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MRUC, MRSI launch new socio-economic classification system after a five-year gap

By afaqs! news bureau , afaqs!, Mumbai | In Marketing | May 04, 2011
The initiative was taken in a bid to keep pace with the fast-evolving economic outlook, consumer attitudes and preferences in the country.

The Media Research Users' Council (MRUC), along with the Market Research Society of India (MRSI) has rolled out the new socio-economic classification (SEC) system.

The initiative was taken in a bid to keep pace with the fast-evolving economic outlook, consumer attitudes and preferences in the country.

For the record, the decision to revisit the SEC grading system was initiated over five years back by MRUC and MRSI, in order to give more relevance to the system. This was done especially because the earlier SEC system was put in place in the mid-1980s and was therefore, dated.

Says Lloyd Mathias, chairman, MRUC (also, president, corporate monitoring, Tata Teleservices), "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 were these findings, he notes, that led MRUC 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.

A committee representing both MRUC and MRSI had identified some key requirements for the development of a new SEC System over a period of five years. These were:

• The new SEC system needed to be more discriminating, with sharper identification of the upper-most segment of the society

• The new system needed to continue to be easy to administer

• There needed to be a common classification for urban and rural India

Ashutosh Sinha, vice-president IMRB, explained that the new system classifies Indian households 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.

Thomas Puliyel, president, IMRB International says, "The new socio-economic classification system is the culmination of many years of hard work by some of the best brains in the industry. 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."

The top-most new SEC class A1 comprises 0.5 per cent of all Indian households. Nearly 2 per cent of urban households and less than 0.1 per cent 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 10 per cent of all Indian households. Only 2 per cent of urban households and 13 per cent of rural households belong to new SEC E3. Nearly 93 per cent of all SEC E3 households are in rural India.

Adds Praveen Tripathi (CEO at Magic9 media & Consumer Knowledge) who has been involved with the development of the new system, "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."

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 is the largest survey of Indian households with a sample size of over 2,60,000 -- of this, roughly 1,75,000 are from urban India while around 85,000 hail from rural India.

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