The trade offs in hard ball tactics

Saurabh quotes two reasons why Cadbury must care enough to be on Big Bazaar shelves. One, the possibility of 'future consumption' and therefore the purchase of a large pack of Cadbury chocolate which could later be gifted or even consumed. Two, the visibility Big Bazaar shelves provide, could aid brand recall resulting in the purchase of the Cadbury brand when a decision on immediate consumption or even future consumption is made.

Both points make good sense. Yet a certain question lingers, at least when the first point is considered. It refers to the Big Bazaar customer profile. Are these the kind that engage in gifting large packs of chocolate or are they more of the 'Indian sweet' consumers? Can their incomes get them afford purchase of large packs? Remember, chocolates are costly.

Sure visibility helps, but should it be sought at the cost of bowing to the wishes of a retailer whose clout seems to be growing? Add the looming prospect of never being able to dictate terms should Cadbury back off this time around and the idea seems unpalatable.

No easy decision there for Cadbury. For the moment, they seem to have taken Big Bazaar head on. The aftermath sure will be followed keenly both by Indian retailers and manufacturers.

Comments

s4ur4bh said…
If you look at the SKUs stored at Big Bazaar's, they are mostly gift packs.

You are thus probably correct when you say that these are meant for future consumption.

The only question that remains now is the percentage of business that larger packs have in the entire business.

Also the cost of these larger packs to Cadbury's should be lower - easy packaging, transport and other such factors. And thus larger margins.

Would be really interesting to see how it pans out.
Regards,
Saurabh Garg
http://saurabhgarg.com
Tiger said…
This comment has been removed by the author.
Tiger said…
I would go for Cadbury but my dad would always choose the Indian sweet. When I think of the number of time we shop most of the times my dad or mom do that and they donot buy cadbury at bigbazaar. So what %age of the shoppers at bigbazaar are young or old. The consumption for cadbury is more of impulsive and not for the consumption of sweet or to satisfy a future consumption. I wouldnt go to bigbazaar to buy a cadbury as I need to stand in line and wait to do that. But I dont mind picking it up when I shop normally. So it matters what replacement could bigbazaar put on its shelves for cadbury.

Remember the Lays chips. Yes, its interesting to see how they sort this out.

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