A Grand Project On CLASS ADVERTISING In partial fulfillment of the requirement of two years full time Masters of Business Administration (MBA) Programme (2008-2010) Of Gujarat University, Ahmedabad UNDER GUIDANCE OF: PREPARED BY: Juhi Shah Chetan Pandya Professor ROLL NO. 8066, MBA (2008-2010) 1
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
A
Grand Project
On
CLASS ADVERTISING
In partial fulfillment of the requirement of two years full time
Masters of Business Administration (MBA) Programme (2008-2010)
Of Gujarat University, Ahmedabad
UNDER GUIDANCE OF: PREPARED BY: Juhi Shah Chetan Pandya Professor ROLL NO. 8066, MBA (2008-2010)
1
N.R INSTITUTE OF BUSINESS MANAGEMENTGLS CAMPUS, AHMEDABAD
GUJARAT UNIVERSITY
CERTIFICATE
This is to certify that Mr. CHETAN PANDYA , ROLL NO : 8066, student of
NAVNITLAL RANCHODLAL INSTITUTE OF BUSINESS MANAGEMENT (GLS-
MBA) has successfully completed his grand project on “CLASS ADVERTISING ” in
partial fulfilment of the MBA program of GUJARAT UNIVERSITY. This is his original
work and has not been submitted elsewhere.
__________________ __________________
Dr.Hitesh Ruparel Juhi Shah (Director) Professor and Project guide
2
PREFACE
As a part of the course curriculum, the MBA students are required to prepare a grand
project in their final semester. The objective behind the preparation of this report is to relate
the Managerial concepts and theories taught in the classroom to the practical application, to
develop the presentation skills and to learn how to make effective reports.
The topic of my project was “CLASS ADVERTISING”. Here I studied the exposure of
different socio economic classes to various media.
This report is entirely prepared for the academic purpose and in spite of my best efforts
there may be errors for which I take the responsibility.
GLS – NRIBM CHETAN PANDYA
Ahmedabad.
MBA (2008-10)
3
ACKNOWLEDGEMENT
In the earnest attempt to prepare this report, Prof. Juhi Shah has played a pivotal role and
has provided constant motivation as a guide. I am truly obliged and indebted to her for the
time and focus she provided.
Further, I would like to extend my acknowledgement to Dr. Hitesh Ruparel for providing
the environment and infrastructure needed to accomplish this task. As a Director in Charge
of the institute, he has thoroughly helped and counseled at each step of this process.
Above all I am also very thankful to all people who directly or indirectly have proved to be
beneficial in completing the project.
Last but not the least, I am grateful to our institute, NR Institute of Business Management
and Gujarat Law Society including all their members and participants for providing such
excellent infrastructure equipped with ultra modern facilities which served as a great source
of convenience and information.
4
CONTENTSPART I
Acknowlegement………………………………………………………..i
Executive Summary…………………………………………………….ii
The Indian Media & Entertainment Industry
An Overview……………………………………………………….1
Categories and Growth………………………………………….4
Advertising Industry
An Overview………………………………………………………10
As a part of IE&M…………………………………………….....12
New Trends……………………………………………………....16
Scope of Ad Industry in India………………………………....17
PART II
5
Mass V/S Class Advertising…………………………………………..18
Shift from Mass to Class………………………………………………23
Class Advertising: Meaning…………………………………………..26
SEC: A debate…………………………………………………………...34
SEC: Understanding Class
Demographics……………………………………..………39
Media………………………………………………………..44
Understanding target and media selection…………..48
SEC: Media Preference
Research Study……………………………………………………
Findings……………………………………………………………..
PART III
Conclusion………………………………………………………..
Bibliography……………………………………………………...
Webography………………………………………………………
Glossary……………………………………………………………
Annexure
Questionnaire……………………………………………..
6
EXECUTIVE SUMMARYWith a view to cater to the need of the advertiser and know the insights of the
advertising industry, the project report covers one of the main aspects that has
been one of the much talked about area of consumer segmentation: Socio-
Economic Classification.
The project report covers the overview of Indian Entertainment & Media industry. It
is one of the fastest growing sectors of the Indian Economy. Further, the Indian
advertising industry as a part of IE&M industry forms 38%, estimated at roughly
around Rs. 17000 crores at present.
With the advent of many media reaching to the bottom of the pyramid, it is very
essential for an advertiser to choose the right media that reaches right people at
right time. However it is not an easy thing to predict as to what would be the best
medium. For this purpose, a new concept was developed The SEC classification,
which was created in 1988, ratified by Market Research Society of India (MRSI)
and is used by most media researchers and brand managers to understand the
Indian consuming class
SEC, the classification of Indian consumers, is based on two parameters:
Occupation and Education (Urban and Rural). For years, marketers followed mass
advertising but then with the increasing competition and rapid media development
and consumer shift in preference, there is a shift from mass advertising to class
advertising. Despite a debate over the reliability of the SEC, it continues to be the
top rated choice of the advertiser for the classification of the Indian consumer
market.
Class advertising requires lot of insights into the area to know the preference of the
person belonging to a particular class. For one such purpose, the project report
shows a survey conducted on the basis of SEC showing the overall media selection
or the inclination of the mass of the class and thereby making it easier for the
advertiser to select the media for advertising. Also the comparative preference
model, that calculates the overall preference of the people based on four
7
parameters Reliability, Effectiveness, Penetration and Preference of class from A1
to E2 (Urban) helps the advertiser to select the medium to advertise based on his
target class and also with the Inter-class and Intra-class media comparision with
the weighted score.
The project is concluded with the brief strategies/ suggestions and the survey
reports that would be of immense help to identify and choose the right media for the
advertiser based on SEC.
8
Research Methodology
OBJECTIVE: To study and provide an insight into advertising with respect to the media
preference based on Socio-Economic Classification. To highlight the shift in focus from mass advertising to class advertising. To arrive at the commonest medium preferred by each SE class by
application of research techniques like measurement and scaling, data interpretation, evaluation, strategy formulation for the advertisers to choose the right medium to attract specific class customers based on my primary survey.
To help advertisers choose the right medium to attract specific class customers based on the primary survey. By providing strategic solution to tap the untapped potential markets
SCOPE:
The project will cover an overview of Indian entertainment and media industry and detailed study about Indian advertising industry. The main area of focus will be on socio-economic classification (SEC) i.e, Urban and rural, of the consumers. A primary survey will be done by collecting primary information thorough questionnaire. Further data analysis and data presentation would be done in order to arrive at the common preference of SEC class for particular advertising media out of Print, TV, Radio, Out of Home (OOH), internet based on weighted average preference model.
LIMITATIONS: Time limit Cost constraint Inability of covering all the aspects related to the Indian Media and
Entertainment sector as well as advertising industry due to its wide scope
PROJECT DETAILS:
AREA OF STUDY
Indian Entertainment Industry: Origin and History Growth Drivers
9
Indian Advertising Industry: Introduction Size of the industry Shift of focus from Mass to Class SEC: Demographic study SEC: Media preference through research study Research Findings Strategic Solution
RESEARCH METHODOLOGY
RESEARCH DESIGN: Exploratory ResearchRESEARCH DATA SOURCE: Primary Source: Questionnaires
Secondary Source: Internet, publication, journals, newspapers, magazines, Business Review, Periodicals, etc.
RESEARCH INSTRUMENT: QuestionnaireSAMPLE METHOD: Stratified Random Sampling, Judgment sampling, Convenience samplingSAMPLE SIZE: 30 for each class (8 classes) = 240
10
An overview
Changing consumption patterns, rising aspiration levels and increase in the number
of middle-income and upper-income households has led to growth in non-
discretionary sectors like retail, telecom, and hotels among other sectors. Media
sector is no exception to the trend.
The Indian media and entertainment sector is one of the fastest growing sectors of
the country and is expected to grow at an annual rate of 18% till the year 2011. It
has seen many changes in terms of economic, demographic, technological,
liberalization and others in the past decade which has led to the higher chances of
growth to the industry.
The Economic influence: The Indian Entertainment and Media (E&M) industry
has out-performed the Indian economy and is one of the fastest growing sectors in
India. The E&M industry generally tends to grow faster when the economy is
expanding. The Indian economy has been growing at a fast clip over the last few
years, and the income levels too have been experiencing a high growth rate. The
increasing rate of urbanization, the penetration of television and radio industry in
the rural areas with the help of the technology and the rising levels of incomes of
the people in India has facilitated the growth rate of Media and Entertainment
industry in India.
Over the past few years, India has registered the fastest growth among major
democracies. It represents the fourth largest economy in terms of ''purchasing
power parity''. Thus, E&M industry is also expected to significantly benefit from this
fast economic growth
The Demographic Influence: Over the years, spending power has steadily
increased in India. Lifestyle changes brought about by changes in economic activity
are also spurring growth of the Indian E&M industry. In urban areas of India, the
consumer mindset is changing due to increased exposure to global influences via
media, and other interactions leading to higher aspirations. The Indian rural market
*Note: The figures taken above include only the legitimate revenues in each segment. Revenues from the Animation and Gaming segments have not been included in the industry size as these are traditionally included in the Indian IT and Software Revenues
Television Industry
Amongst the segments of the industry, the television industry will continue to
contribute the largest share. Subscription revenues are projected to be the key
growth driver and will increase both from the number of pay TV homes as well as
increased subscription rates. New distribution platforms like DTH and IPTV will only
increase the subscriber base and push up subscription revenues.
Print Media Industry
The print media industry, comprising of newspaper and magazine publishing, is
projected to grow at 13% (CAGR) from year 2006-2011. A booming Indian
economy, growing need for content and government initiatives that have opened up
the sector to foreign investment are driving growth in print media. With the literate
population on the rise, more people in rural and urban areas are reading
newspapers and magazines today. Also, there is more interest in India amongst the
global investor community. This leads to the demand for more Indian content from
India.
Film Entertainment
The Indian film entertainment industry is projected to grow from the present size of
Rs 9600 crores to Rs. 17500 crores. Advancements in technology are helping the
Indian film industry in all the spheres-film production, film exhibition and marketing.
The industry is getting increasingly corporative.
Radio
The radio industry, fuelled by the positive FM-II Radio Policy, is projected to grow
with the highest CAGR till the year 2011. In 2005, the government opened up the
16
sector to foreign investment along with migration to a revenue-share scheme.
These factors along with privatization of a large number of frequencies as part of
the FM II Radio Policy will drive growth. New concepts like satellite radio, visual
radio and community radio have also begun to hit the market.
Music
While physical sales in the music industry continue to be hampered by piracy and
falling prices, digital music has witnessed a surge that will propel this industry in the
next five years. The total music industry is currently estimated to be worth around
Rs 740 crore and is expected to grow at a CAGR of 4% in the next five years.
Out Of Home
Globally, outdoor advertising is very popular as corporations abroad have
recognized the outdoor media as a very popular medium of advertising. But in India
in spite of OOH being very effective and very economical in comparison to
newspapers and television it has not gained momentum as compared to other
segments. However, OOH advertising is expected to be the fourth largest segment
of IEM industry by the year 2011.
Live entertainment
Live entertainment is a huge source of revenue for the global Media and
Entertainment industry. Live entertainment - sometimes also called event
management- is growing at a fast and steady rate. The number of corporate
awards, television, films, and sports events are increasing rapidly, helping the
sector grow at a fast rate. The current live entertainment segment of the Media and
Entertainment industry comprises a small number of large event management
companies and a large number of smaller companies.
Internet
17
Internet advertising spending is set to grow several folds, especially in India’s
entertainment sector. While internet advertising comprises nearly 0.5% of
advertising at present, it is expected to be 4% by the year 2010. Until such time, the
projected yearly growth rate of the ad industry is to stabilize at 11%. The growth of
online ad industry is estimated to shoot up to 43% by the year 2011. However,
even though India is ranked eighth in the world in terms of number of internet
users, the country is not ranked amongst the top 10 countries in terms of average
monthly hours online per unique visitor which may hamper the growth of internet
advertising as compared to others media types.
Others
Amongst the other segments, the animation and gaming industry is expected to
show the maximum growth, albeit from a small base. The animation and gaming
industry is projected to grow from the present size of Rs 11 b to Rs 29 b by 2011,
implying a 22% cumulative annual growth over the next five years.
The following is the comparative chart of the different sectors’ percentage revenue
in the Indian Entertainment and the Media industry in the year 2007 and that of
expected in 2011.
18
Thus, the estimate says that TV sector will continue growing while the share of print
and film entertainment will increase in absolute numbers but at a decreasing rate
while the rest of the sectors will have more or less the same share.
Thus The Indian entertainment and media industry today has everything going for it
- be it regulations that allow foreign investment, the impetus from the economy, the
digital lifestyle and spending habits of the consumers and the opportunities thrown
open by the advancements in technology. All it has to do is to cash in on the growth
potential and the opportunities. The government, on its part, needs to play a more
active role in sorting out policy-related impediments to growth. The industry needs
to fight all roadblocks- such as piracy- in a concerted manner, while churning out
high-quality, world class end products. The entertainment and media industry has
all that it takes to be a star performer of the Indian economy.
ADVERTISING INDUSTRY
The concept of advertising existed long before we had a term for it. Advertising is
defined as the art of positioning and creating brands and persuading
consumers to buy them through messages in mass media or personalized
media that is gaining much attention these days.
19
It is also the means of informing as well as influencing the general public to buy
products or services through visual or oral messages. A product or service is
advertised to create awareness in the minds of potential buyers. Some of the
commonly used media for advertising are T.V., radio, websites, newspapers,
magazines, bill-boards, hoardings etc. As a result of economic liberalization and the
changing social trends advertising industry has shown rapid growth in the last
decade.
Advertising is one of the aspects of mass communication. Advertising is actually
brand-building through effective communication and is essentially a service
industry. It helps to create demand, promote marketing system and boost
economic growth. Thus advertising forms the basis of marketing.
Advertising plays a significant role in today's highly competitive world. A career in
advertisement is quite glamorous and at the same time challenging with more and
more agencies opening up every day. Whether its brands, companies, personalities
or even voluntary or religious organizations, all of them use some form of
advertising in order to be able to communicate with the target audience. The salary
structure in advertising is quite high and if you have the knack for it one can reach
the top. It is an ideal profession for a creative individual who can handle work-
pressure.
Today, new areas are emerging within advertising like event management, image
management, internet marketing etc. Event management is wherein events are
marketed; Image management is wherein a particular profile of an individual or an
organization is projected. Internet marketing has also brought about a lot of
changes in advertising as Internet means that one is catering to a select group of
audience rather than a mass audience.
Overview of Advertising Industry in India
The structure of the advertising industry in Asia Pacific has been affected by
globalization and international alignments creating a smaller number of very large
20
agencies and the growth of independent major media buying houses. Very
sophisticated software optimization and planning systems are now integral to the
industry, enabling agencies to offer a unique positioning in the marketplace to
attract new business.
Global companies are discovering the appeal of marketing their products in India.
With a population of more than one billion, and a middle class that's larger than the
total population of the United States, there's definitely money to be made.
Television, movie, video and radio jingles, newspaper and magazine advertising
and neon-lit billboards in the cities are fueling a revolution in consumer products
and spawning new styles of living - changing food habits, fashions and home
décor. This new advertising is pleasing the growing middle class, one of the largest
target populations in the world, but it is drawing criticism from Indians concerned
that it could sharpen social tensions in a country with so many poor people.
Local retailers in apparel, food, watches and jewelry have all increased their
average ad spending by almost 50% in the past two years. Coupled with many
other local players big retailing brands are spending to the tune of Rs 12,000 crores
annually on advertising and promotional activities. This figure, according to industry
estimates, was less than Rs 400 crores about 2-3 years ago which means the
growth has been a whopping 40%. The local firms are using all the available
advertising tools from electronic to print, outdoor advertising and even models. The
advertising and promotional spending by local brands is substantial during the
festival season and almost 70% of the spending is done between Septembers to
January. The advertising industry in India is growing at an average rate of 10-12%
per annum. Over 80% of the business is from Mumbai and Delhi followed by
Bangalore and Chennai from the rest of the other major cities in the country.
A once-flagging advertising industry is booming in India. It has become fiercely
competitive and one of the country's fastest-growing economic sectors. But the
boom in advertising has touched off a debate on whether the industry has
developed too quickly without preparing consumers adequately.
21
Advertising: As a part of Indian entertainment and media
industry.
The advertising industry is one the most important part of the entire Indian
Entertainment and Media industry. The advertising industry contributed a share of
38 percent in the overall IE&M industry revenue of 2007, up from 37 percent in
2006. The advertising industry itself recorded a growth of 22 percent over the
previous year contributing an estimated Rs 19,600 crore in 2007 as compared with
Rs 16,100 crore in 2006. In the last four years, the advertising industry recorded a
cumulative growth of 20 percent on an overall basis.
22
On the basis of the estimation made by various agencies around the world, the
advertisement industry in India is estimated to reach approximately Rs. 36371
crores by the year 2010, the major chunk of which will be contributed by the print
media of nearly 50%. the reason of that could be the literacy levels rising to 551
million people in India. And more people in rural and urban areas are reading
newspapers and magazines today. Print media is also the favourite segment for
global investors with maximum foreign investment in this segment. The print media
industry still has the potential to grow as 236 million literate people in India are still
not tapped by any publication.
At present, the print media is the highest contributor to the advertisement revenue
followed by television and outdoor advertising respectively. In spite of the increase
in the global internet usage, the total number of people using internet in our country
is far less than other countries. Thus the present share of internet media in
advertising is nearly 0.5-1% which is estimated to be 4% by the year 2011.
The following chart shows the figures of the ad spend from the year 2004-2007 and
the estimated ad spend for the year 2008 against 2010.1
23
TOTAL AD SPEND
010002000300040005000
6000700080009000
10000
2004 2005 2006 2007
YEAR
AD
SP
EN
D(
Rs.
Cro
res)
PRINT TV 00H RADIO INTERNET CINEMA
YEAR
MEDIA
PRINT TV OOH RADIO INTERNET CINEMA TOTAL
2004 5464 4872 847 220 58 139 11600
2005 6323 5412 897 317 106 145 13200
2006 6946 6200 945 133 155 131 14510
2007 8591 6766 391 215 215 194 16372
Thus for that past 5 years, print media has been the largest contributor to the ad
industry followed by TV. However with the emergence of various media like radio
and internet which is gaining much attention these days are expected to rise at a
very high rate taking up the share of print and TV. In spite of all these, internet as a
media and advertising is the fastest growing and is expected to have nearly 4- 5%
ad spend share by the year 2010.
Ad market share percentage of various media year 2008 and 2010
24
2008
PRINT47%
TV40%
OOH7%
RADIO3%
CINEMA1%
INTERNET2%
2010
PRINT46%
TV36%
RADIO5%
OOH8%
CINEMA1% INTERNET
4%
Advertising Market Stats/Projections: YEAR 2008
The overall advertising and media industry is expected to close at Rs 21,314
crore in revenues in 2008, riding a 20 per cent growth rate
25
Television advertising market is projected at Rs 8,674 crore in 2008
The print industry stands at nearly Rs 10,000 crore.
The cinema medium will corner around 0.7 per cent of the total advertising
budget in 2008.
Outdoor media industry will grow at 14 per cent to touch Rs 1,454 crore,
Radio is likely to record a 40 per cent growth in 2008 to touch Rs 672 crore
Internet advertising will constitute only 1.7 per cent of the overall advertising
spends in 2008, up from the current 1.4 per cent.
The decline in share of print and TV is not only because of the upcoming media but
also because the market itself is expanding.
New trends in ad industry
26
Ad industry is one of the fastest growing sectors in the country. With the
development of the economy the development in the industry has also gained
momentum.
It is gaining momentum as a source of information and stream of revenue. All the
recent developments have helped in opening new doors for the development in the
industry. For the past so many years; the ad industry had been concentrating on
mass media. Increasingly, other media are overtaking television and other
traditional media because of a shift towards consumer's change in perception.
Thus, it has become necessary for the advertisers to constantly find newer ideas to
attract the attention of the consumers.
The advertisers are now opting for personalized communication than mass
communication. It has become extremely necessary for the advertisers to
understand the needs of the customers on the individual basis. Thus the shift that is
seen in the Indian ad industry is from mass advertising to class advertising.
The latest buzz in the industry is of online marketing. Mass media like newspapers,
magazines, radio and television are no doubt hugely effective media for commercial
advertisements, but internet is completely different from them in many respects in
terms of achieving the objective of an ad. According to statistics, online ad spend
by the year 2010 is expected to grow at the rate of 43%.
Within online advertising there are many options available to the advertiser. Among
that e-mail marketing tops since it is also a good option for personalized
communication which is preferred by most of the advertisers nowadays. Also, blogs
is an emerging way of communicating to the people.
Another upcoming phenomenon is mobile marketing. With the increase in number
of people having the cell phone especially India, which stands second in the
highest number of mobile users, mobile marketing is gaining attention of many
advertisers.
27
One type of mobile ad is based on SMS (Short Message Service) text messages.
The benefit of SMS text messages is people can respond where they are, right
now, stuck in traffic, sitting on the metro.
A new form of advertising that is growing rapidly is Social network advertising. It is
online advertising with a focus on social networking sites. This is a relatively
immature market, but it has shown a lot of promises as advertisers are able to take
advantage of the demographic information the user has provided to the social
networking site.
Scope of Advertising Industry in India
The advertising industry in India has several competitive advantages:
India has a rich pool of strategic planning, creative and media services
personnel: Indeed, Indian advertising industry has been exporting senior-
level talent to many countries, particularly to the Gulf, South-East Asia,
China, the UK and the US. Indian talent is recognized and respected in
global agency networks.
No other country has access to so many trained management graduates
who can provide strategic inputs for brand and media planning.
Indians are multicultural: we learn at least two languages and that gives us
a head start in understanding cultural diversity.
Most of the top 20 agencies in India have a global partner or owner,
which should provide an immediate link to global markets.
Our production standards in TV and print have improved: With a vibrant
animation software industry, we have access to this area of TV
production.
India's advanced IT capabilities can be used to develop Web-based
A = high/intermediate managers/well educated/ businessmen with large organizations
B = intermediate managers/ good education/ businessmen/ self employed with small organizations
C = petty traders/shop owners/clerks/salesman/ supervisors with some education D = poorly educated petty traders/shop owners/clerks/salesman E = skilled/unskilled workers R1 = well educated, living in good houses R2 = good education, living in not very good houses R3 = some education, living in huts and temporary sheltersR4 = uneducated, living in temporary shelters1 Consists of the two Groups A1 and A2:
Male A1 = 4,018 (1%); Female A1 = 3,386(1%); Total A1 = 7,404 (1%); Male A2 = 7,663 (2%); Female A2 = 6,161 (2%); Total A2 = 13,824 (2%); (All in ‘000)
2 Consists of the two Groups B1 and B2:
50
Male B1 = 9,988 (3%); Female B1 = 8,452 (2%); Total B1 = 18,440 (2%); Male B2 = 10,249 (3%); Female B2 = 8,662 (2%); Total B2 = 18,911 (3%); (All in ‘000)
3 Consists of the two Groups E1 and E2: Male E1 = 12,510 (3%); Female E1 = 11,516 (3%); Total E1 = 24,026 (3%); Male E2 = 20,553 (5%); Female E2 = 19,726 (6%); Total E2 = 40,729 (5%);
(All in ‘000)4 A-E, total urban5 R1-R4, total rural
URBAN
As mentioned earlier, urban population has eight levels of classes starting from A1
to E2. Urban population forms nearly 30% of total population. Going on the lines of
this fact, the population stratification would be as follows:
CHART:
URBAN SEC POPULATION
A10%
B18%
C21%
D24%
E27%
As per the above given data, Sections A & B refer to High-class- constitutes over a
quarter of urban population
Sec C refers to Middle-class-- constitutes nearly 20% of the urban population
Sections D & E refer to Low-class-- constitutes over half the urban population.
51
RURAL
Rural population forms 70% of the total population and SEC Rural has four levels
on the basis of occupation and type of house ___ Pucca, Semi-Pucca and Kaccha.
As per the above given data, Section R1 is closer to B2 of urban population and
forms 3% while Section R2 and R3 are closer to D and E1 of urban classification
respectively forming 8% and 27%. The bottom Section R4 constitutes 33% of total
population of ending up being closer to the last section of urban classification E2.
Now the question might arise, how the classes are termed as high income, middle
income and low income group since the classification does not involve income
altogether. The answer is HPI i.e., Household Potential Index.
HPI uses consumption / ownership of a whole host of durables, packaged goods,
services and demographics, to construct a simple aggregate index of how much
purchasing power a household exhibits.
The concept underlying the index is simple - households owning or using a low
penetration item or having a less popular demographic characteristic (like high
education levels) get a higher score for that. The scores are then aggregated
across all items and a HPI score arrived at for the household. Thus in place of
income, we have a sort of "consumption" / "ownership" / "characteristics" based
index which is a measure of purchasing power. Again, the score for any category is
simply done, eliminating all judgement. It is the reciprocal of the penetration of the
category in the total universe. Thus if 70% have a television, then television
ownership in a household generates a lower score on power / potential (1/70), but if
only 10% have an air conditioner, then air conditioner ownership in a household
gets a higher score (1 / 10). The raw scores aggregated across all items included in
this index are then normalized on a 1 to 1000 scale. Further, within a broad
category, premium versions of it are treated differently - example, a black and white
TV, a colour TV and a flat screen TV.
Based on this HPI score, the relative purchasing power of each SEC is as below
52
Source: survey conducted by Hansa Research for the Media Research Users Council, MRUC.
For the first time, on a sensible common scale the rural SECs and the urban SECs
have been compared. This eliminates the differences in how they think about
income (since these types of income surveys measure respondent's perception of
their own income, without any cross checks).
The R1 social class, the top end of rural is between B2 and C of urban, closer to
B2. therefore, we would say that there is one top band of purchasing power in
India, Urban A1A2, comprising about a little over 6 million households; Then there
is the next band, which we believe would qualify for the 'middle class India" label,
comprising B1R1B2C, between them, harbouring 30 million households; The
ABCR1 target group which would form the broadest possible target group for most
consumer goods is about 35.4 million households, and 132 million individuals over
the age of 12. This target group grew 26.9% between the years 2000 and 2005.
Then there is the lower middle, comprising DE1R2 which is about 37 million
households, where we believe that most Bottom of the Pyramid activities should
begin. The lowest income, are the E2R3R4. These households form the bottom
60% of the population by income, but account for an income share of 30%.
Perhaps there is fortune, after all, at the bottom of the pyramid!
53
However the conclusion given here is on the overall basis, where the categorization
may differ for different products.
To understand, consider an example: A trader whose monthly household income
(MHI) is more than that of a person in section A cannot be included in this SEC
because his educational qualification or occupation does not qualify him for
inclusion. However, there always exists a debate if this bifurcation really shows the
true picture. Because if a person belonging to Section A1 has high income then it
may not be true for the person who belongs to section B2, though they both are
categorized as high income group. Thus even in high income group, the income
variation and status differs which marketers don’t notice before selecting media for
advertising their product.
SEC is an indicator or a pointer towards the “likely to consume” set but often
defies the reality of not pointing clearly towards the “consuming class”, which is
the purpose of any targeting by any marketer. The drawback of using Monthly
Household Income (MHI) lies in the difficulty of capturing the correct data, as the
respondents are hesitant to disclose the correct MHI.
Thus, with nothing as an exception to the drawbacks is acceptable too to most of
the marketers.
Understanding Class: Media
As discussed earlier, the focus is now shifting from mass to class concept.
However, in spite of that, there are many media which though trying hard to focus
the affluence level of a household to which an individual belongs. Socio economic
classification of an urban household is defined by the education and occupation of
the chief wage earner (CWE) of a household. SEC is divided into 8 categories A1,
A2, B1, B2, C, D, E1, and E2. (In decreasing order of affluence)
Social Network Advertising is a term that is used to describe a form of Online
advertising that focuses on social networking sites. One of the major benefits of
advertising on a social networking is that advertisers can take advantage of the
users’ demographic information and target their ads appropriately.
Stratified sampling is a method of sampling from a population. Stratification is the
process of grouping members of the population into relatively homogeneous
subgroups before sampling.
86
Third-party logistics provider (3PL) is a firm that provides outsourced or "third
party" logistics services to companies for part, or sometimes all of their supply
chain management functions.
ANNEXURE
Questionnaire
QUESTIONNAIRE ON MEDIA PREFERENCE (SEC)N.B.:1) Please tick () the boxes for your response and leave the others blank.2) Please rank in the order of preference wherever mentioned.3) The information collected in the survey will be kept confidential and used only for the research
purpose.
(Please select only one option under each question)1. Occupation:
This questionnaire is part of Grand Project on “Class Advertising” as a part of M.B.A studies at N.R. Institute of Business Management. Thank you for your valuable time.