Dangerous generalisations !
A recent article in the Economic Times, titled, 'Salsa and facial to end discount era as promotions get face lift' caught my attention. The article is an interesting read. The headline too is eye-catching. Yet the content of the article would have one believe that the way into the Indian consumer's wallet is through offers of 'value added services/benefits' and not through 'price discounts'. the examples quoted range from GM, Whirlpool, Amex, ITC Welcom group to Gitanjali Group. Sure, whoever buys a GM vehicle in India, has an Amex Platinum card, stays in ITC Welcom group Hotels, wears the Asmi jewellery brand would not bat an eyelid at the loss of a few rupees of discounts.
Guess why ? They obviously fall into an income category right at the top of the heap. This High Income group consumer is least bothered about price discounts and is more enamoured by 'Salsa and facial'.
But the lingering question is, Is this true for all consumers in India? Especially the middle class thats reeling under the burden of burgeoning inflation levels. The answer is loud and clear and pretty simple.
NO!
The middle income / lower income category consumers still hunt for bargains and are driven solely by 'price' as the most important criterion of purchase.
One of my student's research project on 'store atmospherics' in a retail store led to the conclusion that it has no bearing on enhanced sales. Consumers weren't bothered. They didn't mind a store with lousy merchandising, as long as there were bargains to be found. In fact to get that bargain, consumers didn't mind the store maximising its utilisation of floor/shelf space as long as it lead to greater operating efficiencies resulting in lowered prices.
Guess why the checkout lines at the Big Bazaar stores are a mile long though their stores are the most cluttered retail spaces in India ?
The authors of the article in Economic Times must be careful to ensure that sweeping generalisations are not made. They must provide specific information which are relevant to issues being discussed. Else the reader would be misled.
I wasn't cos' I'm still looking for that bargain. Oh yes, I've never stayed in a ITC Welcomgroup hotel, don't flaunt the Asmi brand, don't own a GM car.... don't have an Amex card. And just so that you know, I drive a Santro.
Guess why ? They obviously fall into an income category right at the top of the heap. This High Income group consumer is least bothered about price discounts and is more enamoured by 'Salsa and facial'.
But the lingering question is, Is this true for all consumers in India? Especially the middle class thats reeling under the burden of burgeoning inflation levels. The answer is loud and clear and pretty simple.
NO!
The middle income / lower income category consumers still hunt for bargains and are driven solely by 'price' as the most important criterion of purchase.
One of my student's research project on 'store atmospherics' in a retail store led to the conclusion that it has no bearing on enhanced sales. Consumers weren't bothered. They didn't mind a store with lousy merchandising, as long as there were bargains to be found. In fact to get that bargain, consumers didn't mind the store maximising its utilisation of floor/shelf space as long as it lead to greater operating efficiencies resulting in lowered prices.
Guess why the checkout lines at the Big Bazaar stores are a mile long though their stores are the most cluttered retail spaces in India ?
The authors of the article in Economic Times must be careful to ensure that sweeping generalisations are not made. They must provide specific information which are relevant to issues being discussed. Else the reader would be misled.
I wasn't cos' I'm still looking for that bargain. Oh yes, I've never stayed in a ITC Welcomgroup hotel, don't flaunt the Asmi brand, don't own a GM car.... don't have an Amex card. And just so that you know, I drive a Santro.
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