The Bunty Syndrome and Dhoni Effect

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Top Moradabad Hotel and Bottom inside of Ludhiana resort

Have you heard of it? If you are pursuing ‘marketing’ as major subject for your MBA, or if you are in marketing job and wish to be heard by your peers and go fast ahead, you must know about it.

Last year I had been to Ludhiana and Moradabad. In Ludhiana, I stayed for the night with a family and my host took me to a restaurant. So far Moradabad is concerned we just passed through it and took our lunch in a hotel almost right on the road. Whatever, I saw in both places, I just couldn’t believe Bharat has gone so far and fast ahead. I can appreciate both the Bunty Syndrome and Dhoni Effect better. Perhaps the propounder of the syndrome and effect assume that all Indian households are familiar with both the names. For just refreshing those who may still get confused, let me remind that Bunty was the hero of the famous movie ‘Bunty and Bubli’ and Dhoni is the cricketer who has become icon of youngsters. Both came from small or tier II towns. “Bunty and Babli are popular names for boys and girls in small-town India.” Interestingly, my cousin Nirmal named younger son and daughter as Bunty and Bubli 15-16 years ago. Knowledge Wharton came out recently with this interesting paper.

Two related studies are: “The Bunty Syndrome,” by advertising agency Euro RSCG India in October 2007, and “The Dhoni Effect: Rise of Small Town India,” by Ernst & Young in March 2008.

According to the 2008 edition of the RK Swamy BBDO Guide to Market Planning, 51 districts in India have at least one town with a population of more than 500,000. Together, they have twice the market potential of the four metros (Mumbai, Delhi, Chennai and Kolkata) combined.

According to a study by the Future Group, the Indian retailer, and the National Council of Applied Economic Research (NCAER), the ratio of spending to earning is higher in Tier II towns such as Nagpur, Jaipur, Surat and Coimbatore than it is in the metros. An earlier NCAER study, in 2004, had shown a higher percentage of the rich in Middle India than in some metros. For instance, the North Indian state of Haryana had a small-town crorepati density of 280. (Crorepati density is defined as the number of families who annually earn more than Rs1 crore — about $250,000 — per 1 million people.) The relative numbers for Kolkata, Hyderabad and Chennai were 180, 191 and 291, respectively.

The Bunty Syndrome study provides examples of how companies are adapting to the needs and demands of Middle India.

·Grasim, a brand of suits, through the message of “be self-made,” has saluted the “We’ll get there no matter what” spirit of the youth. The message is enhanced by the use of a celebrity (the actor Akshay Kumar) who has made a name for himself on his own in a field where relatives already in the profession are seen as a prerequisite for creating equity in the industry.

·Idea, a mobile-services brand, has propagated caste equality, while Tata Tea has tried to appeal to the young in Tier II cities with a call to “wake up to the issues.”

·Durables brand Voltas has challenged the monopoly of Korean brands in the air-conditioner space by projecting itself as “India’s own AC.”

·The concept of being able to give back to parents has been used to good effect by MasterCard and HDFC Bank.

The Dhoni Effect identifies a phenomenon where rapidly growing small towns of India are taking center stage.

Spending power moved from downtown Mumbai’s Marine Lines to the distant suburb of Malad many years ago. Now it is going further, to Madurai and Moradabad. And demands are different. One example: In the last few years, the male skin whitening category, which didn’t even exist a decade ago, has grown 150% annually to $100 million. Most of this growth has come from Middle India.

Of the 80 million households that constitute the Indian middle class, only 25 million are in Tier I cities. Close to 55 million belong to the smaller towns. Mercedes sells more cars in small-town Ludhiana than it does in Mumbai.

For products such as Vim Bar dishwashing detergent and Head & Shoulders shampoo, the Indian market easily absorbed price hikes of 13% and 18%, respectively, in 2007. Yet for years, candy manufacturers have been trying in vain to increase prices from 50p to Re 1. Value sensitivity, not price sensitivity, is the buzzword. And look at the Titan’s experience.

Last year Titan had a high-priced collection called Raga Crystals as part of its sub-brand Raga, which is aimed at women. This collection, which was studded with Swarovski crystals, was priced at around $200 at the top end of the range. We estimated a certain amount of sales, most of it from the metros. But when we actually introduced the product, we found that it was selling right down to smaller towns. “While the realities of the Middle India consumer may be different from the urban or metro consumer, his expectations and aspirations are the same,”

Is not India leapfrogging ahead?

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