Consumer 360 Dossier

8/7/2019 Consumer 360 Dossier

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NielsenConsumer 360

India

The Next Big Thing


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The number one question we are always confronted with as we are

asked to divine the future consumer for our clients, is usually some

variation of Whats the Next Big Thing?.

Naturally, this will differ by consumer, geography and category.

However, more often than not, the answers that we are encouraged to

unearth deal with broader, deeper, more systemic trends. And these

are precisely what we made the locus of our intellectual inquiry during

the latest edition of the Nielsen Client Conference Consumer 360.

This publication is a tribute to all our Nielsen clients who made it a success with their views

and keen interest, which always drives us to unearth the most insightful consumer

understanding.

In many ways, this was an unprecedented client conference for The Nielsen Company. To have

an inaugural address by Shri.Nandan Nilekani, Chairman of the UIDAI about a single initiative

that had the potential to change the way Indians live, was as breath-taking as it was grounded.

That set the ground for the rest of the sessions as leading voices from industry, media,

marketing and a few consumers themselves deciphered the future for all of us. This publication

chronicles what we see as the big drivers of change in India. As the retail consumer evolves, and

the rural consumer comes to the fore, both telecom and the internet are set to redefine the

marketing landscape in ways many of us may not yet have imagined.

Or have we? The insights by Thought Leaders from across industry and underscored in the

following pages may yet provide a few clues to how we should re-imagine a new, bigger,

brighter, more incredible India.

Piyush Mathur

President, India Region

The Nielsen Company

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Given the changing socio- economic landscape of the

country, building a case for the Unique Identification

Program, Nandan Nilekani, Chairman UID Programme,

outlined four trends taking place across India:

l A demographic disruption taking place with an

expected 11 million new people joining the workforce

every year for the next five years.

l Mass migration to cities. The urban population is

expected to grow by 31 people every minute for many

years to come.

l Low cost mobile phones mean all social sets have

access to the same or similar content.

l Indians are increasingly impatient with failing systems.

As a consequence, service providers are responding

more rapidly than ever.

Aadhaar -Bettering a Billion Lives

The Aadhaar number will create a much more openmarketplace, where hundreds of millions of people

who were shut out of services will now be able to

access them.Nandan Nilekani

Chairman, UID Programme

Nilekani said the shift in attitudes amongst customers was

creating a new urgency for services and infrastructure in

the country. And though there was the emergence of

solutions that respond to these forces, there is a missing

piece that has limited their effectiveness, and their ability

to build scalable, sustainable solutions for the poor

consumer: the lack of a universal identity infrastructure.

And it was this gap that Nilekani hoped the Aadhaar

number would fill.

In short, the Aadhar number will offer two critical features

i) Serve as a proof of identity and address, and

ii) Allow agencies to confirm when a service has been

delivered to an individual.


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Various factors such as the growing economy, media

exposure, rising affluence and the availability of new

products and services have led to rising consumerism in

India. A study conducted by Nielsen India attempted to

understand and map shopper habits and retailer strategies

across urban India.

Of the shoppers studied, nearly 40 percent claimed to

know the prices of most items and nearly half (45%)

claimed to notice a difference in prices across modern and

traditional trade formats.

The study showed, the Indian shopper is simultaneously

loyal to multiple store formats rather than gravitating

towards any one kind. He or she isnt bound by rules either

The Crossover ShopperA Coming of Age

Retailers usually see shoppers gravitating towards one ortwo shop types to meet their needs as markets evolve, the

Crossover Shopper is a phenomenon that has come of age in

India as shoppers have now developed a fixed set of stores

across format types to meet multiple needs:Radhika Chandok

Executive Director, The Nielsen Company

for instance, the Indian shopper flits across formats to fill

shopping baskets with different categories from each store

type in addition to the general store typically visited.

The key takeaways include:

l The Crossover Shopper has come of age. Indian

shoppers have become more loyal to a fixed set of

stores across store types- modern trade and traditional

trade.

l Indian shoppers seek better value regardless of store

format as experimentation declines

l The next BIG things in retail are set to be e-commerce,

greater in-store innovation for shopper

engagement, and shopper-oriented supply chains


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Aligned Retail Ecosystem or ARE refers to the system of

managing a myriad set of interdependencies with the retail

business that have to be interwoven into a failsafe, fool

proof, work flow that works like an eco-system. The

interdependencies can be bunched together to form an

assortment.

Whats in it for the various stakeholders?

For the shopper:

l better choice of products

l improved availability

l consistency of range and availability

l more newness

l cater to the local range more effectively

Aligned Retail Ecosystem or AREWhat is ARE?

For the retailer:

l sharper positioning

l clear link between financial plan and store assortment

l efficient SKU and inventory management

l basis for continuous review and improvement

l NHQ and Zones fully aligned

For the supplier:

l know exactly which SKUs sell in which store,

aggregated up to a region

l can study the region wise sales more accurately

l can forecast sales more accurately

l can monitor OOS data more clearly

If we don't have an approach to deliver ARE, then

we won't hit the target.K Radhakrishnan

President, Future Fresh Foods Ltd., Future Group


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Key Findings

l The Indian rural market is set to become a USD100billion opportunity for retail spending in the next

fifteen years

l For nearly half of the largest FMCG categories, rural

India now contributes more to their growth than urban

l The arrival of the New Rural Consumer signals the

need for marketing strategies tailored to them;

businesses should target high potential villages that

will present the next BIG opportunity

The rural market is currently worth approximately USD 9

billion in consumer spending in the FMCG space annually.

The findings of the study show that food categories will

drive the bulk of the additional USD 91 billion into the

marketplace by 2025.

The study also found a surprising set of priorities. In rural

areas, education of children ranked second, after having a

good crop.

Indias Rural FMCG Market:The Rise and Rise of Rural

On the consumption front, a third of rural consumers are

eating biscuits for breakfast and one in six rural buyers of

hair dye now uses colour other than black to indulge in thetrend of externalized beauty that is picking up fast in rural

areas.

The study also revealed that:

l Rural purchasing power has grown faster than urban in

the last six quarters

l Faster growth in rural is not limited to penetration;

today the rural consumers frequency of consumption

is growing faster as well, demonstrating their

entrenchment in these categories

l Instant noodle sales are growing nearly twice as fast in

rural India compared to urban, in both penetration and

frequency

l Seemingly urbane brands in categories like deodorant

and fabric softener are growing much faster in rural

India than urban

The rate at which rural FMCG market is growing today, by

2025 it will be worth $100 billion , more than the GDP ofUkraine.

Prashant Singh

Vice President, The Nielsen Company


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A Nielsen study on the Indian telecom market brought out

revealing insights about expected 3G penetration in the

telecom market.

Key Findings:

l Only a fifth of Indias urban mobile users intend to

adopt 3G initially, universal penetration to take a

decade

l Initial adoption will be driven by working professionals

and younger consumers

l Amongst urban subscribers who intend to adopt 3G,

63 percent plan to upgrade handsets

l 35 percent of urban subscribers will leave their current

service provider if they do not offer 3G

The 3G Phenomenon in India:Hype or Reality?

The study found that nearly 70 percent of urban mobile

subscribers are aware of 3G services and 63 percent had

familiarity with it as a concept. Even with an enhanced user

experience on a 3G network, driving migration to 3G

devices will be a challenge. The study found that bundling

3G services with new handsets will be the most effective

course of action for telecom carriers.

According to the study by Nielsen, 3Gs success in the

Indian market will depend on three key strategies:

l Creating a compelling user experience through services

and handset upgrades

l Creating a strong brand association with 3G and

demonstrating the relevance of services

l Merely positioning 3G as faster and making it

affordable will not drive adoption in India

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While service providers have succeeded in popularizingthe concept of 3G and articulating its promises clearly,

consumers seem tentative about their disposition to

embrace the technologyArjun Urs

Director, Client Solutions, The Nielsen Company


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The Nielsen Company has also ventured into the social

networking space, measuring the effectiveness of

marketing through social networking sites.

Facts on Social Media in India:

l Facebook in India has over 15 Million users, which

is more than 30% of active internet users in India

l

3 out of 4 social media users visit a social networkingsite at least once a day, and a discussion forum once a

week

l Facebook and Twitters India base has grown by 100%

in 2010

Social Media:The Big Media Revolution

Facebook is an increasingly vital link between consumers andbrands. We have leveraged this strength in the US market. We

are certain that we can use our expertise to help achieve the

same objective in India for vibrant brands.Farshad Family

Managing Director, Nielsen Media

l 60 percent of social media teens spend more

than 30 minutes a day on social networking

l 31-40 year olds are the most active group on

independent review / opinion sites

l Social media users are spending significantly

longer hours on social media channels everyday

l 3 out of 4 social media teens have become fans of a

brand online

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Clicking on an ad or becoming a fan of a brand areamong the top 3 activities


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Neuro Marketing: A study of consumers' cognitive and

affective response to marketing stimuli.

Trends that lead to the Neuro Marketing Revolution:

l Increasing power of computing technology

l Accelerating breakthroughs in neuro science

What does NeuroFocus do?

Apply brainwaves to understand the effectiveness of

branding, products, packaging, communications, in-store

experience -- anything, that can stimulate the mind, orpersuade the consumer.

Techniques:

l 64 sensors collect data 2,000 times every second to

fully capture activity across all brain regions

l High resolution dense-array EEG measures brain

response

The Buying BrainLeveraging Neuro Marketing to Maximize

Competitive Advantage

l Eye-tracking and pupillometry pinpoint hot zones

l GSR (galvanic skin response) confirms engagement

What is measured?

l Attention

l Emotional engagement

l Memory retention

How is the metric translated into market performance

indicators?

Purchase Intent: Directly translates to sales and volumeAwareness: Messaging comprehension

Novelty: Level of uniqueness and differentiation in the

mind of the consumer

Neuro Marketing is applied to all areas-Brand, Packaging,

Product, Advertising, In-store, Media and Entertainment.

We know what is going on in the consumers mindbecause of whats going on in the brain

Caroline Winnett

Chief Marketing Officer, NeuroFocus


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Moderator:

Farshad Family,

Managing Director, Nielsen Media

Panelists:

Kirthiga Reddy, LV Krishnan,

Director of Online Operations and Head of Office, Facebook, India CEO, TAM Media Research

Dharini Mishra, Krishna Prasad,

GM & Global Head - Brand Management, Suzlon Group Chief Experience Officer/

Head of Digital, Dentsu

Vineet K. Singh,

Business Head, 99acres.com & Naukrigulf.com

Panel DiscussionThe BIG Media Revolution:Not Just a Remote Possibility - Social Media, Digitization & Marketing Innovation


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Key Insights:

1. How should companies be thinking about interacting

with broader consumers or potential customers online?

Kirthiga Reddy: The biggest thing about interacting with

the social media community is knowing where your

customers are and how to become a part of their

conversation. Its a combination of how brands use thepower of a platform like Facebook, combined with the

innovation that the platform can come up with.

Krishna Prasad: Several brands engage with social media,

but everyone follows one leader. Ideally, a brand should see

what will work for it rather than just follow. The same

metric doesnt apply for everyone.

2. If companies are trying to reach their audiences using

social media what does it mean for traditional media liketelevision?

LV Krishnan: Online and television complement each other.

News channels put out tweets on their tickers and

sometimes these tweets are also answered by television

anchors. Even on reality shows, eliminations happen online

with viewers logging on and voting for their favourite

contestants.

3. Using online space, some companies have built a

community or a brand, how should others replicate that

success to build their brands, or to build support around a

social cause?

Kirthiga Reddy: TV gives a brand mass reach and through

TV you get to a huge audience, who can be engaged with

on Facebook. Pepsi in India is a great example of drawing

people to their Facebook page, through their outreach

campaigns. A company must decide if they want to use

social media as an afterthought or build a communication

strategy bottom up. Another key factor about community

is to keep in mind who the target audience is for the

communication. It is not just about getting die hard

customers but getting their friends to use the product. It is

important to connect what the brand stands for and what

the consumer wants.

4. Taking social media beyond marketing what

applications do you see for the medium at your company?

Dharini Mishra: Employees need to buy into the promise of

the brand as well. Social media helps in that engagement.

Employees feel positive about the company when they see

positive buzz about the company on social media.

Future Trends:

Krishna Mohan: Internet growth in India has always been

linked to PC penetration, but social media does not need

the use of a PC. Since social media can also be used

through a mobile device, it has huge potential in the

country.

Kirthiga Reddy: More awareness and measurement will

help, as it will increase use of the medium. Also hope for

innovation in applications, to further increase proliferation.

Vineet K Singh: The shift to social media has begun. This is

the experimental phase for companies to understand and

realize what is relevant to them and their brand and find

which platform works best for them. The introduction of

3G services should further help this trend towards social

media.


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Moderator:

Sam Balsara,

Chairman & Managing Director, Madison World

Panelists:

Atul Singh, Mahesh Vyas,

President, India & South West Asia, Coca Cola CEO & MD, CMIE

Neville Taraporewalla, Piyush Mathur,

Head- Advertiser & Publisher Solutions Group in India, President, India Region, The Nielsen Company

Microsoft

BIG Panel DiscussionThe Future of Indias Consumer


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Key Insights:

1. Marketing needs to be a combination of gut feel and

science. Do you think companies need to bring more

science into marketing? Is more success achieved through

observation?

Piyush Mathur: The owners science of observation is

market research, whether done by self observation or by aresearch agency. A consumers need is met by the marketer

who observes a consumer, identifies the unmet need of

that consumer and then addresses it. That is where art

comes together with the science of marketing. Rick Kash

and David Calhouns book How Companies Win talks

about the fifth P in marketing- Precision. With the world

emerging from the recession, supply clearly outstrips

demand and hence precision is key to a marketers

success from a consumer point of view. Going forward,

market researchers must listen to the consumer and try andpredict the future.

2. How far away are we from the Internet helping build a

brand?

Neville Taraporewalla: Consumers have changed

dramatically. Today aspiration plays a big role in driving

consumer demand. Online consumers have a drastically

different behavioural pattern from traditional consumers.

The information available on these consumers, through

surveys etc must be used to understand their needs and

then build effective marketing communication to

successfully build a brand. The web will always be part of

the overall media mix, marketers will have to alter the way

they reach out to consumers factoring in the web.

Television will give you high reach, much engagement will

come from the web.

3. What is going to be the Next Big Thing given the macro

economic data available for the Indian economy?

Mahesh Vyas: The Indian economy is doing extremely well.

If you have a product or a service it is bound to sell. But, itis important to see how much better you are performing

compared to the economy as a whole and the key is to

measure the sustainability of ones growth model.

Investments into India are very high. But with regards to

consumption demands, there is huge disparity in the levels

of spending and potential growth rate available. India

weathered the global economic slowdown remarkably well

and it was only because the Indian consumer had the

money and was willing to spend. The socialist view of the

economy is one of the past.

4. Are volumes in sales higher than marketing costs in

India?

Atul Singh: Marketing costs are rising, but consumption is

as well. The overall buoyancy in the economy is indicative

of that. But how brands interact with consumers will

change. Television will continue to be important for the

advertiser, but the digital space is gaining currency. Also,

there is a huge population in the country that is enteringthe consuming class for the very first time and this means

not just a huge opportunity for marketers but also a very

big challenge.


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