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Grand Project



In partial fulfillment of the requirement of two years full time

Masters of Business Administration (MBA) Programme (2008-2010)
Of Gujarat University, Ahmedabad


Juhi Shah
Chetan Pandya
Professor ROLL NO.
8066, MBA (2008-2010)



This is to certify that Mr. CHETAN PANDYA , ROLL NO : 8066, student of

(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


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

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.


MBA (2008-10)


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.


The Indian Media & Entertainment Industry
Categories and
Advertising Industry
An Overview………………………………………………………
As a part of

Scope of Ad Industry in


Mass V/S Class

Shift from Mass to Class………………………………………………
Class Advertising:
SEC: Understanding Class

Understanding target and media
SEC: Media Preference




With 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 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.

Research Methodology

• 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


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.

• 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



• Indian Entertainment Industry: Origin and History

• Growth Drivers
• 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 DESIGN: Exploratory Research

RESEARCH DATA SOURCE: Primary Source: Questionnaires
Secondary Source: Internet, publication, journals,
newspapers, magazines, Business Review,
Periodicals, etc.
SAMPLE METHOD: Stratified Random Sampling, Judgment sampling,
Convenience sampling
SAMPLE SIZE: 30 for each class (8 classes) = 240

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 with its vast size of nearly three times of urban India, also
offers a huge opportunity that has remained largely untapped due to reasons
of accessibility and affordability.

Liberalizing Foreign Investment: Today India has probably one of the most
liberal investment regimes amongst the emerging economies with a conducive
FDI environment. The E&M industry has significantly benefited from this liberal
regime. In 2005, FDI was permitted in two important sectors - print media and
radio. Films, television and other segments are already open to foreign
investment. In the print media segment, 100% FDI is now allowed for non-
news publications and 26% FDI is allowed for news publications. Printings of
facsimile editions of foreign journals are now also allowed in India. This policy
is helping foreign journals save on the cost of distribution while servicing the
Indian market audiences more effectively. The FM radio sector too was
opened for foreign investment with 20% FDI being allowed.

The Technological Influence: India is witnessing a revolution in this sector

with the emergence of new technologies. The IEM has moved from the growth
phase to the inflection phase. This growth is led by better technologies, higher
quality content, higher penetration and suitable regulations. Exciting new
developments in the technologies used in Media and Entertainment industry
are taking place.

The change is already being witnessed from AM radio to FM radio, single

screen theatres to multiplexes, and basic cable analog to broadband internet.

Going forward, DTH, IP-TV, mobile marketing, gaming zones, and interactive
television are going to hit the markets thereby changing the media scenario.

Animations, multiplexes, new distribution channels, the use of Internet and

personalized communication with the help of the same, are redefining the
media and entertainment industry. All these factors will favour the growth of
Media and Entertainment industry in India. Many companies are taking
initiatives to set up their business all over with the help of such technology.
One such company is city based Net Hot Zone Media Pvt. Limited which has
come up with first of its kind concept of personalized communication with the
customers providing them free internet service while offering part of screen
space on computer to the advertisers by setting up the kiosks at various places
in the city.
Thus given the high rate of economic growth and technological developments,
Indian Media and Entertainment industry is poised to register a tremendous
growth in the coming years.

Low Media Penetration in Lower SECs: Though media penetration is poor in

lower socio-economic classes, the absolute numbers are much higher for
these classes. Hence, efforts to increase the penetration even slightly in these
lower socio-economic classes are likely to deliver much higher results, simply
due to the higher base.

Low Ad Spends: Indian advertising spends 0.34% of GDP, which is very low
as compared to other developed and developing countries. Advertising
revenues are vital for the growth of this industry. While today the low ad
spends may seem like a challenge before the E&M industry, it also throws
open immense potential for growth. This potential can be estimated by the fact
that even if India was to reach the global average, advertising revenues would
at least double the current revenues.

Categories and Growth

The Indian

The IE&M Industry is expected to grow at Entertainment and Media Industry has
a CAGR of 18% till 2011 to touch Rs 1
trillion from Rs 436 b in 2006. recorded a growth of 17 per cent in 2007,
over 2006. In the last four years (2004-
2007), the industry recorded a cumulative
growth of 18% on an overall basis. However
though Indian Entertainment and Media
(IEM) is one of the fastest growing sectors in
the economy, it is just 0.7% of the global
US$ 1.4 trillion media industry

The IEM is divided into different segment like Television, print, films, radio,
music and internet. Out of home advertising (OOH) and live entertainment are
too gaining importance.

As per PwC, India will be one of the key drivers in pushing the global
entertainment and media industry. As mentioned above, it is expected to grow
at a CAGR of 18% till 2011 to touch Rs 1 trillion from Rs 436 b in 2006.

The expected growth for the year 2008-2011 can be known from the following

Given below is the breakup of the revenues among the various segments and
the expected growth rate till 2011. Television and print would continue to
remain the largest segments. Internet, radio and OOH would also witness high
growth rates. However, Internet penetration would take time to mature.

Present and projected growth in E&M industry* (in Rs crore)

2006 2007 2008 2009 2010 2011 CAGR
Television 19,120 21,900 26,600 33,100 43,100 51,900 22%
Print Media 12,790 14,400 16,200 18,200 20,600 23,200 13%
Film Entertainment 8,450 9,600 11,200 12,600 14,600 17,500 16%

Radio 500 600 800 1,100 1,400 1,700 28%
Music 720 740 750 760 800 870 4%
OHH Advertising 1,000 1,200 1,400 1,600 1,900 2,150 17%
Live Entertainment 900 1,100 1,300 1,600 1,800 1,900 16%
Internet 160 270 420 600 820 950 43.00%
Total* 43,640 49810 58,670 69,560 8,5020 100,170 18%

Source: Industry estimates & PwC analysis

*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

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.


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 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


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 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


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.

2007 2011

1%2% 2%1% 1%2% 2%1%

1% 2%
19% 17%




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

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.


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.

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

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 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.

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.

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


AD SPEND( Rs. Crores)

2004 2005 2006 2007

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


OOH 3% 2%



5% 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
• 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
• 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

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

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

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.

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
• 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
communication packages for global clients.


What is mass

To understand what is mass marketing/advertising, it is important to know what

exactly mass refers to. From the viewpoint of marketing, mass is the group of
consumers who occupy the overwhelming mass of a bell curve for common
household products, i.e. they could be tagged as being "average". Yet, this
group consists of such a wide variety of people; their desires towards a certain
product may be totally different from each other. Often competition to supply
the mass market is fierce, but relatively easy to enter because of the large
amount of consumer pool available.

Mass marketing/advertising

Mass advertising is one of the most widely used traditional methods in

advertising. Mass advertising that refers to the approach to advertising that
attempts to reach every consumer, rather than targeting a particular market

It is a type of marketing (or attempting to sell through persuasion) of a product

to a wide audience. The idea is to broadcast a message that will reach the
largest number of people possible. Traditionally mass marketing has focused
on radio, television and newspapers as the medium used to reach this broad
audience. By reaching the largest audience possible exposure to the product is
maximized. In theory this would directly correlate with a larger number of sales
or buy in to the product.

Mass market advertising is usually more expensive than direct marketing,

because they are priced according to the number of consumers who will be
reached, and must generate a larger return in order to justify the expense.

The trend of mass media has seen many ups and downs. These trends are
due to corresponding upswings in mass media, the parent of mass marketing.
For most of the twentieth century, major consumer-products companies held
fast to mass marketing- mass producing, mass distributing and mass

promoting about the same product in about the same way to all consumers.
Mass marketing creates the largest potential market, which leads to the lowest
costs in terms of long term investment.

How mass media markets?

The mass media are capable of facilitating short-term, intermediate-term, and

long-term effects on audiences. Short-term objectives include exposing
audiences to different concepts; creating awareness and knowledge (e.g. right
to information); altering outdated or incorrect knowledge (AIDS campaign,
Coke and Pepsi for clearing doubts in the pesticides case); and enhancing
audience recall of particular advertisements(e.g. Fevicol, Raymond’s) or public
service announcements (PSAs), promotions(Dominos Pizza), or program
names. Intermediate-term objectives include all of the above, as well as
changes in attitudes, behaviours, and perceptions of social norms. Finally,
long-term objectives incorporate all of the aforementioned tasks, in addition to
focused restructuring of perceived social norms, and maintenance of behavior
change. Evidence of achieving these three tiers of objectives is useful in
evaluating the effectiveness of mass media.

Types of mass media

 Television
 Radio
 Print
 Internet

Television is a powerful medium for appealing to mass audiences—it reaches

people regardless of age, sex, income, or educational level. In addition,
television offers sight and sound, and it makes dramatic and lifelike
representations of people and products. Television ads have a different impact
of it on the people’s mind is most remembered. Call it the power of television or
power of sound and image together, television has become one of the most

preferred choices to attract the masses. Also the penetration and the reach of
television has increased incredibly that it is beneficial for the companies to
advertise on television to gain benefit over a long period of time in spite of it
being expensive. Lots of ads targeting masses are seen more on television
than any other media. E.g. soaps, shampoos, water purifiers, automobiles, etc.

Radio. Radio also reaches mass and diverse audiences. The specialization of
radio stations by listener age, taste, and even gender permits more selectivity
in reaching audience segments. Many radio stations have come up in the past
5 years and it’s still increasing. In Ahmedabad itself there are five radio
stations and since placement and production costs are less for radio than for
TV, radio is able to convey messages in greater detail. Thus, radio is
sometimes considered to be more efficient. The main benefit for the same can
be that it is the best means if the target is local. Radio Mirchi, My FM, Red FM,
Radio City and many others have their stations in many other cities. Thus, it
can target mass audience on local level. However radio requires somewhat
greater audience involvement than television, creating the need for more
mental imagery. Because of this, radio can reinforce complementary
messages portrayed in parallel fashion on TV.

Print Newspapers are available in daily and weekly formats, and local,
regional, and national publications exist. In addition, there are numerous
special audience newspapers (e.g., various ethnic groups, women, Geography
– specific). National dailies in India have highest penetration amongst all media
of advertising. Classifieds in that is the commonest form of advertisements.
However the biggest disadvantage is that there are chances of it being
Among other print media, magazines are also preferred by the advertisers
especially the mass is divided.

Other Print Media Pamphlets, brochures, and posters constitute other print
media used to disseminate health messages. These print media were
developed with the assistance of target audiences, and few contained varied

messages, were culturally tailored, or employed readability and face validity
techniques. The extent to which persons read, re-read, and keep these
devices—or circulate them to other readers—is not well evaluated. Thus, their
permanence is unknown.

Outdoor media. Outdoor media include billboards and signs, placards inside
and outside of commercial transportation modes, flying billboards (e.g., signs
in tow of airplanes), blimps, and skywriting. Commercial advertisers such as
Rado, Rolex, Pepsi, Vodafone and Kingfisher all make extensive use of their
logo-bearing blimps around sports stadiums especially any cricket match in
India. For persons who regularly pass by billboards or use public
transportation, these media may provide repeated exposure to messages. Pro-
health messages displayed on urban public transportation may suffer,
however, from the image problems that afflict urban buses and subways. In
addition, the effectiveness of such postings wears out quickly as audiences
grow tired of their sameness.

Internet The advent of the World Wide Web and the massive increase in
Internet users offers enormous opportunities and challenges. The Internet
places users in firmer autonomous control of which messages are accessed
and when they are accessed. It is possible to put virtually anything on-line and
disseminate it to any location having Internet access, but the user has little
control over quality and accuracy. Internet search engines can direct users to
tens of thousands of web sites after the user's introduction of one or more
keywords. But unlike TV or radio, which are available in nearly all households;
Internet access requires some technical skill, as well as the resources to
purchase hardware and Internet subscription services. The most important
benefit is that It can attract masses all over the world unlike TV and Radio.
Also internet is such a medium which can be termed as a personalized media

What can be marketed on mass basis?

A mass market strategy is effective for products that appeal to a broad cross-
section of consumers and used to effect attitude change to as wide an
audience as possible like aspirin or orange juice. It is not appropriate for
products with limited appeal like toothpaste. Toothpaste isn't made especially
for one consumer and it is sold in huge quantities. A company or individual
who manufactures toothpaste wishes to get more people to buy their particular
brand over another. The goal is when a consumer has the option to select a
tube of toothpaste that the consumer would remember the product which was
marketed. Mass marketing is the opposite of niche marketing, where a product
is made especially for one person or a group of persons.

Other products of mass marketing are furniture, artwork, automobiles,

residential communities, fizzy drinks and personal computers. Typically, things
which are perceived to be necessary/essential to the consumer are subject to
mass marketing.

However, even in the products which were earlier thought of being marketed
on the mass basis are nowadays marketed on the basis of customization. Like
furniture is now made as per the demand of the customer. Or the best example
can be that of personal computer. Dell, an American company, sells its
computer as per the requirements of the customer. Thus everywhere there is
shift from mass advertising to class advertising.


The Evolution from Mass Marketing

The successes of mass marketers led to the appearance of an alternate

approach to marketing. Potential competitors wanting a share of the large
market had two options. One was to replicate the organization, promotion, and
distribution systems of the company that had created the mass market. The
other was to go after a part of the market that had unique needs by developing
products specifically for them. For nearly all of the challengers, building an
operation to parallel that of an entrenched industry giant was not profitable or
realistic. As a result, most of them gravitated to the more attractive market-
segmentation approach. General Motors, in the US used market segmentation
as early as the 1920s when it produced different models for different groups of
customers to compete with Ford. Pepsi made a series of attempts, beginning
in the 1990s, to crack into Coca-Cola's market share through changes in
product and targeted promotion strategy in India making it a youth drink. Also
that that time, television provided a powerful tool for both new and old
companies to reach segmented markets. By the late 90s, market segmentation
had surpassed mass marketing as the primary approach.

Mass Marketing Now and in the Future

In spite of the shift to market segmentation, mass marketing continues to be
used in many situations and has potential for others. Products with broad
appeal and few distinguishing characteristics— such as household cleaners,
potato chips, and pain relievers— lend themselves to mass marketing just as
they always have. At the same time, businesses that use mass marketing for
their goods and services continue to look for ways to enlarge their markets by
designing different appeals for non-customers. Chewing gum, for example, is
presented as an alternative to smoking. Utilities and credit cards offer special
rates to entice potential high-volume customers. And discount retailers, such
as Big-Bazaar, match their mix of mass-marketed products to local customer

Any current or future product that has mass-marketable attributes will likely be
marketed by some form of the approach. In addition, the Internet provides a
new medium for mass-marketing initiatives, and newly opened international
markets offer a possible arena for mass-marketing opportunities. But as rightly
said, change is the only thing that is permanent, even the changes are
expected in terms of the ways of marketing and targeting the customers on
personalized basis. Especially with the companies becoming global and
audience becoming conscious of what they want, companies are more
concentrating on offering customers a more personalized touch. Also
segmentation on the basis of classes is one of the most emerging concepts.
India being known for it’s extremities of people in terms of income, education,
work and social classes, companies have started opting this class advertising
approach to attract the targeted audience that’s fits into segment of probable
buyers of the products or services offered by the advertisers. For that new
methods of marketing have been put into practice in this race of attracting
customers. Old model is being replaced by new model of customerization.

Given below is the difference showing the difference in old and new model.

Old model- New model-customerization

Relationship with the Passive participant Active co-producer
Customer Needs Articulated Articulated and Unarticulated

Segmentation Mass market and Target Customized segments

Pricing Fixed pricing & Value based pricing model.
Customer determined
Communication Advertising and PR IMC & interactive
Distribution Traditional retailing and Online distribution channels or third
direct marketing party logistics
Branding Traditional branding and The customer’s name as brands

Basis of competitive Marketing power Marketing finesse and “capturing” the
advantage customer as “partner”
Product and service Line extensions Customer interactions drive new
offerings modification, customizes product development.
products, services, and
marketing. Marketing and
R&D drive new product


Understanding the Indian Consumer

India's economic growth has accelerated significantly over the last two
decades, along with the spending power of its citizens. Real average
household disposable income has roughly doubled since late 80s. With rising
incomes, household consumption has increased, and a new Indian middle
class has emerged.

As Indian incomes rise, the shape of the country's income pyramid will also
change dramatically. More than 291 million people will move from desperate
poverty to a more sustainable life, adding a number of first-time consumers to
the market. While much of this new wealth and consumption will be created in
urban areas, rural households will also benefit.

The Need for Targeting Specific Class/ Group

Two words sum up today’s consumer market: unlimited choice. Over the past
decade, companies have rushed to steal market share by creating an
unending stream of new products to meet the desires of consumers. At the
same time, media outlets have proliferated and different concepts have
emerged to woo the customers from customization to interactive media
advertising. Marketers are faced with the challenge of getting their message
heard by consumers who are hard to find and even harder to influence.

But the question is how can companies create awareness of their products?
One thing is certain: Mass marketing no longer works. Marketers are no longer
able to reach a “mass market.” Even if they could, there is no longer a “one-
product-fits-all” mentality that would appeal to consumers.

Thus marketing concept calls for understanding customers and satisfying their
needs better than the competition. But different customers have different
needs, and it rarely is possible to satisfy all customers by treating them alike.

Mass advertising refers to treatment of the market as a homogenous group

and offering the same marketing mix to all customers and economies of scale
to be realized through mass production, mass distribution, and mass
communication. Target advertising on the other hand recognizes the diversity
of customers and does not try to please all of them with the same offering. The
first step in target marketing is to identify different market segments and their

The drawback of mass marketing is that customer needs and preferences

differ and the same offering is unlikely to be viewed as optimal by all
customers. If firms ignored the differing customer needs, another firm likely
would enter the market with a product that serves a specific group, and the
incumbent firms would lose those customers.

Thus, marketers have found the need to concentrate on a specific group than
mass. But how to group people and on what basis is one of the most
challenging question for the marketers. Earlier the basis for segmentation was
on four major categories, which mostly depends on the marketer to decide.





However, a common classification that is used by marketers to describe the

Indian population is the Socio Economic Classification thus giving rise to an
entirely new concept of CLASS MARKETING.

A common classification that is used by marketers to describe the Indian

population is the Socio Economic Classification (SEC). SEC is the
classification of Indian consumers on the basis of two parameters: Occupation
and Education of the chief wage earner (Head) of the households. The SEC
classification, created in 1988, was ratified by Market Research Society of
India (MRSI), is used by most media researchers and brand managers to
understand the Indian consuming class. SEC is made to understand the
purchase behavior and the consumption pattern of the households. This
classification is more stable than one based on income alone and being
reflective of lifestyle is more relevant to the examination of consumption
behavior which will be presented in brief in the next section.

The basic reasons for developing a SEC system were the following:

1. Income can discriminate between consumers and non-consumers for certain

products, but not for others.

2. Income is not stable over time whereas SEC is, i.e., the cut-offs of high and
low income will vary quite rapidly over time.

3. Income is often understated.

The Urban Sector is divided into SEC A1, A2, B1, B2, C, D, E1, E2
(Calculated as a function of Educational qualifications of the CWE* and his
The Rural Sector is divided into SEC R1, R2, R3, R4
(Calculated as a function of Educational Qualifications of the CWE* and the
type of the household he stays in – Pucca, Semi Pucca or Kaccha)

Table below shows the socioeconomic classification of urban Indian


< 4 yrs 5-9 School
in yrs of certificat Some Post
Illiterate school school e college Graduate graduate
workers E2 E1 D C C B2 B2

workers E2 E2 E1 D D D D

Shop owner D D C B2 B2 A2 A2

Petty trader E2 D D C C B2 B2
Employer of

> 10 persons B1 B1 A2 A2 A1 A1 A1

< 10 persons C B2 B2 B1 A2 A1 A1

None D C B2 B1 A2 A1 A1


Clerk D D D C B2 B1 B1

Supervisor D D C C B2 B1 A2

Professional D D D B2 B1 A2 A1
executive B1 B1 B1 B1 A2 A1 A1
executive C C C B2 B1 A2 A2

There are eight levels — from A1 to E2The level wise classification can be
known from the following table:


A1 Employer of
>10 Persons College/Graduate/Post Graduate
<10 Persons Graduate/Post Graduate
none Graduate/Post Graduate

Professional Post Graduate
Senior Executive Graduate/Post Graduate

A2 Shop Owner Graduate/Post Graduate

Employer of
>10 Persons 5-9years of school/School Certificate
<10 Persons Some College
none Some College
Supervisor Post Graduate
Professional Graduate
Senior Executive Some College

Junior Executive Graduate/Post Graduate

B1 Employer of
>10 Persons Illiterate/Less than 4 years in school
<10 Persons School Certificate
none School Certificate
Clerk Graduate/Post Graduate
Supervisor Graduate
Professional Some College
Illiterate/Less than 4 years in school/
Senior Executive 5-9 years of school/School Certificates

Junior Executive Some College

B2 Skilled worker Graduate/Post Graduate
Shop Owner School Certificate/ Some college
Petty Trader Graduate/Post Graduate
Employer of
Less than 4 years in school/ 5-9 years of
>10 Persons school
none 5-9 years of school
Clerk Some College
Supervisor Some College
Professional School Certificate
Junior Executive School Certificate


C Skilled Workers School Certificate/ Some college
Shop Owners 5-9years of school
Petty Traders School Certificate/ Some college
Employer of
<10 Persons Illiterate

none Less than 4 years in school
Clerk school Certificate
Supervisor 5-9years of school/school Certificate
Illiterate/Less than 4 years in school/
Junior Executive 5-9 years of school
D Skilled Workers 5-9 years of school
Unskilled workers School Certificate/ Some college
Shop Owners Illiterate/Less than 4 years in school
Less than 4 years in school/ 5-9 years of
Petty Traders school
Employer of
none Illiterate
Illiterate/Less than 4 years in school/
Clerk 5-9 years of school
Supervisor Illiterate/Less than 4 years in school
Illiterate/Less than 4 years in school/
Professional 5-9 years of school
E1 Skilled Workers Less than 4 years in school
Unskilled workers 5-9 years of school
E2 Skilled Workers Illiterate
Unskilled workers Illiterate/ Less than 4 years in school
Petty Traders Illiterate

Table below shows the socioeconomic classification of Rural Indian household.

Education of chief
wage earner Type of House
Pucca pucca Kuchcha
Professional degree R1 R2 R3
Graduation/ PG R1 R2 R3
College R1 R2 R3
Class 4-Class 9 R3 R3 R4
Up to class 4 R3 R3 R4
Self-learning R3 R4 R4
Illiterate R4 R4 R4

Level Education Type of House

R1 ProfessionalDegree/Graduation/PG/College Pucca
R2 SSC/HSC Pucca
ProfessionalDegree/Graduation/PG/College Semi-pucca
R3 ProfessionalDegree/Graduation/PG/College Kuchcha
SSC/HSC Semi-pucca/kuchcha
Class 4- Class 9/Up to class 4 Pucca/Semi-pucca
Self-Learning Pucca
R4 Class 4- Class 9/Up to class 4 Kuchcha
Self-Learning Semi-pucca/kuchcha
Illiterate Pucca/Semi-pucca/Kuchcha

Urban & Rural Classification

According to the Census of India 1991, the following criteria were adopted for
treating a place as urban:

1. All statutory towns, i.e., all places with a municipality, corporation,

cantonment board or notified town area committee, etc.

2. All other places which satisfied the following criteria:

- A minimum population of 5000

- At least 75% of the male working population engaged in non-


pursuits, and

- A density of population of at least 400 per sq km

3. Apart from these, the outgrowths of cities and towns have also been treated
as urban

All areas not identified as Urban, are classified as Rural.

SEC: A debate

Over the years, marketers have always targeted customers on the basis of
their income and predicted their requirements on the same basis. For example,
only the richer section were targeted for cars till late 80s until the focus shifted
towards the ‘new emerging – Middle class’ which gained maximum attention of
the marketer then after. Other examples could be expensive furniture, suiting
and other lifestyle products and services which solely concentrated on the Elite

However, with the increase in the trend of being ‘IN’ thing not only are the
people opting for those goods and services which was earlier meant to target
other specific classes or on mass basis but also the spending is more
dependent on the socio economic status than just income. Thus, an executive
who is not so rich by income may have the needs for high-end products like
luxurious car, far-away traveling, branded clothes, etc. The need arises from
his status as an executive though he may not afford it, and would have surely
bought if he belonged to higher class. Other argument is that, demand for
certain products like newspaper arises not out of income. Even a lower income
person can afford the subscription of newspaper, Gujarati, Hindi or English,
which nearly costs same. But a person who is not educated and whose
requirement of profession does not allow him to buy an English newspaper,
naturally he would not go for an English one. Also almost everyone now
spends not looking at their income but the status and to cope up with that,
consumers today do not hesitate to spend their income lavishly leaving only a
mere amount to savings. Also, awareness around the power of information
technology to solve problems, create employment and improve lives has
trickled down to the lowest socio-economic class. Mobiles are the best
examples. The gadget which was earlier a status symbol is now a requirement
and is being used by everyone around the corner.

Created in 1988, the SEC divided Indian households on the basis of the chief
wage earner’s education and occupation, SEC A1 to R4, covering all urban
and rural areas. The direct correlation between a higher SEC and education
was a result of the belief that a better educated person would have greater
(organized) employment opportunities and thus higher income.

This classification is pertinent as compared to an income-level based

classification, since lifestyle reflects the consumption patterns more closely
than the income levels.

The basic reasons for developing a SEC system were the following:

1. Income can discriminate between consumers and non-consumers for certain

products, but not for others.

2. Income is not stable over time whereas SEC is, i.e., the cut-offs of high and
low income will vary quite rapidly over time.

3. Income is often understated.

The last has been proved by large-scale studies that compared household
expenses with claimed income. Over 80 percent of upper income respondents
were found to have regular monthly expenses well in excess of their stated
monthly household income (MHI), and this proportion was not much lower
among lower income respondents too.

The second of the three reasons is also beyond dispute. Salary levels in India
have undergone a huge change in the 1990s; annual incomes of 1 million-plus
rupees are earned by thousands of families today, but were the privilege of the
very rich a decade ago.

Now let us examine the first reason stated in the context of a few product
categories. The method used is that of a selectivity index, which compares the
extent to which target audience definitions using surrogate variables SEC and
monthly household income (MHI) match with the actual target audience as

measured by very large-scale studies — specifically the Indian Readership

However, in spite of there being many arguments in favour of SEC, there are
many questions that have been raised on it. Consumers are now breaking
class barriers. Not only common man but celebrities are under a questionable
situation too. Take Sachin Tendulkar for an example. He owns a Ferrari, and
his million-dollar endorsement deals are a matter of widespread national
interest. As a brand ambassador, he is a marketer’s delight who has helped
reviving the flagging fortunes of several brands.
But many brands that he has endorsed in his 18-year career were never meant
to be used by him. Tendulkar, who hasn’t completed his graduate studies,
would fall into what most Indian marketers recognize as socio economic
classification (SEC) B — a category that is distinctly middle-class. The two-
decade-old demographic classification SEC is past its sell by date —is indeed
a question on everyone’s mind and certainly on marketers’.

The uni-dimensional way of looking at demographics is a key limitation of

SECs. Several layers of consumer segmentation need to be added on like
psychographics, cultural clusters, and life stages to make a compelling basis
for defining consumer segments.

Today, ‘Swift’ competes outside its so-called category with bigger cars such as
Esteem and Ikon. The consumer is willing to pay more for a smaller but better
designed product. People are using brands to express themselves more than
ever before. The size-price equation doesn’t hold good here.

Also there are many big names have completely junked the SEC
segmentation, and prospered nonetheless. The first name is The Future
Group. The company has gone with its own market definition for all of their
retail formats.

“We have been maintaining that the SEC classification is not a true
representation of Indian consumers for three-four years now,” says Future
Chairman Kishore Biyani.

The group has worked out a system where the entire set of Indian consumers
is divided into three broad categories: India One or the consuming class, India
Two or the serving class and India Three or the deprived class. Biyani’s
philosophy is simple.

India One consists of the ‘consuming class’ that makes up 16-18% of the
consumers but account for 95% of the buyers. That is the core target audience
that he is trying to capture. Also on Biyani’s radar is a part of India Two, the
group that serves India One, for instance, servants, watchmen and small

Later, in 2002, Unilever devised its proprietary Living Standard Measurement

(LSM) index as an alternative to SEC, which segments consumers into 18 LSM
clusters on the basis of 25 parameters such as income, education, durables
ownership, media consumption, entertainment preferences et al.

However, even though many big companies going against SEC, there are still
many big marketers who think along those lines. They’re using the (SEC)
classification data, because it’s the only data that they have. They use it along
with additional data like ownership and consumption but there is no alternative
to demographic data.

Owing to this, a temporary solution was formed by splitting SEC A into two
categories, A1 and A2. This led to a further division, as affluence rose in SEC
A1 to an A1+, which was formed with a threshold of Rs 10,000 as monthly
income. Yet, this has become dated, with nearly a decade since the idea of
SEC A1+ was mooted. In fact, it’s been a decade since any serious changes
were made to classify consumers. But what is considered as the biggest
drawback of this SEC is that, it considers the occupation and education of

CWE Chief Wage Earner which may not be always influential as far as
purchase decisions are considered.

Further refinement

No matter what debate it takes, market research in India has been evolving
rapidly to tackle the increasing needs of marketers operating in a complex
environment. One of the key evolutions was the development of a socio-
economic system of classifying consumers around a decade ago. While SEC
is an improvement on income, data from large-scale studies show that further
refinement is now called for.

One possible solution is to introduce further levels in the SEC system. This is
being done by combining SEC with household expenses to see if a combined
system yields better results. The appropriate questions are now being put on to
large-scale surveys.

Understanding Class: Demographics

Indian Socio economic structure is constantly changing. The main reason for
which are:

• Growing Economy
• Consumption Boom
• Rising Income levels
• Rise in Working Population
• Increasing Nuclear Families
• Changing Food Behaviour
• Profusion of Brands

The demographic representation of population according to SEC can be known

from the following chart:

Social Class Total Male Female

Value % Value % Value %
A1 21228 3 11681 3 9547 3
B2 37351 5 20237 6 17114 4
C 46195 6 24718 6 21477 6
D 61573 7 27589 7 23984 7
E3 64305 8 33063 8 31242 9
R1 19671 3 10180 3 9491 3
R2 56491 8 29268 8 27223 8
R3 199061 27 104834 27 94167 26

R4 243749 33 122424 32 121325 34

Group 14 (A-E) 220652 30 117288 31 103364 29

Group 25 (R1-R4) 578972 70 266766 69 252206 71

Source: IRS(2005)

A = high/intermediate managers/well educated/ businessmen with large

B = intermediate managers/ good education/ businessmen/ self employed with
small organizations
C = petty traders/shop owners/clerks/salesman/ supervisors with some
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 shelters
R4 = uneducated, living in temporary shelters
1 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
(All in ‘000)
2 Consists of the two Groups B1 and B2:
Male B1 = 9,988 (3%); Female B1 = 8,452 (2%); Total B1 = 18,440
Male B2 = 10,249 (3%); Female B2 = 8,662 (2%); Total B2 = 18,911
(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
Female E2 = 19,726 (6%); Total E2 = 40,729 (5%);
(All in ‘000)
4 A-E, total urban
5 R1-R4, total rural


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:


E 10%
27% B

24% 21%

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.


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

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

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!

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 on class have yet not been able to penetrate as an effective medium to
attract the classes. Undoubtedly, with an increase in awareness among the
marketers, there have come up few media that have been successful in
attracting ‘classes’ especially in television that attracts elite class like NDTV
good times and Zoom. Whereas the magazines like Femina, She, etc, are of
the commonest choice of magazines among higher middle class and higher

Special focus on class media not only helps marketers to make a deep impact
on the consumers mind but also to capture the ‘top of the mind’ state which
has become very essential in this one of the fastest growing sector.

Apart from this, there is also need of understanding consumers’ needs or

requirements as well as the standard of living, thought it is very difficult to
judge every consumer’s needs, a class is a good representation on collective

Marketers in India have traditionally focused their attention and marketing

effort on the higher socioeconomic classes (otherwise called SEC A&B). Both
they and their advertising agencies have found these segments easier to
understand and identify with. It has been believed that they are more easily
targeted through the traditional mass media. The language and tone of voice
used to communicate with this segment has a more familiar and comfortable
ring to it. But it is now perhaps time to examine the relevance of mid and low
socioeconomic classes ( SEC C, D&E) who, over the last decade, have slowly
but surely grown in economic power and today contribute significant volumes
to a number of product categories.

But then marketer has to understand that the reach of media in both urban and
rural India is not the same. Thus marketers have to advertise knowing what the
best possible options for them are. Looking at the urban and rural reach,
following conclusions have been made.

Urban reach

Television has the highest reach in urban areas and reached more than 75 per
cent of the urban population in 2007. The most significant change, in media
consumption, in the last decade has been an increase in the importance of
television in the lives of the Indian consumer. Currently more than 70% of the
adult (15+) urban population watches television all seven days a week vis-à-vis
just 40% 10 years ago. On a weekday, the average viewer watches television
for around two and quarter hours. Television could slowly replace social
interaction in all its traditional roles of opinion maker, informer, entertainer and
influencer. However, the real change is the increase in the frequency with
which viewers watch television. Television seems to have moved on from
being entertainment to be indulged in on holidays to being part of the
consumer’s daily routine. Now only more than 70% of individuals belonging to
the SEC D&E households and more than 80% individuals belonging to SEC C
households watch television seven days a week in comparison to 90%
individuals belonging to SEC A households.

The print medium has the second highest reach in urban areas, with 35 per
cent penetration. The percentage reach for the print medium denotes average
issue readership.

After print comes radio with 20 per cent reach and then comes cinema with
close to 12 per cent penetration. The percentage of the population mentioned
listened to the radio at least three days a week and went to the cinema at least
once a month.

On the basis of sex, the penetration of all media remains less for females than
for males in both urban and rural areas. In urban India, TV reaches 75 per cent
of males and 74 per cent of females. Press permeates to 46 per cent males
and 27 per cent females. Radio has 24 per cent and 19 per cent reach for
males and females, respectively. Cinema reaches 10 and 3 per cent males
and females and the Internet reaches 6 per cent and 2 per cent males and
females, respectively.

Looking at state wise reach in urban areas, television has the highest reach in
all the states, including Chandigarh, Delhi and Goa. All three states reveal 87
per cent penetration. TV has the lowest reach in Bihar, with only 49 per cent
penetration. Print has the highest penetration in Kerala and the lowest in
Orissa. Reach figures for both states are 71 per cent and 27 per cent,

Radio has the highest reach in Tamil Nadu – 40 per cent – and the lowest
reach in Punjab – 9 per cent. Cinema is most successful in Andhra Pradesh,
with 20 per cent reach, and least effective in Goa and Himachal Pradesh, with
only 1 per cent reach in each state. The Internet is most useful as a medium in
Delhi and Goa, with 12 per cent reach in each state, and the least used
medium in Gujarat, Madhya Pradesh and Chhattisgarh, with just 2 per cent
reach in each state.

Rural reach

The penetration of all these media is relatively different in rural India.

Television continues to be the medium with the highest reach, but penetrates
only 38 per cent of the huge rural population in the country. Radio overtakes
print in rural India and becomes the medium with the second highest reach.

Radio reaches to the 18% of the rural population. The penetration of print is 15
per cent. Cinema, like in urban India, has the lowest reach in rural India – it
reaches a mere 5 per cent of the rural population.

Looking at the reach of the various media on the basis of sexual division, TV’s
penetration in rural areas is 39 per cent for men and 35 per cent for women.
Radio reaches 22 per cent males and 13 per cent females. Print reaches 20
per cent males and 7 per cent females. Cinema reaches 4 per cent males and
1 per cent females.

State wise reach is highest for television in Goa, with 83 per cent penetration; it
is the lowest in Bihar, with 11 per cent penetration. Radio, like in urban India,
has the maximum reach in Tamil Nadu (40 per cent) and the minimum reach in
Andhra Pradesh (3 per cent). Print is most effective as a medium in Kerala
again, with 62 per cent reach, and least effective in Madhya Pradesh, with only
4 per cent reach. Cinema follows the same trend in rural India as in urban India
and has the highest reach in Andhra Pradesh – 20 per cent. The medium has
the lowest reach in the states of Bihar, Gujarat, Haryana, Chhattisgarh, Orissa,
Uttar Pradesh and West Bengal – 1 per cent penetration in each of these


Understanding target and media selection

Factors to be considered for targeting class customers and

selecting media

Identification of the target class is extremely essential before offering both a

product /service as well as advertising and selecting media for the same.
Thus, understanding the product itself is an important thing. When a marketer
markets a product, seldom he markets the one which is for all the classes,
other than basic items like salt. However, though there might be many such
products catering to all the classes the ratio is too low to compare its
penetration against items that targets classes. So how can marketer decide

whom to target? First, the main consideration is affordability of the consumer
because only then, the wants are converted to demand for the product/service.
Secondly, to what extent the consumer is ready to accept. And if the results
show positive response the next question arises is what advertising media
should you use to promote your business? Simple. Use the one that is most
influential and believable, and that comprehensively reaches the highest
percentage of your target audience for the lowest cost.

Media Preference

Until last century, people had not many options as far as media is concerned.
But with the advent of new media and global competition, not many are left
behind in attracting people. However, before the selection of any media to
advertise, one of the most important things to be taken into consideration is
that what consumers prefer as far as media selection is concerned. Thus,
there might rise questions like:

What is consumer preference?

Why is it important for an advertiser to know the preference?

Where should an advertiser advertise for the products or services?

The answer is, no one can say anything for sure what a consumer prefers. It is
an everlasting ongoing process of sticking to one media at some point and
switching to other at the other point. Preference for media is thus cannot so be
so easily predicted. But when we talk about class advertising, it can be said
that the overall preference for the people belonging to the same class remains
same. That is instead of individual choices, class preference show an

inclination towards certain media that might help an advertiser to choose the
media for advertising in a better manner.

For knowing the selection patterns existing among the people, following is the
research conducted to know the class preference (restricted to Ahmedabad,


Research Problem: To know the exposure level of different media to different

socio-economic classes

Research Design: Exploratory research design

Sample Design: Stratified random, Judgment sampling, convenience


Research Instrument: Questionnaire (Annexure)

Sample Size: 30 for each class (8 classes) = 240

Duration: 1 month


The findings below are bifurcated according to the different

classes from A1 to E2.










The results show that the classes B1,B2, C, and D have the highest Tv exposure
amongst all classes. The detaled exposure to various channels is given below.


As the results show the classes A1,A2, and B1 have the highest expoure to news
channels. The remaining classes have almost the same exposure to news channels. For
targeting the A1,A2, and B1 classes advetisment on news channels would prove more
effective as their exposure is high.


As the results show all the classes have high expoure to music channels. The classes
A1 and A2 have less exposure to music compared to the rest. For targeting all the
classes advetisment on music channels would prove more effective as their exposure
is high.


As the results show the classes A1,A2, and B1 have the highest expoure to informative
channels. The remaining classes have almost the same exposure to informative
channels. For targeting the A1,A2, and B1 classes advetisment on informative channels
would prove more effective as their exposure is high. Also the classes C,D,E1 and E2
have very low exposure.


As the results show the classes A1 and E1 have the highest expoure to movie channels.
The exposure for the remaining classes varies greatly. For targeting the A1 and E1
classes advetisment on movie channels would prove more effective as their exposure
is high.


As the results show all the classes have very high expoure. For targeting the all the
classes advetisment on news channels would prove more effective as their exposure to
sops is high.


As the results show the classes B2,C,D,E1 and E2 have the highest expoure to D.D.
channel. The exposure for the remaining classes is not applicable. For targeting the
B2,C,D,E1 and E2 classes advetisment on sop would prove more effective as their
exposure is high.


As the results show the classes A1,A2,B1 and B2 have the highest expoure to news
papers. The remaining classes have almost the same exposure to news papers. For
targeting the A1,A2,B1 and B2 classes advetisment on news papers would prove more
effective as their exposure is high.


As the results show the classes A1and A2 have the highest expoure to english news
papers. The exposure for the remaining classes is not applicable. For targeting the A1
and A2 classes advetisment on english news papers would prove more effective as
their exposure is high.


As the results show all the classes have very high expoure. For targeting the all the
classes advetisment on local language news papers would prove more effective as their
exposure is high.


As the results show the classes A1,A2 and B1 have the highest expoure to both english
and local language news papers. The exposure for the remaining classes C,D,E1 and
E2 is not applicable. For targeting the A1,A2 and B1 classes advetisment on english
and local language news papers would prove more effective as their exposure to is


As the results show the classes A1,A2,B1,B2 and C have the highest exposure to
cinema. The remaining classes have almost the same exposure and that is very less. For

targeting the A1,A2,B1,B2 and C classes advetisment on cinema would prove more
effective as their exposure is high.


As the results show the classes A1,A2,B1and B2 have the highest expoure to
magazines . The exposure for the remaining classes C,D,E1 and E2 is not applicable.
For targeting the A1,A2,B1and B2 classes advetisment in magazines would prove
more effective as their exposure is high.


As the results show the classes A1and A2 have the highest expoure to internet. The
exposure for the remaining classes C,D,E1 and E2 is not applicable. For targeting the
A1and A2 classes advetisment in magazines would prove more effective as their
exposure is high.


As the results show all the classes except B1 and B2 have very high expoure. For
targeting the rest of the classes advetisment on OOH would prove more effective as
their exposure is high.


As the results show the classes A1and A2 have the lowest expoure to radio. The
exposure for the remaining classes B1,B2,C,D,E1 and E2 is very high. For targeting
the B1,B2,C,D,E1 and E2 classes advetisment in radio would prove more effective as
their exposure is high.


The Indian Advertising Industry being one of the fastest growing area of not
only the IE&M but also the Indian Economy, has a huge potential for further
development. The experience of knowing the insights of the Indian
Entertainment and Median Industry as well as the Indian Advertising Industry
was enriching. It gave some of the true picture of the industry with which I was
totally unaware of.

The understanding of the preferences of the various classes to different media

and their exposure to it can help advertisers target the right audience using the
right media.

Thus targeting the right audience for the advertizing and choosing a specific
media can help advertisers save a lot money in advertizing.

Extensive research by companies, advertising agencies or market research
firms can help understand the exact exposure relations of the various socio
economic classes to the various media.

Research can also be undertaken to understand the exposure level of various

classes in the rural area to various media.

Concrete findings can help companies in reducing advertising expenditure by

concentrating on the right media to reach to target audience.

Also, the companies media budget can be used wisely. Not necessarily does
the company have to cut back on its advertising expenses.

Kotler, Philip: Marketing Management, Eleventh Edition, PHI

Kothari C. R.: Research Methodology

Bijapurkar, Rama: We Are Like That Only, Understanding the Logic of

Consumer India, Penguin Portfolio




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

Branding is a traditional advertising method used to create a response from a

target audience based on cumulative impressions and positive reinforcement.

CAGR (Compounded Annual Growth Rate) is used to describe the growth

over a period of time of some element of the business, usually revenue.

Co-branding is an arrangement that associates a single product or service

with more than one brand name, or otherwise associates a product with
someone other than the principal producer.

Community radio is a type of radio service that caters to the interests of a

certain area, broadcasting material that is popular to a local audience but is
overlooked by more powerful broadcast groups.

Direct Broadcast Satellite (DBS) is a term used to refer to satellite television
broadcasts intended for home reception.

Exploratory research is a type of research that helps determine the best

research design, data collection method and selection of subjects. It often
concludes that a perceived problem does not actually exist.

HPI Household Potential Index 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.

Interactive television represents a continuum from low interactivity to

moderate interactivity and high interactivity in which, for example, an audience
member affects the program being watched. The most obvious example of this
would be any kind of real-time voting on the screen, in which audience votes
create decisions that are reflected in how the show continues. A return path to
the program provider is not necessary to have an interactive program
experience. Once a movie is downloaded for example, controls may all be
local. The link was needed to download the program, but texts and software
which can be executed locally at the set-top box or IRD (Integrated Receiver
Decoder) may occur automatically, once the viewer enters the channel.

Internet marketing is the marketing of products or services over the Internet.

Integrated Marketing Communications (IMC), is a planning process

designed to assure that all brand contacts received by a customer or prospect
for a product, service, or organization are relevant to that person and
consistent over time.

Interactive advertising is the use of interactive media to promote and

influence the buying decisions of the consumer in an online and offline

IPTV (Internet Protocol Television) is a system where a digital television
service is delivered using Internet Protocol over a network infrastructure, which
may include delivery by a broadband connection.

Mobile Marketing can refer to one of two categories of marketing. First is

meant to describe marketing on or with a mobile device. Second, and a more
traditional definition, is meant to describe marketing in a moving fashion.

Out-of-home advertising (OOH) is essentially any type of advertising that

reaches the consumer while he or she is outside the home.

Satellite radio (SR) is a digital radio signal that is broadcast by a

communications satellite, which covers a much wider geographical range than
terrestrial radio signals.

Visual radio is a generic term for adding visuals to normal audio radio

Mass communication is the term used to describe the academic study of the
various means by which individuals and entities relay information through
mass media to large segments of the population at the same time.

Market segment is a subgroup of people or organizations sharing one or more

characteristics that cause them to have similar product needs.

Personalization is tailoring a consumer product, electronic or written medium

to a user based on personal details or characteristics they provide.

Psychographic variables are any attributes relating to personality, values,

attitudes, interests, or lifestyles.

Socio Economic Classification: Socio-economic classification (SEC)

indicates 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

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.

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.



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:

( ) Skilled workers ( ) Unskilled workers ( ) Shop owner

( ) Petty trader ( ) Clerk ( ) Supervisor

( ) Professional ( ) Senior executive ( ) Junior executive

( ) Employer of > 10 persons ( ) Employer of < 10


( ) Employer of None

2. Education:

( ) Illiterate ( ) < 4 yrs in school ( ) 5-9 yrs of school

( ) School certificate ( ) Some college ( ) Graduate

( ) Post graduate

3. How much radio do you listen to?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs

4. How much TV do you watch per day?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs

5. How much time do you spend on watching news per day?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs
6. How much time do you spend on watching Music channels per

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs

7. How much time do you spend on watching Informative channels
(ex: discovery, national geography) per day?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs
8. How much time do you spend on watching Sops channels per

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs

9. How much time do you spend on watching D.D. (All doordarshan

channels) per day?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs
10. How much time do you spend reading newspapers per day?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs
11. In which language do you read newspapers?

( ) English ( ) Local language ( ) Both

12. Which type of newspapers do you read?

( ) General ( ) Business ( ) Both

13. How many movies do you watch in a month (in theatres)?

( )0 ( )1 ( )2 ( )3 ( )4 ( ) 5-10permonth
14. How many magazines do you read per day?

( )0 ( )1 ( )2 ( )3 ( )4 ( )5

15. How much time do you spend on internet per week?

( ) 0-1hours ( ) 1-5hours ( ) 5-10hours ( ) 10-20hours ( ) 20-


16. How much do you travel per day?

( ) 0-5kms ( ) 5-10kms ( ) 10-15kms ( ) 15-20kms ( ) 20-

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.