Previous

Page - 2

A recent India Today article on the subject "Enter the Dragon", got to the crux of the matter. It said that the difficult choice before the government was, whom to protect - the Indian manufacturer or the Indian consumer. To this Rama Bijapurkar said, "He who pays
the piper must be allowed to call the tune."

The consumer is shelling out his hard-earned, scarce money and must be allowed to get the best bang for his buck. The conceptual construct of 'bang for the buck' is 'customer perceived value' from any goods or service, where Value is defined as Benefit minus Cost (V = B - C), where Cost is not just the price but the total cost of usage.

What makes customers buy what they want?

The consumer has the right to decide how he wants to spend his own money, what constitutes consumption prudence and what doesn't. Pre-liberalization was the era of 'no options' for the consumers. Several things that people valued were not available. Consequently, it was easy for manufacturers to believe that the consumer did not want them. The marketers lacked in establishing the aesthetic and emotional values to the products along with the economical benefits that has always bothered consumers. But in today's era, the aesthetically nice option always came with a lower price tag from overseas. Not only does it have additional functionality to make it work better, it looks and feels better.

The 'starved for goodies' Indian consumer has been highly enthusiastic about international brands like Scotch, luxury cars, breakfast cereals, jeans, cosmetics. For example, the Korean refrigerators, television and cars are winning against Indian brands, Kellogg's has well-positioned its corn-flakes in Indian snacks category. Why? Better quality products at affordable prices. The benefit-cost equation gives Indian consumers a value advantage.

Does this mean that Indian Brands are dyeing slowly?

Let's now look at Indian brands that are blockbuster success. All of them are clearly winners in the value sweep-stakes, arising from a superior understanding of what drives consumer value. Nirma is the epitome of this, and the pioneer of what is now acknowledged as the best way to win in the Indian market, working with the 'low cost business model'. It created a detergent market 10 times larger than that of the most marketing multinational in India, i.e., Hindustan Lever. It provided adequate quality at affordable prices, the genius being in innovatively creating an entire business system that was low cost. Nirma is clearly the pioneer of the high volume, low margin, low cost business system, which is perfect for unlocking the potential of the Indian market, profitably.

Next

* Contributed by: -
Prof. Sapna Modi,
Asst. Professor (Marketing),
Guru Nanak Institute of Management, Mumbai.