Traditionally as:- Illiterate, Literate but no formal schooling

Traditionally two parameters were
used in socio economic parameters of Indian Consumers. These were: Occupation
and Education of the chief wager of the household. It was originally started by
IMRB international and was ratified in 1988 by Market Research Society of India
(MRSI).  As a way of understanding the
target audience and their consumption pattern, market segmentation was done
based on education and occupation on the chief wages or earning member of a
household. SEC has developed new parameters now which is called NCCS (New
Consumer Classification System) which is also co-developed by Market Research
Users Council (MRUC). It considers the old parameter of Education and now defines
a new parameter in the form of Number of Consumer Durables. While the former as
the grid options such as:- Illiterate, Literate but no formal schooling or
Schooling unto 4 years, Schooling between 5–9 years, High School pass, Some
college (including a diploma but not a graduate), Graduate / Post Graduate
(General), Graduate / Post Graduate (Professional), the latter comes with a
pre-defined list of 11 items owned by the family such as Electricity
Connection, Ceiling Fan, LPG Stove, Two Wheeler, Colour TV, Refrigerator,
Washing Machine, Personal Computer/Laptop, Car/Jeep/Van, Air Conditioner and Agricultural
Land.

While the old version of SEC has 8 grades
(A1 to E2), the new one as 12 grades (from A1 to E3) defined for both urban and
rural population. Simplification of
classification being the prime motive of new SEC system, it takes into
consideration of many anomalies associated with the old one. For instance,
there is an apparent less subjectivity
with the omission of ‘occupation’ as a parameter. Also, it discards the assumption of higher qualifications leading to higher
income and consumption or purchasing power of household. It becomes easier
to classify the consumers’ preferences as the heterogeneity within social grades is reduced significantly. A
single system combats this and projects
a better state of affordability in households. Underlying assumption to
this was that systems based on inequalities was not showing the right picture. The
new SEC system connects households
rather than individuals with the streamlined data collection with the dynamic
variables which change with time and help gain deeper insights for market
researchers. The earlier system has static variables with no significantly
changing discriminators. However, new
SEC to suffer from the lack of utility to make historical comparisons of brands
as the list of durables is updated every two years under this system. To deal
with this ‘Hindustan Unilever’ developed
‘ Living Standard Measurements’  which
segments consumers into 18 segments LSM segments by incorporating 25 parameters
which takes into consideration some factors like media consumption,
entertainment preferences also which makes it more effective to recognise
consumer behaviour. 

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