The Media Research Users’ Council (MRUC) and the Market Research Society of India (MRSI) have unveiled a new Socio-Economic Classification (SEC) system, under which all Indian households will be classified. Under the new system, Indian households will be classified by using two parameters—educational qualifications of the chief wage owner in the household and the number of assets owned (out of a pre-specified list of 11 assets). Based on these two parameters, each household will be classified in one of 12 SEC groups—A1, A2, A3, B1, B2, C1, C2, D1, D2, E1, E2 and E3. These 12 groups are applicable to both urban and rural India.
Announcing the launch of the new system, Lloyd Mathias, chairman, MRUC and president, corporate monitoring, Tata Teleservices Limited, said, “In 2006, extensive research and inputs from industry experts had thrown up a burning need to revisit the classification system, given that the market environment, as also consumer profiles, preferences and attitudes had undergone a sea-change over the last three decades. It was these findings that led us to set up a core team to work on putting together a new SEC system that would be a true reflection of the actual standing of Indian households.”
Thomas Puliyel, president, IMRB International, added, “With the growth of the economy and of small towns and rural, it has become imperative to look at a single system for both urban and rural India.”
Elaborating on the new system, Praveen Tripathi, chief executive officer, Magic 9 Media and Consumer Knowledge, and who has been involved with the development of the new system from MRUC’s side, said, “Given that the new SEC system classifies households on parameters different from the old system, it will not be proper to compare the old SEC classes with their equivalent ones from the new SEC—even if the two carry the same alphanumeric tags - as in class A1 of the new SEC system should not be confused with class A1 of the old system. Indeed, New SEC A1 is more homogenous, owns more assets, and is more affluent than old SEC A1.”
Tripathi also informed that they expected marketers to adopt both the systems during the transition period, while efforts are on from their side to get all the major research bodies to start using the new SEC system. Since the classification depends on ownership of consumer durables, the system will be revisited once every two years to make the classification more accurate.
LV Krishnan, chief executive officer, TAM Media Research confirmed that TAM will be adopting the system as early as July 2011. “We will definitely be adopting the new system and provide the ratings using both the systems initially. Based on industry feedback, we will phase out the old system,” he added.
The formulation of the new SEC system has largely been done using the Indian Readership Survey (IRS) database. The developmental work has also used IMRB’s ‘Household Panel’ data. IRS has a sample size of over 260,000—of this, roughly 175,000 are from urban India while around 85,000 hail from rural India.
Under the new system, the top-most new SEC class A1 comprises of 0.5% of all Indian households. Nearly 2% of urban households and less than 0.1% of rural households belong to the new SEC A1. More than half of all SEC A1 households reside in the top six Indian cities—Delhi, Mumbai, Kolkata, Chennai, Bengaluru and Hyderabad.
At the other end of the spectrum, the bottom-most new SEC class E3 comprises of 10% of all Indian households. Only 2% of urban households and 13% of rural households belong to new SEC E3. Nearly 93% of all SEC E3 households are in rural India.