Financial Daily from THE HINDU group of publications
Friday, May 27, 2005
Financial Daily from THE HINDU group of publications Friday, May 27, 2005 |
|
|
|
|
|
Industry & Economy
-
Economy Marketing - Insight Consumption groups and demand for durables Sudhanshu Ranade
Chennai , May 26
IT is not enough to know how large a market for this or that commodity is. It is also necessary to ascertain where that market is located; in geographical terms, of course, but also across income groups.
Whom ought you to target for the most rapid growth potential? The rich, middle income groups - or perhaps those a little further down the scale. Such an exercise has the additional advantage of simulating the effect on the consumption of this or that item by this or that segment of the population when it moves on to higher levels of income, and acquires the tastes and habits that go with its new status.
Data on how the demand for durables varies with income groups, and how it rises as people move up to higher income brackets are precious. Independent surveys involve a huge and unnecessary expenditure of time, effort and money. And the `market demographics' reports put out various agencies are often of uncertain value. They do not have a proven record of consistently correct assessments. Things are a bit easier now, with the publication of NSS 55th round data relating to the period from July 1999 to June 2000.These data are static; they relate to the situation at a particular point of time. But since the consumption shares of different consumption groups (in both rural and urban India, except for those at the very top) remained roughly steady between 1987/1988 and1999/2000, it would seem that all groups, practically without exception, might increase real total consumption at about 3 to 4 per cent per annum, in keeping with the trend for real per capita GDP.
Indeed, this can be regarded as some sort of a lower-bound. First because the population in the 25-44 age group over the next 20 years will increase by 48 per cent in rural India - and by 44 per cent in towns - for States which rank higher on the per capita GDP ranking. As for States lower down on this list, the increase in rural and urban areas will be 63 and 60 per cent respectively. This change will bring in lifestyle changes with it, particularly in the home entertainment and utility segments. Second, with the nuclearisation of families, many formerly home produced goods are now bought from stores. Not only obvious things like spices and pickles, but also less obvious things like pressure cookers; and `preservatives' like refrigerators. To get full value from studying the often minute quantities of commodities consumed per capita, in this or that income group, one should bear in mind that there were approximately 148 million rural households according to the 2001 Census, and 63 million urban households. Figures for the open-ended upper group seem small only because of the wide range of consumption levels covered by this group.
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|