Consumer is Queen

Following Essay was submitted by me to Council for Fair Business Practice's Annual Essay Competition.

"If you understand women's consumer DNA and implement strategies that ring with authenticity, you will improve all of your marketing efforts. If you make it women-friendly, you make it everybody-friendly!"
- Joanne Yaccato (Gender Intelligence Expert & Founder of Toronto-based consulting firm The Thomas Yaccato Group)

Origin of Concept: Women Consumers
A consumer is a person who uses any product or service. Typically when business people and economists talk of consumers they are talking about person as consumer, an aggregated commodity item with little individuality other than that expressed in the buy/not-buy decision. However there is a trend in marketing to individualize the concept. Here is where the modern marketers distinctly segregated the concept of Women Consumers and saw them in a different light as to how they can be better reached and influenced. Women Consumers are presumed to dictate what goods are purchased and are generally considered the center of economic activity.

Women: Centre of Choice, Therefore Centre of Economic Activity
One of the major contributions that we all make to the economy is through buying things. Women's role as care givers has meant that women play an especially prominent role in buying things that provide sustenance for home and family. Women have been ignored in the past because they're in plain sight, but not anymore. It's standard marketing wisdom that women control 80% of all household purchases (Consulting firm A.T. Kearney estimates). As a result women have to face a number of decisions related to products/services & brands. This insight proves why marketers of household supplies, kids' gear, food, cosmetics and clothes are good at reaching women. But women buy gender-neutral stuff, too: cars, auto services, technology--the list includes everything but Viagra! Increasingly, women take responsibility for buying larger items such as houses and cars. And women are also often responsible for buying gifts on behalf of their families. When kids go to birthday parties, it is usually the mother who purchases and wraps the gift. It often works the same way when a couple attends a wedding or anniversary. Women are faced with endless choices and decisions in their lives as consumers. These facts make them centre of economic activities.



Women-O-Nomics: Underestimation of Economic Contribution of Women
Even the non-monetary part of consumption is part of the economy. Shopping for the goods that we need to survive takes time and attention. Buying food and clothes and school supplies and home furnishings often means watching out for sales and discounts. Comparison shopping, searching for offers, and finding the best deal, is also time-consuming. Shopping is work and is part of the unpaid labour not counted in the formal economy. But whether or not it's recognized as work, shopping is an activity fraught with dichotomy.

Women-O-Nomics: Escalating Economic Power of Women
Younger generations of Indian women have been profound. Whereas Indian women traditionally have been submissive to parents and husbands and valued frugality and modesty, a number of sociological studies show that young Indian females now prize financial independence, freedom to decide when to marry and have children, and glamorous careers. TOMORROW'S BUYERS. A generation back, women would sacrifice themselves and believed in saving, today, it is spend, spend, and spend. It is O.K. for a woman to want something for herself, and people will accept it if she goes out into a man's world making a statement. Because today's young women are the key consumer group of tomorrow, these shifts have big implications for marketing companies.

Women- The Evolved Consumers
Freud famously wondered, "What does a woman want?" He never figured it out, but many business owners have and are making money in the process. What women want right now is attention to detail in product design and service; the right choices, not endless choices; and a nuanced, longer selling process that respects their desire to understand what they're buying before they take it home. This prevailing wisdom doesn't just apply to the obvious categories like clothes, kids' stuff and cosmetics but too many more product categories. Apart from this, women tend to be far more evolved with respect to the kind of data that is assimilated from them through marketing research; they are excellent feedback providers and come up with ingenious insights. Also women are in the forefront to advocate ethical marketing practices and often take up action against fraudulent practitioners. Marketers of any product or service can adopt a service philosophy that delivers what women want. Once you translate these expectations to your market niche, you'll win the hearts and of women which directly translates into a loyal following.

Caselets

1.)A survey carried out in USA (in year 2006) states that 60 percent of women 16 and older are working. In nearly two-thirds of households, women are the primary shoppers, but 72 percent of married women who work full time are the primary shoppers. This reinforces the fact that women are the key decision makers and keeping focus on them is the key.

2.)Recent studies by Grey Global Group (In Year 2005) examined 3,400 unmarried women aged 19-22 of different income and social levels. Altogether, the project involved 40 focus groups in five large metro areas and five smaller cities in India. In some cases, the researchers lived with the women for a while to study them more closely. The researchers supplemented this data with interviews of journalists, teachers, and psychologists. The important trends recorded were as follows:

1.)Guilt-free materialism- 51% of young single women in major metro areas say it's necessary to have a big house and big car to be happy. In smaller cities, 86% agreed with this statement.

2.)Parental ties-67% say they plan to take care of their parents into their old age -- and that means they need money.


3.)Marital freedom- 65% say dating is essential, and they also want to become financially independent before they marry. More than three-quarters -- 76% -- say they want to maintain that independence afterward. Sixty percent say they'll decide how to spend their own salaries


4.)Individualism- Female role models in Indian culture used to personify perfection, Now, 62% of girls say it's O.K. if they have faults and that people see them.


5.)Careerism- 45% of young single females say they would like to be journalists. 39% say they would like to be managers, 38% are interested in design, and 20% think they want to be teachers. Interestingly, 13% say they would like to be in the military. The percentage of those saying they want to be a full-time housewife was minuscule.

6.)Modern husbands- The traditional role donned by husbands is changing and they are more involved with household chores.

Grey Global Group is of the opinion that For Indian society, the changes in young women's outlook on life is revolutionary. For marketers, they offer interesting new opportunities to exploit.

Queen Rules
Women are not just passive recipients of products & services. Women are powerful and have a powerful role to play. Working together as consumers and producers, women can make the world a more just place for all people and for our earth.


"No business owner can afford to ignore The Queen- women, and few would admit to doing so. But not ignoring them is not the same as attracting them, and attracting them is not the same as winning their loyalty. Try hard to woo the Queen, for you are sure to succeed with her!"
- Namita Parekh (Marketing Student & a Women Consumer)

Falling Consumer Confidence Index !

Consumer confidence in India has fallen by 11 points to 122, the lowest level in the last five runs of the Nielsen Global Consumer Confidence Index survey, which measures consumer confidence, major concerns and spending habits in 51 countries. Some 42 per cent of the Indian online consumers who took part in the survey believe that their country is currently in an economic recession.

Globally, the latest Nielsen Consumer Confidence Index has dropped to 88 – down six points in the last six months and the largest single drop the index has recorded in the last three years. India dropped from 133 points in the last leg of the survey in November 2007 to 122 points. Across countries, the US has suffered the biggest fall in the Confidence Index, dropping 17 points.

Overall, Asia Pacific consumers are still amongst the most confident in the world. Five of the global top 10 countries hail from the Asia Pacific and the overall total for the region is one point above the global average. However, for many emerging countries in Asia that have enjoyed the fruits of economic growth and the boom in recent years, the last six months have been a stark wake-up call as consumers find themselves struggling with double-digit inflation, rising unemployment rates and stagflation for the first time in a decade.

According to Mr.Sarang Panchal, managing director, customised research, Greater China and Asia Pacific, The Nielsen Company.The last six months have been a turbulent period for the global economy and this has impacted the growth of the Indian economy as well. The rising crude oil prices, inflation and growing unemployment rates have all diminished consumer spending powers and have in a way shaken the Indian consumer’s confidence.

However, all is not lost. Despite the drop, India ranked second on The Nielsen Consumer Confidence Index, with 122 points, just behind Norway, which scored 129 points. Indian consumers continue to be the most confident in the region, despite posting a dramatic 11 point fall. India is one of the few markets that stand to gain from the grim economic outlook. In recent years, India has established itself as a hub for outsourcing technical and support staff, and as belts in the world’s leading economies tighten, we may well see India’s economy and the confidence of its consumers soar.

Portugal, Korea and Japan languished at the bottom of the rankings as the world’s most pessimistic nations.

Indians are optimistic about the local job prospects over the next 12 months. At 86 per cent, Indians are the second most optimistic people where the job market is concerned over the next 12 months. Around 26 per cent of the Indian respondents said they considered job prospects in the country “excellent”, while 60 per cent respondents said job prospects were “good”.

The promising job prospects over the next 12 months make Indians confident about their personal finances over the same period. Around 12 per cent of the Indian respondents said they considered their state of personal finances to be “excellent”, while 67 per cent said it was “good” in the next 12 months. At 79 per cent in this positive frame of mind, India figures along with Denmark and Indonesia in the list of countries most optimistic about personal finances.

Mr.Panchal adds that in spite of an alarming inflation rate, India is still a growing economy with the GDP ranging at around 9 per cent. There is still demand for talent in the market and, especially with the entry of various multinational brands, the job market looks lucrative.

Good job and financial prospects have sufficiently loosened the Indian purse and 45 per cent of the respondents surveyed were optimistic that this was the perfect time to buy things they want or need.

Indians are shopping more and buying well known brands as seen in the recent Luxury Brands Survey done by Nielsen, where India figured amongst the top three most brand conscious countries in the world. This shows that good jobs, hefty pay packages and exposure to global lifestyles are pushing the Indian consumer towards luxury items. “So, even when there is an economic recession globally, Indians are splurging and optimistic about their finances,” adds Panchal.

Compared to the last leg of the survey, the percentage of people putting their spare cash into savings has increased by 5 per cent and the percentage investing in shares and mutual funds has dropped by 3 per cent.

It is interesting that despite a downturn in the economy, concerns about inflation, etc., the percentage of Indian respondents who do not have any spare cash after their monthly essentials have been paid for remains the same – 4 per cent – as in the last leg of the survey. This shows that the majority of Indian consumers have money left even after meeting their essential expenses.

Savings are still a priority for Indians and 59 per cent Indians put their spare cash into savings, 48 per cent invest in stocks and mutual funds, this being the fourth highest percentage globally.

“Today, Indians are more careful about the financial risks that they want to take. The fluctuating market conditions have curbed risk taking behaviour and made Indian consumers opt for saving, rather than take a chance with their money on the market,” says Panchal.

Spending on holidays and vacations has increased by 4 per cent (to 37 points) and shows the growing interest of Indians in travelling and seeing the world. Incidentally, the amount of money spent on home improvement (27 per cent) and new technology (27 per cent) has been impacted by the rising inflation rates and dropped by 3 and 2 percentage points, respectively.

Paying off debts/ credit cards/ loans (35 per cent), buying new clothes (34 per cent), out of home entertainment (28 per cent), and retirement fund (22 per cent – fifth highest globally) are other areas where Indians spend their spare cash.

The Nielsen Global Online Consumer Survey, conducted by Nielsen Customized Research, was conducted in April 2008 among 28,253 Internet users in 51 markets in Europe, Asia Pacific, North America and West Asia. The survey provides insights into current confidence levels, spending habits/ intentions and the major concerns of consumers across the globe. The Nielsen Consumer Confidence Index is developed based on consumers’ confidence in the job market, the status of their personal finances and their readiness to spend.

The Age Of Neo Consumerism

I am writing this amidst the weekend cacophony at my place which is just getting louder with the grace of euro 2008 quarter finals, endless bollywood award functions telecasted on multiple channels, my desperate attempt to catch a glimpse of the late night edition news headlines and the never ending sound of my inner self.

I had somewhere read (yeah “somewhere”, it’s kind of difficult to remember where I read great articles, interviews or just random thoughts of people’s over fertile imagination... considering the massive overflow of information one is subjected to. Anyways, I feel that as long as remember things that I read, the source does not matter) that an urban individual on an average is subjected to 44 brands daily. My very first reaction on reading this was that of obvious over estimation. Just to satisfy my anxious self, one fine day I decided to actually sit down and note all the brands that I come across from the moment I get up till the wee hours of the night when my enthusiasm actually runs out. Any guesses how many brands figured out on my list? 54!!! And that too on a rather passive day which did not include any sort of major outdoor activity, that would have supplemented the list an made it longer.

So I guess the anonymous estimator’s estimates are pretty much fine tuned. Today I believe is the age of Neo Consumers, consumers who are aware, receptive to company’s offers, are qualified for the product or service offered and have the relevant incomes to actually make a well informed purchase decision. Rather than just buying something for the heck of it people actually weight their options, consider varied elements and go about making their choices. What I am saying pertains more to the modern urban India rather than the rural “Bharat”.

The quality of communication that is projected towards the consumers is becoming more and more sophisticated and polished. Consumers are not treated as intellectually challenged where the onus of consumer education falls on the agencies, but are treated with respect and in some rare cases even inspirational. The better reception and mobility of urban consumers have opened up new avenues for marketers to proliferate deeper into the consumer’s lives and carve out a niche for their brands. More and more people are conscious about their brand choices. They believe in brand associations and want to project a self-relevant image. People’s desire to stand out and have a distinctive appeal is augmented by the kind of brands they use. They let the brands speak for themselves.

Customer inputs for developing new products and services are vital. Companies which are constantly in sync with their customers and incorporate their insights are here to stay and lead. This fact can be proven by the tremendous popularity achieved by many companies who topped this year’s Brand Equity Survey.

I believe that the days are not far when people will have so strong brand connect that they will stand for the brands they believe in. Customers will have a greater say in the product design. This will facilitate a greater emotional bond that people will have with their brands. Companies that harp the tune of emotional appeal have a way to go. Needless to say that the product quality and product perceived-expected value equation need to be at par with the brand promise. Marketers have to scale unexplored heights and constantly develop better products and services, with better benefits that give actual solutions and make life easy.

I also believe that the marketing and the advertising fraternity shall have a great hand in shaping the way brands communicate with the users who feel the brand experience. The age of Neo Consumerism has begun, let’s just let it last as long as possible.

Socio-Cultural Anthropology (Ethnology)- A Qualitative Tool To Analyse Consumer Behaviour

Prominent anthropologist Eric Wolf once described anthropology as "the most scientific of the humanities, and the most humanistic of the sciences." Anthropology as a concept has grown since European colonisation in the 17th century to the present date. In its evolution, it has not only branched out into various other sub categories but also enriched itself by the profound contributions of avid thinkers.

Ethnology is a science that analyses and compares human cultures, as in social structure, language, religion, technology and cultural anthropology. The study of Ethnology and its application in the management discipline will bring about a qualitative development in the way organisations perceive their customers.

Mankind being the most knowledgeable species has evolved into a complex mesh, which requires an intensive mental dissection, for the purpose of analysis and understanding. Social and cultural influences affect us in our day-to-day behaviour. A particular experience can have dramatically different interpretations across the world. Ethnology is a valuable tool that can be applied to business practices to make a difference. Understanding Consumer Behaviour, individually as well as in groups, is the crux of marketing research and a determining factor for the financial growth of organisations. Consumer-centric business practices need to be developed, with reference to social and cultural biases.The sensitivity attached to one’s society and culture needs to be tapped to understand and satisfy different consumer types. Because satisfaction is basically a psychological state, care should be taken in the effort of quantitative measurement; and though a large quantity of research in this area has recently been developed, there is a latent need to show qualitative progresses. This study can be of ground breaking value, which will contribute to differentiation and positioning strategies adopted the world over.

Culture refers to a set of values, traditions or beliefs, which guide individual behaviour. In a way culture is normative, as it prescribes norms of acceptable human behaviour. In other words, culture refers to values, ideas, attitudes and other meaningful symbols created by people, to shape human behaviour and how this behaviour transmitted from one generation to another. For examples, beef is not very readily accepted in the Hindu society and likewise pork in the Muslim society. These things form a core concern for many international food franchises like Mac Donald’s, Pizza Hut etc. Values in any culture are developed through socialisation and acculturation. Refusing beef or pork or garlic by a society is a value developed through socialisation. The use of a fork or knife to eat food, by Indian families, is a value acquired through acculturation. In any culture, there are subcultures that exist. These are different nationalities, religious and geographical groups. For example, in India, we have Hindus, Muslims, Jews, Christians and Sikhs, as exciting religious subcultures. A marketer needs to be aware of these cultural and sub cultural influences on consumer preferences. This will affect his/her brand, packaging, advertising, sales promotion and even distribution decision. A culture's values are likely to influence its member’s purchases and consumption pattern. For example, one consumer may place a high value on achievement and may demonstrate success with symbols of luxury and prestige. Culture not only influences consumer behaviour, it reflects it. The preponderance of exercise machines, fitness clubs, skin care lotions, diet foods and low fat products reflects the emphasis that Indian youth places on fitness. Culture is therefore a mirror of both the values and possessions of its members.

Some organisations have remarkably built a sustainable competitive advantage, by laying emphasis on diverse cultures. For example, the HSBC Bank has quite sucessfully positioned itself as the “World’s local bank”. Being global and personal at the same time is the key to its success. HSBC's international network comprises over 10,000 offices in 83 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. It has sucessfully adapted itself to variours cultures and sub-cultures and constanly thrives on the changes that affect these societies. Its popularity is evident from the numerous awards and the recognition that the bank has be showered with, the prominent ones being The Best Consumer Bank (November 2004 by The Banker Magazine) and the World’s Best Bank Award (July 2004 by Euromoney Awards for Excellence.)

The coffee giant Starbucks has also started capitalising on cultural pluralism. This year during Ramadan, for its customers in the Middle East, Starbucks created a new drink, that it hopes would go on to becoming a Ramadan tradition — the Date Frappuccino.It would seem like a real blunder, maybe even cultural insensitivity, for Starbucks to market a new food product just for the month of Ramadan — the month Muslims fast from sunrise to sunset. But Starbucks executives seem to think, this caffeinated version of “think globally, act locally” strikes the right marketing balance.Starbucks, now with 200 stores in the Middle East (mostly in the oil-rich Gulf countries) has operated in the region, since 1999, with the help of a trading partnership from the region. We have to wait and see if this new move works for Starbucks.

Not having appropriate cross cultural awareness can lead to disastraous consequences for companies. It might result not only in poor penetration and low sales but also a lot of damage to the company’s reputation and goodwill. It is crucial for today's business personnel to understand the impact of cross cultural differences on business, trade and internal company organisation. The success or failure of a company, venture, merger or acquisition is essentially in the hands of people. If people are not cross culturally aware then misunderstandings, offence and a break down in communication can occur.
The need for greater cross cultural awareness is heightened in our global economies. Cross cultural differences in matters such as language, etiquette, non verbal communication, norms and values can, do and will lead to cross cultural blunders.

We can illustrate this with a few examples. In 2002, UMBRO, the UK sports manufacturer, had to withdraw its new trainers (sneakers) called Zyklon. The firm received complaints from many organisations and individuals, as it was the name of the gas used by the Nazi regime to murder millions of Jews in concentration camps.
In 1985, Bechtel pulled out of a joint venture in New Guinea. It seemed flawed from the beginning. Bechtel had 33 months to build a new plant, organise services and meet a production deadline or face financial penalties. They planned to place a mine, at the top of a mountain, in an isolated rain forest, creating a town of 2,500, camps for 400, a power plant, an air strip, roads, hospitals and support services (for natives who had never seen a Westerner). The natives, who were recruited to work (while receiving 400 inches of rain during the rainy season), had no concept of private property, modern money, central government or work regulations. The multicultural workforce of 5,000 comprised mixed indigenous people and imported technicians from the United States, Canada, New Zealand, Korea, and Philippines. The road builders did not believe in working round the clock (the contractor finally went bankrupt). Natives also did not like the work schedule, so they went with bows and arrows to shut down telephone lines, roads and frighten personnel. There was an 85% turnover in the native workforce. It is a classic example, where the company was not able to manage and understand diverse working groups and behavioural patterns of the different socio-cultural people.

Another example of lack of etiquette awareness is that of Proctor & Gamble. They used a television commercial in Japan that was previously popular in Europe. The ad showed a woman bathing, her husband entering the bathroom and caressing her. The Japanese considered this ad an invasion of privacy, inappropriate behaviour and in very poor taste.
A nice cross cultural example of the fact that all pictures or symbols are not interpreted in the same way across the world. Staff at the African port of Stevadores saw the "internationally recognised" symbol for "fragile" (i.e. a broken wine glass) and presumed it was a box of broken glass. Rather than waste space they threw all the boxes into the sea!

American Motors tried to market its new car, the Matador, based on the image of courage and strength. However, in Puerto Rico the name means "killer" and was not popular on the hazardous roads in the country. Some genius, at the Swedish furniture giant, IKEA, somehow came up with the name “FARTFULL”, for one of its new desks. As you can imagine, sales did not exactly hit the roof! Pepsodent tried to sell its toothpaste in Southeast Asia by emphasising that it "whitens your teeth." They found out that the local natives chew betel nuts to blacken their teeth, which they find attractive. Thus a keen understanding of the people, in their social and cultural context, is essential before delivering value through business.


The traditional and obsolete approaches in understanding diverse cultures have to end. We need to have a paradigm shift in our customer orientation. Application of socio-cultural anthropology or ethnological studies to management will make us more culturally sensitive and help us in understanding the end consumers in a better way. In this era of “Glocalisation” where more and more people are integrating and boarding the bandwagon of standardisation, the players who will capitalise on the cultural, social and ethnic differences of the people and address their specific needs will stand apart. Multi-linguistic and multi-cultural people have needs that need to be dealt with differently. One has to play in their field to satisfy them and establish a customer value chain. The role of socio-cultural influences is not necessarily the foremost driving force behind customer purchases, but it is definitely a big part of their conscience and plays an eminent role in their buying decisions. Achieving a tandem between similar economies and buying habits is imperative, but understanding the dissimilarities is also of equal importance. One has to market the products, services, ideas and experiences in a way which will harness their underlying conscience and promote satisfaction-driven sales. This will establish a win-win situation for everyone involved.