MARKETING MANAGEMENT SPECIAL............................ Buyer behaviour: deal is in, brand out

Buyer behaviour: deal is in, brand out

FRUGAL FASHION Shifting responses are challenging the manner in which brands and retailers interact with people, even as they create huge new opportunities in India’s consumption evolution

MUMBAI: When Dippak Khurana bought the first LED TV for his home, he researched online and offline, compared features and prices and finally bought a 40-inch Samsung TV from a retail outlet. When he bought a second TV some months later, having already researched the LED segment, he just ordered a 24-inch Panasonic LED TV from an e-commerce site.

“For me, the discovery of a new category was more important than brands, three-four of which were in my consideration set. Having discovered the LED space, the brand decision for my second TV was much easier after comparisons,” he said.

The co-founder and CEO of Vserv, a mobile consumer analytics company, Khurana observed: “Earlier consumers looked at brands and two-three key features before buying. Today, the focus is on maybe 15-20 features, and then brand. It is all about its attributes and the consumer is well informed. For brands, earlier, it was about solving big needs; today brands have to be nimble and constantly innovate.”

Nielsen’s research indicates that in the list of pre-purchase attributes the consumer considers, brands have moved down in importance. What’s more, given the retail choices and the plethora of deals consumers are getting across product categories, looking for the best (often lowest) price is becoming common. But not at the cost of other attributes.

“We did a study on consumer mindsets recently and found that frugal is in right now. Being able to flaunt a deal is considered acceptable and even fashionable. The ‘exclusive’ coterie is becoming smaller,” said Prashant Singh, MD, Nielsen India.

As growth in consumer incomes spreads beyond the metros and tier I cities, aspirations are driving more consumers to buy more. Consumers are also spending more on themselves and youth are driving experimentation. Consumer behaviours are getting complex – even as aspirational consumers experiment more, traditionally wealthy individuals from rich industrial families also experiment heavily, wanting to be the first in their circles to adopt new products, according to a KPMG study.

This study also found that cities such as Surat, Jaipur, Lucknow, Nagpur, Coimbatore and Kanpur are seeing 20% annual growth in high-income households as compared to 13.7% in the metros.

A report by Capgemini states that in high growth markets including India, consumers are considerably more interested in receiving offers based on their personal data, whereas many in mature markets are not.

Research also indicates that it is difficult to homogenise consumer groups by conventional demographic and income measurements. Vikas Choudhury, COO and CFO, AIMIA Inc., a loyalty management company, said, “India is a very fragmented society with several consumer trends pulling in different directions. At present, there is a consumer tendency towards functional and transactional behaviour – towards instant gratification. But things will settle and new patterns will emerge.”

Khurana pointed to emerging consumer subsets: “Vserv has developed 25-plus user personas like fashionistas, sports fans, avid gamers, travel enthusiasts, music maniacs and metro dwellers.”

HT 141027