Marketing
...oorstep deliveries, generous finance schemes and feature-rich offerings marked transactions in the nineties. These cumulative benefits to the customer were all the result of fierce wars that were fought for the customer’s wallet between corporations from Japan, Korea, America and Europe and the incumbent Indian challengers. And corporations from each country left the indelible stamp of their strategies and tactics in each of the categories. The Strategist takes a look at how the nature of the markets changed under the impact of real competition. At the outset, a word of explanation. We have chosen 1994 as a starting point because that is when the competition in most categories began to take shape. Marketing, marketing, marketing With the forces of consumer demand unleashed, marketing became an all important function in any chief executive’s agenda. According to Raj Jain, managing director, Whirlpool of India, growing competition brought about a shift in focus from the supply side to the demand side of management and the entry of multinationals accelerated the process. “Manufacturing today is secondary,” he says. That is why advertising and marketing spends across the categories have seen a sharp jump. According to various estimates, advertising and promotion spends today range anywhere between 5 per cent to 10 per cent of the total sales, up from 1 per cent to 3 per cent in the early nineties. The other significant change is the overall decline in prices across product categories. Appliances and white goods have seen a 15 per cent to 20 per cent drop in prices; in CTVs, the drop has been a sharp 50 per cent. Of course, multinationals did not directly impact the prices. The prices were impacted by the sheer intensity of the competition. “As the global players started occupying more and more of the space at the higher end, the pressure on the Indian players to reduce the prices to generate volumes was intense,” observes Francis Xavier S, managing director, Francis Kanoi Marketing and Planning Services, a Chennai-based market research agency. This coupled with easy availability of consumer finance has made purchases much more affordable. In t...