REPORT

ON
INDIAN CONSUMER BEHAVIOR




Submitted To: Submitted By:
Dr. G.Muruganantham Apoorva Khetan
215112017

INDEX

1.0 Introduction
2.0 Characteristics Of Indian Consumer Behavior
3.0 Different segments of Indian Consumers
3.1 The Socialites
3.2 The Conservatives
3.3 Working Women
3.4 Rural Consumers
4.0 Evolving New Consumers In India
5.0 Changing Trends In Indian Consumer Behavior
5.1 Bulk Purchasing
5.2 Trendy Lifestyles
5.3 Buyers market In The Making
6.0 Indian Consumer Decision Making
6.1 Information Search
6.2 Celebrity Influence
6.3 Psychological Buying Decision
7.0 Indian Consumer Shopping Style
7.1 Value For Money
7.2 Deals and Promotions
7.3 Loyalty Style
7.4 Quality Oriented
7.5 Eco-Friendly Products
8.0 Changes in the medium of buying of Indian Consumers
8.1 Retail Sector- Indian Scenario
8.2 Online Marketing
9.0 Case Study- Cadbury India
Conclusion
References


1.0 Introduction:
This study on Indian consumer behavior is aimed at studying about the factors influencing the buying
decision process of Indians and the various modes of buying followed by the Indian consumers to get a
better understanding of the Indian market place thus enabling the marketers to embark on selected
strategies to effectively reach the Indian consumers.
There is a world and there is India, an enigma for centuries. For marketers it is a challenge and an
opportunity. Marketing in India is going through a unique phase. Managing up market niche consumers
and entry level mass markets has become rather complex.
India is a big country with 28 states, over one billion people and 120 dialects/languages.
From the market perspective, people of India comprise different segments of consumers, based on class,
status, and income. An important and recent development in Indias consumerism is the emergence of the
rural market for several basic consumer goods. Three-fourths of Indias population lives in rural areas,
and contribute one-third of the national income. This rural population is spread all over India, in close to
0.6 million villages.
India is a lucrative market even though the per capita income in India is low and it remains a huge market,
even for costly products.
The findings from the latest study - The Bird of Gold - The Raise of Indias Consumer Market - published
by McKinsey Global Institute (MGI), reveal that if India continues on its current high-growth path, over
the next two decades the Indian market will undergo a major transformation. Income levels will almost
triple and India will climb from its position as the 12th largest consumer market today to become the
worlds fifth largest market by 2025.
As Indians income rise, over 291 million people will move from desperate poverty to a more sustainable
life, and Indias middle class will swell by over 10 times from its current size of 50 million to 583 million
people. By 2025, over 23 million Indians will number among the countrys wealthiest citizens.
1

2.0 Characteristics of Indian Consumer Behavior:
The Indian consumers are noted for the high degree of value orientation. Such orientation to value has
labeled Indians as one of the most discerning consumers in the world. Even, luxury brands have to design
a unique pricing strategy in order to get a foothold in the Indian market.
Indian consumers have a high degree of family orientation. This orientation in fact, extends to the
extended family and friends as well. Brands with identities that support family values tend to be popular
and accepted easily in the Indian market.
Indian consumers are also associated with values of nurturing, care and affection. These values are far
more dominant that values of ambition and achievement. Product which communicate feelings and
emotions gel with the Indian consumers.
Apart from psychology and economics, the role of history and tradition in shaping the Indian consumer
behavior is quite unique. Perhaps, only in India, one sees traditional products along side modern
products. For example, hair oils and tooth powder existing with shampoos and toothpaste.
2




3.0 Different Segments of Indian Consumers

3.1 The Socialites
Socialites belong to the upper class. They prefer to shop in specialty stores, go to clubs on weekends, and
spend a good amount on luxury goods. They are always looking for something different. They are the
darlings of exclusive establishments. They go for high value, exclusive products. Socialites are also very
brand conscious and would go only for the best known in the market.
3.2 The Conservatives
The Conservatives belong to the middle class. The conservative segment is the reflection of the true
Indian culture. They are traditional in their outlook, cautious in their approach towards purchases, spend
more time with family than in partying and focus more on savings than spending. Slow in decision
making, they seek a lot of information before making any purchase. They look for durability and
functionality but at the same time are also image conscious.
They prefer high value consumer products, but often have to settle for the more affordable one. These
habits in turn affect their purchasing habits where they are trying to go for the middle and upper middle
level priced products.



3.3 The Working Women
The working woman segment is the one, which has seen a tremendous growth in the late nineties. This
segment has opened the floodgates for the Indian retailers. The working woman today has grown out of
her long-standing image of being the homemaker. Today, she is rubbing shoulders with men, proving
herself to be equally good, if not better. Working women have their own mind in decision to purchase the
products that appeal to them.
3.4 Rural Consumers
About three quarters of the Indian population are in the rural areas and with the growing middle class,
specially in the Indian cities, the spill over effect of the growing urban middle class is also felt in the rural
areas.
The Indian rural market has been growing at 3-4% per annum, adding more than 1 million new consumers
every year and now accounts for close to 50% of the volume consumption of fast-moving consumer
goods (FMCG) in India. As a result, it is becoming an important market place for fast moving consumer
goods as well as consumer durables.

4.0 Evolving new Consumers in India
The high rate of industrialization, growth of service sector and better employment opportunities have
increased consumers disposable income, developed new lifestyles and awareness and a drastic change can
be seen in their buying behaviour.

Today, the drivers in urban and rural areas are the same aspiration, quality and price differing
only in order. D Shivakumar, Nokia

The Indian consumers today wants to live in present and prefers a life full of luxury & comfort and are
not much price sensitive. They are highly aware about the product, price, quality and options available
with them. Indian consumers believe that branded products are more reliable. The brand which identifies
and support family values are more popular and accepted easily by them. Introduction of credit culture
has made the Indian consumers to purchase products on credit and pay tomorrow.
3
The differences are the breadth and depth of the Indian market and the fact that India has undergone
much more social and economic change in the last generation than the US has. David Daniel, CEO
of Spencer Stuart

Three major emerging segments were identified: Kids, the Youth (including the young working singles)
and the Urban Indian Woman. These segments have shown a tremendous increase in influencing and
driving purchase decisions and hence are huge drivers of change in the consumer market. More
interestingly, purchases are being driven not by necessity, but to satisfy individual needs. A high-potential
emerging market is also the vast rural hinterland, which has its own unique characteristics.
3

From pester power, kids have changed their role to becoming influencers. In the older age group, they
have actually become consultants, whom parents turn to for advice during the decision-making process.
Rajat Jain, Mobile2Win


The Indian woman is perhaps less homogenous and more conflicted as a consumer group
compared to the Indian man. Jacob Kurian, New Silk Route


5.0 Changing Trends in Indian Consumer Behavior
5.1 Bulk Purchasing
Urbanization is taking place in India at a dramatic pace and is influencing the life style and buying
behaviour of the consumers. The working urbanites are depending more on fast and ready-to-serve food,
they take less pain in traditional method of cooking and cleaning.
4

Bulk purchases from hyper stores seems to be the trend these days with purchasing becoming more of a
once-a-week affair, rather than frequent visits to the neighborhood market/store/vendor.
SHOPPERS ARE TRIP SHY: 62% of all shoppers shop at hypermarkets only once or twice a month. A
factor that fuels this low frequency of visits is that shoppers view the hypermarket more as a 'stock up'
destination (67% of all hypermarket shoppers were on stock up trips). Encouraging other shopping
missions by introducing trip based loyalty programs would make a casual hypermarket visit a lot more
worthwhile for the top up/emergency or even impulse shopper.
5
The popular growing shopping trend among urbanities is purchasing from super markets to hyper stores.
Deal-seeking is now combined with a growing preference for bulk packs to neutralize the impact of rising
prices. "People understand grimace better in times of recession," says a marketer on the condition of
anonymity. According to Nielsen's findings, "35% of modern trade shoppers today cite buying bulk as
their response to rising food prices."
6

5.2 Trendy Lifestyles
The current urban middle and upper class Indian consumer buying behaviour to a large extent has western
influence. There is an increase in positive attitude towards western trends. The Indian consumer has
become much more open-minded and experimental in his/her perspective. There is now an exponential
growth of western trend reaching the Indian consumer by way of the media and Indians working abroad.
Foreign brands have gained wide consumer acceptance in India, they include items such as;
Packed food
Ready to eat food
Pre-cooked food
Canned food
Personal care products
Audio/video products
Garment and apparel
Footwear
Sportswear
Toys
Gift items


Foreign brands vie increasingly with domestic brands for the growing market in India. Foreign made
furniture is well accepted by the Indian consumers. Malaysian, Chinese, Italian furniture are growing in
popularity in India.
Indian consumers have also developed lifestyles which have emerged from changing attitudes and mind
sets; exposure to western influences and a need for self-gratification. Beauty parlors in cities, eateries,
designer wear, watches, hi-tech products are a few instances which reflect these changes.
While these youngsters are likely to be living in families located in the metros, many of them may be
from smaller towns or affluent rural areas, eating out, movies and occasional clubbing are an integral
part of their lifestyle. Dress is invariably modern and attire must be changed frequently. Sell them fashion
but make sure that the price is right otherwise you will lose them to Sarojini Nagar in Delhi and Fashion
Street in Mumbai.
7
Branded salons take off as the great Indian middle class desire to be groomed, styled and pampered.
You could argue that the entire human race is a vain one, which explains why the global hair & beauty
industry is estimated to be worth anything between $80 billion and $110 billion, according to FICCI.
8


As the Indian middle class earns more purchasing power, they're salting away some of that disposable
income for a few hours of indulgence at their friendly neighborhood branded stores.
8


5.3 Buyers Market In The Making
The sellers market is slowly moving towards becoming the buyers market. Since, Indias economic
liberalization policies were initiated in 1991, many new product offerings have entered the Indian market
and product variety has also increased manifold.
Import licensing restrictions are being eliminated and tariffs significantly reduced and this has led to large
range of consumer goods made available in India.
Indian consumers have always preferred foreign goods and with the liberalization, they now have a choice
of foreign products vis--vis the local products.
ENGAGE AND ENTERTAIN THE YOUTH: Hypermarkets are fast becoming entertainment
destinations for the youth. 40% of all co-shoppers who accompanied the primary shopper were his/her
friends. In addition, nearly 40% of all students spent less than `500 on their shopping trip. A greater
proportion of students visit the hypermarket on an impulse, compared to mature/veteran householders.
9

6.0 Indian Consumer Decision Making
6.1 Information search
In India consumers trust the peer groups , family and word of mouth recommendations for buying
decisions.
They will search reliable information over internet (blogs, social media, news clips, discussion forums,
consumer complaint sites, etc), will discuss with peer-opinion leaders among their friendship circle, listen
to the experiences (with that product) of their close friends, check the credibility and coolness of that

product in media (advertisements and promotions) and then convince parents to access the product. The
family and parents are becoming more dependent on the younger members of the family to take the
purchase decision if the product is related to lifestyle and fashion.
10
The youth, not only ends up the purchase process after they acquires the product, but voices their opinion
in web through various forums (such as Mouthshut.com), social networks (such as Facebook) and viral
mail. They are even smart to load a video in youtube if they find a fault in the product and these videos
are considered to be more reliable and credible (virally spread by the peer-network) to their peers against
the brand or product.
10

Marketers strategy:
"With its blogs IndiBlogger can help brands build more trust and credibility than any other online can
claims Rajan .
He cites Neilsen Global Trust in Advertising survey, 2011 that shows less than a third of citizens trust
ads; in comparison 92% who have faith in peer and word-of-mouth recommendations.

IndiBlogger's first brand engagement was with Microsoft through a blogger meet in 2007. Since then
IndiBlogger has organized 50 such congregations; these have been coupled with over 50 contests with
brands across sectors like consumer goods, travel & aviation and retailing among others. Samsung,
Pepsi, Hindustan Unilever Ltd (HUL), Castrol, Cleartrip and Tata Docomo are some brands that have
engaged with consumers through IndiBlogger.

Last November, HUL's Surf Excel used IndiBlogger to engage with women bloggers on the site via a
blogger contest called 'Surf Excel Matic #GetSmart.'
11

6. 2. Celebrity Influence
This is an important tool which is able to influence Indian consumer buying behaviour. In India,
celebrities are being increasingly used in marketing communication by marketers to lend personality to
their products. With the visual media becoming more popular the use of celebrities in the TV media has
increased. Celebrities create headlines. Their activities and movements are being closely watched and
imitated.
In India especially, it is not difficult to look for the reasons as to why companies are increasingly using
celebrities. Indians always love their heroes and heroines.
Consumers like advertisements more if they are admirers of the celebrities in the advertisements. When a
consumer likes the celebrity in the advertisement, he or she is more likely to accept what the celebrity
says about the advertised product and therefore will develop more positive feelings toward the
advertisement and the brand itself. Famous celebrities are able to attract attention and retain attention by
their mere presence in the advertisements.
Celebrities may also help reposition products. Products with sagging sales needs some boosting and in
this Indian celebrities can help by way of them endorsing the product concerned.


Marketers Strategy:
Some brands use celebrity for getting attention(Santro), some for prolonged association(Lux)and some
for the purpose of recall(Cema Bulbs)
12

6.3 Psychological Buying Decision
Indian consumers connect emotionally with the product and the marketers and the advertisers make the
utmost use of this behavior to market the products.
Marketers Strategy:
In 2011, Airtel launched 'Har Ek friend zaroori hotaa hai', an advertising campaign that went on to
become not just a viral hit but also a chart topping ringtone beat.
(So don't judge yourself too harshly if you happened to be one of many who couldn't help but hum the
tune in the elevator or during the daily ablutions.)

The campaign triggered a blitzkrieg of friendly fire, with Airtel being the brand that brings friends closer,
network disruptions notwithstanding. Now they have done it again with 'Jo mera hai woh tera hai,' a tune
that may make your feet go tap, tap, tap.

Brand Airtel intends to extend its communication precinct from friendship to friends and their sharing
fixation with this campaign. Says Bharat Bambawale, global brand director, Bharti Airtel.
13


Brand features considered for purchasing

The features of the brand supplemented with quality, value for money, range of apparels and convenience
of many items may influence the purchase decisions , according to a survey conducted on apparels. The
details of this factor are presented in Table.


7.0 Indian Consumer Shopping Style

7.1Value for money

For Indians getting valued brands for a lesser price enhances their shopping experience and is a
motivating factor for them to be more loyal to the stores, Rajshree Dave, Director, Client Solutions, The
Nielsen Company, India said in a statement.
14

In an online survey conducted by global information and media firm Nielsen Company, about 91 per cent
of Indians voted for Good Value for Money as the important factor, while selecting a grocery shop.
14

Marketers strategy
The strategy - Pay per second- Tata Docomo
When Tata DOCOMO entered the market all operators was charging consumers on a per-minute pulse
with average tariffs around Rs. 1 per minute for local calls and Rs. 1.50 per minute for long distance
calls.
15

1. Tata DOCOMO thus introduced the revolutionary concept of pay-per-use, in which the consumer had to
pay only for the seconds that he talked and not pay for the unused that he had to in a typical minute
pulse.
2. The concept had its genesis in the Tata values of honesty, integrity and customer first and was an attempt
to liberate the consumer from the telecom clutter-land of confusing tariffs that fleeced them by making
them pay even for the unused.
3. The concept of a per second pulse was unheard of in India and needed a strong communication to
establish the honest pay for what you use positioning as the best telecom offering.


7.2 Deals and Promotions
A recently released 'Shopper Trends Study' by Nielsen India which covers the top eight metros and six
other cities with populations of over 20 lakh reinforces what the Indian shopper is looking for: deals.
The proportion of shoppers actively seeking promotions has shot up from 54% from 39% a year ago.
16
So, yes, saliva-inducing offers work like a charm in these times but they have to tie into the entire
shopper experience. Says Suyash Chauhan, general manager, customer marketing, at Hindustan
Unilever Ltd: "Deals and promotions are important elements in purchase decisions but not the only ones.
Shoppers (also) derive value from the product offerings, ease of access to the brands and in-store
shopping experience.
16
29 AUG, 2012, 03.36AM IST,



Source:Nielsen

Marketers Strategy:
29 AUG, 2012, 03.35AM IST, AMIT BAPNA,ET BUREAU

Deals ultimately help retailers in selling more than shoppers would have otherwise intended to buy. Says
Rahul Saigal, vice president - retail, OgilvyAction India, a brand activation agency: "Retailers and brands
are constantly looking to create more occasions that incentivize shoppers to trade-up."
17
Big Bazaar's Sabse Saste 5 Din, five days with Republic Day squeezed in between of "mega discounts
and huge savings." Such shopping orgies are doubtless a great way to woo shoppers Says Sumanta Datta,
VP, customer & commercial for Coca-Cola India & South West Asia: "While pricing & promotions will
continue to play a critical role in the context of the value-conscious Indian shopper.
17

7.3 Loyalty Style
According to the Asian Digital Marketing Association (ADMA) report 2011, India has over 100 million
internet users, more than half of whom read product reviews online and make a purchase based on
feedback. The upshot: There's plenty of opportunity to grow loyalty programs in India.
There exists a fantastic opportunity if social media is tied to loyalty points," says Girish Khare, chief
marketing officer for Reward Port, an incentives and loyalty management services provider.
18



Marketers Strategy:

11 JUL, 2012, 04.20AM IST, DELSHAD IRANI,ET BUREAU
Vodafones latest campaign is all about saying a big, fat, delightful, 'Thank You' to Vodafone's loyal
customers, old and new.
19
The Vodafone Delights campaign intends to surprise customers with a three-
layered gift trifle.

There's scratch-a card to use certain products for free for a while, 'Happy Hours' code for discounted rates
at particular times and birthday greetings from your friendly neighborhood telecom operator if you so
wish to be at the receiving end.
19

7.4 Quality Oriented
Indian consumers looking for quality choose expensive brands as they feel that price is an indicator of
quality.
However, in the absence of well known brands in selected product range, consumers are likely to take
cues from well established retail outlets hoping that these outlets carry quality products.



Source:Nielsen
Respondents include household influencers between the ages 18 and 65 . Over 3,300 respondents were
interviewed for the 2012 Shopper Trends Study.


7.5 Eco-Friendly Products
The environmental awareness in India has started affecting marketing of products based upon their eco-
friendliness. In general, Indian consumers are likely to buy environmentally responsible products and
packs. The future key for marketing could be to select more ethical and ecological responsible products
and packaging, which is also convenient for consumers, thus, balancing environmental concerns with
commercial considerations. Consumers in India are taking lead in prompting manufacturers to adopt
technologies to produce eco-friendly products.
According to a recent National Geographic survey, Indians rank first compared to the rest of the world in
sustainable behavior, and they are least likely to feel guilt for the implications of their choices regarding
the environment.
20
The survey was a measure of consumer behavior in 65 areas relating to housing, transportation, food and
consumer goods.
"The Indian consumer is increasingly conscious of the benefits of environmentally friendly and
sustainable practices. 86% Indian consumers surveyed, place faith in energy efficient products and
appliances, followed by recyclable packaging (79%)," Global Online Environment and Sustainability
Survey by Nielsen said.
21
However, when it comes to actual buying, only about 44% Indians purchase eco-friendly products as they
are 'very expensive'.
21

8.0 Changes in the medium of buying of Indian Consumers

8.1 Retail sector Indian Scenario

The attitudinal shift of the Indian consumer in terms of "Choice Preference", "Value for Money" and the
emergence of organized retail formats have transformed the face of Retailing in India. With a growth over
20 percent per annum over the last 5 years.

The Indian retail industry though predominantly fragmented through the owner -run " Mom and Pop
outlets" has been witnessing the emergence of a few medium sized Indian Retail chains, name Pantaloon
Retail, RPG Retail, Shoppers Stop, Westside (Tata Group) and Lifestyle International.
22

The retail sector in India is witnessing unparalleled growth. Unmatched demographics, rising income
levels, shifting lifestyles and changing aspirations of the burgeoning middleclass has unleashed a retail
revolution in the country. Fresh retail geographies are emerging, innovative formats are being introduced
and retailers are tapping new customer segments with prolific product offerings.

The Indian retail market which is currently valued at $511bn, is projected to grow to $833 bn in the next
five years. Organised retail that currently accounts for less than 5% of the total retail market is expected
to grow with a CAGR of 40% to swell to $107 bn by 2013.
23
So compelling is the opportunity and
potential presented by the retail sector in the country that apart from expansive market penetration plans
of Indian retailers, a multitude of international brands and retailers have either already established
themselves in the market or are aggressively securing a presence through joint-ventures, franchisee and
other arrangements.


Total retail sales in India will grow from US$ 395.96 billion in 2011 to US$ 785.12 billion by 2015,
according to the Business Monitor International (BMI) India Retail Report for the second-quarter of 2011.

Strong underlying economic growth, population expansion, the increasing wealth of individuals
and the rapid construction of organized retail infrastructure are key factors behind the forecast growth.
With the expanding middle and upper class consumer base, there will also be opportunities in India's tier
II and III cities.
23

Organized retail in India is expected to increase from 5 per cent of the total market in 2008 to 14-18 per
cent and reach US$ 450 billion by 2015. (Source: McKinsey & Company report titled 'The Great Indian
Bazaar: Organized Retail Comes of Age in India')

Active shoppers may enjoy the buying experience at retail outlets. For example, a supermarket may have
a food court to provide the experience of socializing if its target segment consists of active shoppers .
A discount outlet, stocked with leading brands, may attract the attention of price shoppers in the
appropriate residential area.










8.11 Major Formats of In-Store Retailing











8.12 Format adopted by Key Players in India





8.2 Online Marketing
With the development of the Internet and the increase of online shopping, ebusiness has become a trendy
way for consumers and/or companies to trade over the Internet. As per news in India times, dated 14th
February, 2011, in a bid to tap online consumer Dabur India Ltd. launched its first ever online shopping
portal www. Daburuveda.com. with this Dabur claimed to have the first Indian FMCG company to come
up with a dedicated online shopping portal for its beauty range product.
24
According to Mr. Singhal, Marketing Manager of Dabur said that with the fast changing consumer
lifestyle and expanding penetration of technology especially consumer goods and durables are bound to
see a growing trend of online purchase with and more consumer seeking the convenience of anytime
anywhere purchase.



8.21 Changing Trend towards Online Shopping in India

Traditionally, Indians are conservative in their approach to shopping. They want to touch and feel the
products and test its features before buying anything. In fact, selected price-savvy customers would also
like to squeeze in an economical deal for themselves with appropriate price negotiation with the vendor.
They are not the ones to accept the price at the face value.
There are different parameters which induces the consumer to buy online like price, convenience, trust,
availability, choice, comparison of products, less efforts, shopping at any time, huge offers and discounts,
safety etc. Moreover with online shopping, distance is not a barrier for sending a gift on occasions like
Birthday, Marriage, Valentine's Day, etc. One can get several brands and products from unlike sellers at
one place. Many online shops offer discount coupons and re-bates. Online shops give us the opportunity
to shop 24 x 7.
24

Source:25
8.22 Growth Of E- commerce In India
Mr. Rajan Anandan the managing director of Google India revealed that E-commerce in India now worth
7 billion dollars. 6 billion of which is travel based which includes online booking of tickets, hotels etc.
This number is estimated to go upto 40 billion in the next 4 to 5 years. 67 % of the non travel E-
commerce is consumer electronics.
26
To take advantage of this growing opportunity, retailers must ensure they are addressing the needs of
potential customers, which include attractive pricing and the convenience of ordering online. The rapid
growth of online coupon sites suggests that consumers in India are looking for deals, highlighting the
need for online retailers to adopt effective marketing and pricing strategies for their goods, remarked
Kedar Gavane, Director- India, comScore.
27

Gulshan Verma, Vice President and Country Head, Ad Network, Komli Media, India and
USA: 2011 is the year that retail -ecommerce finally came of age in India with customers from all over
India buying in multiple categories from fashion, books and gadgets to infant products. There have even
been instances of young adults getting themselves a credit card to primarily shop online.


Anurag Gupta, Managing Director, DGM India Internet Marketing Pvt Ltd: Indian e-shoppers will
have a good time getting great deals and services online, online retailing will explode in 2012 and
beyond.




8.23 Cash on delivery eroding margins of e-commerce firms in India

Srividya Iyer, ET Bureau Mar 13, 2012, 02.31AM IST

As Indian e-commerce looks to accelerate from a slow trot to a gallop, the innovation that got the sector
up and running - cash on delivery - may prove to be a handicap.
The expenses involved in physically collecting cash, higher rejection rates and longer turnaround time to
receive money make cash on delivery a less efficient model to sell merchandise online.
"It is not sustainable." Cash on delivery was meant to create confidence among Indian consumers to buy
online. The expectation was that eventually consumers would start paying online to buy things. But
analysts say that it is leading to significant cash burn, besides causing delays in booking revenue.
In developed Western markets, nearly 80% of online transactions are paid for by credit or debit cards, net
banking and alternative online payment channels such as PayPal, according to a report by Nielsen. Only
about 15% of deals were settled by cash on delivery.
In India, on the other hand, cash on delivery is the payment method for up to eight in 10 transactions.
"Cash on delivery is the most inconvenient payment option. It allows customers too much time to change
their mind," said K Vaitheeswaran, the founder of Indiaplaza.com.
Indiaplaza.com, which sells books and electronic goods, was the first to introduce the payment method
more than a decade ago. It realised in about a year that cash on delivery was "painful". Rejection rates are
at about 45%, partly because there is no upfront cash commitment, according to Vaitheeswaran.
Online lifestyle retailers such as Myntra.com and Fashion and You say that at least 60% of their
transactions rely on cash on delivery. Flipkart.com, one of India's most prominent online retailers,
declined to comment for this story.



9.0 Case Study
Amit Bapna, ET Bureau Aug 31, 2012, 07.16PM IST
Cadbury India cracking the code of emerging shopper

The emerging Indian shopper is posing a huge challenge to the marketers. Brands are grappling on how
best to reach this emerging.

How is the Indian shopper emerging?

India is a constantly evolving market as far is modern trade is concerned. While retailers are working on
modifying formats, offerings and positioning, the shopper is seeking more value in everything he
purchases. This has led to the emergence of specialty formats at the top end, in the form of gourmet
stores. Additionally, relatively premium retailers are formulating innovative deals and promotions to drive
purchases.

Shoppers today are more aware and willing to experiment. Shoppers are especially seeking premium
products. As a result, set of premium offerings, the demand for Cadbury Silk has grown constantly while
the trials for Toblerone have been successful. Recently launched Toblerone in India in modern trade
outlets with a specific focus on point-of-buying. The launch was highly successful and encouraging and
opens up new insights about the new age Indian shopper.

How big are deals and promotions in the Indian shoppers' basket while making a purchase
decision?

Purchase deals in India today are driven by 'in-store behavior' that is an offshoot of the role of the
category in the life of the shopper. The impact of deals and promotions varies with the consumer's
involvement in the category.

In high involvement-high connect categories, the brand's equity heavily outweighs promotion/price off's.
Although deals and promotions are important footfall drivers for certain key value items, when in a store,
shoppers tend to purchase non promoted stocks. This is also because across categories the promoted range
is well within 1/5th of the overall sales.

At Cadbury Kraft Foods similar trends has been observed . A good share for Oreo has been carved out
through a good mix of in-store visibility and multi-buy's. Additionally offering a unit of Oreo with
Bournvita, has not only helped drive sales of Bournvita but also ramp up sales for Oreo.

How are the retail brands deploying the 'deals are a big deal' phenomenon to their benefit? In a
24/7-sale environment, how to ante on the almost quarterly sale occasions - like Independence Day,
Republic Day, Diwali etc?

These days the concept of deals is adopted by most retailers across categories, however it is important to
ensure that these deals are relevant to the category. For Bournvita offering promotions on one kg pack to
up-trade the current shoppers from the 500 gm pack and the offer helped to sell the one kg pack more.
Hence for relevant categories through in-store presence and relevant deals, retailers and brand owners
drive up sales through higher penetrations and higher sales per shopper.

Such occasions presents with an opportunity to increase purchase and consumption. Creating platforms
like Chocolate Month wherein to step up to visibility around chocolates with key retailers to increase
penetration of chocolates.
How much tangible impact is digital making on the India shopper, especially in Cadbury?

Digital media offers great opportunity to build relevance on specific consumption occasions. Campaigns
on the digital platform for Oreo, Bournville and Celebrations have been highly successful. The medium
helps brands drive relevance and build equity. 3 of Cadburys brands have over 2 million highly engaged
fans on Facebook, and 2 of Cadbury,s brands have over 1 million fans.
28




CONCLUSION

There has been a transformation in society, due to urbanization which has led to changes in the buying
behavior of the Indian consumers .Top class, middle class and lower class are income related
classifications of the population and each of this class has its own consumption pattern.
With the evolving market and globalization, there has been a significant change in the strategy of
marketing and targeting the evolving consumers.
There is a great deal of optimism surrounding the Indian consumer market. With double-digit growth
rates, new consumer segments and an ever increasing range of products and services, the sector seems to
have it all.

But is the future as buoyant as many people think? While all trends indicate that it is, consumer marketers
accept that the industry is faced with a talent crunch and if companies fail to tackle this issue in the
present, there will be a huge gap in effective leadership in the future.

Tomorrows leaders not only need to understand leadership concepts, but they also need the ability to
understand current trends while identifying future opportunities. At the same time, companies need to
create internal processes and structures that encourage an entrepreneurial spirit, while giving individuals
the time and space to think beyond their immediate action areas. It is only when the individual and the
organisation approach this together, that the talent gap will be met and the commercial opportunity will be
fully realised.






















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