Changing Consumer Behavior in India: Possibly the most challenging concept in the marketing is to deal with understanding the

buyer behavior. The attitude of Indian consumers has undergone a major transformation over the last few years. The Indian consumer today wants to lead a life full of luxury and comfort. He wants to live in present and does not believe in savings for the future. An important and recent development in India s consumerism is the emergence of the rural market for several basic consumer goods. The Indian middle class has provided a big boost to the consumer culture during the recent past and it is hoped that their buying behavior will continue to change in the coming future. Due to fast growth of the services sector per capita income of people of India is also increasing. The number of middle class is increasing due to another fact that people are fast shifting from agriculture to the services and industry sector where growth prospects are reasonably high as compared to the agriculture sector which is showing slow growth. The consumption pattern of a country depends on liberalization of economic policies, buying habits of the younger generation, financial independence at a young age, increase in number of nuclear families and increase in media exposure of the people. The tastes and preferences of the current generation are changing rapidly. The current generation does not mind paying extra for better facilities and ambience. Another major factor that has led to increased consumerism is the growth of credit culture in India. The Indian consumer does not feel shy to purchase products on credit and pay tomorrow for what they use or buy today. This tendency has led to a tremendous increase in purchase of homes, cars, two-wheelers and consumer goods. The market for luxury products in India is also climbing at an astonishing rate as compared to a decade ago when it was almost negligible. The reason behind this is that the purchasing power of people of India is rising very steeply. The Indian consumer today is highly aware about the product, price, quality and the options available with him. The purchasing is done by keeping all these factors in mind. Today, price is not the only consideration as it was a few years back when prices played a major role in purchasing. Marketers are trying hard to capture this ever increasing Indian middle class as they form the bulk of Indian consumers.

The convergence of economic, demographic, and technological forces will bring about unprecedented changes in consumer behavior, according to a new report from Deloitte Touche Tohmatsu (DTTL), Consumer 2020: Reading the signs. The report throws light on the emergence of India as the worlds fifth largest consumer market by 2025 and 50 million outbound tourists by 2020 providing significant opportunities for consumer business companies. With its large market of middle class consumers and growing purchasing power India is already having a significant impact on the global consumer market across a wide range of consumer goods. As Indias economy gains from strength to strength so does the growth in two- income households giving rise to increased demand for convenience of modern retailing, said Rajan Divekar, Senior Director, DeloitteTouche Tohmatsu India. Going forward, countries like India need to take measures that stimulate consumer spending. This is evident from the fact that over the coming decade we will see a rebalancing in the global economy, as countries that previously witnessed economic growth that was fueled by heavy borrowing and excessive consumer spending move to an era of export-driven growth. Conversely, countries whose growth primarily came from exporting to borrowing countries will no longer be able to rely on such markets. Countries such as China are likely to shift away from export-oriented growth toward growth driven by domestic consumer spending. For countries like India, this could include liberalising consumer finance and improving the social safety net so as to encourage consumer spending and allowing the currency to appreciate in value. Methods of engaging consumers in adopting more sustainable behaviors in purchasing products and services will no longer be just be about marketing and communicating. Rather, customer engagement will be about connecting and socialising with a larger and enlightened group of consumers. Consumers now have the power of information at their fingertips, enabling them to comparison-shop and purchase a wide range of goods and services anytime, anywhere. Also, this trend is likely to accelerate, as mobile communication is expected to play an ever-larger transformative role in the future, as it provides independent access to information and increasing opportunities for mobile commerce.

Trust will remain a key issue with consumers, who will continue to trust peer recommendations over company information. Additionally, the sense of customer loyalty that existed in previous generations will be more short-term and increasingly influenced by social networks, Divekar added. In the Indian context, another major change that is likely to be witnessed over the next decade is the changing profile of the Indian retail sector both in terms of retail formats that are customised to meet the needs of Indian consumers as well as the gradual liberalisation of FDI in the multibrand retail sector, which in turn is likely to attract significant investments in the back end supply and create employment opportunities -- rural employment and employment by the small scale units who will supply to large retailers. As Indian retail enters a new phase of growth in the coming decade, another important change is the gradual shift in the balance of power from consumer product companies to organised retailers. There are early signs of this already, like for example the growth of private label brands and consumer product companies establishing separate sales channels and trade practices for modern trade. Thus in summary, while the Indian consumer market is likely to continue its growth trajectory, there are many underlying shifts taking place both at a consumer level as well as at the retail level. Consumer product companies that make themselves part of this change process are likely to remain relevant and interesting to consumers-and positively differentiated in the marketplace.

CHANGES IN CONSUMER BEHAVIOUR OF INDIA Literature Review: Consumer behavior reflects the totality of consumer

s decisions with respect to the

acquisition, consumption and disposition of goods, services, activities and ideas by human decision making units (Hoyer, Macinnis and Pinaki Das Gupta, 2008). Consumer behavior means more than just how a person buys tangible products such as bath soap, digital music players and automobiles. It also includes consumer s use of services, activities and ideas such

as going to the doctor, visiting a theme park, etc. (Source- Hoyer, Macinnis and Pinaki Das Gupta, 2008). David M Potter (1954) presented the situation of consumers with diverse nature and ambitions. Cyndee Miller (1995) has described the 80 different natures of women as a purchaser in different capacities. Fitzerald (1994) has described the role of life style in deciding the consumer behavior factor. The advertising age (1995) has given the reasons for developing different consumer images. Maxine Wilkie (1995) has advocated that

Demographic plays a vital role for deciding the culture of consumer. Adweek's Marketing week (1994) has given the scene of vanishing culture of housewives and replacement by working wives. Howard and Sheth (1969) explained how consumer s buying behaviour influenced by internal and external factors. They explained that human mind is BLACK BOX which

receive stimuli. This stimulus creates perception in the mind of consumer which implied the kind of learning favourable or unfavourable. This will give the output in the form of acceptance or rejection. Basically this model is based on Stimulus -Response theory.

CHANGES IN CONSUMER BEHAVIOUR OF INDIA

CHANGES IN CONSUMER BEHAVIOUR OF INDIA

References: Britain's Vanishing Housewife", Adweek's Marketing Week,1991 Cyndee, Miller, "Study Dispels '80s Stereotypes of Women, "Marketing News,1995 David M. Potter,People of Plenty, 1954 Hoyer, Macinnis and Pinaki Das Gupta, Consumer Behaviour,2008 J. N. Sheth and J.A. Howard, Theory of Buying Behaviour,Wiley,1969 Kate Fitzgerald, "Hallmark Alters Focus as Life Styles Change, "Advertising Age, 1994 Maxine Wilkie, Scent of a Market, American Demographics, 1 9 9 5 Rama Bijapurkar, We Are Like That Only,2007 S.L.Rao and I. Natrajan,Indian Market Demographic, 1994 www.google.com www.ncaer.org edms.matrade.gov
Business Standard, March 2011

CHANGES IN CONSUMER BEHAVIOR WORLDWIDE While in 2008 & 2009 recession resulted in fear playing an important role in shaping consumer behavior, the near future will see a return of confidence and adaptation to overcome the restraints previously imposed on consumers. Balance has become the new mantra. As consumers find they are able to spend again, balanced spending and balanced consumption are seen as key characteristics of next years: 1. Resilience Consumers are expected to demonstrate resiliencean ability to recover from and adjust to any misfortune or change brought on by the recession. People will face next year with better attitudes and strengthened resolve, learning new skills like cooking, meal planning and DIY repair to cope with the New Economy. Already, some 13 million Brits say theyre cooking from scratch more often, while a quarter of them made their own home improvements to save money. As many people still face unemployment, the coming few years may see them looking to online educational tools to develop professional and social skills. Businesses that harness consumers new resilient, education-driven mentality will benefit in the near future as well. 2. Reviewing and re-evaluating The past year gave consumers cause to re-evaluate every aspect of their lives, looking for value and savings. In the UK, over half of Brits buy more on promotions and 28% have cut back on treats and luxuries. It is expected that shoppers will keep reviewing as they hunt out the best deals and realise where they can get by on less.

Value initiatives are important and theyll remain so. However, consumers will purchase more expensive products if they are convinced of the products value. Brands that engage consumers effectively stand to be successful next year despite price barriers. 3. Prove it accountability Because consumer confidence worldwide took a hit in the few years, next few years will see increased demand for proof and results. People are tracking more areas of their lives through

online forums, comparison sites and micro-blogging sites, so transparency is no longer a differentiator for brands; its a requirement.

A companys need for accountability is nothing new, but the quantity of information available today adds to the challenge. Brands will need to pull out all the stops to gain consumers trust. 4. Escapism The past year has meant a huge amount of economising and scaling back on previously normal treats and experiences. While consumers have become accustomed to staycations, small indulgences and cooking at home, it is predicted that theyll start occasionally breaking free from the tyranny of value post 2011.

Escapism will resonate both in and outside the home as consumers splurge on big purchases. Savvy brands are already capitalising on peoples desire to escape by offering new experiences like 3-D media and audio literature. 5. Media evolution Micro-blogging, social networking and interactive media have exploded into consumers lives, and as confidence in usage grows, people will incorporate new media forms more into their daily lives. In the UK, nine in 10 adults have a computer in their home and in the US, four in 10 Americans have at least one social networking profile.

As people use new media to change and simplify daily tasks, theyll question the nature of authority and effective use of advertising. Companies must work harder next year to truly engage, attract and interact with consumers, as media quickly evolves. 6. Ethical responsibility Itll be even more important to coax consumers out of their spending slumber and wean retailers off perpetual discounting. Ethics will play a large part in rebuilding brands. Environmental and ethical issues still attract attention: nearly half of UK adults view them as important and 90% of Americans buy green products at least sometimes.

For businesses to rebuild brands through ethical efforts, theyll need to connect with consumers, giving them an emotional reason to buy. As consumers demand more from the companies they

do business with, theyll want ethical responsibility to be a chief concern, creating more scrutiny on ethical claims than ever before. 7. Stability The past year left its mark: consumers are shying away from the spending binges of the past few decades and finding that moderation and preparation are possibilities.

As people accept the economy as it is now and embark on more balanced spending, theyll also stabilise other areas of their lives: food, diet, beauty. Brands can capitalise by giving consumers multiple product options at different price and benefit levels.