Socio Economic Classification (SEC) is often said to be lacking in discriminating the truly potential households and audience. Also, as we recognise, SEC is an indicator or a pointer towards the “likely to consume” set but often defies the reality of not pointing clearly towards the “consuming class”, which is the purpose of any targeting by any marketer. The draw back of using Monthly Household Income (MHI) lies in the difficulty of capturing the correct data, as the respondents are hesitant to disclose the correct MHI.

The various assumed variables as a topping to SEC (like durable ownership, frequency of travel by air, intensity of consuming various products and services, recency of purchase etc.) comes with the negative aspect of “judgment” of the individuals concerned, which is often debated by others.

MRUC and Hansa Research Group have put in over nine months of intensive analyses and iterations with the raw data of Indian Readership Survey (IRS), which has the unique advantage of a “truly continuous” data of over a two million records of households and equal number of individuals spanning across India. This data has been collated over the last decade.

What is premium? A car or a Video Camera? Colour TV or a handy cam? Right, it is Video Camera or a handy cam, believes many. Something that is “wanted by many” but “consumed by few” is our definition of Premiumness.

Simply put, premuimness is defined as the inverse of penetration. For example 41 per cent of all homes in India have Television. But only 2 per cent have a flat TV. Hence homes with a flat TV is considered to be “premium” by HPI measure.

In order to ensure that a specific ownership of a durable or consumption of a particular category of FMCG or services does not result in very high scores, 50 different measures have been incorporated into the HPI system.

HPI considers a wide spectrum of categories from Durables, FMCGs, Services, which are covered in IRS and scores are assigned in a scientific and automated method to products owned, consumed/ used. In addition to product categories, HPI also takes into account the key differentiating household demographics, such as, Highest Education in the household, Number of working members, education of the housewife, area occupied by the household vis-à-vis the number of people residing etc.

Take a look at the table below. Going by the definition of SEC, A1 should be the most affluent class. But it is not the reality. As per HPI, if we look at the top 1 per cent of consuming homes in India, only 39 per cent is from the uppermost SEC A1 and the remaining 61 per cent is from other SECs in Urban and Rural segments.

Conversely speaking, 61 per cent of SEC A1 does not feature in the Top 1 per cent of the consuming households.

Table 1: Comparison of Dispersion of Households by SEC with Households dispersion based on HPI Index

Figs in % ( Down – All India = 100)

Figs in 000s

CWE'S OCCUPATION - URBAN	SEC A1	Top 1%
Unskilled Workers	-	10
Skilled Workers	-	41
Petty Trader	-	24
Shop Owner	-	251
Industr./Businessmen	505	400
Self-employed prof.	297	137
Clerk/Salesman	-	109
Supervisory Level	-	112
Officer/Executive - J	-	343
Officer/Executive - M/S	1254	515
Rural Occupation	-	116

Figs : Average HPI Scores

SEC	Mean HPI
A1	100.7
A2	54.9
B1	28.2
B2	18.7
C	11.9
D	6.8
E	4.4
R1	16.1	Close to SEC B2
R2	7.3	Close to SEC D
R3	4.1	Close to SEC E
R4	2.5	< Any Urban class

Table 3 : Ranking of Top cities based on Mean HPI Scores