Nielsen Consumer 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 redene 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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Aadhaar Bettering a Billion Lives

The Aadhaar number will create a much more open marketplace, where hundreds of millions of people who were shut out of services will now be able to access them.
Nandan Nilekani Chairman, UID Programme

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:
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A demographic disruption taking place with an expected 11 million new people joining the workforce every year for the next five years. Mass migration to cities. The urban population is expected to grow by 31 people every minute for many years to come. Low cost mobile phones mean all social sets have access to the same or similar content. Indians are increasingly impatient with failing systems. As a consequence, service providers are responding more rapidly than ever.

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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The Crossover Shopper A Coming of Age

Retailers usually see shoppers gravitating towards one or two 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

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

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:
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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. Indian shoppers seek better value regardless of store format as experimentation declines 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 What is ARE?

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

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

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

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Indias Rural FMCG Market: The Rise and Rise of Rural

The rate at which rural FMCG market is growing today, by 2025 it will be worth $100 billion , more than the GDP of Ukraine.
Prashant Singh Vice President, The Nielsen Company

Key Findings
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The Indian rural market is set to become a USD100 billion opportunity for retail spending in the next fifteen years For nearly half of the largest FMCG categories, rural India now contributes more to their growth than urban 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

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 the trend of externalized beauty that is picking up fast in rural areas. The study also revealed that:
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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.

Rural purchasing power has grown faster than urban in the last six quarters 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 Instant noodle sales are growing nearly twice as fast in rural India compared to urban, in both penetration and frequency Seemingly urbane brands in categories like deodorant and fabric softener are growing much faster in rural India than urban

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The 3G Phenomenon in India: Hype or Reality?

While service providers have succeeded in popularizing the concept of 3G and articulating its promises clearly, consumers seem tentative about their disposition to embrace the technology
Arjun Urs Director, Client Solutions, The Nielsen Company

A Nielsen study on the Indian telecom market brought out revealing insights about expected 3G penetration in the telecom market. Key Findings:
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Only a fifth of Indias urban mobile users intend to adopt 3G initially, universal penetration to take a decade Initial adoption will be driven by working professionals and younger consumers Amongst urban subscribers who intend to adopt 3G, 63 percent plan to upgrade handsets 35 percent of urban subscribers will leave their current service provider if they do not offer 3G

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:
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Creating a compelling user experience through services and handset upgrades Creating a strong brand association with 3G and demonstrating the relevance of services Merely positioning 3G as faster and making it affordable will not drive adoption in India

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Social Media: The Big Media Revolution

Facebook is an increasingly vital link between consumers and brands. 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

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:
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Facebook in India has over 15 Million users, which is more than 30% of active internet users in India 3 out of 4 social media users visit a social networking site at least once a day, and a discussion forum once a week Facebook and Twitters India base has grown by 100% in 2010

60 percent of social media teens spend more than 30 minutes a day on social networking 31-40 year olds are the most active group on independent review / opinion sites Social media users are spending significantly longer hours on social media channels everyday 3 out of 4 social media teens have become fans of a brand online Clicking on an ad or becoming a fan of a brand are among the top 3 activities

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The Buying Brain

Leveraging Neuro Marketing to Maximize Competitive Advantage
We know what is going on in the consumers mind because of whats going on in the brain
Caroline Winnett Chief Marketing Officer, NeuroFocus

Neuro Marketing: A study of consumers' cognitive and affective response to marketing stimuli. Trends that lead to the Neuro Marketing Revolution:
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Eye-tracking and pupillometry pinpoint hot zones GSR (galvanic skin response) confirms engagement

What is measured?
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Increasing power of computing technology Accelerating breakthroughs in neuro science

Attention Emotional engagement Memory retention

What does NeuroFocus do? Apply brainwaves to understand the effectiveness of branding, products, packaging, communications, in-store experience -- anything, that can stimulate the mind, or persuade the consumer. Techniques:
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How is the metric translated into market performance indicators? Purchase Intent: Directly translates to sales and volume Awareness: 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.

64 sensors collect data 2,000 times every second to fully capture activity across all brain regions High resolution dense-array EEG measures brain response

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

Moderator:
Farshad Family, Managing Director, Nielsen Media

Panelists:
Kirthiga Reddy, Director of Online Operations and Head of Office, Facebook, India Dharini Mishra, GM & Global Head - Brand Management, Suzlon Group Vineet K. Singh, Business Head, 99acres.com & Naukrigulf.com LV Krishnan, CEO, TAM Media Research Krishna Prasad, Chief Experience Officer/ Head of Digital, Dentsu

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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 the power 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 like television? 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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BIG Panel Discussion

The Future of Indias Consumer

Moderator:
Sam Balsara, Chairman & Managing Director, Madison World

Panelists:
Atul Singh, President, India & South West Asia, Coca Cola Neville Taraporewalla, Head- Advertiser & Publisher Solutions Group in India, Microsoft Mahesh Vyas, CEO & MD, CMIE Piyush Mathur, President, India Region, The Nielsen Company

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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 a research 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 and predict 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, it is 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 entering the 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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