Understanding the changes in consumer behaviour in India is a crucial challenge for marketers. This research paper aims to explore the factors that influence consumer behaviour and comprehend these changes. By doing so, businesses can develop strategies to adapt and secure future growth and success.
The research paper is based on secondary data sources and the observation of consumer buying behavior. It highlights how Indian consumers’ attitude has shifted towards desiring a luxurious and comfortable lifestyle, prioritizing present enjoyment over future savings. Additionally, it discusses the significant emergence of the rural market in India for various essential consumer products.
The behavior of consumers is influenced by a range of factors, including personal motivations, needs, attitudes, values, personality traits, socio-economic and cultural backgrounds, age, sex, professional status, and social influences from family, friends, colleagues, and society. We developed the HSSE model (Health Safety Sophistication and Environment) specifically for Indian consumers. Our research findings showed that modern consumers strongly embrace their cultural traditions and values. As a result, foreign companies have had to incorporate an Indian aspect into their products in order to thrive in the Indian market.
McDonalds, MTV, Pepsi, Star TV, Coca Cola India, and other brands have had to adjust their strategies to cater to the Indian market in order to thrive in India. The purchasing patterns of Indian consumers have undergone significant transformations. They are no longer solely focused on acquiring products; they also desire enhanced experiences, services, and surroundings. Consequently, shopping malls have gained popularity as they offer a convenient venue where shopping, entertainment, and superior amenities are all accessible. The preferences of younger individuals are rapidly evolving as they are willing to allocate more funds for better facilities and ambiance.
The pace of change in the needs, desires, and wants of Indian consumers is expected to continue increasing. To achieve sustainable long-term success and growth, marketers need to understand how consumers will respond to product features, price, and advertising appeals. This understanding gives them a significant advantage over competitors. The paper on changes in consumer behavior in India includes an introduction, literature review, objective, research methodology, factors affecting consumer behavior, consumer decision-making process and characteristics of Indian consumers,the new Indian market structure, findings and analysis (including today’s consumer trends and changes in marketing strategies), future trends in consumer behavior,and a conclusion on how to succeed.There are 8 references included.
Introduction: Understanding buyer behavior is the most challenging concept in marketing.The attitude of Indian consumers has undergone drastic changes recently.They now desire a life filled with luxury and comfort and prioritize living in the present rather than saving for the future.Notably, there has been an increase in consumerism in India’s rural market for basic goods.The expanding middle class greatly influences the consumer culture in India which anticipates changing purchasing habits.Additionally,the rapid expansion of the services sector results increased per capita income.As the agricultural sector experiences slow growth, there is a shift in people’s transition from agriculture to industries and services that offer better growth opportunities.
The consumption pattern of a country is impacted by numerous factors. These include the liberalization of economic policies, purchasing behavior of the younger generation, financial autonomy at a young age, rise in nuclear families, and increased media exposure. The present generation’s tastes and preferences are changing rapidly as they are willing to pay more for better amenities and ambiance. Furthermore, the growth of credit culture in India has greatly contributed to increasing consumerism.
The purchase of homes, cars, two-wheelers, and consumer goods in India has significantly increased due to the Indian consumer’s willingness to buy on credit and pay later. Additionally, there has been a remarkable rise in the demand for luxury products compared to ten years ago when it was virtually non-existent. This growth is a result of improved purchasing ability among Indian individuals. At present, Indian consumers possess extensive awareness regarding product choices, prices, quality, and alternative options available.
The purchasing is done by taking into account various factors. Nowadays, price is not the only consideration it used to be a few years ago when it played a major role in purchasing. Marketers are making efforts to attract the growing Indian middle class as they make up the majority of Indian consumers. CHANGES IN CONSUMER BEHAVIOUR OF INDIA 5 Literature Review:- Consumer behaviour encompasses all the decisions made by consumers regarding the acquisition, consumption, and disposal of goods, services, activities, and ideas. This includes not only tangible products like bath soap, digital music players, and automobiles but also the use of services, activities, and ideas such as visiting a doctor or going to a theme park. (Source- Hoyer, Macinnis and Pinaki Das Gupta, 2008). In 1954, David M Potter presented the situation of consumers with diverse nature and ambitions. Cyndee Miller (1995) described that women have 80 different natures when it comes to purchasing in various capacities.
Fitzerald (1994) discusses the role of lifestyle in determining consumer behavior. The Advertising Age (1995) provides reasons for creating various consumer images. Maxine Wilkie (1995) argues that demographics are crucial for shaping consumer culture. Adweek’s Marketing Week (1994) presents the shift from housewives to working wives and the fading culture associated with it. Howard and Sheth (1969) explain the influence of internal and external factors on consumer purchasing behavior.
The human mind, often called a “BLACK BOX,” receives stimuli that result in positive or negative perceptions. This stimulus and response model determines whether acceptance or rejection occurs. The aim of this research paper is to understand the changing consumer behavior in India and develop strategies for successful long-term adaptation and growth.
The purpose of this study is to examine how different factors affect consumer behavior in India and what it means for marketing strategies. The research also seeks to uncover new trends in consumer behavior. The study utilizes a descriptive methodology. This article analyzes the changes observed in Indian consumer behavior, aiming to reveal unique insights into its impact on sustainable growth and success in marketing strategies.The research paper assesses consumer behavior by observing consumers in various locations such as shopping halls, talkies, market streets, beauty parlours, hotels, restaurants, schools, colleges, and social gatherings. It utilizes secondary data sources to evaluate the influence of different family members (husband, wife, children) on purchasing specific products or services and examines factors affecting consumer behavior.
The purchasing behavior of consumers is affected by numerous factors such as personal motivations, needs, attitudes, values, personality traits, socio-economic and cultural backgrounds, age, gender, professional status, and social influences from family, friends, colleagues and society in general. These factors work together to shape individuals’ consumer behavior. In rural India, specific factors influence buying behavior.
The environment of the consumer, including their surroundings and living conditions, greatly impacts their buying behavior. For example, access to electricity and water supply can influence the demand for durable goods. Additionally, the geographic location of the consumer reveals their thought process. For instance, villages in South India are more receptive to adopting technology compared to other parts of the country. This disparity leads to HMT selling more winding watches in the northern region and more quartz watches in the southern region.
Influence of occupation – The land owners and service clan purchase more of Category II and Category III durables compared to agricultural labourers/farmers. 4. Place of purchase – (60% prefer HAATS due to better quality, variety, and price). Companies must evaluate the impact of retailers on both village shop consumers and haat shoppers. 5. Creative use of product – For instance, Godrej hair dye is being utilized as a paint to color oxen’s horns, whereas washing machines are being used for churning lassi. Studying the product’s end usage provides indications to the company regarding the need for education and potential new product ideas.
Cultural factors play a significant role in influencing consumer behaviour. They have a broad and deep impact on consumers’ wants and behaviour. Understanding the buyer’s culture is crucial for marketers. In India, with its diverse cultures, this becomes even more challenging for marketers. Some cultural factors that influence buyer behaviour include product characteristics such as colour, size, design, and shape. Numerous examples support this point.
For instance, the Tata Sumo was initially introduced in rural India in white but did not receive a positive reception. Nevertheless, when the Sumo was relaunched under the name Spacio, featuring a vibrant yellow color and an increased seating capacity along with the capability of transporting goods, it gained higher acceptance. Similarly, Philips audio systems provide another illustration. Urban India tends to favor smaller technology, whereas rural India holds a contrasting perspective. This is the primary factor contributing to the widespread acceptance of larger audio systems.
Thus, Philips produces audio systems that are popular in rural India due to their large size. 2. Social practices vary across different cultures. For instance, some villages have communal bathing areas where villagers used to purchase one Lifebuoy cake and divide it into smaller bars. This prompted Lifebuoy to introduce individual 75-gram soap bars. 3. In Indian culture, males are traditionally regarded as the primary decision-makers. The opinions of the Mukhiya (village head) are often shared with the whole village, and even within a household, the male head has the final say. This trend is particularly strong in rural areas. 4. Saving and investment patterns have shifted from gold and land to items such as tractors, VCRs, and LCD TVs. Consumer behavior in India is undergoing changes.
The characteristics of Indian consumers can be summarized using the HSSE model: Safety, Health, Sophistication, and Consumer Environment. There are also different segments within the Indian consumer market. The Socialites, for example, belong to the upper class.
Socialites are individuals who prefer to shop in specialty stores, enjoy going to clubs on weekends, and are willing to spend a generous amount on luxury goods. They are constantly in search of unique and distinct products, opting for high-value and exclusive items. Additionally, socialites prioritize well-known and reputable brands in the market. On the other hand, the conservative segment consists of middle-class individuals who reflect traditional Indian culture. They have a cautious perspective when it comes to making purchases and prioritize spending quality time with family over partying. The conservatives also prioritize savings rather than extravagant spending.
They are slow in decision making and prefer to gather a significant amount of information before making any purchase. They prioritize durability and functionality, while also being conscious of their image. The working women segment has experienced considerable growth in the late nineties, which has provided great opportunities for Indian retailers. These women have evolved from the traditional role of homemakers and are now successfully competing alongside men, proving their capabilities. Working women make independent decisions when it comes to purchasing products that appeal to them.
The consumer behavior of India’s youth segments has undergone significant changes. Referred to as the “rise of generation next,” this shift is met with great optimism and enthusiasm. It is attributed to the liberalization children reaching adulthood. These individuals possess a global perspective and have access to vast amounts of information, unlike their parents. Growing up in a consumption-friendly and consumption-encouraging society, they are predicted to lead the creation of a new, modern, west-embracing consumer society. Moreover, they are expected to contribute to the demographic dividend, driving economic growth in India.
The New Indian Consumer Market Structure can be categorized into five types of consumer groups based on their consumption preferences. This framework helps understand the different consumer segments:
The Rich: This group consists of affluent individuals who possess luxury goods such as cars, PCs, and air conditioners. They are the primary consumers of premium products.
The Consuming Class: This category includes consumers who own 70 percent of “utility” durables such as two-wheelers, refrigerators, washing machines, and the majority of regular FMCGs (Fast-Moving Consumer Goods).
The Climbers: These consumers have at least one major durable item in their households, such as a mixer, sewing machine, or television set.
They are the main consumers of population segment consumer goods. The Aspirants are consumers who are just entering consumption and have the very basics goods like a watch, a bicycle, a radio, or a table fan. The Destitute are consumers who own and consume practically nothing, living as they do from hand to mouth. (Source: S. L. Rao and I. Natrajan, Indian Market Demographic, 1994) CHANGES IN CONSUMER BEHAVIOUR OF INDIA 11 Income distribution of Indian Population in rural and urban areas:- Rural consumer of India:
Rural consumers primarily consider the value of a product, which is associated with its benefits, availability, and cost. When it comes to benefits, they consider the product’s features, packaging, attractiveness, and availability at retail shops and haats. Cost is also an important factor for rural consumers, as they evaluate whether the product is reasonably priced. Other factors that influence their purchasing decisions include their occupation, income, culture, perception, and attitude.
