SEC Classification From Wikipedia, the free encyclopedia The SEC Classification the classification of Indian consumers on the

basis of parameters. Traditionally the two parameters used to categorize consumers were: 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.Originally developed by IMRB International as a way of understanding market segments, and consumer behavior it was standardized and adopted by the Market Research Society of India in the mid-1980s as a measure of socio-economic class and is now commonly used as a market segmentation tool in India. The new version is available at http://www.mruc.net/new-demographic-map-of-india.pdf. Please refer this one. In the older version,the SEC Classification consists of two grids

The Urban SEC Grid, which uses Education levels and Occupational criteria of the Chief Wage Earner (CWE) of a household as measures to determine socioeconomic classification, and segments urban India into 7 groups (A1 to E2) and

The Rural SEC Grid, which uses Education and Type of House (pucca, semi-pucca, and katcha) as measures of socio-economic class, and segments rural India into 4 groups (R1,R2,R3,R4)

This is based on the assumption that higher education leads to higher income thus higher consuming potential. But we know that this may not be true always. A trader or a retailer with no qualification can earn more income than a Post graduate executive, but SEC will categorize the traders/retailers not as SEC A1or A2. So, in order to combat this problem, the Government came up with the new SEC system. The new SEC system is based on two variables: 1. Education of the Chief Earner 2. The number of Consumer durables(pre-decided from a list) owned by the family.The list has 11 items ranging from "electricity and agricultural land" to cars and air conditioners. There are 12 grades in the new system starting from A1 to E3.The list of items are: Electricity connection, ceiling fan, LPG stove, two wheeler, colour TV, refrigerator, washing machine, personal computer,four wheeler, air conditioner and agricultural land.

These grids are used to determine the consumption preferences, and purchasing power of households, and are common tools used by social and business researchers working in India. The SEC grid does not use family income levels as a measure as this data is hard to collect and it has been demonstrated that education levels and occupation criteria in India are better determinants of consumer preference. The methodology used in these tools differs from the Household Potential Index, which measures consumption intensity.

Marketing Funda : Socio Economic Classification (SEC) Funda#3 : What is Socio Economic Classification ( SEC) ? 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.

According to SEC, the U rban Indian households are classified on the basis of the two parameters Education and Occupation into SECA1,A2,B1,B2,C,D,E1,E2

In urban households, SEC A1 include those with graduation/post graduate holding senior positions like CEOs and Middle level managers and also those entrepreneurs having some college education and employs more than 10 staffs. The chart is self-explanatory. While the Rural Indian Households are classified into SEC R1,R2,R3,R4. In the rural classification, the parameters are Education of the Chief wage earner and the type of the house.

The SE C classification helps the marketers to identify segments tha t has high consuming potential.The high potential types : A1,A2, the medium ones and the bottom of pyramid ones. The SEC classification is used by Media planners to decide the media which gives the client maximum effectiveness. The research team at the me dia houses uses the NRS and IRS surveys' raw data to identify the reach of the media in these SEC segments and uses this input for pitching their campaign to large advertisers. Although this classification is popular for over 18 years, the classification has its negatives also since it takes only two parameters: education and occupation .This is based on the assumption that higher education leads to higher income thus higher consuming potential. But we know that this may not be true always. A trader or a retailer with no qualification can earn more income than a Post graduate executive, but SEC will categorize the traders/retailers not as SEC A1or A2. Hence Market research users council ( MRUC) has devised another classification called New Consumer Classification System( NCCS) which calculates a Household Premiumness Index ( HPI) which takes parameters like ownership and consumption of media services and products with other demographics. All these classifications create jargon that we teachers lecture and brand managers are still searching for the White Light that provides the key to understand the Indian consumer.

Chief Earner: Education (Q2)

Illiterate

SSC/ HSC

1 None 1 2 3 4 5 6 7 8 9+ E3 E2 E1 D2 D1 C2 C1 C1 B1 B1

2 E2 E1 E1 D2 C2 C1 B2 B1 A3 A3

3 E2 E1 D2 D1 C2 C1 B2 B1 A3 A3

4 E2 E1 D2 D1 C1 B2 B1 A3 A3 A2

5 E2 D2 D1 C2 C1 B1 A3 A3 A2 A2

6 E1 D2 D1 C2 B2 B1 A3 A2 A2 A1

7 E1 D2 D1 C2 B2 B1 A3 A2 A2 A1

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It was the "family place" to go to since quick service restaurant chain McDonald's entered India. Children were a very important part of its target audience, with a lot of its advertising and menu especially targeting them. But now McDonald's is firmly talking about youth being its primary target consumers. Its advertising, new outlet interior designs and additions to the menu are all firmly targeted at the youth, though the outlets still have that defined family section. Both Amit Jatia, vice chairman, Hardcastle Restaurants, the franchisee that looks after the McDonald's business in the west and south markets in India, and Vikram Bakshi, MD and joint venture partner, McDonald's India -north and east markets - are in complete agreement that youth is the most important consumer segment for McDonald's in India today.

"In fact, we are in the process of re-imaging our restaurants to connect the brand with the youth segment, which is being done in phases. We are making the restaurants contemporary and relevant to the needs and sensibilities of the youth. Menu innovation is another area where we are focusing to introduce products and flavours relevant to this segment," said Bakshi. Jatia said: "The introduction of the spicy range of McDonald's offerings was specifically for the young adult target group. Our continuous efforts to keep our foods affordable and adding more filling fare is also because we are targeting youth. Our international McFlurry's dessert range, our expanding menu, breakfast on the go, are all directed at being relevant to the current market place, where youth has a predominant presence in India." Although one part of the business remains a joint venture (north and east) and the other has now become a franchise (Hardcastle, west and south), both companies in India have a common national marketing board that takes common marketing and advertising decisions at a national level. Regional marketing, however, varies for both companies that each have their regional marketing teams in place. "As our latest endeavour to engage the youth, we are about to unleash an 'augmented reality' initiative to promote McDonald's," Bakshi said. This initiative will see interactive digital imaging on the internet and mobile media, as well as at McDonald's outlets, though McDonald's is not willing to reveal much more about it yet. Jatia said that by 2014, McDonald's would have 450-500 outlets across India. By December, Hardcastle will have 130 outlets, while McDonald's India (north and east) currently has 100 outlets. Both are expanding aggressively.

Marketing stratergies

Sunday, 24 October 2010 Segmentation, Targeting and positioning model of Mcdonalds Segmentation, Targeting and positioning Model of McDonalds: In order to develop a marketing strategy, it is very important for company to understand its target customers. If the company can understand its customer then only it can communicate itself to their consumer Market. Better you know about your consumers, more effectively you could communicate and market them. McDonalds has segmented their products according to bases of Demographic, Psychographic and Behavioral. They have segmented their products and positioned their products according to kids, students and family. But they havent segmented their products according to the Adult target group. Also they havent started segment related to breakfast in every outlet.

Segmentation: Market segmentation is defined as dividing a single market into smaller segments. The basic reason for dividing the market into small segments is to make it simple to address the needs of smaller groups of customers and try to manufacture different products according to their consuming habits. Particularly it is done according to the people who have similar characteristics. It can be done on the basis of age, gender, lifestyle, region, etc. McDonalds in India segmentation it has done is on three different bases: 1) Demographic Segmentation: Kids, Family and Students McDonalds offers different products like Happy Meal which includes a free toy for kids. For families it has made different outlets and meals which are suitable for takeaways and drive-thru. McDonalds has made its environment which is suitable for students of school to hang out with their friends and can get their lunch at McDonalds. 2) Psychographic segmentation: Convenience and lifestyle McDonalds has adopted itself according to the convenience and lifestyle of the Indian consumers, as India has a huge vegetarian population so McDonalds came up with a different and new product line which includes items like Mc Veggie burger and Mc Aloo tikki Burger. They also made McDonalds as a place to relax and even for entertainment. 3) Behavioral segmentation: Occasions, for e.g. Birthday Parties of kids

McDonalds can get more customers by whom they can get most of the share of India Fast Food Industry but they should emphasis on their Targeting technique. To Get a Sustainable Advantage over their competitors McDonalds should introduce new as well as modified products which contains low cholesterol content in it. McDonalds has so much upcoming competition in Indian market that it should concentrate on Differentiation of its products increase its market size by implementing penetration pricing technique in which they should introduce the product with a lower price even lower than the market substitutes price. By this they can they can associate with their marketing objectives and can increase their sales and total revenue even in future. They should apply new positioning technique to create a new image in the minds of consumer about McDonald a place with healthy variants. McDonalds should observe present approach which they are following and subsequent the current advertising with healthy messages. This can be done by adding a more organized and expertise team which can work on healthy mindful advertisement. There advertising should contain all the benefits and healthy qualities about the products McDonalds is offering.

Positioning is a process of creating an image in the mind of consumers by which consumers can understand the uniqueness about your product when compared to competitors product. In India positioning of McDonalds has been directed as a Family restaurant. Then they started positioning according to the kids as well by introducing new advertising of toys with their products such as Happy Meal. In the start they made certain special efforts to not allow it to convert into a teenage and adults (20 to 24 years of age) hangout place. Now youngster and adults has became so use to fast foods that McDonalds should also target them and try to position McDonalds as a place for all. They should target adults also because they can pay for quality and variety of products. This will help McDonalds to be most recognizable brand in India for people of all ages. Or we can say that they should follow concept of undifferentiated marketing in which they should offer same marketing mix to mass audiences. This is due to the fact that in India has second largest population in the world and if they adopt this approach and try to do positioning according to this approach then they will be benefitted and their sales and revenue will surely increase.