The Hindu Business Line : The Dhoni effect: Rise of small town Indian consumers

New Delhi, March 19 The increasing importance of the non-metro consumers from towns such as Ahmedabad, Jaipur, Lucknow and Indore should have advertisers following marketers into small town India with just as much enthusiasm. But media spend, skewed towards the metro markets, is not keeping pace. In other words, though companies smell a good market in these non-metro towns, they are yet to back their marketing with enough advertising focus on these towns.

According to an Ernst and Young study, titled ‘The Dhoni Effect: Rise of Small Town India’, on sheer affluence, 22 key urban towns (KUT) such as Chandigarh, Ahmedabad, Jaipur, Lucknow, Indore or Pune have three-fourths or more of the affluence levels of Mumbai. On growth potential, they do even better. While KUT, and other towns and rural India has a larger share of consumption spends vis-a-vis the metros (70:30), the ad spends in most product categories are not in the same proportion. As in the case of some of the cola manufacturers, this proportion is as high as 80 per cent in favour of the metros, in spite of metros generating only about 25 per cent of sales.

On weighted score of 4.8, based on parameters of affluence index, population size and growth potential, Pune, Chandigarh and Thiruvanathapuram are right behind Hyderabad’s 4.9. Predictably, Delhi (8.5), Mumbai (6.9), Bangalore (5.7) lead the list, but Thiruvananthpuram stands ahead of Chennai and Jaipur’s 4.5 scores. A study of the consumption spends shows that metros constitute about 30 per cent of the total consumption market of hundred cities mapped by Indicus Analytics, implying that KUT, other towns and rural India together garner a whopping 70 per cent.

Interestingly, English movie channels today have higher viewership in cities of Gujarat than some of the larger metros, notes the study. However, while marketers continue to define the top 15-20 towns as their market, a majority of their investment remains restricted to the metros, though this is gradually changing.

An assessment of the key factors driving media spends indicates that while KUT scores higher on growth and potential, has less media clutter and thus offers high media efficiencies the media bias is still towards the metros.

The report blames factors such as limited measurement tools to judge media effectiveness beyond metros and the price-sensitive, volume-driven nature of KUT markets. In addition, there is a significant premium attached to English language medium among the consumer markets given that English has traditionally been the language of the upper socio-economic categories, although this is no longer true, says the study.

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