Discounting to hasten spending

With inflation climbing, consumer consumption has slackened. Curtailed consumption leads to product stocks piling within retail stores and factories. Inventory holding sends costs spiralling upwards. The only way out is to 'pull' consumers into spending. That almost seems impossible considering the times. The only lure they may succumb to is discounts.

In India, weak consumer sentiment has prompted retailers to declare ‘early sale’. Makers of branded clothes, shoes, kidswear, electronics, leather goods and toys are going on a sale frenzy, offering discounts ranging from 10-70% on their products. The forecast is, there will be more of the same in the coming days. Since marketers are aware how an average customer behaves during a slowdown, they are trying to make them enter their stores through high-decibel ads and promos. However, it’s only the mid- to premium brands that suffer during a slowdown. The super-premium and luxury brands are not impacted much as their target customers are not supposed to be affected by inflation.

Comments

Prem said…
Hello sir,

An intersting article i found not completely related to this blog, but its interesting

http://discussionleader.hbsp.com/radjou/2008/06/indias-megadisruptive-social-i.html
Ray Titus said…
Prem,

Thank you for the link.

I totally agree on Navi Radjou's take on the Nano as 'Disruptive social innovation'.

Check my posts on the Nano-

http://buyerbehaviour.blogspot.com/2008/01/tata-nano-and-its-targeted-market.html

http://buyerbehaviour.blogspot.com/2008/01/should-consumers-care-for-societal-good.html

Cheers

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