NEW Customers - Middle Class - 1

It has been talked every where in world .
The basics are same, its cycle is fundamentally proved

Developing economy > People making more money > Wages increase > Middle class increase > Spending power increase > Increase in GDP > Economical development.

A new study by the McKinsey Global Institute (MGI) suggests that if India continues its recent growth, average household incomes will triple over the next two decades and it will become the world’s 5th-largest consumer economy by 2025, up from 12th now.

Now as the people will become richer and spending will take place. With this effect first stage will be making life more comfortable which will see the rise of spending in Housing , education , clothing . Then comes consumer goods and entertainment.

Only catch here is as the consumer will reach to the stage of consumer goods and entertainment , its spending strength will be much higher than the stage where he spent on Housing, education and clothing.

Now this is psychological that as and when the first stage becomes more visible, it becomes necessity.We have example of TV, initially it was an luxury but slowly with the spread it became a necessity and now Flat panels are at same stage.

It is a process as per my understanding :

Top down should look like this :

Luxury >> Addition >> Need >> Want


Now here this transition is also important for Companies with are into consumer demand products because when their products are in Luxury the equation is : less consumer and more premium price, but as it reaches Want equation changes : More Consumers and less premium price.Now a successful management will be one which is making profits in all circumstances and shows increase in profits as they move forward.

Marketing has a very crucial role to play in this. It is marketing that will decide the time line for each stage because it is them who will make the commitment and communication to consumers