Posted in Marketing & Strategy Articles, Total Reads: 1059
, Published on 21 May 2013
In this world, today, things are undergoing a transformation , its no more a laid back life with weekends basking in the sun, today its about weekends splurge at the malls and weekday is all about ensuring to earn for the splurge. In the 21st Century the line between the need and want have blurred completely, if not disappeared.
Consider India and you see Diamond Shape demography of disposable income, the blooming middle class makes the Marketers scratch their head to devise ways of squeezing as much juice out of the wallets as possible. And this makes Marketers look for every other reason to make the customers splurge. Though India on an average saves 33% of their income but this number is down to half among the young earning professionals (The potential target).
Why Marketers do what they do, in terms of getting maximum mind as well as wallet share of Customers:
India is a nation of price sensitive consumers
Even youngsters with high disposable income in the middle class have been brought up in an environment where value for money means everything
Fashion/Trends are becoming transient, pushing companies to clear stocks early
Competition is huge with scores of alternative in every product category
Leaving aside the Luxury products, even the premium products have been forced to play the volume game because of reducing margin
Increasing brand awareness among people and desire to own them
All these reasons lead to companies offering various promotions and discounts to reach as many households as possible. Be it discounts on Fragrances on the Mother’s Day or Offers on Diamonds for Raksha Bandhan, we are today overwhelmed with promotional gimmicks. Even Father’s day comes with Travel Discounts (Priceline.com). There are SKUs designed specifically for these unconventional events (PhotoBalloonStore.com offered balloons specifically with Teacher’s Day messages). When the Valentine’s Day seemed not enough, Archies has cards for everyday of the week prior to Valentines’ day. The objective is to have as many interactions with the customers as possible and since India is a country that splurges only on occasions and for a reason, the marketers are on the lookout of making anything and everything around you a reason worth celebrating (Even World Earth Day was not spared which had PR Campaign on tree plantation by companies like Ujala)
The problem with this kind of Year round Discount and Promotion Scheme is already showing, instances of brand dilution (Eg. Koutons rarely sells without discount now) and it incentivizes people to wait until the off season sale time thus introducing a lot of seasonality in the shopping pattern, also long term discounts sets a question mark in terms of the perception about product’s quality.
But there are companies that leverage the unique times for augmenting sales, Amul used cartoons on India against Corruption. Myntra launched a hash tag of “Bachpan Style” on children’s day inspired by Gangnam Style. Retailers at London made the best of Olympics by offering huge discounts on the souvenirs. Boxing Day(Discount Shopping Day post Thanksgiving) is one such day, which has taken a shape of a Shopping Festival, On the same lines Future Group came up with the concept of “ The Great Indian Shopping Festival “ .This kind of discount frenzy is not just limited to Offline Markets, Cyber Monday is touted as an online equivalent to Boxing Day. What is common between all these unique promotion techniques is they all generate enormous profits for the company even post huge discounts, all these promotions create an impression of a festival in the minds of the customer as the build up for these events is done through advertisements at least a month in advance. With the cluttering happening in every product category, brands are trying to stay in people’s conscience for as long as possible before being replaced by some other brand. Latest example is when Nokia Lumia came up with an ad promoting GPS Application (helps in locating Police Station) clashing with the time when the entire country was on the streets for Women Safety. Even the NGOs market themselves at unconventional times to garner fund in a week called “Joy of giving Week” (Last Year: 2nd to 8th Oct). Also Marathon Events (Mumbai Marathon collected Rs 15.5 crore in 2011) are the biggest destinations for companies to promote their CSR activities. Thus it’s not just promotion or discounts for which companies are on the lookout, it’s precisely the Mind share and eventually the wallet Share that makes them do what they do and traditional festivals offer far little opportunity to meet the sales as desired.