The drivers of change in Indian consumer behaviour may seem familiar - rising incomes, increased product availability, shifting demographics, changing lifestyles - but their effects are becoming more fragmented as greater choice and new priorities lead to ever-increasing combinations of customer preferences. This growing diversity is reflected in the increasingly varied shopping baskets of grocery shoppers.
But with so many preferences being expressed in so many different ways, how can you spot the trends that your business can actually profit from? And, once you’ve identified a trend, how do you act upon it?
Take a 3-dimensional approach to segmentation
The first step in solving this complex puzzle of consumer behaviour is to identify those customers - or groups of customers - that really matter to you.
When identifying your target customer it is essential that you don’t group consumers solely by which of your products they buy and the amount that they spend. For example, a mithai brand that saw their high spending customers simply as buyers of premium Indian sweets is not likely to have anticipated the sharp switch to chocolates observed over the recent Diwali period. However, a chocolate marketer that regarded these same consumers as a group that primarily buys for gifting, that wants greater social status among their peers and therefore values things like international brand and quality packaging, would likely have spotted a lucrative and untapped market segment.
To spot these opportunities, companies should look at three dimensions of their customers when building up a profile of their target segment. These three dimensions include; the reason why they are shopping, the need they are seeking to satisfy and the things they value in a product.
Get in the shoes of your customers
With a clear understanding of your target customer and their needs, you are able to delve deeper to uncover the important trends in their behaviour.
However, delving deep does not just mean tracking customer spending data and crunching the numbers. Many of the real insights into customer behaviour come from observing the consumer wherever they purchase, prepare or consume a product.
In the food and beverage sector, this means in the grocery store, at the restaurant, and in the home. Companies are now waking up to this essential part of customer analysis. For example, Hindustan Unilever requires its employees to acquire a ‘consumer licence’ through 50 hours face time with customers before they can work on a brand.
Adapt your product-market strategy
Once you’ve spotted a trend affecting your target customers you can only reap the benefits if you are able to adapt your strategy accordingly. Your strategic response should incorporate your product development, your product-market mix, and your marketing activities.
Firstly, if your target customers are seeking to express their increasing wealth and require products that communicate their rising status, then continually upgrading packaging, adding new premium product lines and even introducing a dedicated brand may all be considered.
Secondly, these new products will need to be directed to the right geographies and through the right channels if they are to be available where the demand is greatest.
Finally, aligning your marketing strategy with your target customer is essential in communicating a superior value proposition. ITC, for example, has its premium Dark Fantasy Choco Fills biscuits distributed and promoted on domestic flights, simultaneously reaching customers who are both wealthier and who value convenience.
With a strategic approach to spotting trends and developing your brand’s response, your chances of keeping up with the changing whims of the Indian consumer are significantly improved.