The first thing to know about us is that we are a poor country. Despite the long Indian billionaires list put out by Forbes magazine, we remain a country of poor people. But being poor does not make the vast majority of Indians stupid. Au contraire: we are quite clever and, to use business school jargon, very “value conscious”. Our consumers are dead-set against shoddy goods (or goods perceived to be shoddy) being palmed off on them merely because they are poor. They are quite competent to make complex trade-offs usually associated with very sophisticated market participants.

Indeed, the Indian consumer is very price-conscious. She does not like to make huge upfront investments based on uncertain promises of future service quality. The entry price has got to be low to justify the risk of a new experiment however well-advised it may be. Secondly, any attempt to link lower price with lower quality, real or perceived, is likely to bomb. Thirdly, the definition of quality is almost always functional. “Does it meet my real needs?” is the question she asks, not whether it gratifies her ego.

She is willing to pay for good service as she goes along by increasing her usage and paying in modest increments for the increased usage. Lastly, please do not underestimate her ability to find uses for the product that are totally at variance with the original intent of producers. India is that strange country where washing machines are used to convert yoghurt into lassi, a drink that she enjoys all year round.

... contd.