Last week, we looked at segment B2, households with highly educated chief wage earners in the middle years, married with young children. This week, we move up the life stage to look at households where the chief wage earner is married, in the middle years but with grown up, unmarried children—segment B3. The same educational profile as the last two weeks continues—highly educated chief wage earners, who are executives or managers in their employment profiles.

Illustration: Shyamal Banerjee / Mint

By making such finer cuts in consumer segmentation, the differences in asset ownership, consumption baskets and household characteristics come through very clearly, making the task easier for creating and marketing specific products and services.

With a population of more than 2 million, B3 segment households represent those urban well-educated families, who are settled in life. Almost three-quarters of these families own the house they live in. With the median household income at Rs5.5 lakh, these households would be quite representative of India’s middle-aged urban middle class. Yet, around 20% of the households at the top end of this segment earn more than Rs15 lakh a year.

B3 segment households are small households, 69% have just one or two children and less than 20% have senior citizens staying with them. The children are in their late teens or older, almost all would be studying in college. In fact, 8% of the household budget is spent on education services, the second highest share among all consumer segments.

The chief wage earner in these households is typically around 45 to 54 years of age, has a college degree or diploma and holds a regular salaried job. Most of the chief wage earners are employed in financial services or in public administration, with basic graduate degrees giving them the passport to an executive or managerial post—57% of the households fall in this category. Those with engineering related degrees would be largely in manufacturing sector, which provides employment to 17% of the chief wage earners in this segment.

Also See | Indicus Analytics Research (Graphic)

B3 segment (Graphic)

The spouse of the chief wage earner, though fairly well-educated is generally a home-maker. Though 55% of the spouses hold a graduate degree or above, yet 79% stay at home. This is due to a combination of factors. Firstly, spouses also come from educationally weaker backgrounds—while none are illiterate, 3% are educated below primary, 32% have barely finished higher secondary schooling. When the educational profile of spouses is compared with younger B segments, like B2, we see a clear relationship emerging of spouses having higher educational profiles in younger households—an indication of how female education has become more important over the last three decades. Secondly, women who have stayed home to take care of children in their younger days find it more difficult to restart a career in later years. This trend should change in the decades ahead as opportunities open up for self-employment and women get relatively more freedom than before. However, irrespective of the educational levels and of employment profiles, women are taking a larger role in decision making in the households: whether this is in consumption or in investment.

Also Read | Previous articles in the Indicus Indian Consumer Spectrum Series

B3 households spend more than half their budgets on services, in line with their age and income levels. They spend much less on rent than the other B segments, as home ownership increases with age. Almost a quarter of their expenditure is on transport: personal and public.

Households in this segment also spend a larger proportion of their budget on food than younger B segments. In fact, high value and processed food form 13% of their consumption basket, reflecting the teen-plus profile and higher income in these households.

The B3 households comprise 2.34 million people in 569,000 households—an average household size of 4.1.

Let’s take a look at the spread of B3 segment in the top 135 districts of India, which account for two-thirds of the urban population.

The top 12 districts with B3 concentration are Delhi, Mumbai, Bangalore, Chennai, Kolkata, Thane, Hyderabad, Pune, North 24 Parganas, Nagpur, Bardhaman and Kanpur Nagar. They account for 35% of the B3 population in the country. Maharashtra accounts for 16.3% of the B3 population. The top 5 states account for 50% of the B3 population.

Income Distribution

As much as 33% of this segment has household income of over 10 lakh per annum, which makes it an attractive urban segment for a wide variety of products and services in both the premium and mid-market segments.

This series is brought to you by research firm Indicus Analytics Pvt. Ltd

Graphics by Ahmed Raza Khan / Mint