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Synopsis

After the successful "paanch strategy" advertised heavily by the Coke in India, there has been a sudden trend of pricing different products, some of which include shampoos, toothpastes, adhesive tubes, chocolates, noodles, bathing soaps, washing soaps, etc. It is a common sight nowadays in any kirana stores, paanwaala shops and tea-stalls where we see lot of satchets struggling to find a place for themselves. Except for few products, which are priced at Re.1, all other items are priced at Rs.5.

A supermarket provides a host of options for the customers to choose from different products priced at this attractive price point. The attractive packaging, adequate quantity and affordability factor wins over other products priced at other points. A customer feels a better value for money when buying a five-rupee product rather than a one-rupee of the same product. Perception plays an important role in pricing. Further, the five-rupee coin offers some other differentiable advantages.

This paper tries to find the reasons behind the sudden pricing of so many products at the above said price. Apart from this, the reasons supporting the paanch factor and the threats in future has also been outlined.

The project concludes by providing some tips to further cash on the five-rupee strategy.

Introduction

One can never forget the typical Anglo-Indian Babu from Bihar in the form of Aamir Khan when he enters into an argument with a shopkeeper who was trying to sell Coke at Rs.6 rather than Rs.5 to two village girls. The "paanch" advertisement in a sense has revolutionized the Indian Market. After this successful "paanch strategy" advertised heavily by the Coke in India, there has been a sudden trend of pricing different products some of which include shampoos, toothpastes, adhesive-tubes, chocolates, noodles, bathing soaps, washing soaps, etc. It is a common sight nowadays in any kirana stores, paanwaala shops and tea-stalls where we see lot of satchets struggling to find a place for themselves. Except for few products, which are priced at Re.1, all other items are priced at Rs.5.

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* Contributed by -
Mayur Mayank,
PGP-II (2004-2006),
Bharathidasan Institute of Management, Trichy.