More on Brands which are Similar.

More thoughts on what happens when a customer confronts a purchase decision that involves making a choice between brands which are perceived to be similar. I think if it is a high purchase decision like a consumer durable, and the consumer has some time at his disposal, he will wait till he has a chance to interact with the brand outside the buying context. Say in an exhibition or some other place and this contact with the brand helps him in deciding for or against the brand.

In the same context because the brands seem comparable the consumer falls back on non-rational means of decision-making, like may be look into things like country-of-origin of the brands and other issues which he would not normally look into, if he the brands are clearly differentiated in his mind.

Used Vehicles-Opportunities For Manufactures and Consumers.

The pursuit of growth is forcing companies’ to capitalize on the value which lies hidden in the value chain of the business. Companies like Maruti & Automart India Ltd.were the early birds to fly in to a totally newer concept i.e. used car sales through their “True Value” chains, and now in many cities the true value dealership is as good as that of the new car dealership. Now Ashokleyland is entering into the used truck market. For the consumer it is win-win situation, because he can rely on the companies to provide warranty and assurance on the quality of the car or truck he or she is purchasing and the company gains by gaining an entry into hitherto unorganized market. The process of entering into the sales of used cars also helps push the resale value of the company’s vehicles. The objective is to squeeze out as much value as possible from the value chain and inturn also provide value to the customer. Companies like Porsche claim that 2/3 of the cars ever manufactured by the company are still on the road, maybe one of these days Maruti’s might also come up with such a claim.

Decision-Making and Intution.

What is the linkage between managerial Decision-making and intuition? Most of us would like to believe that management is a perfect science, and one can afford to rely totally on facts and analysis. That is why time and again we come up formulas and prescriptions on achieving success in the market place. The problem of accepting that intuition could have an important role to play in Decision-making is discomforting because it takes away a lot of control over things which we are comfortable with and can be verified upon. By going away from analysis we are accepting that there are things which are not in our control, or maybe driven by the gut-feel of an executive, reinforces the fact that maybe what was achieved yesterday using ‘n’ variables would not lead to the same result tomorrow even with the same input, so we are accepting is that managerial decision making is closer to cooking than a precise science?

The book "The case of the Bonsai Manager" written by R Goplakrishnan, dwells upon the importance of intuition and how managers should consciously try to develop it. In the book he has used many of his personal experiences, which are drawn from his experiences in HLL and Tata’s and analogies from the animal world to elaborate his views. For me who has been a regular follower of his column in Economic times the book was a one stop source of his ideas, and I would recommend it highly to any one with interest in management and especially younger people....

Branded Petrol and Disel,from commodity to Brand.

The other day while traveling in Bhubaneswar, I saw the auto-rikswas purchasing the branded diesel, which is priced at a premium versus the normal diesel. And these auto guys run on ‘share-basis’ wherein they keep collecting customers on the way and dropping them to their destinations. They run on even thinner margins compared to the usual meter auto guys. I spoke to a few them to find out if they were actually getting mileage and performance out of the Branded diesel, for which the answer was in positive. I felt that was a vindication of the performance of the branded Diesel and felt this should be highlighted in the communication adopted by the petrol companies.
It was in the last few years that we have seen the launch of branded Petrol and Diesel by the major oil PSUs in the country along with the attempt to improve the petrol pumps itself. The Trigger was the imminent entry of private players into petrol and diesel retailing in the country. The secondary reason was an attempt to convert a commodity into a brand. A commodity is a product which cannot be differentiated and price becomes the only differentiating point and in a controlled economy situation where price would be same across different petrol pumps, the petroleum majors never had any incentive to either improve customer service or try to brand their products. But entry of competition has changed all that. The positive results of the introduction and adoption by vehicle drivers was mentioned in the newspapers a few months back and the example in the beginning reinforces the fact that the segment of branded petrol and Diesel would only grow in the near future.

Convenience Driven Market Place ?

A few years back the use of packed atta , pickles, ginger garlic paste was used to be looked down upon in the Indian household. It was considered a part of the duties of the "Bhahu" to make all these things in house and the skills of preparing these items were passed on from one generation to another mother or mother-in-law to daughter. Times have changes in many of the families the house has also started working and thus leading to the shortage in the availability of free time and the working women have taken to these packaged mixes and preparations with great enthusiasm. The guilt associated with the inability of preparing these things on their own has also given way to the pleasure of being able to save time. Even the demand for frozen peas has grown and they are being stocked in fresh vegetable shops in the country and the consumer is asking for the frozen peas as he would buy a kilo of potato. Another example which come to my mind is that of "Tomato Puree" when Godrej introduced it in the late 90s , they could sell it only in months when the prices of fresh tomatoes were very high, but today the consumers purchase the puree because of the convenience involved in using the product and the cooking time it would save.....

Rural Hypermarket - ITC's "Choupal saagar"

Rural Hypermarts - ITC’s 'Choupal Saagar'
In the previous blog I had touched upon most of the options that would be available for retailing in villages, but I did leave out a new format being tried out by ITC. ITC is coming up with rural hypermarts, called 'Choupal Saagar'. The Choupla saagrs are aimed to become a multiple service provider for the villager, a single point where he can sell his produce and purchase consumables, insurance, farm inputs, and so on.

The first of these Malls has come up in Sehore MP. The number has gone up to 10 with another 9 in the pipe line according to http://www.itcportal.com. The estimated cost of setting up each choupal is around 5 crores with each mall spread across 5 acres. And the company has plans to open 700 such hypermarts across the country in the next ten years. The plan is to create a linkage between the echoupal and choupal saagar , and the same catchment of farmers who are engaged with the company for the sale of their products should also become the first customers of the choupal sagaar.
The obvious reality is that these malls have come up in the more prosperous areas of the rural country side, not in the far flung and isolated areas of the country. It is an experiment which many companies are watching with great interest and infact many of them have tied up with ITC to provide their services to farmers who shop at the hypermart.

It is said that the point where the farmer collects his money for the sale of his produce is located at the back of the hypermart. Designed such that the farmer has to walk through the mall, and thus break any hesitation that he might have and also see the products up for sale and perhaps on his way back also make some purchases.

Impact of IT in Rural Marketing.

Impact of IT on Rural Marketing:

Information Technology has an overwhelming influence on all the spheres of life; here we will try to look at the influence of IT on rural marketing in general and distribution in particular. Two examples have been discussed; one would be the use of GIS (Geographic Information System) and second would be emergence of rural kiosks.
First the application of GIS. The software is facilitating distribution in villages. Satellite images have been used to identify clusters of villages, their distance from the town and roads. Using this data decisions on where to set up distribution points, setting up distribution routes and which clusters to cover can be decided much easily.
In the last five years many companies like ITC, Parry’s, HLL have come up with rural kiosks, which is basically a net-enabled PC installed in a village. Though the main objective of setting up the kiosk is not distribution, like ITC's e-choupal is there as a procurement point and HLL i-shakti is an extension of its shakti scheme in rural areas. But once the infrastructure is in place, it will be and is being leveraged by these companies to sell their products and non-competing products from other companies.