When one talks about retail most of us would start thinking about the plush interiors of an air-conditioned large format retail outlet. But in India the diversity in retail is very high. A few days back I saw this retail option , where VCDs were being sold by a cycle push cart. Now this itself is not new, if you were to be in the ice cream business then push carts form a substantial portion of your retail reach. You can have them at strategic locations across the city, like India Gate in Delhi , in parks ...But these push cart selling Moser Baer CDs and DVDs located near various shopping complexes in the city forced me think why would a company/distributor look them as an alternate means of reaching the consumers. And the company is the world's second largest manufacturer of optical storage media....
One of the reasons why they would have resorted to this would be looking at the buying habit of consumer buying movie VCDs and DVDs. They are low-priced Rs40/- for a CD and them 99/- for a DVD (appro.), and the company wants to offer a non-pirated and cheap option (pirated ones would be still cheaper). For that they have to be physically present in those places where consumers look for these low-priced VCDs and DVDs. And once the prices are low means the overall margins you can get would also not be very high, thus ruling out the expensive and time-consuming activity of setting up your own outlets, so that is where these push carts become a very good alternative way of reaching your consumers. You reach where your typical buyer would go looking for these kind of VCDs and DVDs and that too at a fraction of the cost of setting up your own outlets...
Even when Nokia initially came to India, they had to rethink the distribution channel strategy, because the typical consumer dealer network did not want to stock a category like mobile phones. They were used to handling larger bulkier products (with low pilferage)and were not willing to work with a new product which might require more hand holding and service issues. And thus Nokia had to look at the small mom-pop stores for stocking of their products, and rest is history...
But innovative alternatives of reaching customers would yield results.....
Really good one to stop buying pirated one.
ReplyDeletePiracy still exists is because of one reason i.e, they sell DVD's/VCD's on very first day/ before film release.
But, it will take more time for Moser Baer to come with newly realeased audio/film where as not in case of pirated one.
@ Shishir, yese the I think once the company starts getting the new releases that they will have a substantial impact, but will they be able to price it as low???
ReplyDeleteRajesh,
ReplyDeleteGood article...
I think you could also interview some of these push cart sellers, find out whether its a viable option. How much do they make per day etc... That might throw some more light on the financials of this model.
Regards
Vikas
Dear Vikas,
ReplyDeleteThanks for your sugesstion, I was planning to speak to the distributors, but speaking to the vendors directly might throw bring out more insights..
Regards
Rajesh
Sir
ReplyDeleteThis is what I feel about the pricing scene:
The pricing for new movies on CD / DVD will be high, but a movie has a short life, in terms of theatrical release. Three weeks is the best that one can give a movie in Bollywood. So if Moser Baer starts advertising that the CD will be released, within the first week itself, the those who want to wait will wait for the CD. Moreover, people are willing to wait for a clear version instead of a shoddy print.
However, movie producers may demand more fees as rights, because early advertisements may hamper ticket sales accg. to them. Then Moser Baer can actually think of pricing the CD / DVD a bit higher, say Rs. 10 higher, and trying to recover the costs. I know this model is not perfect, but atleast its an idea...