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Section 4: Consumerism (Professional Life in the US, and Information on Life in America)

 GaramChai.com >> Book >> Section 4

Consumerism and US Immigrants

Shopping in a consumerist market can be thrilling and confusing at the same time. People moving from India to the west need to ready to be overwhelmed by the choices. Shopping for products and services can be intriguing because the quality, quantity or brand alone does not drive prices. On the other hand, the adage “you get what you pay for” also generally holds true. The service sector in the US can also be exhilarating. Over the decades, the service industry has fine-tuned itself to provide “world class” service to consumers. As a prudent consumer, you are expected to know your rights too. 

In this section of the book, we will look at the different aspects pertaining to consumerism in the US including consumer choices, the service industry and how people try to find their way around markets. America is known for its world class service and a mature service industry translates to better customer satisfaction. We will also look at the aftermath of e-commerce revolution, how a brand new channel has been opened up for consumers wishing to shop in the privacy of their homes and offices. We conclude this section with a look at Indian shopping in the US.   


Consumerism in the US  

America is perhaps the most consumerist nation in the world. Being consumerist is a double-edged sword. On one hand, Americans who love the latest products get what they want, but in the process, the choices overwhelm many consumers. In any consumer driven market, the main beneficiaries are the consumers since the producers and manufacturers bend over their backs to satisfy their (consumers) whims.

Any marketing manager will tell you that choice is good, and that it helps individuals feel better about the products they are buying, giving a touch of individualism. A mature free market leads to a proliferation of goods and services, leading to the survival of the fittest. However it also leaves a lot of room for second and third rung products that manage to find a niche.

Shopping in America is an art. Every savvy shopper lives to hunt for the best deal she can. There is a whole range of shops, malls, supermarkets, discount chains and specialty stores to choose from, not to mention shopping online on the web. Prices for the same (or similar) products vary widely. Even food chains stock a variety of products and there too the prices can vary. People who are price conscious generally prefer buying bulk packaged items at discount and warehouse clubs. On arriving in a new city, people generally ask their peers, colleagues or friends to get an idea of the kind of shopping available.

Americans didn’t always have this kind of variety. Even a generation ago, people had to be content with a few generic brands of most products, the same kind that Jones’s next door were getting. Henry Ford, the legendary founder of the Ford motor company reportedly once said, “Give them any colour (car) as long as they are black”. America has come a long way since Mr Ford’s proclamation sometime in 1906. The choices, when it comes to cars are astounding, almost mind blowing. The same goes for every other consumer product — from cereals to cell phones, TVs to trucks. Consumers have the kind of choices, which are unimaginable in many other parts of the world.

Take a walk down any supermarket aisle and choices immediately confront you. Getting a gallon of milk from the dairy section may not be as simple as it sounds, especially since milk comes in over a dozen varieties ranging from zero fat to extra rich (and a few varieties in between). The same goes for yoghurt — that ranges from plain, cultured, flavoured, half fat, zero fat, made by different brands, in different packages and sizes.

I remember the first time I went a supermarket to buy some breakfast cereal. I hadn’t gone with any particular brand or category in mind since I was used to ‘Kellogg’s’ back in India. Most supermarkets have whole isles dedicated to the display of cereals and they carry at least half a dozen brands including national brands like Kellogg’s and Post. Each brand in turn will have a slew of varieties including honey, crunchy, barn, oats etc.

How does one go about deciding what the best brand out there is? Tough! Trial and error is perhaps one way to do it — go about sampling one brand at a time and with any luck you will find a brand (or kind) that you may like. However, just as you get comfortable with your brand of cereal, the marketing gods might decide to change the packaging and flavour just a bit, enough to make you want to start the process again. If you thought deciding on a brand of cereals is not the biggest problem in life, you probably are right. For everything that you want to shop for, you are going to face a similar challenge.

The issue of choices, when it comes to shopping is exacerbated by the fact that there is no uniformity or even rhyme or reason behind pricing. Almost everyone here lives with the nagging fear that they will end up paying more than Jones or the neighbour-next-door. People are eternally looking for the ‘right deal’ and sales, stocking stuff they don’t even need. Because of the wide array of products and variations being provided by marketers, they have devised clever pricing plans, bundling in discretionary promotions and discounts. The end result? The same box of cereal will not cost the same in two different supermarkets down the road.

The enormity of choices available to us was brought home one recent evening when my friend and I, currently in the market for a used car, decided to brainstorm over a cup of coffee (Starbucks, latte with extra cream and sugar, in case you were wondering). In the back of my mind, I knew that we had come a long way since Mr Ford made his pronouncement over a century ago; Still, the availability of brands, models and makes, with the variations in features, not to mention the colours and prices, did not cease to amaze. I am glad that we had decided to rule out new, ex-showroom cars from our already complicated search algorithm. It is the complicated research process, along with the lack of transparent information that lead to the theory of asymmetric information which won George Akerlof, Michael Spence and Joseph Stiglitz, the Nobel Economic Prize for 2001.

Most consumers have realised that there is a method in the madness and individuals device their own strategies for shopping — some focus on pricing and others on convenience. There is ample scope for everyone to experiment and come up with their individual strategies. As you may expect, there are a number of magazines, websites, radio and TV shows dedicated to educating and informing consumers. Going to the mall or supermarket is a welcome diversion to most of us, even if it means using the gray cells to do some calculative shopping.  



World-class service in America

 One of the best “perks” of living in the west is the opportunity to enjoy a world-class service in almost every aspect of life. By world-class service, I mean the day-to-day interactions we have with our service providers, be it bankers, sales persons at stores, customer representatives over the phone, check-out girls at the supermarkets or even online interactions over the Web.  

Let me illustrate with a personal anecdote. Just the other day, I had an opportunity to test the limits of customer-service at my bank in Colorado. I try to complete most of my transactions — including paying my bills, transferring money and checking balances etc — over the Web using my PC-bank account. I had issued a cheque, payable to someone; but later I decided that I shouldn’t have issued the cheque since I didn’t need the service. Realising that it would be more cumbersome to get a refund after the cheque was cashed, I resolved to place a ‘stop order’ on it. I logged on to my online bank and filled out the stop order from. A small fee was charged from my account the next day and I assumed that everything was hunky-dory.  

However, a couple of days later, I was astounded to find that the amount on the cheque was charged from my account. I drove down to the nearby branch and explained my predicament to the manager. She looked at my account and got the details of the transaction and made a call to the online team and presto, my case was solved. She assured me that the amount would be credited back to my account and that I could consider my problem solved. 

This story and incidents like these are repeated hundreds of thousands of times across the US. Customers and consumers here have come to expect a certain level of service. As the level of service increases, the bar is raised and every business and enterprise tries to become more service oriented.  

The US economy is predominantly a service economy, meaning the bulk of the revenue generated by corporations come from the services they provide. The higher level of customer service includes the ambience of shops, eating joints, malls and supermarkets. It also includes the ‘standardised’ service that customers come to expect when they go to a familiar chain like McDonalds. McDonalds strives to ensure that every outlet across the globe has a similar look, feel and level of service. Companies in the west employ a variety of media in order to enhance customer satisfaction and feedback. This includes use of ‘1-800’ free-phone numbers, web sites and mail-in customer cards. Most products and services come with the service description and include free contact numbers that customers from anywhere in the country can call.  

The premise behind service culture is simple. Things and systems, however well designed, can and will go wrong. What makes a difference in the customers mind is the ‘recovery process’, i.e. the company or service provider’s reaction to an anomaly in service and how they recover. Service employees in the US are empowered to take a decision that will satisfy the customer. They are also educated and trained to act as ambassadors of the company’s culture. 

Companies and service providers in the West have realised that the cost of acquiring a new customer is many times higher than servicing and retaining existing ones. They also realise that the word-of-mouth that a good service experience generates, is more valuable than any advertisement. Customers have come to expect a certain level of service. As the level increases, the bar is raised and every business and enterprise tries to become more service oriented 

For many Indians, who are used to sub-standard service in every walk of life, the service focus in the West comes as a breath of fresh air. Of course, a number of Indians are increasingly travelling to the West and returning to India with world-class service experiences fresh in their minds. They are starting to communicate these experiences to the service providers in India, which has led to an increasing number of Indians expecting (and receiving) world-class service in their back-alley too.



Consumerism in the US

America is perhaps the most consumerist nation in the world. Being consumerist is a double-edged sword. On one hand, Americans who love the latest products get what they want, but in the process, the choices overwhelm many consumers. In any consumer driven market, the main beneficiaries are the consumers since the producers and manufacturers bend over their backs to satisfy their (consumers) whims.

Any marketing manager will tell you that choice is good, and that it helps individuals feel better about the products they are buying, giving a touch of individualism. A mature free market leads to a proliferation of goods and services, leading to the survival of the fittest. However it also leaves a lot of room for second and third rung products that manage to find a niche.

Shopping in America is an art. Every savvy shopper lives to hunt for the best deal she can. There is a whole range of shops, malls, supermarkets, discount chains and specialty stores to choose from, not to mention shopping online on the web. Prices for the same (or similar) products vary widely. Even food chains stock a variety of products and there too the prices can vary. People who are price conscious generally prefer buying bulk packaged items at discount and warehouse clubs. On arriving in a new city, people generally ask their peers, colleagues or friends to get an idea of the kind of shopping available.

Americans didn’t always have this kind of variety. Even a generation ago, people had to be content with a few generic brands of most products, the same kind that Jones’s next door were getting. Henry Ford, the legendary founder of the Ford motor company reportedly once said, “Give them any colour (car) as long as they are black”. America has come a long way since Mr Ford’s proclamation sometime in 1906. The choices, when it comes to cars are astounding, almost mind blowing. The same goes for every other consumer product — from cereals to cell phones, TVs to trucks. Consumers have the kind of choices, which are unimaginable in many other parts of the world.

Take a walk down any supermarket aisle and choices immediately confront you. Getting a gallon of milk from the dairy section may not be as simple as it sounds, especially since milk comes in over a dozen varieties ranging from zero fat to extra rich (and a few varieties in between). The same goes for yoghurt — that ranges from plain, cultured, flavoured, half fat, zero fat, made by different brands, in different packages and sizes.

I remember the first time I went a supermarket to buy some breakfast cereal. I hadn’t gone with any particular brand or category in mind since I was used to ‘Kellogg’s’ back in India. Most supermarkets have whole isles dedicated to the display of cereals and they carry at least half a dozen brands including national brands like Kellogg’s and Post. Each brand in turn will have a slew of varieties including honey, crunchy, barn, oats etc.

How does one go about deciding what the best brand out there is? Tough! Trial and error is perhaps one way to do it — go about sampling one brand at a time and with any luck you will find a brand (or kind) that you may like. However, just as you get comfortable with your brand of cereal, the marketing gods might decide to change the packaging and flavour just a bit, enough to make you want to start the process again. If you thought deciding on a brand of cereals is not the biggest problem in life, you probably are right. For everything that you want to shop for, you are going to face a similar challenge.

The issue of choices, when it comes to shopping is exacerbated by the fact that there is no uniformity or even rhyme or reason behind pricing. Almost everyone here lives with the nagging fear that they will end up paying more than Jones or the neighbour-next-door. People are eternally looking for the ‘right deal’ and sales, stocking stuff they don’t even need. Because of the wide array of products and variations being provided by marketers, they have devised clever pricing plans, bundling in discretionary promotions and discounts. The end result? The same box of cereal will not cost the same in two different supermarkets down the road.

The enormity of choices available to us was brought home one recent evening when my friend and I, currently in the market for a used car, decided to brainstorm over a cup of coffee (Starbucks, latte with extra cream and sugar, in case you were wondering). In the back of my mind, I knew that we had come a long way since Mr Ford made his pronouncement over a century ago; Still, the availability of brands, models and makes, with the variations in features, not to mention the colours and prices, did not cease to amaze. I am glad that we had decided to rule out new, ex-showroom cars from our already complicated search algorithm. It is the complicated research process, along with the lack of transparent information that lead to the theory of asymmetric information which won George Akerlof, Michael Spence and Joseph Stiglitz, the Nobel Economic Prize for 2001.

Most consumers have realised that there is a method in the madness and individuals device their own strategies for shopping — some focus on pricing and others on convenience. There is ample scope for everyone to experiment and come up with their individual strategies. As you may expect, there are a number of magazines, websites, radio and TV shows dedicated to educating and informing consumers. Going to the mall or supermarket is a welcome diversion to most of us, even if it means using the gray cells to do some calculative shopping.  



 

World-class service in America

 One of the best “perks” of living in the west is the opportunity to enjoy a world-class service in almost every aspect of life. By world-class service, I mean the day-to-day interactions we have with our service providers, be it bankers, sales persons at stores, customer representatives over the phone, check-out girls at the supermarkets or even online interactions over the Web.  

Let me illustrate with a personal anecdote. Just the other day, I had an opportunity to test the limits of customer-service at my bank in Colorado. I try to complete most of my transactions — including paying my bills, transferring money and checking balances etc — over the Web using my PC-bank account. I had issued a cheque, payable to someone; but later I decided that I shouldn’t have issued the cheque since I didn’t need the service. Realising that it would be more cumbersome to get a refund after the cheque was cashed, I resolved to place a ‘stop order’ on it. I logged on to my online bank and filled out the stop order from. A small fee was charged from my account the next day and I assumed that everything was hunky-dory.  

However, a couple of days later, I was astounded to find that the amount on the cheque was charged from my account. I drove down to the nearby branch and explained my predicament to the manager. She looked at my account and got the details of the transaction and made a call to the online team and presto, my case was solved. She assured me that the amount would be credited back to my account and that I could consider my problem solved. 

This story and incidents like these are repeated hundreds of thousands of times across the US. Customers and consumers here have come to expect a certain level of service. As the level of service increases, the bar is raised and every business and enterprise tries to become more service oriented.  

The US economy is predominantly a service economy, meaning the bulk of the revenue generated by corporations come from the services they provide. The higher level of customer service includes the ambience of shops, eating joints, malls and supermarkets. It also includes the ‘standardised’ service that customers come to expect when they go to a familiar chain like McDonalds. McDonalds strives to ensure that every outlet across the globe has a similar look, feel and level of service. Companies in the west employ a variety of media in order to enhance customer satisfaction and feedback. This includes use of ‘1-800’ free-phone numbers, web sites and mail-in customer cards. Most products and services come with the service description and include free contact numbers that customers from anywhere in the country can call.  

The premise behind service culture is simple. Things and systems, however well designed, can and will go wrong. What makes a difference in the customers mind is the ‘recovery process’, i.e. the company or service provider’s reaction to an anomaly in service and how they recover. Service employees in the US are empowered to take a decision that will satisfy the customer. They are also educated and trained to act as ambassadors of the company’s culture. 

Companies and service providers in the West have realised that the cost of acquiring a new customer is many times higher than servicing and retaining existing ones. They also realise that the word-of-mouth that a good service experience generates, is more valuable than any advertisement. Customers have come to expect a certain level of service. As the level increases, the bar is raised and every business and enterprise tries to become more service oriented 

For many Indians, who are used to sub-standard service in every walk of life, the service focus in the West comes as a breath of fresh air. Of course, a number of Indians are increasingly travelling to the West and returning to India with world-class service experiences fresh in their minds. They are starting to communicate these experiences to the service providers in India, which has led to an increasing number of Indians expecting (and receiving) world-class service in their back-alley too.




Aftermath of the E-Commerce revolution

The e-commerce revolution and growth left behind technologies, applications and ideas that are going to stay with us for a long time. There have been innumerable books and articles written about the dot.com burst and how it helped propel the economic slowdown that we are seeing now. However, there is little doubt that a lot of good came out of the e-commerce revolution that we experienced. Many Indians, especially tech-savvy youngsters got a once-in-a-lifetime opportunity to launch a career and set sail to distant shores of Boston, Liverpool and Santa Clara. They got an opportunity to partake in, what some call, the largest creation of wealth in human history. Indians who came to the US as ‘producers’ of e-commerce technologies realised that they could also be sophisticated users of these technologies. Many ended up becoming voracious consumers of these slick e-commerce applications that made life simpler.

Back in 1997, on discovering the joys of Internet surfing, I bumped into (then) little-known online bookseller who was willing to take credit card details over the Web and ship the orders I placed ‘online’. Before coming to the US, I hadn’t even done any shopping through catalogue retailers and here I was, giving my credit card details to an online retailer. Doing this, I knew I wasn’t alone. Of course, it helped that I knew a couple of Indian friends who worked for that bookseller Amazon.com who would wax eloquent over the dream that their company was out to capture the world of book retailing.

Of course, my friends, colleagues and I gradually started trusting most of the large online retailers and took to buying goods and services over the Web. When my bank offered me the chance to pay all my bills online, I jumped at the opportunity. Eventually I got sucked in, doing every conceivable thing over the Web trading stocks, managing my portfolio, planning a vacation...the whole nine yards. Needless to say, the dotcom burst has done little to dampen the enthusiasm of my fellow Indians, especially as consumers of e-commerce technologies that have become a way of life.

Indians in the US are among the top ten percentile when it comes to using online tools and technologies. Case in point: Net meetings, which started off as a means for geeks to exchange instant messages over the Internet has become as ubiquitous as telephone, services and e-mail. Instant message sessions are a convenient and cheap (actually free) means of communicating with parents, relatives and friends in India. Voice chat is really giving a run for the money to all the long distance telecommunication giants.

Realising the potential of Indians in the US, a number of entrepreneurs jumped in to build “portals” targeting this community. Even a year ago, there were over a dozen portals offering services ranging from directory listings to chat and bulletin board services along with news and information. The dot.com burst didn’t spare them. Giants like ChaiTime.com and GoYogi.com that were started with a lot of fanfare and pizzazz are nowhere to be seen. Of course a handful of them are still surviving, Rediff.com and SatyamOnline.com had the good fortune of cashing in on their IPO and are not too concerned about burning through their cash. A few small directories like Sulekha.com and GaramChai.com have survived, probably because they were not overly ambitious and didn’t expend too much on buying hype. 

A number of online grocers have also jumped in to capture the Indian audience. Namaste.com, flush with venture capital funding seems to be going strong, so is IndiaPlaza.com. The business model of these retailers is simple Indians in the US still love to eat ‘dal chawaal’ or ‘sabzi roti’ and they aim to cater to our tastes. There are Indian grocery shops almost all the major towns and cities in the US. The online bazaars are trying to bypass these retailers and sell directly to us, the consumers. A few brave (and cash rich) Indian grocers in the US are trying to keep their head above water. Namaste.com ,  Rediff.com, IndiaPlaza.com and Eshakti.com may be down but not out.

E-commerce as a revolutionary way to do business may be dead but the mundane applications and business models that the e-commerce technologies are trying to support are here to stay. Even after the so-called ‘meltdown’, we are seeing a growth in the use of technology as a means to connect the ever-growing Indian populace in the US with life and things back home.



 Indian shopping in the US

Towards the end of 1994, preparing to travel abroad for the first time, along with my other apprehensions I was wondering what I should carry with me. Among other things, my boss who was on-site suggested that I carry with me some of my favourite music, Indian condiments and other ingredients. At that time I did not realize that the world was shrinking and that one could find just about any kind of Indian spice or ingridients in Indian stores abroad. Indians living in different corners of the world have their favourite Indian haunts from Devon Avenue in Chicago, to Southhall in London, not to mention the ubiquitous corner shops which exist in almost all the major cities in the US, Canada and UK. One can also find exclusive Indian enclaves in Singapore, Mauritius and other parts of the globe. 

Interestingly, many of the products one finds in Indian shopping shelves are the same ones being sold in the US and UK. Since they have to pass through rigorous checks, like those done by Food and Drug Administration in the US, the products exported abroad are generally of a superior quality. This works out to a win-win situation even for the manufacturers and producers since they get a stamp of “export quality” which they tout aggressively in their domestic marketing. Even the ease of use and preparation of some of the ready-to-make Indian products has improved substantially in the last. For instance, rava idlis made using MTR’s mix many not be the same as the ones you get in a Kamat or Udupi restaurant in Bangalore, but they come close, especially if you are willing to discount the fact that you are making it out of a tetra-pack, thousands of miles away from Bangalore! It might surprise some to hear that Indian beer - Kingfisher and Knockout, compete for market space in the increasingly glamorous international beer market in the US. They are available at many large liquor shops across the country. 

The market is huge but fragmented. As per the 2000 census, there are 1.7 million people in the US who identify themselves as Asian Indians or Indian Americans first- and second-generation immigrants or whose ancestors migrated to the US from India. If even half of this population consumes Indian food at least four or five times a week, this translates to a tremendous market. There are a number of established importers of Indian spices, lentils (dal’s), herbs and condiments who distribute them through the chain of Indian shops and bazaars.  

Another aspect of our “Indian culture” that people abroad love to nurture is our love for everything ‘Bollywood’. Although I don’t watch a lot of movies, I am in the minority. My wife is the kind of person movie marketers’ dream of - she loves Hindi movies and music, hence we are regular patrons at the local India bazaar which also rents videos and DVD’s. Technical advances, especially in the DVD technology, have made watching Indian movies a pleasure, especially when one thinks about the shoddy quality of some of the videos that used to circulate even a few years ago. In many metros in the US, people have access to Indian channels on cable. A number of movie-halls across the country also regularly screen Indian movies. It is not surprising that Bollywood recovers most of its movie production costs from “international rights”, especially when if one considers the exorbitant ticket prices one pays to watch Indian movies.  A list of Indian bazaars and grocers can be found at GaramChai.com    

 

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All rights are reserved. Mohan Babu ("Author") hereby grants permission to use, copy and distribute this document for any NON-PROFIT purpose, provided that the article is used in its complete, UNMODIFIED form including both the above Copyright notice and this permission notice. Reproducing this article by any means, including (but not limited to) printing, copying existing prints, or publishing by electronic or other means, implies full agreement to the above non-profit-use clause. Exceptions to the above, such as including the article in a compendium to be sold for profit, are permitted only by EXPLICIT PRIOR WRITTEN CONSENT of Mohan Babu. 

Disclaimer: This document represents the personal opinions of the Author, and does not necessarily represent the opinion of the Author's employer, nor anyone other than the Author. Any mentions of commercial products, company names, or universities are solely for information purposes and do not imply any endorsement by the Author or any other entity. The Author provides this article "as is." The Author disclaims any express or implied warranties including, but not limited to, any implied warranties of commercial value, accuracy, or fitness for any particular purpose. If you use the information in this document in any way, you do so entirely at your own risk.

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Book Index

  • Intro
  • Section 1: Visas and Immigration
  • Section 2 Finances
  • Section 3 Law and legal system
  • Section 4 Consumerism
  • Section 5 Life and weekends in the US
  • Section 6 Health and lifestyle
  • Section 7 Demographics
  • Section 8 Indians in America: Looking to the future after Sep 11th
  • Section 9 Preparing for the next wave
  • Appendix
  •  

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