TV; Tupperware also has its products on display at several supermarkets for a touch and feel experience; others like Oriflame and Avon are targeting a higher sales consultant base before advertising or exploring alternate/ complimentary distribution channels. Modicare is also slowly and steadily expanding its sales consultant base along with product portfolio to attract the Tier-III and smaller town customers.

Whatever the approach may be, each one has set its growth goals and is striving to achieve them. Perhaps, it is the traditional FMCG and OTC companies that need to take notice and be prepared.

Sources: News articles, Company websites.

 

By,

Roshni Jhaveri

May 14, 2012 at 8:40 am 8 comments

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