Let’s begin with a question: how many ways in which the humble ‘dal’ (lentils) can be prepared?
Depending on a recipe, ‘dal’ can be made in over hundred ways in India. Add to that the quirks and preferences of each cook and the number goes up manifold.
If there is such an incredible variety across India in the way home cooks prepare ‘dal’, driven by culture, tradition, preferences, motivations, and a host of other factors, it feels presumptuous on the part of marketers to target generic catchphrases like GenZ, Millennials and small-town India for long-term growth. Yet, this one-size-fits-all approach is surprisingly trendy among marketers today, and it's as short-sighted as trying to sell the same dal recipe to every household in India.
In this article, we make a case that not taking the time and effort to build quantified consumer understanding (and relying on catchphrases or sweeping generalizations) is detrimental to your growth strategy. We will take examples from actual conversations with some of our clients (marketers, innovators, and brand builders) to explain why:
This statement assumes that twenty-year-olds in Meerut would expect same things from life and the categories that they use as twenty-year-olds in Bengaluru or Mumbai. Unfortunately, they do NOT. Successful targeting of twenty-year-olds in Meerut vs. Metros is not possible without understanding what drives them.
Kantar’s work across sectors and clients shows that urban India, the ‘young’ demographic is clearly divided into two segments: 1) the more posh, upmarket youngster who wants to just enjoy life and be popular 2) the ambitious, middle-class youth from smaller towns which believes that they can do bigger things than the circumstances of their birth dictate.
The second group is double the size of the first. And what they want from your category could be very different things. There is a good chance that you are not meeting either of their needs because you are targeting the GenZ cohort or at best dividing them by their geo identities.
More critically, you remain unaware of the size of your opportunity and white space.
‘When we met consumers on market visits, they told us what they want’.
A client – market leader in a niche category – thought they understood consumer habits, needs and need gaps through qualitative research. They followed it up with big investments in new launches expecting a growth spurt. Few years later, they came to us wondering why their new launches had not succeeded, despite consumers expressing a need for their innovations during one-on-one interactions.
They went wrong when they did not invest in sizing the consumer needs and the possible solutions which would address them.
This begs the question: how can a handful of consumer interactions be enough for any marketer to invest millions of dollars and years of hard work?
If it were as simple as asking people what they want, then based on qualitative consumer interactions, Nokia should have foreseen the rise of smartphones, auto sector should have known about the need for share cabs and the big skincare brands should have anticipated the backlash against traditional definitions of beauty.
Understanding people’s motivations and expectations at scale is crucial, then quantifying and sizing them before building your strategy.
The question to you, dear reader, is: do you know what will be of ‘value’ to the consumers when you outline your ‘premiumization’ strategy?
The lack of any solid quantification of opportunity in these conversations is strangely at odds with growing pride in data backed, consumer driven decisions across organizations. More and more business leaders and marketers are relying on either few consumer interviews or indulging in social listening (primarily X, given all others are mostly walled gardens) which tends to amplify the loudest voices.
Robust sizing and detailed insight into consumer motivations are often sacrificed in the name of agility and relevance. How can any long-term strategy be irreparably delayed due to extra month or two that foundational, quantitative consumer research may take? And what happens if you do go to the market without understanding your target and their needs and their evolution better? Which loss is greater? The extra month or two and expense on in-depth consumer research or going to the market without data backing to be proven wrong eventually?
1. New launches- Kantar Worldpanel analysis shows that little more than 1% of new launches achieve 1%+ penetration in a year – that means they are bought at least once a year in households. The volume share would be even lower.
IMPLICATION: the innovations being launched are likely not targeting the right needs and motivations of the consumers, either in terms of sizing or more fundamentally, knowing what they actually want.
2. FMCG growth- Despite rising ad spends and new launches, FMCG growth in India has consistently lagged GDP growth. The only exception was during COVID-19 when the economy was shrinking, and people were stocking up.
![cohorts](/-/media/project/kantar/global/fmcg-growth.png?h=283&w=749&hash=2161C4F20499D587774E213C79A7FFF8)
Source: Kantar Worldpanel
Only six of ninety categories tracked on the household panel showed organic growth, meaning they added more households than the population growth and increased consumption. Since the pandemic, value growth (excluding Atta) consistently outpaced volume growth by at least 4 percentage points each quarter, until Q4 2023, when the difference dropped to 1.3 points, the lowest since 2018. This indicates that price increases without added value are hitting a saturation point.
![cohorts](/-/media/project/kantar/global/value-vs-volume-growth.png?h=665&w=749&hash=02DAF0BC6D2A14FD1BBF26D38563B809)
Source: Kantar Worldpanel
![cohorts](/-/media/project/kantar/global/even-the-elite-seek-value.jpg?h=422&w=751&hash=D72859CB9A14722277E1AB53E9E29BBF)
IMPLICATION: Categories and brands do not know what ‘value’ means to the consumers. Price increases are based on internal data of own brand performances or ‘gut feel’ or are simply ‘cost & inflation plus’. Neither consumer’s needs which can drive organic consumption growth or ‘value’ expectation (which is not same as price), which drives willingness to pay is accounted for.
3. OTT Content- In the more happening and emerging categories like OTT, millions of dollars are spent on creating grand spectacles in the name of content, yet ‘paid’ subscriber growth remains stubbornly slow in many cases.
Increasingly consumers demand ‘content for me’ and the ‘me’ is different and diverse – for some ‘me is same as family’, for others it is about ‘my mood’. How successfully is the lavish content targeting these different ‘me’s?
IMPLICATION: It is important to know which ‘me’ are you creating content for and what is their size and what kind of content. ‘Genre’ is a generic and marketer-out term with significant overlaps and little meaning for the viewer.
4. ‘Quick Commerce’ is hailed as the next big disruptor, yet its penetration is just about 2% and is projected to grow only till 4% in next five years with at least four established players. Can the growth be higher? Difficult to answer until you know what consumers are looking for.
![cohorts](/-/media/project/kantar/global/statista.png?h=513&w=750&hash=306F8ADDABA6ADE8B89ED9FD4E385AC7)
![cohorts](/-/media/project/kantar/global/how-top-player-stack-up.png?h=330&w=750&hash=5B256E76925266047D5E10A708E25C01)
IMPLICATION: Technology is a disruptive enabler and not every gap that exists in needs may merit same attention or investment.
![cohorts](/-/media/project/kantar/global/need-for-speed.png?h=424&w=750&hash=2DEBE6D7F1C972CFC79D522C1152B41F)
![cohorts](/-/media/project/kantar/global/car-body-type.png?h=555&w=750&hash=E5064CF659EAA89296E9AF280B2EFFFF)
Source: Team-bhp.com
So, the learning is clear. Foundational quantitative consumer research – where you plumb the length and breadth of India and its rich diversity to identify, size and target your next big growth source – will remain the most robust bedrock of your strategy. It should not be sacrificed in the name of agility and intuitive marketing.
Feel provoked yet? Call us to debate or brainstorm on how to be meaningfully different to your consumers through identification, sizing and creating for ‘new spaces’ to grow sustainably.
Depending on a recipe, ‘dal’ can be made in over hundred ways in India. Add to that the quirks and preferences of each cook and the number goes up manifold.
If there is such an incredible variety across India in the way home cooks prepare ‘dal’, driven by culture, tradition, preferences, motivations, and a host of other factors, it feels presumptuous on the part of marketers to target generic catchphrases like GenZ, Millennials and small-town India for long-term growth. Yet, this one-size-fits-all approach is surprisingly trendy among marketers today, and it's as short-sighted as trying to sell the same dal recipe to every household in India.
In this article, we make a case that not taking the time and effort to build quantified consumer understanding (and relying on catchphrases or sweeping generalizations) is detrimental to your growth strategy. We will take examples from actual conversations with some of our clients (marketers, innovators, and brand builders) to explain why:
‘We want to go after GenZ’.
This statement assumes that twenty-year-olds in Meerut would expect same things from life and the categories that they use as twenty-year-olds in Bengaluru or Mumbai. Unfortunately, they do NOT. Successful targeting of twenty-year-olds in Meerut vs. Metros is not possible without understanding what drives them. Kantar’s work across sectors and clients shows that urban India, the ‘young’ demographic is clearly divided into two segments: 1) the more posh, upmarket youngster who wants to just enjoy life and be popular 2) the ambitious, middle-class youth from smaller towns which believes that they can do bigger things than the circumstances of their birth dictate.
The second group is double the size of the first. And what they want from your category could be very different things. There is a good chance that you are not meeting either of their needs because you are targeting the GenZ cohort or at best dividing them by their geo identities.
More critically, you remain unaware of the size of your opportunity and white space.
‘When we met consumers on market visits, they told us what they want’.
A client – market leader in a niche category – thought they understood consumer habits, needs and need gaps through qualitative research. They followed it up with big investments in new launches expecting a growth spurt. Few years later, they came to us wondering why their new launches had not succeeded, despite consumers expressing a need for their innovations during one-on-one interactions.
They went wrong when they did not invest in sizing the consumer needs and the possible solutions which would address them.
This begs the question: how can a handful of consumer interactions be enough for any marketer to invest millions of dollars and years of hard work?
If it were as simple as asking people what they want, then based on qualitative consumer interactions, Nokia should have foreseen the rise of smartphones, auto sector should have known about the need for share cabs and the big skincare brands should have anticipated the backlash against traditional definitions of beauty.
Understanding people’s motivations and expectations at scale is crucial, then quantifying and sizing them before building your strategy.
‘We want to premiumize. People are willing to pay more these days’.
Yes, they do but not without value. For example, with rise of eco awareness among the masses and social media buzz, many brands assumed that ‘sustainable’ products could command a premium. On contrary, Kantar’s work around the world and in India has shown that ‘sustainability’ for people must have day-to-day value, should be easily accessible and most importantly, deliver on what they buy the product for in the first place. This segment of consumers is rarely more than 20% of any market and in most cases, they tend to be regular, middle class good Samaritans.The question to you, dear reader, is: do you know what will be of ‘value’ to the consumers when you outline your ‘premiumization’ strategy?
The lack of any solid quantification of opportunity in these conversations is strangely at odds with growing pride in data backed, consumer driven decisions across organizations. More and more business leaders and marketers are relying on either few consumer interviews or indulging in social listening (primarily X, given all others are mostly walled gardens) which tends to amplify the loudest voices.
Robust sizing and detailed insight into consumer motivations are often sacrificed in the name of agility and relevance. How can any long-term strategy be irreparably delayed due to extra month or two that foundational, quantitative consumer research may take? And what happens if you do go to the market without understanding your target and their needs and their evolution better? Which loss is greater? The extra month or two and expense on in-depth consumer research or going to the market without data backing to be proven wrong eventually?
How growth is lost:
When quantified insights into consumer needs, habits and need gaps is dispensed with, brands and in some cases, entire sectors struggle to find growth.1. New launches- Kantar Worldpanel analysis shows that little more than 1% of new launches achieve 1%+ penetration in a year – that means they are bought at least once a year in households. The volume share would be even lower.
IMPLICATION: the innovations being launched are likely not targeting the right needs and motivations of the consumers, either in terms of sizing or more fundamentally, knowing what they actually want.
2. FMCG growth- Despite rising ad spends and new launches, FMCG growth in India has consistently lagged GDP growth. The only exception was during COVID-19 when the economy was shrinking, and people were stocking up.
![cohorts](/-/media/project/kantar/global/fmcg-growth.png?h=283&w=749&hash=2161C4F20499D587774E213C79A7FFF8)
Source: Kantar Worldpanel
Only six of ninety categories tracked on the household panel showed organic growth, meaning they added more households than the population growth and increased consumption. Since the pandemic, value growth (excluding Atta) consistently outpaced volume growth by at least 4 percentage points each quarter, until Q4 2023, when the difference dropped to 1.3 points, the lowest since 2018. This indicates that price increases without added value are hitting a saturation point.
![cohorts](/-/media/project/kantar/global/value-vs-volume-growth.png?h=665&w=749&hash=02DAF0BC6D2A14FD1BBF26D38563B809)
Source: Kantar Worldpanel
![cohorts](/-/media/project/kantar/global/even-the-elite-seek-value.jpg?h=422&w=751&hash=D72859CB9A14722277E1AB53E9E29BBF)
IMPLICATION: Categories and brands do not know what ‘value’ means to the consumers. Price increases are based on internal data of own brand performances or ‘gut feel’ or are simply ‘cost & inflation plus’. Neither consumer’s needs which can drive organic consumption growth or ‘value’ expectation (which is not same as price), which drives willingness to pay is accounted for.
3. OTT Content- In the more happening and emerging categories like OTT, millions of dollars are spent on creating grand spectacles in the name of content, yet ‘paid’ subscriber growth remains stubbornly slow in many cases.
Increasingly consumers demand ‘content for me’ and the ‘me’ is different and diverse – for some ‘me is same as family’, for others it is about ‘my mood’. How successfully is the lavish content targeting these different ‘me’s?
IMPLICATION: It is important to know which ‘me’ are you creating content for and what is their size and what kind of content. ‘Genre’ is a generic and marketer-out term with significant overlaps and little meaning for the viewer.
4. ‘Quick Commerce’ is hailed as the next big disruptor, yet its penetration is just about 2% and is projected to grow only till 4% in next five years with at least four established players. Can the growth be higher? Difficult to answer until you know what consumers are looking for.
![cohorts](/-/media/project/kantar/global/statista.png?h=513&w=750&hash=306F8ADDABA6ADE8B89ED9FD4E385AC7)
![cohorts](/-/media/project/kantar/global/how-top-player-stack-up.png?h=330&w=750&hash=5B256E76925266047D5E10A708E25C01)
IMPLICATION: Technology is a disruptive enabler and not every gap that exists in needs may merit same attention or investment.
And how growth is gained?
The auto sector in India is moving from ‘tech / product out’ thinking to ‘consumer out’. The results are evident in the numbers. EVs have been one of the biggest growth drivers - it is their value proposition as an alternative to expensive petrol that has been driving their appeal, not the nebulous promise of sustainability. The SUVs have ridden the aspiration wave while entry level small cars are declining. A quantitative sizing of what different dimensions of aspirations help build the right features at right price.![cohorts](/-/media/project/kantar/global/need-for-speed.png?h=424&w=750&hash=2DEBE6D7F1C972CFC79D522C1152B41F)
![cohorts](/-/media/project/kantar/global/car-body-type.png?h=555&w=750&hash=E5064CF659EAA89296E9AF280B2EFFFF)
Source: Team-bhp.com
Conclusion
If you do not invest in understanding your consumer at scale beyond generic labels, jargons and fancy letters, you might save some time and money in short term but will likely lose in the long term.So, the learning is clear. Foundational quantitative consumer research – where you plumb the length and breadth of India and its rich diversity to identify, size and target your next big growth source – will remain the most robust bedrock of your strategy. It should not be sacrificed in the name of agility and intuitive marketing.
Feel provoked yet? Call us to debate or brainstorm on how to be meaningfully different to your consumers through identification, sizing and creating for ‘new spaces’ to grow sustainably.