Epsilon, the global leader in delivering direct-to-consumer connections that drive business performance, announced the India results of the 2013 Consumer Loyalty Study in the report, India: No Single Solution; Multiple Opportunities. The study finds that the perceived value of a purchase outranks service when it comes to driving loyalty among Indian consumers. This contrasts sharply with findings in China and Australia, whose consumers saw after sales services and preferential customer service far more influential than Indian consumers. While service is welcomed by Indian consumers, and indeed can help foster loyalty, it is clearly subordinate to the pursuit of the best value and quality in the marketplace.
“To a certain extent, poor service will be tolerated if the price is right, yet an issue like incorrect billing is much more likely than higher prices to irritate value-savvy consumers and cause them to switch from their usual shops,” comments Janet Low, Client Services Director, Asia, Epsilon. “Value-conscious as they might be, according to the survey, a healthy majority of Indian consumers across all socio-economic classes and age categories strongly agrees that it pays to be loyal to their favourite brands.”
The study also reveals that there is a marked disparity for preference of domestic brands between socio-economic class (SEC) A Indian consumers, who are generally wealthier and well-educated, compared to the middle class SEC B and generally lower-income SEC C. While less than half of SEC A Indians (45%) prefer locally-made products, a significant segment in SEC B (63%) and a majority of SEC C Indians (74%) expressed a preference for local goods. The Indian retail sector, including consumer-oriented services, is entering a phase of massive transition due to the Indian government’s relaxation of rules on overseas businesses entering joint ventures. A number of international brands representing a wide variety of market sectors have already started operating in India in the last 12 to 18 months.
“New entrants to India will undoubtedly be a game-changer,” says Dominic Powers, Senior Vice President & Managing Director, International, Epsilon. “It will be exciting to see if they can have the same impact on local consumers as they have in China and Australia in recent years.”
Another key finding is the power of Word of Mouth (WOM) from friends, family and partners/spouses in influencing a purchase decision. It carries significantly more weight than other communication channels across all SECs and loyalists. Encouraging consumers to share information about their purchases with family and friends is crucial to the development of an engagement strategy that will induce purchases and raise loyalty. “The failure of Internet technologies to penetrate significantly into lower socio-economic categories further highlights the importance of WOM in India,” says Low.
Focused on four specific retail sectors (clothing, grocery, financial services and travel), other key findings from the India study include:
• Except for travel service, the proportion of Indian consumers identifying themselves as loyal has increased significantly since 2011 in the other three sectors: clothing up from 45% to 57%, grocery up from 47% to 65%, and financial services from 47% to 64%.
• Email is the most preferred channel to receive marketing messages from brands/retailers among the high-income SEC A Indian consumers (72%); while SEC C is far more attached to TV (80%) and radio (31%) due to the slow development of broadband and 3G infrastructure into the lower SEC community.
• Indian consumers across different SECs including the affluent and loyalists enjoy learning about company information from television. Television is second only to email as the most preferred medium among the affluent and it is the distant winner for consumers of the middle and lower-income classes.
• WOM from co-workers influences about one-third of their middle-class (29%) and affluent colleagues (36%) in their purchase decisions.
“As Indian consumers continue to evolve, marketers need to recognise and appeal to their attitudes and behaviour. Consumer referrals remain influential tools in fostering and strengthening trust and building loyalty towards a brand,” says Powers. “India is a highly fragmented market with significant differences in attitudes and media consumption habits across consumers in different groups. This research study serves as a valuable barometer of consumers by socio-economic classes (SECs) and loyalists.Marketers aiming to engage with Indian consumers must clearly differentiate among SEC A, B and C, and in some cases sub-categories within each, to determine a clearly defined strategy for the segment which populates the target audience.”
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