Defining Value in India: a Function of Brand and CommunitySabrina Tharani |
Consumers are increasingly aware of the difference between price and value: they realize that their purchases are not just about finding the lowest price, but the best quality available. And it’s a global realization.
Last year, in collaboration with GfK Roper Consulting, Global Insights identified seven U.S. consumer trends that were having the greatest impact on the banking and payments industry. Recently refreshed 2012 data validated the applicability of these trends not just for the U.S., but on a global scale. In India, the same methodology indicates that the trend More for Less is greatly relevant to Indian consumers.
In India consumers are highly concerned with “[owning] fewer, but higher quality items” (75 percent of Indians agree versus 40 percent of consumers globally), and “[buying] products from a trusted brand” (73 percent vs. 35 percent). They aren’t cutting back on spending – in fact, per capita consumer spending reached Rs 44,462 ($830 USD) in 2011, up from Rs 34,713 ($648 USD) in 2006. Instead, they are closer scrutinizing the everyday purchases they do make.
Eighty percent of Indians agree that it is “better to buy well-known brands because you can rely on their quality” and 66 percent admit to “[going] out of [their] way to tell other people about the brands and services I really like.” This high degree of agreement with statements that endorse brand recognition and peer feedback demonstrates a national consensus as to what constitutes value, despite India’s widespread geographic and economic incongruities.
Because Indians are looking for value in their relationships with brands and banks alike, banks should carefully consider leveraging this trend to better connect with its customer base. One way to accomplish this is to reward those consumers with multiple banking products at the institution. This can come in many forms, such as offering lower rates on loans or credit cards to consumers with higher checking deposits, or waived banking fees for those consumers who have multiple accounts with the same bank.
By doing so, banks will not only encourage relationship consolidation and therefore increase revenue, but also generate the brand recognition and positive word-of-mouth that are fundamental to consumer acquisition, retention and ultimately defining value in the eyes of Indian consumers.
Topics: Payments Strategy