CONSUMER BUYING BEHAVIOUR - AIR CONDITIONER MARKET IN INDIA

CONSUMER BUYING BEHAVIOR - AIR CONDITIONER MARKET IN INDIA :-

The success of a product in India is not predictable as it is very difficult for market researcher to understand the buying behavior of a consumer in India as their purchase decision is entirely different form needs stated. For past few years due to country’s economic growth and increasing PPP( purchasing power parity) households form middle and lower middle segment of SEC (socio-economic category) are able to afford consumer durables like air conditioner.

Air conditioner was once considered as a mark of luxury and only upper socio-economic category household were able to afford it. According a Euro-monitor article disposable income of Indian households are increasing but the air-conditioning industry is increasing at even higher rate. According to All India Air conditioning & Refrigeration Association (AIACRA) CAGR of air conditioning system is 15-20% which is highest among all the countries.

CONSUMER BUYING BEHAVIOR FOR AC

Penetration rate of ACs are very poor in Indian household which is less that 4%. Main reasons behind low penetration rate are low income and load-shading in smaller cities and rural areas. ACs have reached very small numbers of households in small cities and towns on the other side rural market is totally untapped and it would take quite a time to penetrate in rural market.

Buying Behavior Of AC In India :-

Due to increasing purchasing power parity, favorable weather conditions, growing Indian economy, me-too attitude of Indian consumers and other factors air conditioning is strengthening its foothold in Indian market. Buyer make an informed decision as product like ACs are very high involvement product. To understand the buying behavior of ACs in India lets understand the needs, usage, benefits and motivation behind purchasing this product.

Needs of AC in India:-

Changing lifestyle: As Indian population is moving towards service sector from manufacturing and agriculture sector, their lifestyle have changed over this transition period. Middle class population and above are getting habituated of comfortable life and products like ACs fit right in place in these situation.

Social Status: For Indian consumers it is really important to keep up to the society. If one household buys some product it triggers a chain reaction of purchase in the society to prove their capability to own a similar product.

Fresh air and lesser noise: ACs refines the air before emitting air which keeps a room fresh and cool. On the other hand one need not open the doors and windows for fresh air which reduces noise level in the room. Which gives a feeling of sanity in chaotic life of overcrowded cities.

Hot and humid climate: Average temperature of India has been increasing over years which demands a mode to keep the heat down. Households which can’t afford ACs they use air cooler to keep the temperature down.

Usage of AC in India:-

Major customers of air conditioner are commercial sectors. Almost all the offices, malls, big and medium sized shops or market places are equipped with ACs. Apart from these commercial sector many household have also started consuming ACs. ACs in India are mainly used in the summer when heat and humidity is at its peak. Most of the Indian households are cost driven. So, unless air conditions are indeed required most of the household refrain from using it in order to save electricity bills.

Penetration of ACs in Indian household in less than 4% which is very low numbers. This number is higher in metro or tier 1 cities. Rural market is still untouched.

Benefits from Using ACs:-

Middle class in India consists major chunk of population. And this SEC category is highly driven on cost. Though disposable income of these households are increasing these households take every possible measure to cut down the cost of running the household.

Jain et al. have showed in his research that energy labeling have very less impact on buying behavior of consumers. Initial price and other social benefit outweighs the benefits derived from ACs consuming lesser power. Social benefits: Me-too behavior and reputation in society yields major benefits for middle class families. Clean and clear air: ACs help in keeping air clean in the house which reduces the chances of getting breathing diseases. Unaffected by weather and heat: This is the final benefit derived from using this product.