Packaging Quality & Size

The rising inflation is making FMCG marketers rework their packaging strategy. The sachet revolution has become a folklore in the marketing world, on how it pushed consumption into newer and newer markets. But the current need to revisit their packaging decision is not driven by the need to increase penetration, but from the need to control price increase. Though some of the companies are still working on reducing the weight & keeping the price constant, I am not sure about its efficacy, when the reduction is 5-10 gms , as in the case of biscuits & confectionery maybe the consumer will not notice but when the weight goes down from 500gms to 325gms it sure to be noticed ...

The second aspect is related to coming up with cheaper packing options, so that it helps them save money. This again seems to be a very risky strategy where in many categories the packing also protects the basic product itself , especially in the context of the mom-n-pop stores in Indian retail. They say that when Marico first introduced plastic containers for parachute they had to do a lot of convincing before the retailer agreed , because till that point plastic quality used to be so bad that rats could actually eat into the containers!!!

And overall the packing quality has never been comparable to the developed world , either in terms of quality or in terms of details on the packs. Are we moving in the right direction?

Growth - But Sustainable ??

Every company wants to grow, and post liberalization we have seen companies grow at rates which were unheard of earlier. Airtel, LG, Nokia, Hyndai are examples of this fast growth..

The news is that HUL has set a target of 50,000 crores by 2015, link to the story. To put the target in perspective, it took the company 75 years to touch 20,000 crores and now wants to reach 50k. According to the news paper article these kind of target are called BHAGs, or Big Hairy Audacious Goals, in multinational parlance. Those which provide a sense of larger purpose and propels the organization to move at a faster pace.

My take on the audacious goals is that , though it might help push the company beyond the typical growth targets of 10-12% and be happy,, to look beyond and stretch their resources to meet these targets, it will also create a lot of pressure in the system ( distribution channels and sales personnel) which needs to be handled well. Even if an inorganic way of growth will not be an easy one.

But yes from an outside observer it will be interesting to see how things evolve ....

Why is Nano not selling?

This question has been bogging me ever since I read the news that they have been able to sell only 500 odd Nanos for the month of November. This is a figure which has surprised many, including me given the fact that Nano is the cheapest car in the world. Nano had in fact brought India and the Indian automobile industry into highlight as no other event had dine earlier, there were worries that Indian roads will soon be full of Nanos and the already congested road infrastructure would fall apart . I myself has written a post earlier in how Nano is perhaps a car for the BOP consumer..

I tried speaking to a few others to understand the possible reasons for the low sales, I will just briefly list the possible reasons ,

Price on road is much higher than the initially 1 lakh tag and many consumer feel that they can always upgrade to a Alto by stretching a bit more.
Not being seen as a car , because of it's looks and the fact that it cannot be driven beyond a certain speed..
The fire incidents have only added to the perception of quality and safely issue with the car.
Inadequate credit facility to push the sales of the car, especially to be upgrade the two-wheeler owner to upgrade (he is the target consumer)
Maybe the car buyer in India has upgraded, they don’t want to buy a low-priced car and would want to start with the next level of cars.
The issue of low-price itself could be the one which is hampering the sales, as a car is seen as a status symbol and a low-priced car defeats that basic purpose of owning a car.
Even the issue of delayed deliveries may have added to the problems and many consumer have felt disheartened by the long waiting periods initially..

I might have left out some more reasons, but still find it very difficult to come to terms with the fact that in country of our size a product like Nano could not find more than 500 buyers, I think there is bound to be some thing is not getting covered, and perhaps in the coming days we will be able to understand the issue better...

Even Carl-Peter Forster, managing director and CEO, Tata Motors said “These are new ways of marketing the Nano. To be frank, we are learning as we do. We market a passenger car to customers that are either never there to dream of a passenger car or they couldn’t afford a passenger car. It’s a very different way of marketing. It means new channels for the dealers.”

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...

Does season influence a marketer's mood?

With the advent of winter in the plains of north India, I was thinking how two of my marketer friends would react to this change,one looks forward to it with a wide smile and other one is looks depressed and is cursing the cold winds which are sweeping the place. Both of them are in the beverages business , but one is with soft drinks and the other one sells tea. The change of season has a different impact on the sales of both the product categories...

There are many other product categories where this shift happens, Air conditioners, you can see the sales guy dusting his stock of room heaters and getting ready to sell, the street vendors also shifting from selling of cucumbers to boiled eggs, the street side cloth shops shifting from cotton to woolen...

But what is interesting to note how the mood of a marketers also gets influenced, if you talk to my soft drinks friend he is all cheerful when the summer is at its worst, it maybe also a reflection of how involve one is in his business, and how far your job influences you..

Online Shopping - Over promise and underdeliver!!!!!

Some say we are at the inflexion point with regard to online shopping in India. People like Kishore Biyani of Pantaloon retail are betting big on the sector with a target of 1000 crore from their recently started online venture.

I personally am a great believer in the power of Internet the impact it has had and will have on shopping (overall marketing) , and I personally have shifted most of my book buying to Internet. But the test of these things when there is a glitch in their operations, system or rather the faith in it gets tested when there is a problem......

I will share the recent experience which I had with flipkart.com, while buying books. I have been buying on the site for last one year, and the service has been very good. They have sent the books at the promised time and I have recommended the site to a few of my friends who are also happy with the site.

Then last Saturday night I wanted to buy a few more books, and did my usual net banking transaction only to find that the money was transferred from my account but the flipkart site said payment not received. I knew that these kind of glitches do happen and so I checked their site where they had given a helpline number saying you could call it 24X7 on any day of the week. So i called on the number and , was put on hold saying the operator would attend, and then no response.... I tried a couple of times and then mailed their customer care, there at least I got a email after a few hrs saying they are looking into the issue and would get back to me in 24 hrs , and ...no response. I ultimately after more than 48 hrs I tried calling the number again and this time (being Monday) some one responded and was able to get the issue sorted out. Hopefully will be getting the books in a few days.

Looking back I was trying to understand why was I getting frustrated by the experience as the issue was sorted out in less than 48 hrs, which could be considered a very good response time, from what we have been used to till now, but then the problem is because of the promises which the vendor was making , a 24 hr helpline (paid, not a toll-free!) which does not work on a Saturday and the customer support saying that it will respond in 24 hrs or less and then you are the one who has to again call up and get a response. Do not promise something which you cannot deliver- if we look many other helplines, they mention the timing 9am-5pm on weekday and we do not expect them to respond to my phone call on a Sunday....

I hope to listen more from reader on their experiences and opinions on online shopping

Road side vending of Tea and Coffee

Yesterday I saw this initiative by Brooke Bond on a busy intersection in the city. The guy was vending hot tea and coffee to people on the move. I spoke to him and had a cup of tea which was very good ...

People have been speaking about redefining your competition; here an organized player not only acknowledges competition from street vendors but also goes down to compete with them. It creates a very good touch point directly with consumers, which could be leveraged to strengthen the brand....

Shopping habits are changing ?

I was wondering if our shopping habits have changed ? Especially in the context of grocery buying....

If today you were to ask a typical married male the prices of various grocery products my guess is that he would be able to give more accurate answers than a similar profiled person a generation back.

The reasons would be the fact that as many of us shift to buying from organized retail, grocery buying which used to be in the exclusive domain of the lady of the house has also shifted and now has become a sort of joint family activity

This has implication for marketers as till now for many categories communication has been targeted at the house wife, but when the buying habit shifts should the focus of communication also shift??

Credit Card usage in India

Read an interesting bit of news that use of credit cards is going down, and that of debit card increasing link

People belonging to a generation before were strictly against debt, the saying "keep your legs within the blanket" which meant that live within your means was what they believed in... But the younger generation , was thought to be the one which did not seem to care much about swiping the card and making purchases. Spend today and pay later was seemed to the order of the day..

But the data from RBI, shows a different picture, consumers not using their credit cards and moving on to debit card use. Is it just a blip and consumers would again switch back to their credit cards is something which needs to be seen, but maybe the consumer is also getting smarter in realizing the high interest rated being charged....

Link to my article in Economic times on Managing Customer Expectations

Sharing the link to my article in Economic times on Exceeding Customer Expectations, Link