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Showing posts from February, 2007

Dangerous generalisations !

A recent article in the Economic Times, titled, 'Salsa and facial to end discount era as promotions get face lift' caught my attention. The article is an interesting read. The headline too is eye-catching. Yet the content of the article would have one believe that the way into the Indian consumer's wallet is through offers of 'value added services/benefits' and not through 'price discounts'. the examples quoted range from GM, Whirlpool, Amex, ITCWelcom group to Gitanjali Group. Sure, whoever buys a GM vehicle in India, has an AmexPlatinum card, stays in ITCWelcom group Hotels, wears the Asmi jewellery brand would not bat an eyelid at the loss of a few rupees of discounts.
Guess why ? They obviously fall into an income category right at the top of the heap. This High Income group consumer is least bothered about price discounts and is more enamoured by 'Salsa and facial'.
But the lingering question is, Is this true for all consumers in India? Especiall…

Starbucks in India

Will Starbucks be successful in India ?

After a lot of wait, Starbucks, finally will be in India. It would be interesting to see how Starbucks positions itself in the Indian market. Up market Cafes are popular in the metros, yet are a draw only with the yuppie segment. The per capita consumption of coffee too, in India, is not as high as other Asian countries. Italian coffee Roaster, Lavazza, too plans to enter the Indian market with possible takeovers of 'Barista' and 'Fresh & Honest' Coffee chains.

Coffee in India is surely brewing.

Demise of Mom n Pop stores ?....Not yet...

The announcement by Reliance Retail on franchisee opportunities augurs well for Mom n Pop stores. Hindustan Lever's 'Super Value' concept has already paved way for Mom n Pop stores to refurbish themselves as 'Super Value' stores.

A recent study by KSA Technopak too confirms that Mom n Pop stores are not going to be relegated to history. On the other hand, the study concludes that ' in top towns (population above 1 million), within the next 10 years, the total population of retail outlets will actually substantially increase from the current estimate of about 0.68 million to 1.29 million.'

That is indeed heartening news.

What's in a name ?

HLL ( Hindustan Level Ltd. ) has officially rechristened itself as Hindustan Unilever Ltd..

The rationale behind this move according to the company is to ' provide the optimum balance between maintaining the heritage of the company and the future benefits and synergies of global alignment with the corporate name of its global parent Unilever'

Businesses have to be careful while changing names /brandnames. Jeff Wuorio in article titled 'Change your business name ? 7 issues ' noted seven issues to be borne in mind while embarking on a change in name.

1. Identify a substantive reason to change the name.
2. Know what a name change really entails.
3. Can you reestablish a brand name?
4. Keep an eye on your core functions.
5. If a new name makes sense, check it out.
6. Run the new name by customers.
7. Above all, take the process slowly.

Ref :
http://www.microsoft.com/smallbusiness/resources/marketing/advertising_branding/change_your_business_name_7_issues.mspx

Can 'Orange Pulpy' turn things around ?

Coke has had quite a few problems operating in India. Its still not been able to eke out decent returns in the Indian market unlike its successes in China.

The Soft Drink market has been marred by controversies such as the 'pesticide' issue, insensitive advertising ( by Coke ) among others. The consuming populace seems to favour Fruit drinks over Carbonated beverages. Infact the market share for carbonated beverages segment is growing at 3-4% annually as against a whopping 30% in the fruit drinks segment. The fruit juice segment is growing at a healthy 18-19%. Coke's arch rival, Pepsi claims a market share of around 27% with its fruit drink, Tropicana.

Its against this backdrop that Coke launches its Minute Maid Pulpy Orange, in pack sizes of 400 ml. priced at Rs. 25 and 1 ltr. priced at Rs. 60. The drink has been positioned as 'juice with real orange pulp'. It remains to be seen as to whether Pulpy Orange will make an impact in its segment. The pricing seems to be c…

Does Brand Loyalty exist ?

That's a very interesting question, especially in a country like India. The Great Indian Middle class, always on the lookout for a bargain, is ready to switch brands at the slightest notion of 'enhanced value' from a competing brand.
Sure, this is so, if there are no other constraints, such as switching costs, etc,.
A recent research work done by one of my students showed shifting loyalties with a different flavour.
Among Company executives, everytime they took an airline trip and the company in question footed the bill, they preferred a particular or a few Airline brands. When they paid from their own pockets, it was a completely different take. They looked around for the best deal in terms of prices.

This raises an interesting issue. In a developing country like India, where disposable incomes, especially among the middle class though on the rise is not vey high, can brand loyalty exist ?
Interesting....

A Nation of Shopkeepers ?

Will India still remain a nation of shopkeepers ?
http://http://www.euromonitor.com/Retailing_in_India_A_nation_of_shopkeepers
The Retail industry is overwhelmingly unorganised. That makes it lucrative for organised retail formats to enter and rake in the moolah. Organised retail, at 2 per cent, is expected to reach 10 per cent by 2010 — over $20 billion. But will that come easy ?
How will consumers respond to large retail formats ?
Will the consumer sacrifice convenience of a nearby 'kirana' shop to shift his hosehold purchases to a large format retail store ?
Can Large format retail players operate with efficiencies that result in sustained low pricing ?
The Indian Retail space is up for quite a few battles.
Ref :
http://www.etretailbiz.com/mar2003/cover.html
http://www.hindu.com/2003/12/07/stories/2003120700621300.htm
http://money.cnn.com/2007/02/06/news/companies/retailindia_setback/index.htm

Valentine's Day Retail sales

February 14th is a day when retailers make quite some bucks.
http://retailindustry.about.com/od/sales_holiday/a/valentines_day.htm ( Year 2006 )
In India too, retailers look forward to this day. Online retail buying too surges.
http://iamai.co.in/section.php3?secid=16&press_id=832&mon=2
This year, thankfully, certain political parties that have not approved of Valentine's day in the past have lain low. Thats good news, both for consumers and for retailers.

Well...Romance is in the air... :-)

Buyer Behaviour

Why do we buy what we buy ?

This is indeed a pertinent question as the reason/s behind the purchase of the same product or service by different people is varied.

How do people evaluate products or services ?
Why do evaluate a particular brand as better than another one ?

This blog intends to discuss these issues...

Welcome...