India Table of Contents

The Growth of Cities

Accelerating urbanization is powerfully affecting the transformation of Indian society.

Slightly more than 26 percent of the country's population is urban, and in 1991 more than
half of urban dwellers lived in 299 urban agglomerates or cities of more than 100,000
people. By 1991 India had twenty-four cities with populations of at least 1 million. By
that year, among cities of the world, Bombay (or Mumbai, in Marathi), in Maharashtra,
ranked seventh in the world at 12.6 million, and Calcutta, in West Bengal, ranked eighth
at almost 11 million. In the 1990s, India's larger cities have been growing at twice the rate
of smaller towns and villages. Between the 1960s and 1991, the population of the Union
Territory of Delhi quadrupled, to 8.4 million, and Madras, in Tamil Nadu, grew to 5.4
million. Bangalore, in Karnataka; Hyderabad, in Andhra Pradesh; and many other cities
are expanding rapidly. About half of these increases are the result of rural-urban
migration, as villagers seek better lives for themselves in the cities.

Most Indian cities are very densely populated. New Delhi, for example, had 6,352 people
per square kilometer in 1991. Congestion, noise, traffic jams, air pollution, and major
shortages of key necessities characterize urban life. Every major city of India faces the
same proliferating problems of grossly inadequate housing, transportation, sewerage,
electric power, water supplies, schools, and hospitals. Slums and jumbles of pavement
dwellers' lean-tos constantly multiply. An increasing number of trucks, buses, cars, three-
wheel autorickshaws, motorcy-cles, and motorscooters, all spewing uncontrolled fumes,
surge in sometimes haphazard patterns over city streets jammed with jaywalking
pedestrians, cattle, and goats. Accident rates are high (India's fatality rate from road
accidents, the most common cause of accidental death, is said to be twenty times higher
than United States rates), and it is a daily occurrence for a city dweller to witness a crash
or the running down of a pedestrian. In 1984 the citizens of Bhopal suffered the
nightmare of India's largest industrial accident, when poisonous gas leaking from a Union
Carbide plant killed and injured thousands of city dwellers. Less spectacularly, on a daily
basis, uncontrolled pollutants from factories all over India damage the urban
environments in which millions live.

Urban Inequities

Major socioeconomic differences are much on display in cities. The fine homes--often a
walled compound with a garden, servants' quarters, and garage--and gleaming
automobiles of the super wealthy stand in stark contrast to the burlap-covered huts of the
barefoot poor. Shops filled with elegant silk saris and air-conditioned restaurants cater to
the privileged, while ragged dust-covered children with outstretched hands wait outside
in hopes of receiving a few coins. The wealthy and the middle class employ servants and
workers of various kinds, but jajmani -like ties are essentially lacking, and the rich and
the poor live much more separate lives than in villages. At the same time, casual
interaction and physical contact among people of all castes is constant, on public streets
and in buses, trains, and movie theaters.
As would-be urbanites stream into the cities, they often seek out people from their
village, caste, or region who have gone before them and receive enough hospitality to tide
them over until they can settle in themselves. They find accommodation wherever they
can, even if only on a quiet corner of a sidewalk, or inside a concrete sewer pipe waiting
to be laid. Some are fortunate enough to find shelter in decrepit tenements or in open
areas where they can throw up flimsy structures of mud, tin sheeting, or burlap. In such
slum settlements, a single outhouse may be shared by literally thousands of people, or,
more usually, there are no sanitary facilities at all. Ditches are awash in raw sewage, and
byways are strewn with the refuse of people and animals with nowhere else to go.

Despite the exterior appearance of chaos, slum life is highly structured, with many
economic, religious, caste, and political interests expressed in daily activity. Living
conditions are extremely difficult, and slum dwellers fear the constant threat of having
their homes bulldozed in municipal "slum clearance" efforts; nonetheless, slum life is
animated by a strong sense of joie de vivre.

In many sections of Indian cities, scavenging pigs, often owned by Sweepers, along with
stray dogs, help to recycle fecal material. Piles of less noxious vegetal and paper garbage
are sorted through by the poorest people, who seek usable or salable bits of things. Cattle
and goats, owned by entrepreneurial folk, graze on these piles, turning otherwise useless
garbage into valuable milk, dung (used for cooking fuel), and meat. These domestic
animals roam even in neighborhoods of fine homes, outside the compound walls that
protect the privileged and their gardener-tended rose bushes from needy animals and
people.

Finding employment in the urban setting can be extremely challenging, and, whenever
possible, networks of relatives and friends are used to help seek jobs. Millions of Indians
are unemployed or underemployed. Ingenuity and tenacity are the hallmarks of urban
workers, who carry out a remarkable multitude of tasks and sell an incredible variety of
foods, trinkets, and services, all under difficult conditions. Many of the urban poor are
migrant laborers carrying headloads of bricks and earth up rickety bamboo scaffolding at
construction sites, while their small children play about at the edge of excavations or
huddle on mounds of gravel in the blazing sun. Nursing mothers must take time out
periodically to suckle their babies at the edge of construction sites; such "recesses" are
considered reason to pay a woman less for a day's work than a man earns (male
construction workers earned about US$1 a day in 1994). Moreover, women are seen as
physically weaker by some employers and thus not deserving of equal wages with men.

These construction projects are financed by governments and by business enterprises,

which are run by cadres of well-educated, healthy, well-dressed men and, increasingly,
women, who occupy positions of power and make decisions affecting many people.
India's major cities have long been headquarters for the country's highest socioeconomic
groups, people with transnational and international connections whose choices are taking
India into new realms of economic development and social change. Among these well-
placed people, intercaste marriages raise few eyebrows, as long as marital unions link
people of similar upper- or upper-middle-class backgrounds. Such marriages, sometimes
even across religious lines, help knit India's most powerful people together.

Increasingly conspicuous in India's cities are the growing ranks of the middle class. In
carefully laundered clothes, they emerge from modest and semiprosperous homes to ride
buses and motorscooters to their jobs in offices, hospitals, courts, and commercial
establishments. Their well-tended children are educated in properly organized schools.
Family groups go out together to places of worship, social events, snack shops, and to
bazaars bustling with consumers eager to buy the necessities of a comfortable life.
Members of the middle class cluster around small stock-market outlets in cities all over
the country. Even in Calcutta, notorious for slums and street dwellers, the dominant
image is of office workers in pressed white garments riding crowded buses--or Calcutta's
world-class subway line--to their jobs as office workers and professionals (see
Transportation, ch. 6).

For nearly everyone within the highly challenging urban environment, ties to family and
kin remain crucial to prosperity. Even in the harshest urban conditions, families show
remarkable resilience. Neighborhoods, too, take on importance, and neighbors from
various backgrounds develop cooperative ties with one another. Neighborhood solidarity
is expressed at such annual Hindu festivals as Ganesh's Birthday (Ganesh Chaturthi) in
Bombay and Durga Puja in Calcutta, when neighborhood associations create elaborate
images of the deities and take them out in grand processions.

Cities as Centers

Cosmopolitan cities are the great hubs of commerce and government upon which the
nation's functioning depends. Bombay, India's largest city and port, is India's economic
powerhouse and locus of the nation's atomic research. The National Capital Territory of
Delhi, where a series of seven cities was built over centuries, is the site of the capital--
New Delhi--and political nerve center of the world's largest democracy. Calcutta and
Madras fill major roles in the country's economic life, as do high-tech Bangalore and
Ahmadabad (in Gujarat), famous for textiles. Great markets in foods, manufactured
goods, and a host of key commodities are centered in urban trading and distribution
points. Most eminent institutions of higher learning, cradles of intellectual development
and scientific investigation, are situated in cities. The visual arts, music, classical
dancing, poetry, and literature all flourish in the urban setting. Critical political and social
commentary appears in urban newspapers and periodicals. Creative new trends in
architecture and design are conceptualized and brought to reality in cities.

Cities are the source of television broadcasts and those great favorites of the Indian
public, movies. Bombay, sometimes called "Bollywood," and Madras are major centers
of film production, bringing depictions of urban lifestyles before the eyes of small-town
dwellers and villagers all over the nation. With the continuing national proliferation of
television sets, videocassette recorders, and movie videocassettes, the influence of such
productions should not be underestimated.
Social revolutions, too, receive the support of urban visionaries. Among the more
important social developments in contemporary India is the growing women's movement,
largely led by educated urban women. Seeking to restructure society and gender relations,
activists, scholars, and workers in the women's movement have come together in
numerous loosely allied and highly diverse organizations focusing on issues of rights and
equality, empowerment, and justice for women. Some of these groups exist in rural areas,
but most are city based.

The escalating issues of dowry-related murder and suicide are most pressing in New
Delhi, where groups such as Saheli (Woman Friend) provide essential support to troubled
women. The pathbreaking feminist publication Manushi is published in New Delhi and
distributed throughout the country. The overwhelming economic needs of self-employed
poor female workers in Ahmadabad inspired Ela Bhatt and her coworkers in the Self-
Employed Women's Association, which has been highly successful in helping poor
women improve their own lives.

Urban women have initiated protests challenging female feticide, child marriage, child
prostitution, domestic violence, polygyny, sati, sexual harassment, police rape of female
plaintiffs, and other gender-related injustices. Their efforts have brought new ways of
thinking out of elite, educated circles into the broader public arena of India's multilevel
society.

In 1994, two attractive urban Indian women won the most prominent international beauty
contests, the Miss Universe and the Miss World competitions. Thousands of young Indian
women idolized the glamorous beauties and many newspapers gushed about the victories,
but women's groups and feminist commentators decried this adulation. They pointed out
that the deprivations and injustices experienced by a high proportion of Indian women
were being given short shrift. While the beauty contest winners were being paraded about
in crowns and white chariots before admiring throngs, almost ignored by the public and
the media were the torture-slaying of a village woman accused of theft by a soothsayer
and the historic qualification of six women as the Indian air force's first female pilots (see
The Air Force, ch. 10). In 1995, the All India Democratic Women's Association and other
groups protested in New Delhi against the Miss India contest.

Source: U.S. Library of Congress

Up until recently, large part of the marketing that was done in this country was done,
targeting the urban population of the country. Now the marketing potential of the
rural part of the country is rapidly growing. Let us get an understanding of the urban
and rural break up of the country.
26% of the population lives in the cities or in urban India. The remaining 74% lives
in the villages or in rural India. The population of the country is spread over the
villages but is very concentrated in the cities. India has six of the largest cities in the
world. These are - Calcutta, Bombay, Delhi, Madras, Bangalore and Hyderabad.
Besides these cities, there are six other cities that are growing at a very rapid rate
and have a huge concentration of the population. These are - Ahmedabad, Kanpur,
Pune, Nagpur, Lucknow and Jaipur. In addition to these cities, there are around 4000
towns that have concentrations of the population.
In the cities, there are a lot of jobs available now-a-days due to call centers and
BPO's. This has given many more people purchasing power. Items that were luxury
items a few years a go are seen in every house in the cities.
Besides the cities 74% of Indian population lives in the villages. As the standard of
living in the villages also improves, many modern facilities are available in almost
every house hold in the villages too.
Now a days the TV is there in most of the houses in the villages too. This has
exposed them to a lot of advertising lifestyles and products. The villages have
become a huge market that will be of great consequence in the near future. In the
future, companies with a strong product distribution system reaching all the villages
will have a very strong advantage over the rest.
The country is growing, and is a place where business will thrive in the near future.
To understand this better consider the following favorable shifts that have taken
place in the consumer patters of buying.
The country is growing, and is a place where business will thrive in the near future.
To understand this better consider the following favorable shifts that have taken
place in the consumer patters of buying.

Favorable shifts in consumption pattern:

Analysis shows that over the years, the expenditure on non-food items has grown
faster that the expenditure on food items. India is witnessing a great change in the
lifestyles and buying patterns of consumers. Convenience foods like instant coffee
and noodles are now very popular. The number of modern gadgets like washing
machines in the number of house holds is now on the increase. As we have
mentioned before, yesterday’s luxuries are now becoming today’s necessities.
The Indian consumer has more money and is now using it more liberally than ever
before. Food and drink have acquired a greater "fun" image for him than ever before.
Because of the TV and the booming media, even the economically lower class of the
Indian population craves for a lifestyle like the well-to-do people they see on the TV.
Understanding Indian economical classes
The country is very diverse and has many different languages, cultures, beliefs etc.
It is hard to categorize the Indian buyer on basis of this diversity because it is so
varied.
The consumers in India can be classified on basis of their economic status to get a
better idea about the populations buying behavior.

The affluent group:

The affluent group forms a very small part of the population of the country. They are
negligible in percentage. A large manufacturing/marketing business cannot be
supported by the consumers from this group alone. (Unless the products are
especially designed, high priced luxury products.)
The middle class:
The middle class forms the customer base for most of the business in the country.
India has a very large middle class. The population of the middle class exceeds the
population of both Germany and France put together. This is the largest economic
class in the country. Special attention is to be given to the consumers in this class
and so this class will be discussed in detail a little later.

The poor:
The poor class is the second largest class in the country. They have very little
purchasing power. However, now as the country is growing, and due to the work of
many social, educational and economic programs, a large part of this class is slowly
merging into the middle class.
Indian middle class “male” consumer
The middle class of India is for whom most of the advertising is targeted. Even in the
lower middle class, consumer products like biscuits, talcum powder, hair oil, hair
cream, toilet soaps, leather foot ware, casual foot ware, wrist watches, quartz
watches etc. are purchased.
To get a much better understanding of the middle class “male” head of the family,
consider the following characteristics:

Security Seeking:
The middle class generally consists of security seeking people. Even though they are
receptive to new ideas, they do not very readily dash into new ventures. The middle
class man does not only want economic security, but he also wants emotional
security.
He will not do something that is likely to upset his emotional ties. He wants social
security. He wants to be part of society. He does not want to be a rebel or an
outcast. Being part of society he enjoys a degree of protection. He is likely to
welcome new innovations is they satisfy his sense of security. If he feels that a
particular idea will help him improve his economic position or social relationships he
will accept it. Anything that is likely to upset this balance is going to be discarded by
him.

Credit purchases:
The middle class Indian normally lives in a fixed income. He has to manage his
finance in a rigid budget. He wife selects reasonably good furnishings and uses
modern cooking gadgets. He usually has a two-wheeler of this own. He aspires for
the well-to-do lifestyle he sees on TV. So his purchases are generally materialistic in
nature. Because of this he likes to make large purchases and pay for though the
different credit facilities that are made available to him by the banks and other
financial institutions.
Now days practically everything is made available to him on installment payments.
The availability of credit facility acts as a temptation to buy. His desire for bringing
home more and more material comforts is realized by the availability of credit
facilities.
The State Bank Of India campaign of a few years ago, "Be a big shoppers! Make a
big buy! Take home a car, a VCR or a sewing machine today! You can do it now with
the big buy scheme..." appealed to many Indians.
The system of "credit cards" is also growing in the country at a very fast rate. It is
expected that in the near future, Indians will be the biggest users of credit cards
second only to America.
Prestige Conscious:
The middle class Indians have many of their possessions, largely because they are
"status conscious" or "prestige conscious". The middle class man’s finances may be
tight and he may even struggle to meet ends. Still, he looks for more than average
comforts, and plans for more material possessions. These possessions act as status
symbols. By appealing to this prestige a marketer may motivate the middle class
man.

Strong Family Ties....Home loving:

The middle class man is a home loving man. He assigns a lot of importance to the
well being of his family. He spends a good portion of his income on the education of
his children. His children get priority in his budget. He without much resistance will
adjust to the changing fashions of his college going children even though these
changes may be costly for him. The concept of "small family more comforts" has
gone well with him. The "family tie" binds him so strongly that anything that appeals
to this "human bond" will find his ready acceptance.
His son's education or his daughter’s marriage are life long dreams for him. Any
thing that appeals to these dreams will catch his immediate attention.
However, the middle class man is greatly influenced by his wife especially on his
buying decisions. Tooth-paste, hair oil, magazines or tape recorders, the purchasing
decision is consented by her. There are certain buying decisions that are made by his
wife solely so the middle class housewife is another important person to study from
the marketing point of view.
The Indian middle class “house wife” as a consumer
The percentage of working women in India is growing at a steady pace. This is
mainly because of the development in communication systems and growth of
educational opportunities given to women. Because of this growth of working
women, the women now-a-days also have an increased purchasing power. Due to
this, industries that are directly related to women like cosmetics etc. have seen a
major boost. Also, toiletries, food and beverages etc. have seen a growth.
The middle class house wife is generally educated and is the purchasing agent for
some of the products the family buys. She is also the "gatekeeper" for many
products like new cooking medium, fast food etc. that cannot enter the house
without her clearance. She also decides purchases meant for children.
To get a much better understanding of the Indian house wife, consider the following
characteristics of her buying decisions:

Cautious, but not averse to change:

The middle class house wife is generally educated, earns her own money or has to
use money given to her on a fixed budget. This makes the middle class house wife a
discriminating and cautious buyer. However, she is not averse to new ideas and
things. She is willing to try new things but she will not adopt any product instantly.
She will make a sample purchase, check with people who use the product, listen for
guidance and then finally she may go in for purchasing the product.

Quality as well as cost cautious:

The middle class house wife is a quality as well as cost cautious buyer. She will try to
purchase products that will last her for a long time. She will try to get "millage" out
of every rupee she spends. She is less likely to purchase “use and throw” type of
products. Besides being quality conscious, he also is cost conscious. Before buying a
particular product she will first check the price with other sellers and will then go in
for the lowest price.
Because of being quality and cost conscious, extra features like re-usable containers
will influence her buying decision. Bonus prizes, coupons, rebates etc. will definitely
attract her attention.
Instead of advertising she relies on word-of-mouth communication. She is interested
in knowing what her neighbor or colleges are using. Even after she purchases a
product she seeks reassurance about making the right purchase decision.

Leisure seeking:
As time passes the house wife is getting used to more and more leisure though the
use of modern gadgets like washing machines and other such house hold items. She
will be interested in new innovations that reduce her work time even more. She may
not be able to afford all the modern gadgets that are available in the market but they
still hold her interest because they are a potential for saving time and avoiding
drudgery.

Sense of grooming:
Sense of beauty is a strong motive force behind several of her purchases. Soap or
shampoo, vanishing cream or cleansing milk, perfumes or hair oil - selecting her
brand is greatly influenced by her sense of grooming. She is generally fashion loving
however she is not fashion crazy. A strong sense of traditionalism runs thought her
personality. Products or ideas that uproot her basic personality or values will not find
acceptance with her.
Understanding the “middle class” urban teenager as consumer
They are more adventurous than their elders and they care less for tradition and
religion. The often are after a "New Look" and they seek novelties. They are quick to
adopt new fashions that emerge.
They are generally more receptive to change. They believe more in spending money
in the pursuit of pleasure than saving for the future. It is not easy to dupe them but
it is quite easy to motivate them. Teenagers are becoming quite a distinct market
segment.
They not only have products and services that been designed to cater their needs but
also they are an influence on the decisions taken by adults. Some estimates show
that around Rs.500 crore a year is the amount of money given to children as pocket
money.
That covers a general understanding of the Indian market on the whole and the
middle class of the market (which is the biggest consumer base for industries) in
specific. Now let us go into a detailed understanding of how the process of marketing
is done.