Mall Mania: The Road Ahead

The state of two malls just outside the railway station in Navi Mumbai is indicative of the trend mall development in India is likely to witness. The first mall started years back and was the only shopping mall housing multitudes of brands inside it. It attracted thousands of footfalls as people thronged the destination to sample a taste of the new shopping experience. The going was smooth for the first mover till the time there was no competition. But competition soon came in, just a few hundred metres across the road. To its advantage, the second mall housed a multiplex which has become its biggest trump card to woo the audience. And within no time, the first mover has almost become a ghost town of sorts as both brands and customers have moved across the road to the new one.
The example indicates the scenario one will increasingly witness across India. The mall mania which has engulfed the country with as many as 400 malls estimated to come up, will definitely see a purge. Some will manage to survive the shakeout while some will bite the dust. Mall developers have simply forgotten the basic tenant of retailing that a catchment is needed for a mall to sustain. So simply building a mall just next to an existing one is unviable. Also the tenant mix has to be given due consideration depending on the demographics of the catchment. The formula of shopping-entertainment-eating out is the one that seems to be working. But the element of shopping while housing brands as tenants has to take into consideration the needs and requirement of the target audience and the benefit she will derive shopping in the format.

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Go Local

Ali Bhai isn't any different from other private vehicle drivers. But this Hyderabadi who has a penchant for speed is also an amazing resovoir of local information. Ask him about towns and villages enroute and he knows the route like the back of his hand. And it's not just the roads and towns Ali Bhai's familiar about, ask him about any people mover or passenger (both three wheeler and four wheeler) and he has an expert opinion about them the vehicles as well. "I have driven all vehicles in the last 10 years and seen how the entry of one brand has affected the incumbents," he says.

When commander came into the market, it ruled the roads, he says, but now with three wheeler brands like Ape, Bajaj and Alpha in the picture, the commanders are slowly getting wiped out, he says. Ali Bhai talks on how the local auto drivers are fixing LPG cylinders used for cooking in the engine. The result - it gives them more mileage and therefore more earnings, never mind the dangers.

It's people like Ali bhai who can become the one stop point for information for brands looking to tap the hinterland. Ask him about catchments, the professions of the locals and he tells you just like that. And 90 % of the time, he is correct. Maybe among the countless power point presentations, research and local promotions, if a marketer can catch hold of a person like Ali bhai, the task becomes that much more easier.

Fixing the Wheel: Rural Ground Level Innovations

If you think Tata Motors pulled every trick out of the innovation book to make Nano a reality, you just have to meet the auto drivers in rural Andhra. A simple Bajaj three-wheeler , with 3+1 capacity, is modified to accommodate 10 passengers .

A long foam below the back rest of the driver’s seat collapses into a small seat to accommodate three people, facing the three already seated in the auto. The metallic side bars on both sides of the auto have small cushions to seat a passenger apiece. In the front, on both sides of the driver’s seat, there are speaker boxes. While some have speakers, most of them are hollow, and are used to seat two more passengers in front. And in case there are some more passengers, the cover of the rear engine is opened for them to stand on, holding on to the sides.

In Tata Magic, the leaf spring (shock absorbers) are modified by the drivers. An additional absorber is added to the existing two to make the vehicle sturdier. And once the showroom tyres wear out, bigger tyres are fitted to take more weight. The side bars are cushioned to provide seating space. And in the tiny room behind the back seat, two plastic seats are placed. The Magic is now ready to take 16 passengers , compared to official capacity of 6+1.

http://economictimes.indiatimes.com/Features/Brand_Equity_/Tatas_magic_being_sold_in_Andhra_Pradesh/articleshow/msid-3409636,curpg-4.cms

Agri Retailing in the Hinterland

It’s a 3,000-sq ft space, and houses various brands neatly categorised with displays and price charts. It’s a mall — at least the name says so. The ruse of passing off a supermarket space as ‘a mall’ is quite common in big cities, but JKS Agrimall is 70 kilometers away from Hyderabad , in a small town called Jangaon. But one can forgive the owners simply because of the genesis of JKS Agrimall. ‘JKS’ stands for ‘Jantha’ , ‘Kishore’ and ‘Santosh’ , three friends who have come together to start this supermarket retailing pesticides, fertilisers, seeds, sprayers and cement.

The three friends, who operated individual shops selling fertilisers, got together to start JKS Agrimall in May 2008. “Not that we were doing badly individually , but we wanted to compete with bigger organised players who are coming into the market,” explains Pajjuri Kishore, one of the owners. The preparations started by visiting modern formats and looking as to how they do business. The lessons have been applied here, with computerised inventory management, display, competitive pricing and prompt service, says Kishore.

Today, JKS Agrimall services a radius of 50 kilometers, and Kishore says that the aim is to acquire a huge volume business by pricing lesser than the market. On expansion plans, Kishore says they have no plans to expand and instead, want to consolidate within the same market, so that when competition arrives they are ready. Kishore and his friends plan to touch a turnover of Rs 25 crore in the first year. Maybe some of the ‘mall owners’ in the big cities can pick up a trick or two on retailing from JKS.

http://economictimes.indiatimes.com/Features/Brand_Equity_/JKS_Agrimall_a_mall_with_difference/articleshow/3409700.cms

Navratan Oil activation

Hi Friends,

It's been some time that I have posted new thoughts, ideas and trends. I have been travelling and am back with a bag ful of insights to share. Meanwhile Vivek Dwivedi of Rural Connect has shared the activation done for Navratan Oil from Emami. Please send in your feedback and also any new trends and ideas you have seen and witnessed in either the rural or urban markets.

Navratan Oil Backgrounder:

In small towns and villages there's a common meeting point for people to gather to gossip / share information / play cards / talk about the country and problems, gossip about films and movies / crack jokes / share even personal problems in some cases, political issues. Every thing under the sun is discussed. These common points are Addas or chaupal.

ADDA’s are identified to be the most interesting and common location where NRO(Navratan Oil) audience can be found and that’s where we planed to contact , engage & excite them with free Champi to all.

To implement this initiative we identified the location where 6-7 or more people can be contacted in a day. We were equipped with one champiwala(barber) along with a moderator( a graduate & well conversant in local language) and a sales supervisor in a branded van with ready stock.
In the case of women audience, the barber just puts the oil on their palm so that she herself can massage the oil on her head and feel the difference of NRO, however the job of sales supervisor was to ensure he availability of NRO and cool talc in the retail outlets of that village.
The activity covered 100-125 champi per day per van and 25% of sales growth especially in case of small packs and sachets showed very good response in eastern parts of UP and after the rains they are planning to replicate this initiative in other parts of UP and major parts of Bihar.

Selling Mobile in Rural Markets

Further to my post on Mobile Telephony in the Hinterland (Aug 7, 2008), I have received some interesting comments and experiences from readers, which I want to share with you all. This comment has been posted by Vivek Dwivedi, owner, Rural Connect. Here goes:

Ayushi Vodafone (at that time it was Hutch) had initiated (with me as MART's Consultant) a pilot in Jaunpur district of Uttar Pradesh to introduce "Hutch Saathi", two years back to promote its value added services(VAS) in rural areas. The idea was that Hutch Saathis will cover two-three villages and one haat per day according to their pre decided PJP and teach villagers how to use the cell phone and how to type the messages. At a later stage, they were taught to use the mobile to know the mandi rates. The Hutch Saathis also had a daily sales targets of RCVs(recharge vouchers) and new connections. They were paid Rs 100 per new connection as commission and their average was 2-3 connections per day per hutch saathi plus margins on RCV sale.
I invite others to please share their thoughts and experiences about activations, programmes, promotions under taken in both urban and rural market.

Influencing the Influencers

MUMBAI: Word-of-mouth marketing has always been a popular model in penetrating markets. Opinion leaders or influencers are now becoming a critical component in the marketing strategies of new product developers and existing brand influencers like bartenders, mechanics, gram panchayats, doctors and school teachers. Even barbers are being tapped to spread the brand message—so be it an entirely new category being created or deeper penetration by existing brands.
Ultra Motors marketing director Deba Ghoshal says for e-bikes a positive word of mouth is very important. Ultra Motors is working with municipal bodies and panchayats to set up charging stations and use them to spread the benefits of using an e-bike. “We realise that these bodies influence decisions in smaller towns. So, they are effective platforms to aggregate opinion about the product,” says Mr Ghoshal. For its B2B initiative, UMC is engaging delivery boys to propagate the cost effectiveness of e-bikes to the franchisee owners.
In the lubricants space, Castrol, apart from working with OEMs, is actively working with mechanics and workshops to advocate the benefits to consumers. “In the lubes business, the programme with the mechanics is a synergy between native skillsets and the expertise which Castrol brings on table,” says Castrol India ED AS Ramchander.
Diageo with brands like Smirnoff and Johnnie Walker has barman club and Smirnoff Mix It programmes. “The idea behind the club was to create a community and help it upgrade its skill sets and knowledge,” says Diageo marketing director Santosh Kanekar. Companies have realised the trust reposed on influencers and have initiated customised programmes to leverage them. “Mechanics and workshops often have a loyal customer base and are important ambassadors. These influencers look forward to extending their repute through their existing franchise,” says Mr Ramchander. For example, barbers form an important constituent for Marico for the Parachute After Shower Cream. “The barber becomes the inflection point to influence the men who go for regular haircut and shave. It’s here that men discuss their hair-related problems,” says Marico marketing head Sameer Satpathy. The barber programme is spread across top six metros. Also, the company is working with doctors and schools for its Saffola and Starz brand, respectively.
The positive rub off ploughs back as end-users use the brand following the suggestion from a trusted source. “In Delhi, because of our efforts, the message reached the chief minister and a subsidy of 15% on e-vehicles was announced. Also, VAT of 12.5% has been removed. In effect, there is a saving of nearly 28% for end-users,” says Mr Ghoshal. Mr Ramchander says that while such programmes lead to top line growth, the increase in brand recall is what makes the effort worthwhile. “Our track record in making oils best suited for specific engines has given us credibility and additional business from influencers. For example, in the motorcycle lubes space we get about 15% of our sales from mechanics/workshops,” he says.
The key is to help influencers improve their skill sets when it comes to the likes of mechanics and barbers. “One has to treat them like doctors. One can’t just influence them with incentives. They have to buy and believe in the product,” explains Mr Ramchander. Training programmes, upgrading their skill sets and tools, and imparting knowledge are critical in winning influencers’ confidence.

http://economictimes.indiatimes.com/News/News_By_Industry/Services/Advertising/Brand_managers_now_go_for_word_of_mouth/articleshow/3374396.cms

Id62 Sales: Promotions Galore

Hi Friends. Going through each page of the newspaper yesterday, I was amazed at the number of sales and discount offers every retailer is throwing to entice customers. Some of the retailers have Independence as the tag to annouce their discount offers, some have combined independence and shop-at-our-store-to-beat the inflation punch to attract footfalls. The long weekend is what these retailers are aiming at to get the maximum sales in a month which is considered inauspicious by customers to make any high ticket purchases.
So, can the retailers convert the footfalls to sales? We will know in a few days from now...

Manning the Cash Counter

I went to D-Mart the other day to buy some provisions for home. As I waited my turn at the cash counter, what struck me is the fight for shelf space at the cash tills. What began as point of connect for impulse purchase items like chocolates and chewing gums now has beverages, dairy products and even movie titles been retailed near the counter.
And it make complete sense for these categories to position themselves near the cash tills. With various SKU sizes, the smaller packs with the lowest price denominator are placed as customers wait in queue to pay. And it becomes more of an impulse purchase to pick up a Rs 35 movie VCD kept near the cash counter, as one never plans for such purchases.
But what's lacking in my opinion is display of merchandise. Most of the counter tops are haphardly kept with products overflowing. It seems the retailer is trying to get the maximum out of the limited space. One needs to understand standees and counter tops near the cash counters also need the same attention as any of the regular shelf in a retail outlet. More emphasis on merchandising like signages and posters to make it look attractive also adds to the allure.

Sales or Marketing. Who's better?

It's a debate which perhaps will bring out the most vocal arguement. Does working as a marketer help, if he or she has spent ample time in sales? Well, almost every sales person whom I have spoken to or met eventually endeavours to land a marketing responsibility. But that doesn't mean that they take sales as a chore to be done with as fast as possible. Infact it was refreshing to see executives fresh out of B-school liking what the work they were doing upcountry, far away from air conditioned cabins and power point presentations.
Off course, they dream to be there in future, but for now, the learnings they are acquiring from market visits, negotiating with the trade and getting a grip on what works and what doesn't out there. So that when the same people move to don the marketing coat, they know exactly what it takes to create a market or compete with others. In short, a stint in sales helps one remain connected with the grind of the real world.

Technology for the Sales Force

It was a familiar sight at most grocer outlets. A man carrying a large ledger book scanning the shelves and making entries. On eight-out-of-ten occasions, the retailer would try to fend off the excess stock that the ledger-man , otherwise called a sales representative , was pushing down his shelves. Called ‘Maal Thokna’ , in local parlance, salesmen are renowned to try and push more than is possible, offering fancy credit terms to retailers, just to offload stock and hit that magic monthly target. One can’t really blame them, though. Compared to the flashy marketing function, sales has often been looked upon as a poorer cousin. Right from remembering the numbers of SKUs to be sold, to making a new product sales pitch to planograming (the art of product display), and of course, taking copious notes in that dog-eared ledger, salesmen have had to be there, and expected to do that. Now, for most salesmen, that’s a postcard from the past.
The ledgers have been replaced by PDAs (personal digital assistant). Even before they enter the shop, the salesmen have a finger on the pulse of the store. A few clicks on the PDA and the salesman knows the transaction history of the store. He knows what’s selling , how much he has sold and his target. While the sales person still has the onerous task of selling to the retailer, the PDA is his force multiplier, feeding vital information for the ensuing negotiations. It’s technology to the rescue for people who form the first line of offence for companies. As we talk, more and more companies are undertaking efforts to automate the sales force and improve the efficiency of the sales function. Yet, automation is just one part of the story. The other side is about how the changing retail landscape is forcing companies to take a real hard and close relook at the sales function. While automation is still the starting point, the changes being undertaken touch each and every aspect of selling — right from the distributor and stockist, to the shopkeeper. Over the last few years, most FMCG companies invested in creating IT backbones and central servers. Now, they are linking upto the front end. The link-up enables the sales force to access relevant information related to catchment, product offtake and total sales. Take consumer goods major Hindustan Unilever (HUL) as an example .
Sanjiv Kakkar, ED - sales and customer development , HUL says that the next big leap is at the front end, where 9,000 HUL’s distributor sales representatives in urban markets have been provided hand held devices (HHDs). “The HHDs facilitate not just electronic order booking, but also helps the sales representatives to make a far more disciplined sales call,” says Kakkar, adding that the device can leverage database usage for a more intelligent sale. Similarly, Marico, the makers of Parachute and Saffola, which began prototyping the use of intelligent PDAs for its sales force in Mumbai last year has now taken the initiative to seven major metros across India

On auto pilot The PDAs connected to the central IT backbone is used by the sales force to access real time data instantly and take decisions quickly, says B Sridhar, head - sales, Marico . “The PDA is a decision support system which has made the sales call scientific and sharply focused,” explains Sridhar. It’s not just the PDAs which is the front end device provided to the sales force. Companies like Ruchi Soya and even toy maker Mattel have provided laptops to their sales force. Sanjay Luthra, MD, Mattel Toys India, says, “The sales force today has to become an information power house. One needs to know more than the customer. Technology helps to do that,” explains Luthra. That’s because the market scenario is vastly different from what it was a decade back, when a single trade channel and lower number of SKUs did not make a compelling case to improve efficiency. Currently , with segmentation of trade channels, large number of SKUs and new product launches, upgrading the skillsets has become necessary to survive in an open market .
“The average retailer has seen an explosion of categories, categories within categories and segments within categories. As a result, space at the general retail format is now coming at a premium. Hence retailers are trying to maximise the return on investment from the limited display space,” says Kakkar of HUL. Sridhar of Marico seconds the thought. “A distributor or retailer today has to see value in how the DSR (daily sales representatives) meets his needs. With such a large number of SKUs, technology enables the DSRs to drive multiple brands across various channels,” he says. “We are able to do an analysis of weaker performance areas and thereby take immediate steps to improve. Our credit mechanism has improved a lot and we have absolute control over our debtors. We can keep a check on billing to our debtors and lock their billing if necessary,” says Aditya Agarwal , director, Emami Group on the benefits.
Given the fragmentation of channels, it’s also become imperative for marketers to have their ears to the ground on aspects like replenishment cycles. Luthra of Mattel cites the instance of Food Bazaar for its toy cars. He says the stocks are supplied twice a day within a gap of two hours. “So while the replenishment cycle has shortened, the plans on how much returns is the product generating has become a long term play,” he says. Sarvesh Shahra, head of foods division , Ruchi Group believes that automation has helped ensure that right SKUs are available both at depot and plant location to service the market. “Earlier, the sales forecast previously was mostly done on gut-feel of the regional manager. But with automation processes he goes down the detail of arriving at the sales forecast for his region with all the likely factors taken into consideration and with historical trends available,” says Shahra, adding that the efficiency of projection has improved from around 60 % to more than 90% now.
It’s not just efficiency of sales projections and stock replenishments where technology is lending a helping hand. Kakkar says that efficiencies on promotional costs can also be tracked using technology, on what’s working and what promotions are not delivering. “It’s dramatically helped us relook at what promotions we run and how many we do run in a month. It has helped us bring down our level of expenditure on wasteful promotional expenditure and bring science and efficiency to promotions.” Similarly, in Marico, the PDA is also being used by the sales person to show TVC’s / films during brand launches to the retailer making the entire process of the sales call more engaging, says Sridhar. Technology is also coming of use when it comes to planograming within the store. Mattel has provided a planograming tool to its sales staff to make a visual presentation of how the product will look on the shelf particularly for the organised retail channel. “The three-dimensional visual tool combines the dimensions of both the product and retail store shelf to a give a virtual display ,” he says, adding that with such a tool, it becomes easier for the company to visually display how the balance stocks on the shelves looks. “It makes the case convincing and selling becomes easier.” There are other examples of how initiatives at the frontline are also leading to changes in the entire cycle of sales and distribution .
Godrej Sara Lee has realised the importance of tapping the entrepreneurial abilities of its sales force and initiated the ‘intrapreneurship’ concept for its sales employees. “The concept of intrapreneurship was visualised to generate excitement among sales professionals,” says A Mahendran , MD, Godrej Sara Lee. On the other end of the spectrum is CavinKare which is employing people from rural areas as a part of its rural sales force to push brands like Chic shampoo and Fairever into the hinterland. “A sales person from the urban areas will be all-at-sea managing the rural market. A native will reach the market using any mode of transportation,” says CK Ranganathan, chairman, CavinKare This horse-for-course strategy is enabling CavinKare to deploy its sales force optimally, depending on the channels . Shahra of Ruchi group says that during ‘Manda’ and ‘Teji’ , the availability of the product at the right time is of utmost importance . So to achieve this, co-ordination between sales and distributors also becomes critical, as the sales has the information which is passed on to the distributors to enable replenishment. “The turn around time at the factory for a truck was 3-4 days and in some cases it extended to 5-6 days as well, but a process reengineering has been done for the truck movement in the factory and now the turnaround time for the truck is reduced to 24 hours,” he says. Moving from a manual system of studying sales trends, targets and discussion, it’s now a continous replenishment system, where stock levels are captured at each distributor , order automatically generated and stocks are despatched.
Kakkar says that an additional 33 per cent of the sales field force time has moved to the front end and is devoted to customer facing issues rather than manning internal company processes or managing the interface with distributors. As the market evolves and the scenario becomes more competitive, every penny saved by tweaking the system will add to the bottomline of brands. It’s clearly evident that the re-engineering of the sales function is well underway in India and technology is playing a crucial role. One can therefore expect more initiatives which enables companies to drive sales better and faster. As Kakkar puts it, “The next frontier will be to see what we can do with the ubiquitous mobile phone. But that’s still in a stage of infancy.” This idea, however, might be just a step away from adulthood.


http://economictimes.indiatimes.com/Features/Brand_Equity_/Bottoms_Up_Market_dynamics_undergo_an_ocean-change/articleshow/msid-3304047,curpg-1.cms

P&G giving Wal-Mart a helping Hand

MUMBAI: Wal-Mart, the $340-billion retail giant, is looking to its long-time partner Procter & Gamble to learn the tricks of the Indian market, as it tries to get a foothold here. Globally, the relationship between the two goes well beyond a vendor-retailer relationship and P&G has offered to share its understanding of the Indian market to help Wal-Mart in building efficiencies in supply chain and merchandising for its cash-and-carry business. Senior officials at P&G told ET that its India unit has shipped its first consignment of personal-care products to Bharti-Wal Mart, a joint venture for the cash-and-carry and logistics initiatives. While the joint venture will focus on B2B business, the Bharti group plans to launch small-format retail stores shortly. The officials said P&G India is helping Wal-Mart understand the nuances of doing business in India. Wal-Mart’s India exposure has been so far restricted to sourcing from the country for its global operations.

“Our managers are offering insights of the Indian market on supply chain and merchandising. This co-operation is taking the long-standing relationship that we have with Wal-Mart globally,” said a P&G official. When contacted, a Wal-Mart spokesperson said they have strong working relationships globally with several large companies, including P&G. s “As part of these relationships, we work closely together to understand market trends, including merchandising and consumer insights. In India, we are collaborating with large companies to comprehend market trends for our cash-and-carry business,” the spokesperson said. The Wal-Mart official said the first cash-and-carry store is expected to open by 2009. “It is too early for us to comment on the details of our cash-and-carry format,” said the official. Sources close to Bharti-Wal Mart said the collaboration between P&G and Wal-Mart comes as the US retailer wants to ride P&G’s experience in retail trade in India.

They said even before Bharti-Wal-Mart announced the joint venture, a P&G research team was helping Wal-Mart understand the Indian market better in terms of consumer behaviour and buying patterns. “Studies like psychographic differentiation were undertaken by P&G for Wal-Mart in India. Aspects like why consumers shop at ‘kirana’ stores were studied and forwarded to Wal-Mart,” said an official, adding that although the collaboration is for the joint venture, P&G’s inputs will help Bharti’s small-format retail initiative, too. According to Wal-Mart, P&G has done good work in India, although it lags behind rival Unilever in the country. “The trust also stems from Wal-Mart’s close working relationship with P&G at the global level,” said an official. World-wide, P&G works closely with retailers like Wal-Mart and Tesco. Right from SKUs (stock-keeping units) to product design, packaging and distribution, P&G is collaborating with retailers with insights in point-of-sales data for supply chain, merchandising and category performances inside the stores. “Even for trade, Wal-Mart is a new player in the market. So P&G’s relationship and understanding of retail has been absorbed by Wal-Mart,” said a company official. Though modern trade constitutes just about 5% of the estimated $350- billion retail market in India, vendor-retailer relationship is evolving from a pure margin play. So, collaboration is taking place in terms of category management and dedicated trade marketing teams to handle large accounts.

http://economictimes.indiatimes.com/Wal-Mart_takes_retail_tips_from_PG_India/articleshow/2934007.cms

Lessons from the Unorganised Trade

Further to my post on Modern Techniques by Unorganised Trade, I spoke to Tushar Shinde of Shree Vashi Pharmacy on what's been the response to his SMS marketing initiative. Shinde says that there's been a steady increase in the number of people subscribing to his SMS service. With over a 1000 customers database within a 5 km radius, Shinde knows the wealth of information he's sitting on. And companies know it too with Shinde getting enquiries by companies to push new product launches, price discounts and offers to his captive base using SMS. Some have even offered to buy out the database. Shinde says that companies like Ranbaxy-OTC, P&G, Cadilla Healthcare to name a few are some of the companies using his SMS service.

Soon, Shinde plans to start a website which will be the online version of his pharmacy on the Internet. The website will retail Home and Personal Care products, but for OTC drugs, a prescription will be needed according to the regulations.

So, will it be fair to call Shinde part of unorganised trade? He had the far sightedness of how the market is developing and adapted accordingly. Not only that, he now is thinking ahead as to how can he harness platforms like Internet, which though nascent is bound to grow even in India. The bottomline is there are enough instances of unorganised trade adapting to the changing environment and there are lessons one can learn from them. It's the power of local knowledge, which marketers can ill afford to ignore. Please do mail me your thoughts....

Chief Influencers: An Effective Marketing Tool

It's a conundrum which every marketer faces at some point or the other. How to influence a market and get customers to buy the product? So, make an ad and get a recall. But with multitudes of channels to choose from, deciphering which channel will get you the maximum recall is like a roullete — you may or may not strike jackpot. Then there are the conventional trade visits, trying to get the trade to endorse your product. But seeding the market using the trade route requires time. So how does a marketer go about establishing recall for his brand in the market?

The answer is using chief influencers. In my interactions and observations, I have seen some real effective use of chief influencers by brands to break into a market. Take for example a alcobev company with some reputed brands in its portfolio. The challenge for the company was to create a recall as well as increase consumption for its brands in a market dominated by brands who were first movers and have entrenched themselves firmly. So apart from above the line communication, the company looked at bar tenders as a channel to propogate the brands. The trick was to work with the bar tenders, make them aware and teach them the proposition which the liquor brands have to offer to end consumers. While this may seem like a small component in the overall scheme of marketing the brands. Think about it? On the number of times, we have given a patient hearing to bar tenders on their recommendations and accepted their offer to try a new drink or cocktail. And at the last mile of connectivity, if one has a conduit to connect and give a positive recommendation, what more can a brand ask for?

In one of my recent visits to the market, I came across a good example of how chief influencers were bring targetted by a company — a passenger vehicle company. The company was launching a new model in the market and was up against some well entrenched players. So across the markets, it started targetting infuencers like automotive union leaders, school authorities and even families to spread the message of the advantage of buying the vehicle. While this activation has to be in synergy with other promotional activities, the fact remains that focussing on chief influencers enables brands to create a pull.

Would like to get more such examples on effective use of chief influencers from you all...

The Evolution of Trade Marketing

Imagine a liquor store which offers customers the quintessential, leisurely self-service experience: rows upon rows of neatly stacked beer and alcohol bottles. Touch them, read the fine print, remember an important anniversary or occasion that’s round the corner, and pick one of the bottles up and head for the counter. A far cry from the liquor shops where you push and shove your way to the counter, thrust a handful of cash out, holler for your favourite tipple and hope like hell that the callous salesman catches your eye from amid a sea of parched and expectant faces.

Now imagine a garage — spanking clean, with courteous staff. A garage where you’re not constantly keeping one eye out for grubby grease and oil stains, while you keep the other trained on the shifty mechanic who’s likely to spring a nasty surprise on you in the form of some cost or the other. Now before you banish the two scenarios detailed above as being delightful but highly utopian concepts, it’d do well to remember that both could well be the shape of things to come at your neighbourhood wine shop or garage. Put simply, these are both trade marketing initiatives at work, where non-FMCG marketers are trying to revamp their trade channels to make things more customer-friendly. Across business segments like alcohol, automobiles and ancillaries, trade channels and brands are joining hands to give their respective customers a different experience with branding, self-service counters and glossy signages. Be it JW Select from Diageo, UB’s World of Spirits, Castrol’s Car Cares and Bike Points or Ceat’s Fitter programme — all are not merely facelifts, but concerted efforts to upgrade the service offering by channel partners.

Players like UB and Diageo have initiated trade marketing activities with the alcobev channel. Diageo, for example, has helped revamp local wine shops and re-branded them as JW Select outlets. Similarly, UB rolled out the UB World of Spirits concept last year, and currently has 16 stores across Indian cities. “From a push effect earlier, initiatives like JW Select create the pull effect. Once the experience is created, offtake happens ,” says Santosh Kanekar, marketing director, Diageo India. A similar change is taking place in the automobiles and ancillaries space. Castrol has the Castrol Bike Points and Car Care programmes, under which a comprehensive revamp package — where training modules on improving the look and feel of the outlet, its visibility and its signages is imparted to small mechanics and work shops in two- and four-wheeler category — is offered by the company.

On the other hand, for tyre maker Ceat, the fitter — who changes tyres, tubes and flaps, and pumps in the right quantity of air — is a critical channel. Three months back, the company started a pilot programme to work with fitters to help them upgrade their service offering. Subrata Basu, business manager – commercial tyres, Ceat Ltd, says that the programme starts as basic as providing a permanent base for fitters to providing them with the latest tools and equipment to service customers better. Also, Ceat has created Ceat Hubs to target the emerging radial tyre market in the truck category, with service as the key element . Basu says these Hubs, situated at national highways and transport nagars, will assimilate data on tyre purchases and make recommendations to buyers. “We have the expertise and therefore can offer advice. And once we have the data at the time of purchase, we can track the performance and make suggestions accordingly.” And in the time to come, as both offerings evolve, Ceat Hub and the Fitter programme will merge to provide a more comprehensive offering to end users.

The reason for the increased impetus on trade by non-FMCG companies comes as the market is undergoing a sea change, even in segments like alcohol and tyres. Marketers realise the importance of helping the trade upgrade as it not only gives their brands visibility, but also leads to increased offtake. Basu says that the fitter programme enables the company to tap the channel to understand customer buying patterns. “The data that the fitter takes at the time of transaction is useful for data mining. As a company, we can set standards which no other company has done. Customers then don’t have to go to any third party,” he says. Anant Iyer, head of trade marketing & institutional sales at United Spirits, believes that rising disposable incomes and the growing social acceptance to drinking have necessitated UB’s channel segmentation exercise. “Customers are looking for an experience that large-format stores like Food World and Spencer’s offer in the basic sense of touch-and-feel with browsing,” Iyer says. Kanekar adds that the benefits come as the average ticket sizes increase within the trade as a result of programmes like JW Select. “Through touchscreen kiosks and category management, one works towards widening the shopper basket and increasing the size of purchases,” he says, adding that there’s been a 50% increase in sales in the premium category within JW Select outlets, with brands like Johnnie Walker, Smirnoff Black, malts and wines flying off the shelves.

These initiatives go much beyond the traditional effort of cleaning a shop window and installing a new product range. It’s a complete revamp of the store in partnership with the shop owner. There are no freebies on offer to the trade, and the store owner has to bear 50% of the costs incurred in the revamp. “We bring branding, display and shopper management, and share the costs of fixtures and fittings. If there’s no price attached, it’s not considered ‘valuable’,” Kanekar explains the rationale. UB’s Iyer adds: “The joint venture between the local liquor vendor and the company entails providing anywhere from just management advice to complete investment.

The shelf space and stock space that United Spirits’ products occupy is pre-determined and so is the visibility on the shelves.” Players are learning the rules of the game — and what works and what doesn’t — as they go along initiating trade marketing activities. Kanekar says that for JW Select, only outlets in high street areas are now being targeted as increasing footfalls is critical. “Even for the general trade, we have to look at what is the maximum return-per-sq-foot one can derive . Understanding shopper behaviour and tweaking your replenishment cycles according to the buying and consumption patterns is an important learning,” he says.

http://economictimes.indiatimes.com/Features/Brand_Equity_/Marketers_partnering_with_traditional_trade_channels/articleshow/msid-3331087,curpg-1.cms

Modern Techniques by the unorganised trade

There’s nothing overtly impressive about Sukesh Gupta. Neither is the establishment he runs, Gupta Vastu Bhandar, particularly striking. Situated near the main town hall office in Hoshiarpur, Gupta Vastu Bhandar is much like a million other kirana stores scattered across India. And Gupta himself has only studied till standard eight, before he took over the reins of the shop. But what he lacks in terms of ‘qualifications’ Gupta more than makes up with his ingenuity think database marketing, cold calls, home deliveries with customer ID numbers, SMS marketing, loyalty programmes or even web-based shopping.
Now connect Gupta and these initiatives to the likes of Ritesh Bhatada of Sai Supermarket in Sholapur, Maharashtra, and Tushar Shinde of Shri Vashi Pharmacy in Navi Mumbai, and you have a vanguard movement where ‘modern trade’ techniques are being leveraged by individual kirana stores to stay relevant, and stay in business, in a rapidly changing retail environment. Shinde, a pharmacy graduate, has been running his chemist shop for the last four years. With the rise of SMS as a communication tool, Shinde hit upon the idea of using messaging to reach out to customers within his catchment area. “A lot of companies wanted to reach out to end users, but didn’t have the conduit to do so. The chemist shop can be the intermediary,” he explains. Shinde also knew that given the familiarity he has with his customers, they would be receptive to messages from him rather than the companies. So four months ago, Shinde began registering customers who walked into his shop for the SMS services, and today he has a database of 500 customers within a two-to-four kilometer radius.
Shinde didn’t stop at that: he now has a database of nearly 500 customers with diabetic problems as well, and he keeps them informed about offers and schemes regularly. Naturally, these databases have caught the eye of marketing companies, who’re flocking to his shop. “A lot of companies want to buy the database, but we have refused,” he admits. Maybe it’s a function of being thousands of miles away in remote Hoshiarpur, but so far, Gupta has had no takers for the database of 4,500 customers he’s amassed since 2000. Not that he is perturbed. Gupta was inspired to start a home delivery service after a visit to Delhi in 1986, where he saw shopkeepers delivering even single loaves of bread. “Inko aisi service do ki woh tumhaare ghulam ban jaye(give them service levels that make them your slaves),” laughs Gupta, as he remembers the shopkeeper’s advice in Delhi. It was only after 2000 that his efforts started paying off. From a turnover of around Rs 3 lakh per annum, Gupta touched a turnover of Rs 95 lakh last year, this year, he’s aiming for Rs 1.25 crore from his 500 sq feet of shop space. This stupendous rise in turnover hinged on Gupta’s foresight of investing in technology to harvest the database. Starting with a computer into which the data was fed and issuing consumer numbers for home deliveries, Gupta progressed to installing software to feed the market rates of products everyday. “I have employed a developer who updates the software from time to time,” he says. As winds of modern trade sweep into Hoshiarpur, Gupta believes he’s ready for the change. And the challenge. “Customers now compare my rates with players like Subhiksha. I try to keep my rates low and deliver on quality,” he answers.
It’s a simple equation of sacrificing margins for volumes, which Gupta with his initiatives has been able to capitalise on. “Because of low overheads, I can survive on a margin of 4%-5% as the volumes are big,” he explains. The volume business comes because Gupta has been proactive in his attempt to connect with the customers. Seated inside the shop is an employee whose job is to make calls for home deliveries as well as informing customers on offers and incentives. Gupta says that the response has been slow but encouraging. Mindful of the fact that customers won’t tolerate random cold calls, the rule laid out is simple, take a date and time for the order and then call again. “We have built a relationship with customers over decades. We don’t want to lose them by making cold calls,” he explains. Bhatada of Sai Supermarket believes that keeping his ears to the ground allowed him to adapt and create a supermarket environment for his 3,000-sq feet store, situated in Sholapur. During visits to other cities he saw the benefits of upgrading his store. So he introduced changes ranging from fixtures to category management to check-out counters with e-pos (electronic point of sale) systems, with even a loyalty card programme for customers. “One assumes that such initiatives are seen and heard in major metros. To see such steps undertaken by an ordinary retailer without any help is impressive,” admits Manish Shukla, founder of Retailscape, who was impressed that every measure implemented by modern trade was present at Sai Supermarket.
For Shinde of Vashi Pharmacy, SMS marketing is earning him more than goodwill and footfalls; it’s also become a trump card in his negotiations with brands. Shinde reveals that with companies selling pharma or healthcare products, the database is used to bargain for offers and services like dental camps or check ups for customers. With FMCG companies, it’s either more margins for products, or paying the cost of sending SMSes. And brands like P&G, Colgate and Godrej are more than willing to play ball. “SMS marketing enabled us to direct customer traffic to our shop. As the footfalls have increased, so has the turnover,” says Shinde, adding that on an average, he sends twothree messages a month to customers; he also provides an ‘unsubscribe’ facility to those who don’t want to avail of the service. In the last four months, the FMCG business at Vashi Pharmacy has witnessed a rise of around 20%. “If the offtake of Colgate brushes was Rs 6,000 a month four months back, today it touches Rs 12,000,” says Shinde. Buoyed by the results, Shinde next plans to create a database of doctors within the catchment area. This database will be used to give customers’ information on doctors and their medical expertise on offer. “It’s just a service to my customers to ensure their loyalty,” says Shinde.

Meanwhile, Gupta in Hoshiarpur has purchased the area behind his shop and converted it into a self-service counter. The response has been good, he says, but for lack of funds he hasn’t been able to convert his entire shop into a self-service store. “The plan is to also have a presence on the web. But I am unable to find a developer to create the website in Hoshiarpur,” he says exasperated. Much has been made of how the arrival of big, organised retail is threatening the livelihood of the small kirana outlets. And it’s not to say that the onslaught is more imagined than real. But the resilience and foresight of the likes of Gupta, Bhatada and Shinde demonstrate that there’s still plenty of pluck left in the unorganised players, some of who actually have a head start over modern trade at least within their respective catchment areas. Even as Gupta has succeeded in growing the business, he says his initiatives invite the skepticism of his fellow shop owners. “They think I am a fool. Because they think a growing business will attract the attention of the sales tax department. But if my business is growing, where’s the problem in paying tax?” he asks.
http://economictimes.indiatimes.com/rssarticleshow/msid-3017146,flstry-1.cms

Ground Level Innovation

The advent of modern trade in India has seen a mushrooming of supermarkets, hypermarkets and shopping malls. Swanky in their presentation, they are called the new temples of India. So it's not uncommon to see throngs of people during weekends, who frequent these shopping complexes just to get a feel of the new shopping experience. Even if it's just window shopping or merely going up and down the escalator, Indians are lapping it up. Some observers believe the rise of modern grocery formats will lead to the demise of the neighbourhood kirana stores. While the kirana stores may be impacted in some pockets, the fear of modern trade killing the conventional trade is unfounded.
In my market visits across the country, I have witnessed how ordinary stores are rising up to the challenge from modern trade. In fact, in some cases they are far ahead in their attempt to service customers better. These shop owners are educated second generation traders who realise the importance to be abreast with the changes taking place in the market. So a local chemist shop in Mumbai has introduced SMS marketing for its target audience, a shop keeper in Hoshiarpur has a small call centre to call customers for their daily needs and three friends who have come together in Andhra Pradesh to start an Agri Mall to service villagers within a radius of 50 kms.
All the above examples reflect that the general trade is witnessing the changes taking place and is eager to adapt. Some do it on their own, but a large majority (grocer channel) will require help. Companies therefore have to be more proactive in their engagement with the grocer trade as helping this channel upgrade will only help the brands. Remember, modern trade is just 5-7 % of the total trade in India, the rest is the unorganised trade. Thus in the time to come, trade marketing with focus towards various trade channels will increasingly play an important role. I welcome thoughts, ideas and observations from readers on the changes in the market...

Mobile Telephony in the hinterland

I have travelled across Himachal, Eastern UP, Maharashtra and Andhra Pradesh and each time I marvel at the way mobile telephony is making further in-roads into the hinterland. Even if it's a population of only 1000 plus, the single shop within the village stocks recharge coupons or mobile accessories. The signages of Airtel, Idea, Vodafone to name a few adorn these shops. It's amazing that service providers have reached the last point of contact with the customers through these shops, which even FMCG companies have not touched so far.
These shops are grocer shops or kirana outlets, who now double up as mobile services outlets as well. In one instance, a tailor based in a small highway town along the Kalka-Shimla highway has become a mobile retailer, having converted half his shop into a mobile services outlet. And he's reaping the benefit, getting wooed by mobile services companies with freebies and margins. The sales team from companies are constantly on the lookout for such retailers who help them get an entry into such virgins markets. And as the next big battle for mobile services companies is the rural markets, expect more and more interesting marketing activities across rural India.