The International Retail Leaders summit in Mumbai organized by Economic Times brought together some of the best and the brightest minds from the field of marketing. The summit began on a gloomy note with references to the slowing economy and challenges in the current economic climate, but picked up pace with the ideas and views of the marketers who had gathered on the occasion. The mood became buoyant as they spelt out how these challenges could be transformed into opportunities.
In the midst of a dismal economic scenario where the rupee is on a constant decline, marketers are facing problems at all phases of their business: weakening consumer sentiment, supply side being hit by the crashing rupee, curbing of expenditure, increasing competition among many others. The only way to face these tough times is by striving for innovation in marketing.
The FMCG sector remains the least affected in a slowdown but during the first quarter of the financial year, HUL witnessed the impact, their growth having decreased from 10 per cent to 5 per cent. Speaking about the solutions to these problems, Manish Tiwari, ED, HUL said, â€œWe have understood that this is the time to invest in understanding the consumer sentiments and also to approach the rural market to connect with the bottom of pyramid. We might have to change the business models according to these markets and also to collaborate with more players.â€
Unlike FMCG, the apparel sector is among the first few sectors to feel the heat of the slowdown. Speaking about the challenges and opportunities that emerged out of them, Tim Eynon, Business Head, Provogue said, â€œFor us, the best possible option was – brand extension. We have extended the brand by coming out with personal grooming products like deodorants. And this is the right time to expand via franchisees. We are focusing on expanding our presence to the rest of India and strengthening our distribution.â€
Discounts have been an ever green solution for marketers hoping to make some profits during a crisis. The CEO for Starbucks India, Avni Davda stressed on the â€˜value factorâ€™ as she said, â€œWe are present in several countries and each country has a different sentiment. India being a value driven nation, we make sure the customer finds value in the purchase. Discounts are one of many options. Apart from that, it is very important for us to market our brand where we find the biggest target group. We have been aggressively expanding to airports and metro stations.â€ While Davda spoke about the value factor, Harish Bijoor, Consultant, Bijoor Consultants named discounts as â€˜diseasesâ€™. In his words, â€œDiscounting is not very exciting, if we check the records, store loyalty for kirana stores, which do not discount, is more than 80 per cent whereas the modern retail outlets which are burning their margins by giving huge discounts, do not have a loyalty of more than 40 per cent. Discounts are nothing more than diseases.â€
Food Bazarâ€™s president, Devendra Chawla said, â€œCreating categories is one way to move ahead. If we talk about market penetration, products like soaps and detergents have a healthy penetration but categories like deodorants and energy drinks have penetration still in single digits.â€ Speaking about his own initiatives he said, â€œWe have started the occasion marketing phenomenon. We have come up with a â€˜Tea-Time Comboâ€™ which is a unique combination of Tea, Sugar, Cookies and a frying pan. Similarly we saw a huge spike in the sale of cleaning combos where we had put together different categories of cleaning products.â€
As the market continues to show signs of sickness, Indian marketers are doing everything to woo customers. As many marketers explained, the placement of the product was critical in todayâ€™s times to write a positive growth story.
By Ankur Gaurav