A close look at factors that influence buying in major product categories
Indian consumers today are spoilt for choice like never before. And the explosion in the number of choices has prompted consumers to turn choosy. Now consumers are less likely to stay loyal to a brand unless it has something special to offer. Today, innovative planning and strategy can help companies and manufacturers shift demand to the tune of $20 billion in key categories.
Our studies have shown that the spending patterns of consumers— particularly those decision-makers who buy fast-moving consumer goods (FMCG), movie tickets or automobiles, go travelling, take loans or build independent homes—can be influenced to a large degree with great deals, strong brand presence on the Internet, and productive person-to-person interactions. Today, it’s crucial for companies to stand out, and leveraging their means to get ahead in these three areas can make the difference that matters.
Since promotions influence $10 billion worth of sales every year, companies need to make the right pitch with intelligent deals that can beat competition. Smart deals can change the minds of between a fifth and half of all shoppers across several product categories.
Among people shopping for FMCG, for example, discounts and promotions cause a large percentage to experiment and buy a different product than planned. At least 1 in every 4 shoppers buys more due to promotions offered. And as many as 80 percent of the moviegoers who took our survey said they made changes to their movie plans to take advantage of discounts and offers. Similarly, promotions played a key role in attracting customers to loan products. In fact, 31 percent of consumers avail of loans earlier than they planned because of promotional offerings. Comparatively, more than two out of five (44%) consumers wait for better deals before taking out a loan. We also found that for most travellers, the key parameter for choosing airlines and hotels was value for money and promotions, and not the lowest cost. Travellers favour instant gratification: they prefer discounts on current bookings and instant cash-back offers over loyalty points and special services. Even while buying building materials for independent homes, people in Tier II cities prefer certain stores because of their proximity and better prices. Though regional players have bigger roles in these smaller cities, the behaviour of such consumers is a clue to what companies can do to gain an edge.
Indian consumers are increasingly relying on the Internet for information prior to making purchases. Between a third and two-third of buyers hook up to the Information Superhighway as part of their pre-purchase activities. The volume of online sales may not be that impressive, but hunting for information on the Web is extremely popular. Importantly, influential affluent shoppers rely on the Internet for their information, highlighting the need for companies to build brands online. The influence of the digital space is estimated to be around $14 billion.
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