CONSUMER BEHAVIOUR

PROJECT

Submitted to
Prof. PUSHP LAMBA

HPI
Household Premiumness Index

Submitted By:- LEGENDARY KINGS , FE-2

RAHUL JOSHI RAMKRISHNA RAJKUMAR SINGH MANU GANGWAL SUNIL SOLANKI
 SEC

• Refers to a method by which the general population is

divided into segments basis their social and economic status.

• An effective socio economic classification system helps us

in achieving the following:

– Targeting the right segments for a given product category, especially

in the launch phase.
– Conducting marketing research activities with the most appropriate
consumers for a given category or brand.
– Designing differential marketing strategies for different segments.

HPI
 NEGATIVES OF SEC

• Market Research Users Council or MRUC believes that the

socio-economic classification, which every marketer has been
using till date, is often inadequate to understand TG and to
uniquely identify premium households.

• SEC is essentially judged by two broad categories – education

and occupation of the chief wage earner of a household.

• SEC does not take into account the consumption pattern of the
home. Hence it is an indirect measure.

HPI
 EVOLUTION OF HPI

• Hansa Research, in association with MRUC, has developed a

new classification, 'Household Premiumness Index' (HPI).

• HPI provides an understanding of the true affluence of a

household through new offers.

• It is a derived indicator, based on demographics, ownership and

consumption of media products and services.

• HPI further classifies SECs and is not an alternative to the

economic categorization.

HPI
 PREMIUMNESS

• Something that is “wanted by many” but “consumed by few” is

the meaning of Premiumness.

• Premiumness is defined as the inverse of penetration.

• For example 41 per cent of all homes in India have Television.

But only 2 per cent have a flat TV. Hence homes with a flat TV
is considered to be “premium” by HPI measure.

HPI
 HPI

• It classifies homes based on their premiumness which is

obtained from different products and services that they have or
use.

• The concept of HPI allocates high scores for less penetrated

product categories and services. On the other hand, lower scores
to higher penetrated categories or mass consumed categories.

• 50 different measures have been incorporated into the HPI

system.

HPI
 HPI Contd…

• In HPI Hansa Research and MRUC has identified 18

durables, 22 FMCG products, four services and six
demographic measures to judge the premiumness of a
household.

•Premiumness points are accumulated 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.

HPI
 HPI SCORES
Variables used to construct the HPI
CATEGORIES DESCRIPTION
Entertainment 3
• The scores reflects the relative
value of the household in terms Transportation 2
of its use of products, services
18 Durables
Kitchen 7
and other consumer evolution Other Durables 6
measures.
Personal Care 8
22 FMCGs Household Care 4
• The year 2004 has been taken Food & Beverages 10
as the base year for this Telephone, C&S, Internet,
analysis 4 Services Banking
Education 3
6 Demographic House 2
Variables
Number of working members

HPI
 INDIAN CLASSES
&HPI SCORES
Samriddha I,
• The entire country has been divided into 8 0.5%, 1 mn,
HPI* 1997

consumer classes based on their average HPI Samriddha II,

0.5%, 1 mn,
scores. HPI* 998

Sampanna, 2%,
4 mn, HPI* 484
• Each upper class has twice the HPI score of Siddha, 3%, 6 mn,
its lower class. HPI* 235
Unmukh, 9%, 19 mn, HPI*
119

Saamanya, 10%, 21 mn, HPI* 65

Sangharshi, 35%, 71 mn, HPI* 32

Nirdhan, 40%, 83 mn, HPI* 15

HPI
CONSUMER CLASS
PROFILING

HPI
 SEC CLASSES & HPI

HPI Top 5.3 %

HPI Top 1 % HPI Top 2.8 %
• As per the current classification of SEC
Size of
segment (Size Equal to (Size Equal to SEC
(Size Equal to
SEC A1,A2 &
SEC, 1.0 per cent of the household SEC A1) A1/A2)
B1)
in India is A1 and 1.8 per cent is A2.
A1 1 39 26 17

A2 1.8 31 28 23
• But as per HPI, among this top 1 B1 2.5 12 16 18
per cent of the household, only 39
B2+R1 5.2 10 14 19
per cent belong to SEC A1 and 31
per cent belong to SEC A2, the C 6 5 8 12
balance 30 per cent belong to
D+R2 14.3 2 5 7
different SECs (B1, B2, C, D, R1,
R2 and R3).
E+R3 35.3 1 3 4

R4 33.8 0 0 0

HPI
 URBAN & RURAL MAPPING
SEC Mean HPI
A1 100.7
• Through use of HPI, for the first A2 54.9
time, all households in India, both B1 28.2
Urban & Rural can be mapped
B2 18.7
according to their potential to own/
C 11.9
consume/ use as fixed by the HPI.
D 6.8
E 4.4
• HPI enables a direct comparison R1 16.1 Close to SEC B2
of urban and rural on the same R2 7.3 Close to SEC D
scale. R3 4.1 Close to SEC E
R4 2.5 < Any Urban class

HPI
 HPI RESEARCH
• The study indicates that Delhi and Chandigarh are the top two states in terms
of HPI. The mean HPI for Delhi is 43 and Chandigarh's mean HPI is 34.

• In comparison, the all India average of mean HPI is 7.7.

• West Bengal, Bihar, Jharkhand are among the poorer states with a mean HPI
of 6, 5 and 4, respectively.

• Mumbai comes at the sixth position with a mean HPI of 28. Chennai comes
next, with a mean HPI of 25.

• Among the metros, Kolkata doesn't even figure in the top 20 list.

• Guwahati with a mean HPI of 24 is the only east Indian city to feature
among the top twenty cities.

HPI
 BENEFITS OF HPI

• It provides an opportunity to classify the entire country into a

single consumer index.

• It helps identify the top-end consumer better, including that of

the rural population.

• SEC did not consider the rural affluent class and hence lost out
on an important portion of the TG, so this drawback is removed
by the introduction of HPI.

HPI
 BENEFITS Contd….

• 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.

• HPI also takes into account the key differentiating household

demographics, such as, highest education in the household,
number of working members, education of the housewife.

HPI
 BENEFITS Contd….

• Representative of Vast Rural population.

• The another advantage of HPI is that being a continuous

variable, it does not place restrictions on marketers while
defining the target group. Marketers can define their target
audience precisely.

• Marketers can develop better strategies for-

 Market Sizing & Targeting

 Consumer Profiling
 Media Planning

HPI
HPI