The Hindu Business Line : Pampering the right customer

Indians are getting richer and they are no longer shy of spending. Many global lifestyle companies have set up operations in India, more are on the way. sector.

A LOUIS VUITTON store in Mumbai.

"The potential is massive in India ... we will develop a new generation of customers in India, people who are very aware of what's happening in the rest of the world."

_ Yves Carcelle, Chairman, LVMH

"We were successful in China in a short time. India is also an emerging market and we wanted to be among the first to start here."

_ Xavier Bertrand, Head of

Chanel in India

There is potential for luxury brands in India but figuring out how the rich consume is a complex task. While there is old money from the industrial dynasties, there is new money coming in from the many faces of entrepreneurship, which includes the BPO generation.

While retail consultancy Technopak has published a study on the luxury segment, of late there have been fledgling agencies from the media and market research fraternities latching on to this segment. From an audience-rating agency like TAM that has created an elite panel, there are more marketing and communications outfits being created and commissioned to cater to this growing segment.

Take Starcom MediaVest Group's recent decision to set up a sector vertical consulting unit, `C', for lifestyle marketing and communication. Explaining the need to create the new vertical, Ravi Kiran, CEO, South Asia, Starcom MediaVest Group, says: "Today we are supported by a strong economy, buoyant personal income trends and growing consumer eagerness to spend. The lifestyle products and services sector is witnessing exemplary growth. On the one hand, Indians are getting richer and on the other, they are no longer shy of spending on themselves. Many international lifestyle companies, several dozen of which have set up operations in India, have noticed this trend and many more are on their way. Simultaneously, many Indian brands are attempting to establish a strong presence in this sector. We see a significant opportunity in providing marketing and communication consulting services to these brands through our dedicated sector vertical.''

Creating its first syndicated proprietary research - Top Drawer - to understand the elusive luxury customer, the objective of the study was segmentation analysis, purchase and recommendation behaviour, media consumption behaviour and opportunity exploration in the luxury segment.

According to Anjana Sharma, Managing Consultant, `C', "Many characteristics distinguish the luxury consumer, the true affluent from the rest of the population. Yet, more myths surround this audience segment than perhaps any other. Given the fact that the truly affluent consumers are also the least researched, `C' attempted to create original knowledge by commissioning an intensive proprietary study ahead of the formal launch of the unit.''

The largest media buying and planning agency Group M's marketing communications consultancy division, m Consult, is conducting a study on luxury consumers. Having clients wanting to enter the luxury segment in the country, the division is in the process of tying up with a market research agency with its research in this area.

Apart from aiding its own clients with the study, m Consult would be working with the Insights team of the respective Group M agencies to provide the high-end clients with solutions. Group M's agencies such as Mindshare, Maxxus, mediaedge:cia and Motivator are expected to be given solutions while servicing their high-end clients with the help of m Consult.

Juhi Ramakrishnan, Director, m Consult, says, "While the super-rich segment has always existed, it had not come forward to choose the kind of products it wanted. Now with premium brands coming into the country, it has a choice of what to buy.'' m Consult expects to tap into segments such as apparel, financial services, automobiles and telecom. And the study is not just limited to the affluent class. There are local entrepreneurs who are looking at going premium with their offerings. As Ramakrishnan says, "It is not just about the Tatas and the Birlas. There are new emerging segments such as the moneyed professional who are also asking the same questions about the luxury segment. This year, the luxury segment is going to be high on our agenda.''

The year-old division of Group M has been offering marketing consultancy to entrepreneurs who offer niche products to high-end consumers. Its clients would range from fashion brands such as Armani to the local Indian designer brand waiting to make a mark in the luxury segment.

"We already have large quantitative data but now will be topping it up with qualitative data and work on individual categories. We would be working with the Insight teams at Group M to come up with client-specific solutions,'' says Ramakrishnan. From studying the media consumption patterns to observing behavioural patterns at retail stores, m Consult would be offering solutions to its clients who want to tap the luxury segment.

Then there is TAM Media Research, which recently released the preliminary findings of the world's first Elite TV Panel. An initiative of the Indian media industry, this is the latest value addition for the Indian TV industry. It will assess TV viewership behaviour of the most precious set of consumers that the brand owners attempt to target - the crème de la crème of the Mumbai and Delhi population. TAM's Elite Panel is a mix of cable, DTH and CAS homes.

Claims L. V. Krishnan, CEO, TAM Media Research, "Across the globe, all elite consumer media studies are recall-based survey measurements. Very few attempts have been made to measure this exclusive set of consumers through a continuous panel-based method. TAM's Elite Panel is the world's first such study to understand elite consumers' TV viewing habits."

The Indian elite panel captures the nuances of TV viewing among the top 3 per cent of the socio-economic strata in Mumbai and Delhi.

Meanwhile, agencies such as Hansa Research believe they can provide depth and width when it comes to studying the upwardly mobile urban males of India, through its `first of its kind' study, (UM)2. According to Ashok Das, Managing Director, Hansa Research, "Conventional wisdom says that upper SEC homes hold much greater potential for marketers, as they are also synonymous with more disposable income. As a result these homes and their individual members have been researched to death. What they wear, what they eat, what they spray on, where they go for vacations, for fitness, to eat out ... all these and more have bombarded the poor man time and again. Customised studies, syndicated studies, panels - each of these tools have been used to extract meaningful data, with a view to taking tactical decisions. However, these studies fail when it comes to tapping the entire gamut due to cost and time considerations and geography being restricted to the specific marketer's area of operation.''

Hansa Research has leveraged its expertise in IRS (India's Readership Survey) in its (UM)2 study that interviews nearly 1,000 men from top-end homes (SEC A1+), covers the `work span' of most men (25-50-year-olds) who work as entrepreneurs, businessmen or as employees and across 35 towns of India (5 lakh + towns).

Explaining the attributes of the male consumers (UM)2 studied, Das says, "They consume more and their male grooming quotient is nearly twice as high as compared to their lower SEC counterparts in the same geographies. Their investment in insurance is four times higher in this group as compared to the all-India figure of 13 per cent. For every four-wheeler-owning home in the lower SEC there are 21 (UM)2 homes. Besides, credit card ownership is 15 times higher among (UM)2.''

Hansa Research claims that marketers such as HLL, L'Oreal, Airtel, Bharti-WalMart and Dentsu are expected to be users of its (UM) 2 study.

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