Originally developed by EMIR International as a way of understanding market segments, and consumer behavior it was standardized and adopted by the Market Research Society of India in the mid-sass as a measure of socio- economic class and is now commonly used as a market segmentation tool in India. The new version is available at http://whom. Mrs.. Net/new-demographic- map-of-India. PDF. Please refer this one.
In the Older version,the SEC Classification consists of two grids- ; The Urban SEC Grid, which uses Education levels and Occupational criteria of the Chief Wage Earner (CHEW) of a household as measures to determine socio-economic classification, and segments urban India into 7 groups (AY to E) and ; The Rural SEC Grid, which uses Education and Type of House (PUC, semi-PUC, and catch) as measures of socio-economic class, and segments rural India into 4 groups (RI ,RE,RE,RE) This is based on the assumption that higher education leads to higher income thus higher consuming potential.
But we know that this may not be true always. A trader or a retailer with no qualification can earn more income than a Post graduate executive, but SEC will categorize the traders/ retailers not as SEC AY or AY. So, in order to combat this problem, the Government came up with the new SEC system. The new SEC system is based n two variables: 1. Education of the Chief Earner 2.
The number of Consumer durables(pre-decided from a list) owned by the family. The list has 11 items ranging from “electricity and agricultural land” to cars and air conditioners. There are 12 grades in the new system starting from AY to E. The list of items are: Electricity connection, ceiling fan, LIP stove, two wheeler, color TV, refrigerator, washing machine, personal computer,four wheeler, air conditioner and agricultural land.
These grids are used to determine the consumption preferences, and purchasing power of shoulder, and are common tools used by social and business researchers working in India. The SEC grid does not use family income levels as a measure as this data is hard to collect and it has been demonstrated that education levels and occupation criteria in India are better determinants of consumer preference. The methodology used in these tools differs from the Household Potential Index, which measures consumption intensity.