Chapter:-1

INTRODUCTION OF

INDUSTRY

1
The Indian Media & Entertainment Industry

The concept of advertising existed long before we had a term for it. Advertising is defined
as the art of positioning and creating brands and persuading consumers to buy them
through messages in mass media or personalized media that is gaining much attention
these days.

It is also the means of informing as well as influencing the general public to buy products or
services through visual or oral messages. A product or service is advertised to create
awareness in the minds of potential buyers. Some of the commonly used media for
advertising are T.V., radio, websites, newspapers, magazines, bill-boards, hoardings etc.
As a result of economic liberalization and the changing social trends advertising industry
has shown rapid growth in the last decade.

Adve0072tising is one of the aspects of mass communication. Advertising is actually

brand-building through effective communication and is essentially a service
industry. It helps to create demand, promote marketing system and boost economic
growth. Thus advertising forms the basis of marketing.

Advertising plays a significant role in today's highly competitive world. A career in

advertisement is quite glamorous and at the same time challenging with more and more
agencies opening up every day. Whether its brands, companies, personalities or even
voluntary or religious organizations, all of them use some form of advertising in order to be
able to communicate with the target audience. The salary structure in advertising is quite
high and if you have the knack for it one can reach the top. It is an ideal profession for a
creative individual who can handle work-pressure.

Today, new areas are emerging within advertising like event management, image
management, internet marketing etc. Event management is wherein events are marketed;
Image management is wherein a particular profile of an individual or an organization is
projected. Internet marketing has also brought about a lot of changes in advertising as
Internet means that one is catering to a select group of audience

Changing consumption patterns, rising aspiration levels and increase in the number of
middle-income and upper-income households has led to growth in non- discretionary

2
sectors like retail, telecom, and hotels among other sectors. Media sector is no exception to
the trend.

The Indian media and entertainment sector is one of the fastest growing sectors of the
country and is expected to grow at an annual rate of 18% till the year 2011. It has seen
many changes in terms of economic, demographic, technological, liberalization and others
in the past decade which has led to the higher chances of growth to the industry.

The Economic influence: The Indian Entertainment and Media (E&M) industry has out-
performed the Indian economy and is one of the fastest growing sectors in India. The E&M
industry generally tends to grow faster when the economy is expanding. The Indian
economy has been growing at a fast clip over the last few years, and the income levels too
have been experiencing a high growth rate. The increasing rate of urbanization, the
penetration of television and radio industry in the rural areas with the help of the technology
and the rising levels of incomes of the people in India has facilitated the growth rate of
Media and Entertainment industry in India.

Over the past few years, India has registered the fastest growth among major democracies.
It represents the fourth largest economy in terms of ''purchasing power parity''. Thus, E&M
industry is also expected to significantly benefit from this fast economic growth

The Demographic Influence: Over the years, spending power has steadily increased in
India. Lifestyle changes brought about by changes in economic activity are also spurring
growth of the Indian E&M industry. In urban areas of India, the consumer mindset is
changing due to increased exposure to global influences via media, and other interactions
leading to higher aspirations. The Indian rural market with its vast size of nearly three times
of urban India, also offers a huge opportunity that has remained largely untapped due to
reasons of accessibility and affordability.

Liberalizing Foreign Investment: Today India has probably one of the most liberal
investment regimes amongst the emerging economies with a conducive FDI environment.
The E&M industry has significantly benefited from this liberal regime. In 2005, FDI was
permitted in two important sectors - print media and radio. Films, television and other
segments are already open to foreign investment. In the print media segment, 100% FDI is
now allowed for non-news publications and 26% FDI is allowed for news publications.

3
Printings of facsimile editions of foreign journals are now also allowed in India. This policy is
helping foreign journals save on the cost of distribution while servicing the Indian market
audiences more effectively. The FM radio sector too was opened for foreign investment
with 20% FDI being allowed.

The Technological Influence: India is witnessing a revolution in this sector with the
emergence of new technologies. The IEM has moved from the growth phase to the
inflection phase. This growth is led by better technologies, higher quality content, higher
penetration and suitable regulations. Exciting new developments in the technologies used
in Media and Entertainment industry are taking place.

The change is already being witnessed from AM radio to FM radio, single screen theatres
to multiplexes, and basic cable analog to broadband internet. Going forward, DTH, IP-TV,
mobile marketing, gaming zones, and interactive television are going to hit the markets
thereby changing the media scenario.

Animations, multiplexes, new distribution channels, the use of Internet and personalized
communication with the help of the same, are redefining the media and entertainment
industry. All these factors will favour the growth of Media and Entertainment industry in
India. Many companies are taking initiatives to set up their business all over with the help of
such technology. One such company is city based Net Hot Zone Media Pvt. Limited which
has come up with first of its kind concept of personalized communication with the
customers providing them free internet service while offering part of screen space on
computer to the advertisers by setting up the kiosks at various places in the city.
Thus given the high rate of economic growth and technological developments, Indian Media
and Entertainment industry is poised to register a tremendous growth in the coming years.

Low Media Penetration in Lower SECs: Though media penetration is poor in lower socio-
economic classes, the absolute numbers are much higher for these classes. Hence, efforts
to increase the penetration even slightly in these lower socio-economic classes are likely to
deliver much higher results, simply due to the higher base.

Low Ad Spends: Indian advertising spends 0.34% of GDP, which is very low as compared
to other developed and developing countries. Advertising revenues are vital for the growth
of this industry. While today the low ad spends may seem like a challenge before the E&M
industry, it also throws open immense potential for growth. This potential can be estimated

4
by the fact that even if India was to reach the global average, advertising revenues would at
least double the current revenues.

The IE&M Industry is expected to grow at a CAGR of

18% till 2011 to touchRs 1 trillion from Rs 436 b in
2006.

Categories and Growth

The Indian Entertainment and Media Industry has

recorded a growth of 17 per cent in 2007, over 2006. In
the last four years (2004-2007), the industry recorded a
cumulative growth of 18% on an overall basis. However
though Indian Entertainment and Media (IEM) is one of
the fastest growing sectors in the economy, it is just 0.7%
of the global US$ 1.4 trillion media industry

5
The IEM is divided into different segment like Television, print, films, radio, music and
internet. Out of home advertising (OOH) and live entertainment are too gaining importance.

As per PwC, India will be one of the key drivers in pushing the global entertainment and
media industry. As mentioned above, it is expected to grow at a CAGR of 18% till 2011 to
touch Rs 1 trillion from Rs 436 b in 2006.

The expected growth for the year 2008-2011 can be known from the following chart:

Given below is the breakup of the revenues among the various segments and the expected
growth rate till 2011. Television and print would continue to remain the largest segments.
Internet, radio and OOH would also witness high growth rates. However, Internet
penetration would take time to mature.

Present and projected growth in E&M industry* (in Rs crore)

2006 2007 2008 2008 2010 2011 CAGR
Television 19,120 21,900 26,600 33,100 43,100 51,900 22%
Print Media 12,790 14,400 16,200 18,200 20,600 23,200 13%
Film Entertainment 8,450 9,600 11,200 12,600 14,600 17,500 16%
Radio 500 600 800 1,100 1,400 1,700 28%
Music 720 740 750 760 800 870 4%
OHH Advertising 1,000 1,200 1,400 1,600 1,900 2,150 17%
Live Entertainment 900 1,100 1,300 1,600 1,800 1,900 16%
Internet 160 270 420 600 820 950 43.00%
Total* 43,640 49810 58,670 69,560 8,5020 100,170 18%

Source: Industry estimates & PwC analysis

*Note: The figures taken above include only the legitimate revenues in each segment.
6
Revenues from the Animation and Gaming segments have not been included in the
industry size as these are traditionally included in the Indian IT and Software Revenues

Television Industry

Amongst the segments of the industry, the television industry will continue to contribute the
largest share. Subscription revenues are projected to be the key growth driver and will
increase both from the number of pay TV homes as well as increased subscription rates.
New distribution platforms like DTH and IPTV will only increase the subscriber base and
push up subscription revenues.

Print Media Industry

The print media industry, comprising of newspaper and magazine publishing, is projected to
grow at 13% (CAGR) from year 2006-2011. A booming Indian economy, growing need for
content and government initiatives that have opened up the sector to foreign investment are
driving growth in print media. With the literate population on the rise, more people in rural
and urban areas are reading newspapers and magazines today. Also, there is more interest
in India amongst the global investor community. This leads to the demand for more Indian
content from India.

Film Entertainment

The Indian film entertainment industry is projected to grow from the present size of Rs 9600
crores to Rs. 17500 crores. Advancements in technology are helping the Indian film
industry in all the spheres-film production, film exhibition and marketing. The industry is
getting increasingly corporative.

Radio

The radio industry, fuelled by the positive FM-II Radio Policy, is projected to grow with the
highest CAGR till the year 2011. In 2005, the government opened up the sector to foreign
investment along with migration to a revenue-share scheme. These factors along with
privatization of a large number of frequencies as part of the FM II Radio Policy will drive

7
growth. New concepts like satellite radio, visual radio and community radio have also
begun to hit the market.

Music

While physical sales in the music industry continue to be hampered by piracy and falling
prices, digital music has witnessed a surge that will propel this industry in the next five
years. The total music industry is currently estimated to be worth around Rs 740 crore and
is expected to grow at a CAGR of 4% in the next five years.

Out Of Home

Globally, outdoor advertising is very popular as corporations abroad have recognized the
outdoor media as a very popular medium of advertising. But in India in spite of OOH being
very effective and very economical in comparison to newspapers and television it has not
gained momentum as compared to other segments. However, OOH advertising is expected
to be the fourth largest segment of IEM industry by the year 2011.

Live entertainment

Live entertainment is a huge source of revenue for the global Media and Entertainment
industry. Live entertainment - sometimes also called event management- is growing at a
fast and steady rate. The number of corporate awards, television, films, and sports events
are increasing rapidly, helping the sector grow at a fast rate. The current live entertainment
segment of the Media and Entertainment industry comprises a small number of large event
management companies and a large number of smaller companies.

Internet

Internet advertising spending is set to grow several folds, especially in India’s entertainment
sector. While internet advertising comprises nearly 0.5% of advertising at present, it is
expected to be 4% by the year 2010. Until such time, the projected yearly growth rate of the
ad industry is to stabilize at 11%. The growth of online ad industry is estimated to shoot up
to 43% by the year 2011. However, even though India is ranked eighth in the world in terms
of number of internet users, the country is not ranked amongst the top 10 countries in terms
8
of average monthly hours online per unique visitor which may hamper the growth of internet
advertising as compared to others media types.

Others

Amongst the other segments, the animation and gaming industry is expected to show the
maximum growth, albeit from a small base. The animation and gaming industry is projected
to grow from the present size of Rs 11 b to Rs 29 b by 2011, implying a 22% cumulative
annual growth over the next five years.

The following is the comparative chart of the different sectors’ percentage revenue in the
Indian Entertainment and the Media industry in the year 2007 and that of expected in 2011.

2011
2007

17%
19% 2%2%
1%1%
1% 2%2%
1%
44%
2% 1%
52% Thus, the estimate says that TV sector will
continue growing while the share of print
23% 29%
and film entertainment will increase in
absolute numbers but at a decreasing rate
TV TV PRINTPRINT while the rest of the sectors will have
FILMFILM
ENT.ENT. RADIORADIO
MUSIC OOH OOH more or less the same share.
MUSIC
LIVE LIVE
ENT.ENT. INTERNET
INTERNET

Thus The Indian entertainment and media industry today has everything going for it - be it
regulations that allow foreign investment, the impetus from the economy, the digital lifestyle
and spending habits of the consumers and the opportunities thrown open by the
advancements in technology. All it has to do is to cash in on the growth potential and the
opportunities. The government, on its part, needs to play a more active role in sorting out
policy-related impediments to growth. The industry needs to fight all roadblocks- such as
piracy- in a concerted manner, while churning out high-quality, world class end products.

9
The entertainment and media industry has all that it takes to be a star performer of the
Indian economy.

10
 Chapter:-2

introduction of
advertising

Overview of Advertising Industry in India

The structure of the advertising industry in Asia Pacific has been affected by globalization
and international alignments creating a smaller number of very large agencies and the
growth of independent major media buying houses.Very sophisticated software optimization
and planning systems are now integral to the industry.
Global companies are discovering the appeal of marketing their products in India. With a
population of more than one billion, and a middle class that's larger than the total population
of the United States, there's definitely money to be made. Television, movie, video and

11
radio jingles, newspaper and magazine advertising and neon-lit billboards in the cities are
fueling a revolution in consumer products and spawning new styles of living - changing food
habits, fashions and home décor. This new advertising is pleasing the growing middle
class, one of the largest target populations in the world, but it is drawing criticism from
Indians concerned that it could sharpen social tensions in a country with so many poor
people.

Local retailers in apparel, food, watches and jewelry have all increased their average ad
spending by almost 50% in the past two years. Coupled with many other local players big
retailing brands are spending to the tune of Rs 12,000 crores annually on advertising and
promotional activities. This figure, according to industry estimates, was less than Rs 400
crores about 2-3 years ago which means the growth has been a whopping 40%. The local
firms are using all the available advertising tools from electronic to print, outdoor advertising
and even models. The advertising and promotional spending by local brands is substantial
during the festival season and almost 70% of the spending is done between Septembers to
January. The advertising industry in India is growing at an average rate of 10-12% per
annum. Over 80% of the business is from Mumbai and Delhi followed by Bangalore and
Chennai from the rest of the other major cities in the country.

A once-flagging advertising industry is booming in India. It has become fiercely competitive

and one of the country's fastest-growing economic sectors. But the boom in advertising has
touched off a debate on whether the industry has developed too quickly without preparing
consumers adequately.
Advertising is one of the aspects of mass communication. Advertising is actually brand-
building through effective communication and is essentially a service industry. It
helps to create demand, promote marketing system and boost economic growth. Thus
advertising forms the basis of marketing.
Branding is a traditional advertising method used to create a response from a target
audience based on cumulative impressions and positive reinforcement.

CAGR (Compounded Annual Growth Rate) is used to describe the growth over a period
of time of some element of the business, usually revenue.

Co-branding is an arrangement that associates a single product or service with more than
one brand name, or otherwise associates a product with someone other than the principal
producer.
12
Community radio is a type of radio service that caters to the interests of a certain area,
broadcasting material that is popular to a local audience but is overlooked by more powerful
broadcast groups.

Direct Broadcast Satellite (DBS) is a term used to refer to satellite television broadcasts
intended for home reception.

Exploratory research is a type of research that helps determine the best research design,
data collection method and selection of subjects. It often concludes that a perceived
problem does not actually exist.

HPI Household Potential Index uses consumption / ownership of a whole host of durables,
packaged goods, services and demographics, to construct a simple aggregate index of how
much purchasing power a household exhibits.

Interactive television represents a continuum from low interactivity to moderate

interactivity and high interactivity in which, for example, an audience member affects the
program being watched. The most obvious example of this would be any kind of real-time
voting on the screen, in which audience votes create decisions that are reflected in how the
show continues. A return path to the program provider is not necessary to have an
interactive program experience. Once a movie is downloaded for example, controls may all
be local. The link was needed to download the program, but texts and software which can
be executed locally at the set-top box or IRD (Integrated Receiver Decoder) may occur
automatically, once the viewer enters the channel.

Internet marketing is the marketing of products or services over the Internet.

Integrated Marketing Communications (IMC), is a planning process designed to assure

that all brand contacts received by a customer or prospect for a product, service, or
organization are relevant to that person and consistent over time.

Interactive advertising is the use of interactive media to promote and influence the buying
decisions of the consumer in an online and offline environment.

13
IPTV (Internet Protocol Television) is a system where a digital television service is
delivered using Internet Protocol over a network infrastructure, which may include delivery
by a broadband connection.

Mobile Marketing can refer to one of two categories of marketing. First is meant to
describe marketing on or with a mobile device. Second, and a more traditional definition, is
meant to describe marketing in a moving fashion.

Out-of-home advertising (OOH) is essentially any type of advertising that reaches the
consumer while he or she is outside the home.

Satellite radio (SR) is a digital radio signal that is broadcast by a communications satellite,
which covers a much wider geographical range than terrestrial radio signals.

Visual radio is a generic term for adding visuals to normal audio radio broadcast.

Mass communication is the term used to describe the academic study of the various
means by which individuals and entities relay information through mass media to large
segments of the population at the same time.

Market segment is a subgroup of people or organizations sharing one or more

characteristics that cause them to have similar product needs.

Personalization is tailoring a consumer product, electronic or written medium to a user

based on personal details or characteristics they provide.

Psychographic variables are any attributes relating to personality, values, attitudes,

interests, or lifestyles.

Socio Economic Classification: Socio-economic classification (SEC) indicates the

affluence level of a household to which an individual belongs. Socio economic classification
of an urban household is defined by the education and occupation of the chief wage earner
(CWE) of a household. SEC is divided into 8 categories A1, A2, B1, B2, C, D, E1, and E2.
(In decreasing order of affluence)

14
Social Network Advertising is a term that is used to describe a form of Online advertising
that focuses on social networking sites. One of the major benefits of advertising on a social
networking is that advertisers can take advantage of the users’ demographic information
and target their ads appropriately.

Stratified sampling is a method of sampling from a population. Stratification is the process

of grouping members of the population into relatively homogeneous subgroups before
sampling.

Third-party logistics provider (3PL) is a firm that provides outsourced or "third party"
logistics services to companies for part, or sometimes all of their supply chain management
functions.

Advertising: As a part of Indian entertainment and media

industry.

The advertising industry is one the most important part of the entire Indian Entertainment
and Media industry. The advertising industry contributed a share of 38 percent in the overall
IE&M industry revenue of 2007, up from 37 percent in 2006. The advertising industry itself
recorded a growth of 22 percent over the previous year contributing an estimated Rs
19,600 crore in 2007 as compared with Rs 16,100 crore in 2006. In the last four years, the
advertising industry recorded a cumulative growth of 20 percent on an overall basis.

On the basis of the estimation made by various agencies around the world, the
advertisement industry in India is estimated to reach approximately Rs. 36371 crores by the
year 2010, the major chunk of which will be contributed by the print media of nearly 50%.
the reason of that could be the literacy levels rising to 551 million people in India. And more
people in rural and urban areas are reading newspapers and magazines today. Print media
is also the favourite segment for global investors with maximum foreign investment in this
segment. The print media industry still has the potential to grow as 236 million literate
people in India are still not tapped by any publication.

15
At present, the print media is the highest contributor to the advertisement revenue followed
by television and outdoor advertising respectively. In spite of the increase in the global
internet usage, the total number of people using internet in our country is far less than other
countries. Thus the present share of internet media in advertising is nearly 0.5-1% which is
estimated to be 4% by the year 2011.

The following chart shows the figures of the ad spend from the year 2004-2007 and the
estimated ad spend for the year 2008 against 2010.

TOTAL AD SPEND

10000
9000
8000
AD SPEND( Rs. Crores)

7000
6000
5000
4000
3000
2000
1000
0
2004 2005 2006 2007
YEAR
PRINT TV 00H RADIO INTERNET CINEMA

YEAR MEDIA

16
 PRINT TV OOH RADIO INTERNET CINEMA TOTAL
2004 5464 4872 847 220 58 139 11600
2005 6323 5412 897 317 106 145 13200
2006 6946 6200 945 133 155 131 14510
2007 8591 6766 391 215 215 194 16372

Thus for that past 5 years, print media has been the largest contributor to the ad industry
followed by TV. However with the emergence of various media like radio and internet which
is gaining much attention these days are expected to rise at a very high rate taking up the
share of print and TV. In spite of all these, internet as a media and advertising is the fastest
growing and is expected to have nearly 4- 5% ad spend share by the year 2010.

Ad market share percentage of various media year 2008 and 2010

2008
CINEMA
RADIO 1% INTERNET
OOH 3% 2%
7%

PRINT
47%

TV
40%

17
 2010
CINEMA
RADIO 1% INTERNET
5% 4%
OOH
8%
PRINT
46%

TV
36%

Advertising Market Stats/Projections: YEAR 2008

 The overall advertising and media industry is expected to close at Rs 21,314 crore in
revenues in 2008, riding a 20 per cent growth rate
 Television advertising market is projected at Rs 8,674 crore in 2008
 The print industry stands at nearly Rs 10,000 crore.
 The cinema medium will corner around 0.7 per cent of the total advertising budget in
2008.
 Outdoor media industry will grow at 14 per cent to touch Rs 1,454 crore,
 Radio is likely to record a 40 per cent growth in 2008 to touch Rs 672 crore

18
  Internet advertising will constitute only 1.7 per cent of the overall advertising spends
in 2008, up from the current 1.4 per cent.

The decline in share of print and TV is not only because of the upcoming media but also
because the market itself is expanding.

New trends in ad industry

Ad industry is one of the fastest growing sectors in the country. With the development of the
economy the development in the industry has also gained momentum.

It is gaining momentum as a source of information and stream of revenue. All the recent
developments have helped in opening new doors for the development in the industry. For
the past so many years; the ad industry had been concentrating on mass media.
Increasingly, other media are overtaking television and other traditional media because of a

19
shift towards consumer's change in perception. Thus, it has become necessary for the
advertisers to constantly find newer ideas to attract the attention of the consumers.

The advertisers are now opting for personalized communication than mass communication.
It has become extremely necessary for the advertisers to understand the needs of the
customers on the individual basis. Thus the shift that is seen in the Indian ad industry is
from mass advertising to class advertising.

The latest buzz in the industry is of online marketing. Mass media like newspapers,
magazines, radio and television are no doubt hugely effective media for commercial
advertisements, but internet is completely different from them in many respects in terms of
achieving the objective of an ad. According to statistics, online ad spend by the year 2010
is expected to grow at the rate of 43%.

Within online advertising there are many options available to the advertiser. Among that e-
mail marketing tops since it is also a good option for personalized communication which is
preferred by most of the advertisers nowadays. Also, blogs is an emerging way of
communicating to the people.

Another upcoming phenomenon is mobile marketing. With the increase in number of people
having the cell phone especially India, which stands second in the highest number of
mobile users, mobile marketing is gaining attention of many advertisers.

One type of mobile ad is based on SMS (Short Message Service) text messages. The
benefit of SMS text messages is people can respond where they are, right now, stuck in
traffic, sitting on the metro.

A new form of advertising that is growing rapidly is Social network advertising. It is online
advertising with a focus on social networking sites. This is a relatively immature market, but
it has shown a lot of promises as advertisers are able to take advantage of the
demographic information the user has provided to the social networking site.

Scope of Advertising Industry in India

The advertising industry in India has several competitive advantages:

20
  India has a rich pool of strategic planning, creative and media services
personnel: Indeed, Indian advertising industry has been exporting senior-level talent
to many countries, particularly to the Gulf, South-East Asia, China, the UK and the
US. Indian talent is recognized and respected in global agency networks.
 No other country has access to so many trained management graduates who
can provide strategic inputs for brand and media planning.
 Indians are multicultural: we learn at least two languages and that gives us a head
start in understanding cultural diversity.
 Most of the top 20 agencies in India have a global partner or owner, which
should provide an immediate link to global markets.
 Our production standards in TV and print have improved: With a vibrant
animation software industry, we have access to this area of TV production.

India's advanced IT capabilities can be used to develop Web-based communication

packages for global clients.

21
 Chapter:-3

Introduction of the
Topic

MASS V/S CLASS ADVERTISING

What is mass

To understand what is mass marketing/advertising, it is important to know what exactly

mass refers to. From the viewpoint of marketing, mass is the group of consumers who
occupy the overwhelming mass of a bell curve for common household products, i.e. they

22
could be tagged as being "average". Yet, this group consists of such a wide variety of
people; their desires towards a certain product may be totally different from each other.
Often competition to supply the mass market is fierce, but relatively easy to enter because
of the large amount of consumer pool available.

Mass marketing/advertising

Mass advertising is one of the most widely used traditional methods in advertising. Mass
advertising that refers to the approach to advertising that attempts to reach every
consumer, rather than targeting a particular market segment.

It is a type of marketing (or attempting to sell through persuasion) of a product to a wide

audience. The idea is to broadcast a message that will reach the largest number of people
possible. Traditionally mass marketing has focused on radio, television and newspapers as
the medium used to reach this broad audience. By reaching the largest audience possible
exposure to the product is maximized. In theory this would directly correlate with a larger
number of sales or buy in to the product.

Mass market advertising is usually more expensive than direct marketing, because they are
priced according to the number of consumers who will be reached, and must generate a
larger return in order to justify the expense.

The trend of mass media has seen many ups and downs. These trends are due to
corresponding upswings in mass media, the parent of mass marketing. For most of the
twentieth century, major consumer-products companies held fast to mass marketing- mass
producing, mass distributing and mass promoting about the same product in about the
same way to all consumers. Mass marketing creates the largest potential market, which
leads to the lowest costs in terms of long term investment.

How mass media markets?

The mass media are capable of facilitating short-term, intermediate-term, and long-term
effects on audiences. Short-term objectives include exposing audiences to different
concepts; creating awareness and knowledge (e.g. right to information); altering outdated
or incorrect knowledge (AIDS campaign, Coke and Pepsi for clearing doubts in the
23
pesticides case); and enhancing audience recall of particular advertisements(e.g. Fevicol,
Raymond’s) or public service announcements (PSAs), promotions(Dominos Pizza), or
program names. Intermediate-term objectives include all of the above, as well as changes
in attitudes, behaviours, and perceptions of social norms. Finally, long-term objectives
incorporate all of the aforementioned tasks, in addition to focused restructuring of perceived
social norms, and maintenance of behavior change. Evidence of achieving these three tiers
of objectives is useful in evaluating the effectiveness of mass media.

Types of mass media

 Television

 Radio

 Print

 OOH

 Internet

Television is a powerful medium for appealing to mass audiences—it reaches people

regardless of age, sex, income, or educational level. In addition, television offers sight and
sound, and it makes dramatic and lifelike representations of people and products.
Television ads have a different impact of it on the people’s mind is most remembered. Call
it the power of television or power of sound and image together, television has become one
of the most preferred choices to attract the masses. Also the penetration and the reach of
television has increased incredibly that it is beneficial for the companies to advertise on
television to gain benefit over a long period of time in spite of it being expensive. Lots of
ads targeting masses are seen more on television than any other media. E.g. soaps,
shampoos, water purifiers, automobiles, etc.

Radio. Radio also reaches mass and diverse audiences. The specialization of radio
stations by listener age, taste, and even gender permits more selectivity in reaching
audience segments. Many radio stations have come up in the past 5 years and it’s still
increasing. In Ahmedabad itself there are five radio stations and since placement and
production costs are less for radio than for TV, radio is able to convey messages in greater
detail. Thus, radio is sometimes considered to be more efficient. The main benefit for the

24
same can be that it is the best means if the target is local. Radio Mirchi, My FM, Red FM,
Radio City and many others have their stations in many other cities. Thus, it can target
mass audience on local level. However radio requires somewhat greater audience
involvement than television, creating the need for more mental imagery. Because of this,
radio can reinforce complementary messages portrayed in parallel fashion on TV.

Print Newspapers are available in daily and weekly formats, and local, regional, and
national publications exist. In addition, there are numerous special audience newspapers
(e.g., various ethnic groups, women, Geography – specific). National dailies in India have
highest penetration amongst all media of advertising. Classifieds in that is the commonest
form of advertisements. However the biggest disadvantage is that there are chances of it
being overlooked.
Among other print media, magazines are also preferred by the advertisers especially the
mass is divided.

Other Print Media Pamphlets, brochures, and posters constitute other print media used to
disseminate health messages. These print media were developed with the assistance of
target audiences, and few contained varied messages, were culturally tailored, or employed
readability and face validity techniques. The extent to which persons read, re-read, and
keep these devices—or circulate them to other readers—is not well evaluated. Thus, their
permanence is unknown.

Outdoor media. Outdoor media include billboards and signs, placards inside and outside
of commercial transportation modes, flying billboards (e.g., signs in tow of airplanes),
blimps, and skywriting. Commercial advertisers such as Rado, Rolex, Pepsi, Vodafone and
Kingfisher all make extensive use of their logo-bearing blimps around sports stadiums
especially any cricket match in India. For persons who regularly pass by billboards or use
public transportation, these media may provide repeated exposure to messages. Pro-health
messages displayed on urban public transportation may suffer, however, from the image
problems that afflict urban buses and subways. In addition, the effectiveness of such
postings wears out quickly as audiences grow tired of their sameness.

Internet The advent of the World Wide Web and the massive increase in Internet users
offers enormous opportunities and challenges. The Internet places users in firmer
autonomous control of which messages are accessed and when they are accessed. It is
25
possible to put virtually anything on-line and disseminate it to any location having Internet
access, but the user has little control over quality and accuracy. Internet search engines
can direct users to tens of thousands of web sites after the user's introduction of one or
more keywords. But unlike TV or radio, which are available in nearly all households;
Internet access requires some technical skill, as well as the resources to purchase
hardware and Internet subscription services. The most important benefit is that It can attract
masses all over the world unlike TV and Radio. Also internet is such a medium which can
be termed as a personalized media too.

What can be marketed on mass basis?

A mass market strategy is effective for products that appeal to a broad cross-section of
consumers and used to effect attitude change to as wide an audience as possible like
aspirin or orange juice. It is not appropriate for products with limited appeal like toothpaste.
Toothpaste isn't made especially for one consumer and it is sold in huge quantities. A
company or individual who manufactures toothpaste wishes to get more people to buy their
particular brand over another. The goal is when a consumer has the option to select a tube
of toothpaste that the consumer would remember the product which was marketed. Mass
marketing is the opposite of niche marketing, where a product is made especially for one
person or a group of persons.

Other products of mass marketing are furniture, artwork, automobiles, residential

communities, fizzy drinks and personal computers. Typically, things which are perceived to
be necessary/essential to the consumer are subject to mass marketing.

However, even in the products which were earlier thought of being marketed on the mass
basis are nowadays marketed on the basis of customization. Like furniture is now made as
per the demand of the customer. Or the best example can be that of personal computer.
Dell, an American company, sells its computer as per the requirements of the customer.
Thus everywhere there is shift from mass advertising to class advertising.

SHIFT FROM MASS TO CLASS

The Evolution from Mass Marketing

26
The successes of mass marketers led to the appearance of an alternate approach to
marketing. Potential competitors wanting a share of the large market had two options. One
was to replicate the organization, promotion, and distribution systems of the company that
had created the mass market. The other was to go after a part of the market that had
unique needs by developing products specifically for them. For nearly all of the challengers,
building an operation to parallel that of an entrenched industry giant was not profitable or
realistic. As a result, most of them gravitated to the more attractive market-segmentation
approach. General Motors, in the US used market segmentation as early as the 1920s
when it produced different models for different groups of customers to compete with Ford.
Pepsi made a series of attempts, beginning in the 1990s, to crack into Coca-Cola's market
share through changes in product and targeted promotion strategy in India making it a
youth drink. Also that that time, television provided a powerful tool for both new and old
companies to reach segmented markets. By the late 90s, market segmentation had
surpassed mass marketing as the primary approach.

Mass Marketing Now and in the Future

In spite of the shift to market segmentation, mass marketing continues to be used in many
situations and has potential for others. Products with broad appeal and few distinguishing
characteristics— such as household cleaners, potato chips, and pain relievers— lend
themselves to mass marketing just as they always have. At the same time, businesses that
use mass marketing for their goods and services continue to look for ways to enlarge their
markets by designing different appeals for non-customers. Chewing gum, for example, is
presented as an alternative to smoking. Utilities and credit cards offer special rates to
entice potential high-volume customers. And discount retailers, such as Big-Bazaar, match
their mix of mass-marketed products to local customer bases.

Any current or future product that has mass-marketable attributes will likely be marketed by
some form of the approach. In addition, the Internet provides a new medium for mass-
marketing initiatives, and newly opened international markets offer a possible arena for
mass-marketing opportunities. But as rightly said, change is the only thing that is
permanent, even the changes are expected in terms of the ways of marketing and targeting
the customers on personalized basis. Especially with the companies becoming global and
audience becoming conscious of what they want, companies are more concentrating on
27
offering customers a more personalized touch. Also segmentation on the basis of classes is
one of the most emerging concepts. India being known for it’s extremities of people in terms
of income, education, work and social classes, companies have started opting this class
advertising approach to attract the targeted audience that’s fits into segment of probable
buyers of the products or services offered by the advertisers. For that new methods of
marketing have been put into practice in this race of attracting customers. Old model is
being replaced by new model of customerization.

Given below is the difference showing the difference in old and new model.

Old model- New model-customerization

28
 traditional
Relationship with the Passive participant Active co-producer
customer
Customer Needs Articulated Articulated and Unarticulated

Segmentation Mass market and Target Customized segments

segments
Pricing Fixed pricing & Value based pricing model.
discounting
Customer determined
Communication Advertising and PR IMC & interactive
Distribution Traditional retailing and Online distribution channels or third
direct marketing party logistics
Branding Traditional branding and The customer’s name as brands
co-branding
Basis of competitive Marketing power Marketing finesse and “capturing” the
advantage customer as “partner”
Product and service Line extensions Customer interactions drive new
offerings modification, customizes product development.
products, services, and
marketing. Marketing and
R&D drive new product

CLASS ADVERTISING

Understanding the Indian Consumer

29
India's economic growth has accelerated significantly over the last two decades, along with
the spending power of its citizens. Real average household disposable income has roughly
doubled since late 80s. With rising incomes, household consumption has increased, and a
new Indian middle class has emerged.

As Indian incomes rise, the shape of the country's income pyramid will also change
dramatically. More than 291 million people will move from desperate poverty to a more
sustainable life, adding a number of first-time consumers to the market. While much of this
new wealth and consumption will be created in urban areas, rural households will also
benefit.

The Need for Targeting Specific Class/ Group

Two words sum up today’s consumer market: unlimited choice. Over the past decade,
companies have rushed to steal market share by creating an unending stream of new
products to meet the desires of consumers. At the same time, media outlets have
proliferated and different concepts have emerged to woo the customers from customization
to interactive media advertising. Marketers are faced with the challenge of getting their
message heard by consumers who are hard to find and even harder to influence.

But the question is how can companies create awareness of their products? One thing is
certain: Mass marketing no longer works. Marketers are no longer able to reach a “mass
market.” Even if they could, there is no longer a “one-product-fits-all” mentality that would
appeal to consumers.

Thus marketing concept calls for understanding customers and satisfying their needs better
than the competition. But different customers have different needs, and it rarely is possible
to satisfy all customers by treating them alike. While

Mass advertising refers to treatment of the market as a homogenous group and offering
the same marketing mix to all customers and economies of scale to be realized through
mass production, mass distribution, and mass communication. Target advertising on the
other hand recognizes the diversity of customers and does not try to please all of them with
the same offering. The first step in target marketing is to identify different market segments
and their needs.

30
The drawback of mass marketing is that customer needs and preferences differ and the
same offering is unlikely to be viewed as optimal by all customers. If firms ignored the
differing customer needs, another firm likely would enter the market with a product that
serves a specific group, and the incumbent firms would lose those customers.

Thus, marketers have found the need to concentrate on a specific group than mass. But
how to group people and on what basis is one of the most challenging question for the
marketers. Earlier the basis for segmentation was on four major categories, which mostly
depends on the marketer to decide.

Geographic

Demographic

Psychographic

Behavioral

However, a common classification that is used by marketers to describe the Indian

population is the Socio Economic Classification thus giving rise to an entirely new concept
of CLASS MARKETING.

A common classification that is used by marketers to describe the Indian population is the
Socio Economic Classification (SEC). SEC is the classification of Indian consumers on the
basis of two parameters: Occupation and Education of the chief wage earner (Head) of the
households. The SEC classification, created in 1988, was ratified by Market Research
Society of India (MRSI), is used by most media researchers and brand managers to
understand the Indian consuming class. SEC is made to understand the purchase behavior
and the consumption pattern of the households. This classification is more stable than one
based on income alone and being reflective of lifestyle is more relevant to the examination
of consumption behavior which will be presented in brief in the next section.

The basic reasons for developing a SEC system were the following:

1. Income can discriminate between consumers and non-consumers for certain products,
but not for others.
31
2. Income is not stable over time whereas SEC is, i.e., the cut-offs of high and low income
will vary quite rapidly over time.

3. Income is often understated.

The Urban Sector is divided into SEC A1, A2, B1, B2, C, D, E1, E2 (Calculated as a
function of Educational qualifications of the CWE* and his occupation)

The Rural Sector is divided into SEC R1, R2, R3, R4 (Calculated as a function of
Educational Qualifications of the CWE* and the type of the household he stays in – Pucca,
Semi Pucca or Kaccha)

OCCUPATIO
N EDUCATION
  5-9
< 4 yrs yrs of School Some Post
in schoo certificat colleg Graduat graduat
Illiterate school l e e e e
32
 Skilled
workers E2 E1 D C C B2 B2
Unskilled
workers E2 E2 E1 D D D D

Shop owner D D C B2 B2 A2 A2

Petty trader E2 D D C C B2 B2
Employer of

> 10 persons B1 B1 A2 A2 A1 A1 A1

< 10 persons C B2 B2 B1 A2 A1 A1

None D C B2 B1 A2 A1 A1

Others

Clerk D D D C B2 B1 B1

Supervisor D D C C B2 B1 A2

Professional D D D B2 B1 A2 A1
Senior
executive B1 B1 B1 B1 A2 A1 A1
Junior
executive C C C B2 B1 A2 A2

Table below shows the socioeconomic classification of urban Indian households.

There are eight levels — from A1 to E2The level wise classification can be known from the
following table:

33
LEVEL OCCUPATION EDUCATION
A1 Employer of
>10 Persons College/Graduate/Post Graduate
<10 Persons Graduate/Post Graduate
none Graduate/Post Graduate
Professional Post Graduate
Senior Executive Graduate/Post Graduate

A2 Shop Owner Graduate/Post Graduate

Employer of
>10 Persons 5-9years of school/School Certificate
<10 Persons Some College
none Some College
Supervisor Post Graduate
Professional Graduate
Senior Executive Some College

Junior Executive Graduate/Post Graduate

B1 Employer of
>10 Persons Illiterate/Less than 4 years in school
<10 Persons School Certificate
none School Certificate
Clerk Graduate/Post Graduate
Supervisor Graduate
Professional Some College
Illiterate/Less than 4 years in school/
Senior Executive 5-9 years of school/School Certificates

Junior Executive Some College

B2 Skilled worker Graduate/Post Graduate
Shop Owner School Certificate/ Some college
Petty Trader Graduate/Post Graduate
Employer of
Less than 4 years in school/ 5-9 years of
>10 Persons school
none 5-9 years of school
Clerk Some College
Supervisor Some College
Professional School Certificate
Junior Executive School Certificate

LEVEL OCCUPATION EDUCATION

C Skilled Workers School Certificate/ Some college
Shop Owners 5-9years of school

34
 Petty Traders School Certificate/ Some college
Employer of
<10 Persons Illiterate
none Less than 4 years in school
Clerk school Certificate
Supervisor 5-9years of school/school Certificate
Illiterate/Less than 4 years in school/
Junior Executive 5-9 years of school
D Skilled Workers 5-9 years of school
Unskilled workers School Certificate/ Some college
Shop Owners Illiterate/Less than 4 years in school
Less than 4 years in school/ 5-9 years of
Petty Traders school
Employer of
none Illiterate
Illiterate/Less than 4 years in school/
Clerk 5-9 years of school
Supervisor Illiterate/Less than 4 years in school
Illiterate/Less than 4 years in school/
Professional 5-9 years of school
E1 Skilled Workers Less than 4 years in school
Unskilled workers 5-9 years of school
E2 Skilled Workers Illiterate
Unskilled workers Illiterate/ Less than 4 years in school
Petty Traders Illiterate

35
Table below shows the socioeconomic classification of Rural Indian household.

Education of chief
wage earner Type of House
Semi-
  Pucca pucca Kuchcha
Professional degree R1 R2 R3
Graduation/ PG R1 R2 R3
College R1 R2 R3
SSC/HSC R2 R3 R3
Class 4-Class 9 R3 R3 R4
Up to class 4 R3 R3 R4
Self-learning R3 R4 R4
Illiterate R4 R4 R4

Level Education Type of House

ProfessionalDegree/Graduation/PG/Coll
R1 ege Pucca
R2 SSC/HSC Pucca
ProfessionalDegree/Graduation/PG/Coll
  ege Semi-pucca
ProfessionalDegree/Graduation/PG/Coll
R3 ege Kuchcha
  SSC/HSC Semi-pucca/kuchcha
  Class 4- Class 9/Up to class 4 Pucca/Semi-pucca
  Self-Learning Pucca
R4 Class 4- Class 9/Up to class 4 Kuchcha
  Self-Learning Semi-pucca/kuchcha
Pucca/Semi-
  Illiterate pucca/Kuchcha

36
Urban & Rural Classification

According to the Census of India 1991, the following criteria were adopted for treating a
place as urban:

1. All statutory towns, i.e., all places with a municipality, corporation, cantonment board
or notified town area committee, etc.

2. All other places which satisfied the following criteria:

- A minimum population of 5000

- At least 75% of the male working population engaged in non-agricultural

pursuits, and

- A density of population of at least 400 per sq km

3. Apart from these, the outgrowths of cities and towns have also been treated as urban

All areas not identified as Urban, are classified as Rural.

37
SEC: A debate

Over the years, marketers have always targeted customers on the basis of their income
and predicted their requirements on the same basis. For example, only the richer section
were targeted for cars till late 80s until the focus shifted towards the ‘new emerging –
Middle class’ which gained maximum attention of the marketer then after. Other examples
could be expensive furniture, suiting and other lifestyle products and services which solely
concentrated on the Elite class.

However, with the increase in the trend of being ‘IN’ thing not only are the people opting for
those goods and services which was earlier meant to target other specific classes or on
mass basis but also the spending is more dependent on the socio economic status than
just income. Thus, an executive who is not so rich by income may have the needs for high-
end products like luxurious car, far-away traveling, branded clothes, etc. The need arises
from his status as an executive though he may not afford it, and would have surely bought if
he belonged to higher class. Other argument is that, demand for certain products like
newspaper arises not out of income. Even a lower income person can afford the
subscription of newspaper, Gujarati, Hindi or English, which nearly costs same. But a
person who is not educated and whose requirement of profession does not allow him to buy
an English newspaper, naturally he would not go for an English one. Also almost everyone
now spends not looking at their income but the status and to cope up with that, consumers

38
today do not hesitate to spend their income lavishly leaving only a mere amount to savings.
Also, awareness around the power of information technology to solve problems, create
employment and improve lives has trickled down to the lowest socio-economic class.
Mobiles are the best examples. The gadget which was earlier a status symbol is now a
requirement and is being used by everyone around the corner.

Created in 1988, the SEC divided Indian households on the basis of the chief wage
earner’s education and occupation, SEC A1 to R4, covering all urban and rural areas. The
direct correlation between a higher SEC and education was a result of the belief that a
better educated person would have greater (organized) employment opportunities and thus
higher income.

This classification is pertinent as compared to an income-level based classification, since

lifestyle reflects the consumption patterns more closely than the income levels.

The basic reasons for developing a SEC system were the following:

1. Income can discriminate between consumers and non-consumers for certain products,
but not for others.

2. Income is not stable over time whereas SEC is, i.e., the cut-offs of high and low income
will vary quite rapidly over time.

3. Income is often understated.

The last has been proved by large-scale studies that compared household expenses with
claimed income. Over 80 percent of upper income respondents were found to have regular
monthly expenses well in excess of their stated monthly household income (MHI), and this
proportion was not much lower among lower income respondents too.

The second of the three reasons is also beyond dispute. Salary levels in India have
undergone a huge change in the 1990s; annual incomes of 1 million-plus rupees are
earned by thousands of families today, but were the privilege of the very rich a decade ago.

Now let us examine the first reason stated in the context of a few product categories. The
method used is that of a selectivity index, which compares the extent to which target
audience definitions using surrogate variables SEC and monthly household income (MHI)

39
match with the actual target audience as measured by very large-scale studies —
specifically the Indian Readership Survey.

However, in spite of there being many arguments in favour of SEC, there are many
questions that have been raised on it. Consumers are now breaking class barriers. Not only
common man but celebrities are under a questionable situation too. Take Sachin Tendulkar
for an example. He owns a Ferrari, and his million-dollar endorsement deals are a matter of
widespread national interest. As a brand ambassador, he is a marketer’s delight who has
helped reviving the flagging fortunes ofseveral brands.But many brands that he has
endorsed in his 18-year career were never meant to be used by him. Tendulkar, who hasn’t
completed his graduate studies, would fall into what most Indian marketers recognize as
socio economic classification (SEC) B — a category that is distinctly middle-class. The two-
decade-old demographic classification SEC is past its sell by date —is indeed a question
on everyone’s mind and certainlyon marketers’.

The uni-dimensional way of looking at demographics is a key limitation of SECs. Several

layers of consumer segmentation need to be added on like psychographics, cultural
clusters, and life stages to make a compelling basis for defining consumer segments.

Today, ‘Swift’ competes outside its so-called category with bigger cars such as Esteem and
Ikon. The consumer is willing to pay more for a smaller but better designed product. People
are using brands to express themselves more than ever before. The size-price equation
doesn’t hold good here.

Also there are many big names have completely junked the SEC segmentation, and
prospered nonetheless. The first name is The Future Group. The company has gone with
its own market definition for all of their retail formats.

“We have been maintaining that the SEC classification is not a true representation of Indian
consumers for three-four years now,” says Future Chairman Kishore Biyani.

The group has worked out a system where the entire set of Indian consumers is divided
into three broad categories: India One or the consuming class, India Two or the serving
class and India Three or the deprived class. Biyani’s philosophy is simple.

40
India One consists of the ‘consuming class’ that makes up 16-18% of the consumers but
account for 95% of the buyers. That is the core target audience that he is trying to capture.
Also on Biyani’s radar is a part of India Two, the group that serves India One, for instance,
servants, watchmen and small grocers.

Later, in 2002, Unilever devised its proprietary Living Standard Measurement (LSM) index
as an alternative to SEC, which segments consumers into 18 LSM clusters on the basis of
25 parameters such as income, education, durables ownership, media consumption,
entertainment preferences et al.

However, even though many big companies going against SEC, there are still many big
marketers who think along those lines. They’re using the (SEC) classification data, because
it’s the only data that they have. They use it along with additional data like ownership and
consumption but there is no alternative to demographic data.

Owing to this, a temporary solution was formed by splitting SEC A into two categories, A1
and A2. This led to a further division, as affluence rose in SEC A1 to an A1+, which was
formed with a threshold of Rs 10,000 as monthly income. Yet, this has become dated, with
nearly a decade since the idea of SEC A1+ was mooted. In fact, it’s been a decade since
any serious changes were made to classify consumers. But what is considered as the
biggest drawback of this SEC is that, it considers the occupation and education of CWE
Chief Wage Earner which may not be always influential as far as purchase decisions are
considered.

FURTHER REFINEMENT

No matter what debate it takes, market research in India has been evolving rapidly to tackle
the increasing needs of marketers operating in a complex environment. One of the key
evolutions was the development of a socio-economic system of classifying consumers
around a decade ago. While SEC is an improvement on income, data from large-scale
studies show that further refinement is now called for.

41
One possible solution is to introduce further levels in the SEC system. This is being done
by combining SEC with household expenses to see if a combined system yields better
results. The appropriate questions are now being put on to large-scale surveys.

URBAN

As mentioned earlier, urban population has eight levels of classes starting from A1 to E2.
Urban population forms nearly 30% of total population. Going on the lines of this fact, the
population stratification would be as follows:

CHART:

42
 URBAN SEC POPULATION
A
E 10%
27% B
18%

D C
24% 21%

As per the above given data, Sections A & B refer to High-class- constitutes over a quarter
of urban population

Sec C refers to Middle-class-- constitutes nearly 20% of the urban population Sections D &
E refer to Low-class-- constitutes over half the urban population.

RURAL

Rural population forms 70% of the total population and SEC Rural has four levels on the
___
basis of occupation and type of house Pucca, Semi-Pucca and Kaccha.

As per the above given data, Section R1 is closer to B2 of urban population and forms 3%
while Section R2 and R3 are closer to D and E1 of urban classification respectively forming
8% and 27%. The bottom Section R4 constitutes 33% of total population of ending up being
closer to the last section of urban classification E2.

Now the question might arise, how the classes are termed as high income, middle income
and low income group since the classification does not involve income altogether. The
answer is HPI i.e., Household Potential Index.

43
HPI uses consumption / ownership of a whole host of durables, packaged goods, services
and demographics, to construct a simple aggregate index of how much purchasing power a
household exhibits.

The concept underlying the index is simple - households owning or using a low penetration
item or having a less popular demographic characteristic (like high education levels) get a
higher score for that. The scores are then aggregated across all items and a HPI score
arrived at for the household. Thus in place of income, we have a sort of "consumption" /
"ownership" / "characteristics" based index which is a measure of purchasing power. Again,
the score for any category is simply done, eliminating all judgement. It is the reciprocal of
the penetration of the category in the total universe. Thus if 70% have a television, then
television ownership in a household generates a lower score on power / potential (1/70),
but if only 10% have an air conditioner, then air conditioner ownership in a household gets
a higher score (1 / 10). The raw scores aggregated across all items included in this index
are then normalized on a 1 to 1000 scale. Further, within a broad category, premium
versions of it are treated differently - example, a black and white TV, a colour TV and a flat
screen TV.

Based on this HPI score, the relative purchasing power of each SEC is as below

44
 Source: survey conducted by Hansa Research for the Media Research Users Council,
MRUC.

For the first time, on a sensible common scale the rural SECs and the urban SECs have
been compared. This eliminates the differences in how they think about income (since
these types of income surveys measure respondent's perception of their own income,
without any cross checks).

The R1 social class, the top end of rural is between B2 and C of urban, closer to B2.
therefore, we would say that there is one top band of purchasing power in India, Urban
A1A2, comprising about a little over 6 million households; Then there is the next band,
which we believe would qualify for the 'middle class India" label, comprising B1R1B2C,
between them, harbouring 30 million households; The ABCR1 target group which would
form the broadest possible target group for most consumer goods is about 35.4 million
households, and 132 million individuals over the age of 12. This target group grew 26.9%
between the years 2000 and 2005. Then there is the lower middle, comprising DE1R2
which is about 37 million households, where we believe that most Bottom of the Pyramid
activities should begin. The lowest income, are the E2R3R4. These households form the
bottom 60% of the population by income, but account for an income share of 30%. Perhaps
there is fortune, after all, at the bottom of the pyramid!

However the conclusion given here is on the overall basis, where the categorization may
differ for different products.

45
To understand, consider an example: A trader whose monthly household income (MHI) is
more than that of a person in section A cannot be included in this SEC because his
educational qualification or occupation does not qualify him for inclusion. However, there
always exists a debate if this bifurcation really shows the true picture. Because if a person
belonging to Section A1 has high income then it may not be true for the person who
belongs to section B2, though they both are categorized as high income group. Thus even
in high income group, the income variation and status differs which marketers don’t notice
before selecting media for advertising heir product

SEC is an indicator or a pointer towards the “likely to consume” set but often defies the
reality of not pointing clearly towards the “consuming class”, which is the purpose of any
targeting by any marketer. The drawback of using Monthly Household Income (MHI) lies in
the difficulty of capturing the correct data, as the respondents are hesitant to disclose the
correct MHI.
Thus, with nothing as an exception to the drawbacks is acceptable too to most of the
marketers.

Understanding Class: Media

46
As discussed earlier, the focus is now shifting from mass to class concept. However, in
spite of that, there are many media which though trying hard to focus on class have yet not
been able to penetrate as an effective medium to attract the classes. Undoubtedly, with an
increase in awareness among the marketers, there have come up few media that have
been successful in attracting ‘classes’ especially in television that attracts elite class like
NDTV good times and Zoom. Whereas the magazines like Femina, She, etc, are of the
commonest choice of magazines among higher middle class and higher classes.

Special focus on class media not only helps marketers to make a deep impact on the
consumers mind but also to capture the ‘top of the mind’ state which has become very
essential in this one of the fastest growing sector.

Apart from this, there is also need of understanding consumers’ needs or requirements as
well as the standard of living, thought it is very difficult to judge every consumer’s needs, a
class is a good representation on collective basis.

Marketers in India have traditionally focused their attention and marketing effort on the
higher socioeconomic classes (otherwise called SEC A&B). Both they and their advertising
agencies have found these segments easier to understand and identify with. It has been
believed that they are more easily targeted through the traditional mass media. The
language and tone of voice used to communicate with this segment has a more familiar and
comfortable ring to it. But it is now perhaps time to examine the relevance of mid and low
socioeconomic classes ( SEC C, D&E) who, over the last decade, have slowly but surely
grown in economic power and today contribute significant volumes to a number of product
categories.

But then marketer has to understand that the reach of media in both urban and rural India is
not the same. Thus marketers have to advertise knowing what the best possible options for
them are. Looking at the urban and rural reach, following conclusions have been made.

Urban reach
47
Television has the highest reach in urban areas and reached more than 75 per cent of the
urban population in 2007. The most significant change, in media consumption, in the last
decade has been an increase in the importance of television in the lives of the Indian
consumer. Currently more than 70% of the adult (15+) urban population watches television
all seven days a week vis-à-vis just 40% 10 years ago. On a weekday, the average viewer
watches television for around two and quarter hours. Television could slowly replace social
interaction in all its traditional roles of opinion maker, informer, entertainer and influencer.
However, the real change is the increase in the frequency with which viewers watch
television. Television seems to have moved on from being entertainment to be indulged in
on holidays to being part of the consumer’s daily routine. Now only more than 70% of
individuals belonging to the SEC D&E households and more than 80% individuals
belonging to SEC C households watch television seven days a week in comparison to 90%
individuals belonging to SEC A households.

The print medium has the second highest reach in urban areas, with 35 per cent
penetration. The percentage reach for the print medium denotes average issue readership.

After print comes radio with 20 per cent reach and then comes cinema with close to 12 per
cent penetration. The percentage of the population mentioned listened to the radio at least
three days a week and went to the cinema at least once a month.

On the basis of sex, the penetration of all media remains less for females than for males in
both urban and rural areas. In urban India, TV reaches 75 per cent of males and 74 per
cent of females. Press permeates to 46 per cent males and 27 per cent females. Radio has
24 per cent and 19 per cent reach for males and females, respectively. Cinema reaches 10
and 3 per cent males and females and the Internet reaches 6 per cent and 2 per cent males
and females, respectively.

Looking at state wise reach in urban areas, television has the highest reach in all the
states, including Chandigarh, Delhi and Goa. All three states reveal 87 per cent
penetration. TV has the lowest reach in Bihar, with only 49 per cent penetration. Print has
the highest penetration in Kerala and the lowest in Orissa. Reach figures for both states are
71 per cent and 27 per cent, respectively.

48
Radio has the highest reach in Tamil Nadu – 40 per cent – and the lowest reach in Punjab
– 9 per cent. Cinema is most successful in Andhra Pradesh, with 20 per cent reach, and
least effective in Goa and Himachal Pradesh, with only 1 per cent reach in each state. The
Internet is most useful as a medium in Delhi and Goa, with 12 per cent reach in each state,
and the least used medium in Gujarat, Madhya Pradesh and Chhattisgarh, with just 2 per
cent reach in each state.

Rural reach

The penetration of all these media is relatively different in rural India. Television continues
to be the medium with the highest reach, but penetrates only 38 per cent of the huge rural
population in the country. Radio overtakes print in rural India and becomes the medium with
the second highest reach. Radio reaches to the 18% of the rural population. The
penetration of print is 15 per cent. Cinema, like in urban India, has the lowest reach in rural
India – it reaches a mere 5 per cent of the rural population.
Looking at the reach of the various media on the basis of sexual division, TV’s penetration
in rural areas is 39 per cent for men and 35 per cent for women. Radio reaches 22 per cent
males and 13 per cent females. Print reaches 20 per cent males and 7 per cent females.
Cinema reaches 4 per cent males and 1 per cent females.
State wise reach is highest for television in Goa, with 83 per cent penetration; it is the
lowest in Bihar, with 11 per cent penetration. Radio, like in urban India, has the maximum
reach in Tamil Nadu (40 per cent) and the minimum reach in Andhra Pradesh (3 per cent).
Print is most effective as a medium in Kerala again, with 62 per cent reach, and least
effective in Madhya Pradesh, with only 4 per cent reach. Cinema follows the same trend in
rural India as in urban India and has the highest reach in Andhra Pradesh – 20 per cent.
The medium has the lowest reach in the states of Bihar, Gujarat, Haryana, Chhattisgarh,
Orissa, Uttar Pradesh and West Bengal – 1 per cent penetration in each of these states.

49
Understanding target and media selection

Factors to be considered for targeting class customers and selecting

media

Identification of the target class is extremely essential before offering both a product
/service as well as advertising and selecting media for the same. Thus, understanding the
product itself is an important thing. When a marketer markets a product, seldom he markets
the one which is for all the classes, other than basic items like salt. However, though there
might be many such products catering to all the classes the ratio is too low to compare its
penetration against items that targets classes. So how can marketer decide whom to
target? First, the main consideration is affordability of the consumer because only then, the
wants are converted to demand for the product/service. Secondly, to what extent the
consumer is ready to accept. And if the results show positive response the next question
arises is what advertising media should you use to promote your business? Simple. Use
the one that is most influential and believable, and that comprehensively reaches the
highest percentage of your target audience for the lowest cost. 

Media Preference

Until last century, people had not many options as far as media is concerned. But with the
advent of new media and global competition, not many are left behind in attracting people.
However, before the selection of any media to advertise, one of the most important things
to be taken into consideration is that what consumers prefer as far as media selection is
concerned. Thus, there might rise questions like:

1. What is consumer preference?

2. Why is it important for an advertiser to know the preference?

3. Where should an advertiser advertise for the products or services?

The answer is, no one can say anything for sure what a consumer prefers. It is an
everlasting ongoing process of sticking to one media at some point and switching to other
at the other point. Preference for media is thus cannot so be so easily predicted. But when
we talk about class advertising, it can be said that the overall preference for the people
belonging to the same class remains same. That is instead of individual choices, class
50
preference show an inclination towards certain media that might help an advertiser to
choose the media for advertising in a better manner.

For knowing the selection patterns existing among the people, following is the research
conducted to know the class preference (restricted to Ahmedabad, Urban)

51
 CHAPTER-4

RESEARCH METHODOLOGY

52
OBJECTIVE:

 To study and provide an insight into advertising with respect to the media preference
based on Socio-Economic Classification.
 To highlight the shift in focus from mass advertising to class advertising.
 To arrive at the commonest medium preferred by each SE class by application of
research techniques like measurement and scaling, data interpretation, evaluation,
strategy formulation for the advertisers to choose the right medium to attract specific
class customers based on my primary survey.
 To help advertisers choose the right medium to attract specific class customers
based on the primary survey. By providing strategic solution to tap the untapped
potential markets

SCOPE:

The project will cover an overview of Indian entertainment and media industry and detailed
study about Indian advertising industry. The main area of focus will be on socio-economic
classification (SEC) i.e, Urban and rural, of the consumers. A primary survey will be done
by collecting primary information thorough questionnaire. Further data analysis and data
presentation would be done in order to arrive at the common preference of SEC class for
particular advertising media out of Print, TV, Radio, Out of Home (OOH), internet based on
weighted average preference model.

LIMITATIONS:

 Time limit
 Cost constraint
 Inability of covering all the aspects related to the Indian Media and Entertainment sector
as well as advertising industry due to its wide scope

53
PROJECT DETAILS:

AREA OF STUDY

 Indian Entertainment Industry: Origin and History

 Growth Drivers
 Indian Advertising Industry: Introduction
 Size of the industry
 Shift of focus from Mass to Class
 SEC: Demographic study
 SEC: Media preference through research study
 Research Findings
 Strategic Solution

RESEARCH DESIGN: Exploratory Research

RESEARCH DATA SOURCE: Primary Source: Questionnaires

Secondary Source: Internet, publication, journals, newspapers,
magazines, Business Review, Periodicals, etc.
RESEARCH INSTRUMENT: Questionnaire
SAMPLE METHOD: Stratified Random Sampling, Judgment sampling, Convenience
sampling
SAMPLE SIZE: 30 for each class (8 classes) = 240

54
CHAPTER:- 5

ANALYSIS AND
INTERPRETATION

55
The analysis below are bifurcated according to the different classes from A1 to E2.

A1: THE AFFLUENTS

A2: THE RICH

B1: THE DREAMERS

B2: THE AMBITIOUS

C: THE CLIMBERS

D: THE STRUGGLERS

E1: THE LAGGARDS

E2: THE FORTUNE SEEKERS

56
 1. TV EXPOSURE

TV exposure (hrs/day)
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

The results show that the classes B1,B2, C, and D have the highest Tv exposure amongst
all classes. The detaled exposure to various channels is given below.

57
 2. NEWS EXPOSURE

News exposure (hrs/day)

90
80
70
60
50
40
30
20
10
0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

As the results show the classes A1,A2, and B1 have the highest expoure to news channels.
The remaining classes have almost the same exposure to news channels. For targeting the
A1,A2, and B1 classes advetisment on news channels would prove more effective as their
exposure is high.

58
 3. MUSIC CHANNEL EXPOSURE

Music Channel exposure (hrs/day)

100
90
80
70
60
50
40
30
20
10
0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

As the results show all the classes have high expoure to music channels. The classes A1
and A2 have less exposure to music compared to the rest. For targeting all the classes
advetisment on music channels would prove more effective as their exposure is high.

59
 4. INFORMATIVE CHANNEL EXPOSURE

Informative Channel exposure (hrs/day)

90
80
70
60
50
40
30
20
10
0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

As the results show the classes A1,A2, and B1 have the highest expoure to informative
channels. The remaining classes have almost the same exposure to informative channels.
For targeting the A1,A2, and B1 classes advetisment on informative channels would prove
more effective as their exposure is high. Also the classes C,D,E1 and E2 have very low
exposure.

60
 5. MOVIE CHANNEL EXPOSURE

Movie channel exposure (hrs/day)

140
120
100
80
60
40
20
0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

As the results show the classes A1 and E1 have the highest expoure to movie channels.
The exposure for the remaining classes varies greatly. For targeting the A1 and E1 classes
advetisment on movie channels would prove more effective as their exposure is high.

61
 6. NEWSPAPER EXPOSURE

Newspaper exposure (no./day)

70
60
50
40
30
20
10
0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

As the results show the classes A1,A2,B1 and B2 have the highest expoure to news
papers. The remaining classes have almost the same exposure to news papers. For
targeting the A1,A2,B1 and B2 classes advetisment on news papers would prove more
effective as their exposure is high.

62
 7. ENGLISH

English N/P
6
5
4
3
2
1
0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

As the results show the classes A1and A2 have the highest expoure to english news
papers. The exposure for the remaining classes is not applicable. For targeting the A1 and
A2 classes advetisment on english news papers would prove more effective as their
exposure is high.

63
 8. LOCAL LANGUAGE

Local language N/P

30

25

20

15

10

0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

As the results show all the classes have very high expoure. For targeting the all the classes
advetisment on local language news papers would prove more effective as their exposure
is high.

64
 9. ENGLISH + LOCAL LANGUAGE

English+Local language
8
7
6
5
4
3
2
1
0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

As the results show the classes A1,A2 and B1 have the highest expoure to both english
and local language news papers. The exposure for the remaining classes C,D,E1 and E2
is not applicable. For targeting the A1,A2 and B1 classes advetisment on english and local
language news papers would prove more effective as their exposure to is high.

65
 10. CINEMA EXPOSURE

Cinema exposure (No. per month)

4
3.5
3
2.5
2
1.5
1
0.5
0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

As the results show the classes A1,A2,B1,B2 and C have the highest exposure to cinema.
The remaining classes have almost the same exposure and that is very less. For targeting
the A1,A2,B1,B2 and C classes advetisment on cinema would prove more effective as their
exposure is high.

66
 11. MAGAZINE EXPOSURE

Magazine exposure (no./month)

2.5

1.5

0.5

0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

As the results show the classes A1,A2,B1and B2 have the highest expoure to magazines .
The exposure for the remaining classes C,D,E1 and E2 is not applicable. For targeting the
A1,A2,B1and B2 classes advetisment in magazines would prove more effective as their
exposure is high.

67
 12. INTERNET EXPOSURE

Internet exposure (hrs./week)

7
6
5
4
3
2
1
0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

As the results show the classes A1and A2 have the highest expoure to internet. The
exposure for the remaining classes C,D,E1 and E2 is not applicable. For targeting the
A1and A2 classes advetisment in magazines would prove more effective as their exposure
is high.

68
 13. RADIO EXPOSURE

Radio exposure (hrs/day)

2.5

1.5

0.5

0
A1 A2 B1 B2 C D E1 E2

INTERPRETATION:-

As the results show the classes A1and A2 have the lowest expoure to radio. The exposure
for the remaining classes B1,B2,C,D,E1 and E2 is very high. For targeting the
B1,B2,C,D,E1 and E2 classes advetisment in radio would prove more effective as their
exposure is high.

69
 CHAPTER:-6

FACTS & FINDINGS

70
 FACTS & FINDINGS

 It create quick demand for a newly introduced product

 It create awareness about the product in the mind of prospects
 Class advertising creates desire and motivates consumer to purchase the product
 Class advertising quickly draws the attention of people towards the strong points of
the product and promotes its sale. Many product such a color TV Computer Washing
machine etc. get popular support from consumer due to their advertising
 Class advertising makes consumers conscious of their needs.

71
 CHAPTER:- 7

SWOT ANALYSIS

72
 SWOT ANALYSIS

STRENGTHS:
1) Media And Entertainment is one of the most booming sectors in India due to its vast
customer reach. The various segments of the Media And Entertainment industry like
television and film industry have a large customer base.
2) The growing middle class with higher disposable income has become the strength of
the Media And Entertainment industry.
3) Change in the lifestyle and spending patterns of the Indian masses on entertainment.
4) Technological innovations like online distribution channels, web-stores, multi- and
mega-plexes are complementing the ongoing revolution and the growth of the sector.
5) Indian film industry is second largest in the world and the largest in terms of the films
produced and tickets sold.
6) The low cost of production and high revenues ensure a good return on investment for
Indian Media And Entertainment industry.

WEAKNESSES:

1) The Media And Entertainment sector in India is highly fragmented.

2) Lack of cohesive production & distribution infrastructure, especially in the case of
music industry.
3) The lack of efforts for media penetration in lower socio-economic classes, where the
media penetration is low.

73
OPPORTUNITIES:

1) The concept of crossover movies, such as Bend It Like Beckham has helped open
up new doors to the crossover audience and offers immense potential for
development.
2) The increasing interest of the global investors in the sector.
3) The media penetration is poor among the poorer sections of the society, offering
opportunities for expansion in the area.
4) The nascent stage of the new distribution channels offers an opportunity for
development.
5) Rapid de-regulation in the Industry
6) Rise in the viewership and the advertising expenditure.
7) Technological innovations like animations, multiplexes, etc and new distribution
channels like mobiles and Internet have opened up the doors of new opportunities in
the sector.

THREATS:

1) Piracy, violation of intellectual property rights pose a major treat to the Media And
Entertainment companies.
2) Lack of quality content has emerged as a major concern because of the 'Quick-
buck' route being followed in the industry.
3) With technological innovations taking place so rapidly, the media sector is facing
considerable uncertainty about success in the marketplace.

74
CHAPTER:- 8

CONCLUSION

75
 CONCLUSION

The Indian Advertising Industry being one of the fastest growing area of not only the IE&M
but also the Indian Economy, has a huge potential for further development. The experience
of knowing the insights of the Indian Entertainment and Median Industry as well as the
Indian Advertising Industry was enriching. It gave some of the true picture of the industry
with which I was totally unaware of.

The understanding of the preferences of the various classes to different media and their
exposure to it can help advertisers target the right audience using the right media.

Thus targeting the right audience for the advertizing and choosing a specific media can
help advertisers save a lot money in advertizing.

76
 CHAPTER:- 9

RECOMMENDATIONS
& SUGGESTIONS

77
 RECOMMENDATIONS & SUGGESTIONS

Extensive research by companies, advertising agencies or market research firms can help
understand the exact exposure relations of the various socio economic classes to the
various media.

Research can also be undertaken to understand the exposure level of various classes in
the rural area to various media.

Concrete findings can help companies in reducing advertising expenditure by

concentrating on the right media to reach to target audience.

Also, the companies media budget can be used wisely. Not necessarily does the company
have to cut back on its advertising expenses.

78
CHAPTER:-10

APPENDIX

79
 BIBILIOGRAPY

Kotler, Philip: Marketing Management, Eleventh Edition, PHI

Kothari C. R.: Research Methodology

Bijapurkar, Rama: We Are Like That Only, Understanding the Logic of Consumer India,
Penguin Portfolio

http://www.egyankosh.com

http://www.quirks.com

http://www.impactonnet.com/V4_issue2.asp

http://www.quizlet.com/set/317730/

http://www.scribd.com

http://www.agencyfaqs.com

http://www.indiatoday.com

80
 QUESTIONNAIRE

QUESTIONNAIRE ON MEDIA PREFERENCE (SEC)

N.B.:
1) Please tick () the boxes for your response and leave the others blank.
2) Please rank in the order of preference wherever mentioned.
3) The information collected in the survey will be kept confidential and used only for the research purpose.

(Please select only one option under each question)

1. Occupation:
( ) Skilled workers ( ) Unskilled workers ( ) Shop owner
( ) Petty trader ( ) Clerk ( ) Supervisor
( ) Professional ( ) Senior executive ( ) Junior executive
( ) Employer of > 10 persons ( ) Employer of < 10 persons
( ) Employer of None

2. Education:
( ) Illiterate ( ) < 4 yrs in school ( ) 5-9 yrs of school
( ) School certificate ( ) Some college ( ) Graduate
( ) Post graduate

3. How much radio do you listen to?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins
( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs

4. How much TV do you watch per day?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

81
 ( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs

5. How much time do you spend on watching news per day?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs
6. How much time do you spend on watching Music channels per day?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs
7. How much time do you spend on watching Informative channels (ex:
discovery, national geography) per day?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs
8. How much time do you spend on watching Sops channels per day?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs

9. How much time do you spend on watching D.D. (All doordarshan channels)
per day?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs ( ) 2-3hrs ( ) 3-5hrs
10. How much time do you spend reading newspapers per day?

( ) 0-15mins ( ) 15-30mins ( ) 30-45mins

( ) 45-60mins ( ) 1-2hrs
11. In which language do you read newspapers?
( ) English ( ) Local language ( ) Both

12. Which type of newspapers do you read?

( ) General ( ) Business ( ) Both

13. How many movies do you watch in a month (in theatres)?

82
 ( )0 ( )1 ( )2 ( )3 ( )4 ( ) 5-10permonth
14. How many magazines do you read per day?
( )0 ( )1 ( )2 ( )3 ( )4 ( )5

15. How much time do you spend on internet per week?

( ) 0-1hours ( ) 1-5hours ( ) 5-10hours ( ) 10-20hours ( ) 20-25hours

83