Netting premium customers

The Market Research Users' Council (MRUC) that publishes the Indian Readership Survey (IRS), in association with Hansa Research, launched two new tools for marketers, the Household Premiumness Index (HPI) and the IRS Local Area Potential (ILAP).

The tools help marketers penetrate the target consumers and audiences (TG) more systematically.

Hansa Research managing director Ashok Das, who developed the household premiumness index has over 20 years of experience in market research.

Das is credited for conceptualising two well-known projects "" the Indian Readership Survey and INTAM (the people-meter based TV audience measurement panel).

Business Standard caught up with Das in Delhi last week to understand the new tool and its benefits.

How do you explain the Household Premiumness Index?

It's a new consumer classification system. It classifies homes based on their premiumness which is obtained from different products and services that they have or use.

We accumulate the premiumness points from niche products (durables and FMCGs like branded cheese and sauce) and services (use of banking, Internet etc), add up the score and index it to a scale of 0 to 1000.

The household premiumness index defines premiummness as being inverse of penetration.

That is to say, the less penetrated a product category, the more premium it is with respect to another more penetrated category. For instance, a mobile phone may have been a premium product, say, 10 years back but not anymore with its immense penetration.

For years, the Socio-Economic Category (SEC) has been the standard classification. Why was there a need to develop another tool?

The SEC is primarily based on the details of the household head"" his occupation and education. It does not take into account the consumption pattern of the home.

Hence it is an indirect measure. The new index, on the other hand, looks at consumption directly by taking into account a range of products and variables.

It is purely mathematical and data driven which is important for indexing.

How does the tool benefit marketers?

It provides an opportunity to classify the entire country into a single consumer index. Besides, it helps identify the top-end consumer better, including that of the rural population.

Till now, SEC did not consider the rural affluent class and hence lost out on an important portion of the TG. The premiumness index scores reveal that prosperity is not always directly correlated to SEC.

It helps marketers identify where to find premium homes, how to determine the market size and plan distribution accordingly.

Does the National Readership Survey have any similar classifying tool?

Not as of now. But I'm sure it, too, will soon come up with a more specialised tool to identify the top-end market. In one of our sessions in Mumbai, somebody in fact suggested that I should patent this concept.

What kind of research went into the evolution of the concept?

The basic concept, that premiumness is something that lot of people want but few have, was evolved by me. But a team of analysts did extensive research, testing 100 odd variables over a period of 6-8 months.

The concept will be ready for the market along with IRS by next month. Although it'll be initially marketed free along with the IRS, after, say about 6 months, we will charge a small fee for the household premiumness data separately.

Voices on irs' Household Premiumness Index

Manjula R Natrajan,
senior manager, marketing,
The Times of India

Household Premiumness Index will certainly work to our advantage as TOI caters to a premium audience. The SEC, which has been in use since 1975, was unable to identify the premium market for us with its generalised categories.

HPI uses a simplistic but a logical concept that premiumness is inverse of penetration. Although it's conceptually sound, I think it's early to judge the tool's worthiness.

Ruchika Gupta
consumer insight manager,
Nokia

We have been looking for an indepth understanding of the top-end consumers for quite some time.

The idea of household premiumness index sounds interesting, though one wonders how it'll work or how much does it go beyond the SEC. It seems to be a step in the right direction, though not the end in itself. I think the concept requires a lot more research.

Asha Ambike
manager marketing,
Red FM

The tool appears more like a consumption index than a premiumness index. It should have included more lifestyle indicators like foreign holidays or the kind of media consumption.

It may be a slight improvement on the SEC classification but nothing very drastic. For us, the ILAP which breaks cities into smaller areas and enables micro-marketing seems more useful.