Raining Cars in India

I have written earlier that cars and economic growth were connected, at least they were during the last fifty years , though now things are changing. But even then one can observe how the increasing prosperity in India is getting reflected in the type and number of cars which are plying on the roads today. Every month we find that the car sales touching a new record level in terms of numbers , and the only aberration perhaps would be the low sales figure of Nano in November, apart from that for almost every car company sales have been good..

The segment which saw maximum activity in the initial days of liberalization was the entry level, the 800's , Alto's and Santro's, but now the focus is slowly shifting to the next level which is defined by cars like Swift, i10, i20. And we have a lot of players who are looking at this segment which is just above the entry level. Players like Toyota and Honda have their new cars entering this segment and knowing both the companies and their reputation one can foresee the life of entrenched players like Maruti and Hyundai getting more and more difficult in the coming days and the consumer spoilt for choice. Toyota Etios is predicted to be a game changer in the segment ...

At one time a company like Maruti could afford to continue with the same model for more than two decades, but those are days which have gone and the marketer of today can hardly afford to relax, he has to respond and be on the treadmill of continuous improvement to just retain its place in the market...

Regional Brands in India gaining over the larger brands??

In many product categories one can see the emergence of very strong regional brands at the number two or three slots. In last decade or so we have seen these regional players taking the fight to the more experienced marketing companies. These small and medium brands have been giving sleepless nights to their multinational counter parts , be it a Cavinkare or Jyothi laboratories in the south , or a Ghadi detergent in UP or Wagh Bakri tea in the west . The sluggishness of slowdown only adds to the growth of these smaller players.

The thought was actually triggered by the recent success achieved by santoor in becoming the number three player in the highly competitive soap market, though even Godrej's No1 is also claiming the number three slot in the market according to some reports. A recent report also shows that HUL has been losing market share in the shampoo market to companies like Dabur. And from almost nowhere Anchor toothpaste has also emerged as the number three player in the highly competitive toothpaste market which has deeply entrenched players like colgate...

Other strong regional brands are,Ahmedabad-based Paras Pharmaceuticals, North-based Surya foods with its Priya brand of biscuits, Emani.....

India in my understanding would predominantly be a market of regional brands, because the regional differences within the markets is too great to be catered to by a single national brand, though the phenomenon is yet to manifest itself fully due to the lack of economies of scale at these levels, but in the future as these regional markets mature so would brands catering to them.

Changing Indian Market Place - From Category Penetration to Competing for Market Share

We are entering the second phase of marketing in India, for the first time we are witnessing a situation of categories entering into a stage where penetration would reach near 100% or exceed it. Till now we have been working on marketing strategies to increase penetration , getting the first time users to try out offerings versus a situation where the you have to either increase the usage of the product or a service in a well established market. This is where maybe we will see the true meaning of the statement "Customer is the King".

Taking the example of what is happening in the mobile phone market, in most of the metro markets the penetration levels are reaching 80% and in some markets like Chennai the figure has exceeded 100%. So what does it mean for new operators like Aircel, and virgin mobile when it enters a market where the category penetration is so high. There would be two ways of gaining market share , first and more difficult option would be to try and attract users from established players or second way is to encourage users to go for another mobile.

To push consumers to switch their operators would involve a different set of marketing strategies versus the ones which are used to increase the penetration in a particular category. May this is what we can see from the approach that both virgin and aircel are using , by focusing on value added services and non-typical offerings like paying for incoming calls. But this is just the beginning and we will see the manifestation of this change in the coming few years...

Nimbu Pani by Coca Cola and Pepsi - Unorganized to branded !!!

A week back we had the news that coke has drawn out plans to introduce Nimbu Panni(lemonade) in the coming summer. Now if Coke is planning on some thing can Pepsi be too far behind, so a couple of days back the news that Pepsi is also planning a similar offering in the market is out.

At a generic level the competition of soft drinks companies is not from each other but from the large untapped unorganized players like the local juice guy who serves fresh juice, or the lemonade made in homes or the road-side vendor. The aim is to convert these consumer who are presently being served by the unorganized market into branded consumers. This was what being attempted till now in the juice market but this attempt to tap the Nimbu Pani market is something new.

One of the main advantages of Nimbu panni served at the roadside vendor, is 'freshness' because the vendor would cut the lemon in front of the customers and then prepare the drink. Second plus would be the price at which the drink is being served. But there are many doubts which would be there in the consumer's mind, in terms of the quality of water or ice being used apart from the general hygiene and cleanliness. Though these would be taken care off  if the same is prepared at home.

The  new packaged nimbu pani from the stable of Coca Cola and Pepsi would have to handle the twin challenge of freshness and price, the one front in which it would score high would be the hygiene. But freshness would be a difficult issue because as soon as some thing is  offered in a packaged form the concept of freshness goes out of the window in spite of all assurances from the company that they will ensure freshness. On the second dimension of pricing, both coke and Pepsi plan to price is quite low, but how low will they be able to sell the drink, looking at the distribution and other marketing costs involved....

If one were to look at earlier examples of trying to introduce packaged drinks like tender coconut the experiences have not been something to write home about in spite of the use of appropriate technology. The reasons attributed to the failure include the fact that for a consumer drinking a fresh coconut water from a vendor is not just a product , but a total experience, when he selects the tender coconut, and it is open in front of him and then he drinks it , versus imagine the opening the cap of a plastic bottle or a a tetra pack....

Will it 'Nimbu Panni' be a success in India ?.....

SX4 Vs Honda City

SX4 the new car launched by MUL in May did well in the first month in the market, beating the market leader in the segment Honda city by close to 200 cars, but June city is back into leadership position. City has clawed back into number one position the segment with a sale of 2,656 cars versus 1,975 of SX4. MUL has cited the regular maintenance shut down of the plant, the same reason given by Honda on the lower sales of ‘City’ in May. The shut-down lead to lower supplies to the dealers hence the lower sales. One wonders in today's world with the advanced supply chain management systems in place and ERP.... and what not to track the supplies, plan for and monitor manufacturing, can the company not plan for regular maintenance shut-down.I think there is more to what the company's are ready to share; none of the companies want to accept that the sales are down because of reasons other than supply glitches. The car war in the segment has just started and the coming months will show who the winner is, though I have a personal bias towards SX4.

Changing Dynamics in Marketing

Marketing was easier twenty years back. Have one successful product in the portfolio and the company and the manager could sit back and relax. But the scenarios today is a lot different increased pressure from competition, more demanding consumers and impact of technology is forcing the marketers to be on his toes, they cannot afford to relax. It is like pedaling a cycle uphill if you stop pedaling you will go down. One classic case which comes to my mind is that of Sony Playstation, When PS-I came into the market it was an out and out success, responsible for a major part of Sony’s profits at that time. But the current third version PS-III is not doing as well as was anticipated. In a period of 12-14 years the situation for Sony has changed. Old competitors Ninentodo's Wii and newer ones like Microsoft’s XBox is doing better in the market.



The reasons attributed PSIII below par performance has been supply chain glitches and pricing issues. But the stark reality for a marketer is that he or she cannot be complacent and hope that the earlier successes would be enough to get him the sales day after day. The competition responds at a far greater speed than what used to be in the earlier days and consumers want newer features and versions every year and if you don't provide them the competitor would. Though it is truer in the case of technology-driven companies, it also applies to the old economy companies, but the rate of change is much slower....