Innovative Offers in Auto
Reportedly, February saw the biggest fall in the last 12 years in car sales – passenger car sales in February 2013 declined by 25.71% over February 2012. Overall the car sales increased by only 3.68% over last year (Source: SIAM). 
Given the high interest rates and soaring fuel prices, the car market is expected to remain weak. In the wake of such circumstances, car manufacturers are thinking outside the box, or at least stretching it to regain sales momentum.
To lure in customers, car manufacturers are offering several attractive offers across their range of cars. While some are offering 0% interest, others are offering attractive EMI schemes, some are doing buy-backs and exchanges while some are offering additional accessories and fittings for free. Nothing new in this kitty, these are typical of March, because its year-end for everyone.
But wait, car manufacturers are now offering something new too. For example: Volkswagen is offering a trade-in scheme, where you can bring in your old car + Re.1 and take home a brand new Vento, rest of the payment to be made after one year, in full or in attractive 36 EMIs.
Tata Motors is offering its Manza customers 60% of the purchase price after three years. That’s quite an attractive offer, locking in the resale value, knowing for sure that you will get 60% of your car’s price, Given how poor the resale market has been in the past few years, with so many players in the market and manufacturers introducing new models and upgrades to old ones much more frequently, buyers are spoilt for choice even in the resale market.
It’s understandable that the car manufacturers themselves are offering such bold schemes because they have the deep pockets to take in some of these costs, but there are some entrepreneurial automobile dealers who have come up with some innovative offers for their own markets.
A Skoda dealer in Gujarat is offering ‘Buy a Rapid, Get a Fabia free’! We’ve heard of buy one, get one free offers in FMCG, but a first in automobiles, that too an initiative not by the manufacturer but by a lone dealer! Sure, from your point of view, you get the hatchback (Fabia) free only after five years, but by then won’t it be time to change your car anyways? Who would pass up on such an offer?! He sure has worked out his economics and has gone in head first to tackle the sales slowdown. A source from the trade says, “This is quite a bold move. In a time like this, when they are sitting on so much inventory, it is cheaper to offer such deals than to pay the bank interest. More cars on the road at least ensures us that we will have constant revenues from car servicing…”
A Jaguar Land Rover dealer in the north gave 15 cars to the who’s-who of society without taking a penny. He knew these people would pay him eventually given their status in society, but to just send off 15 of such high-end cars is quite a gutsy move. He was only trying to capitalize on the North-Indian “if he has it, I should have it too” attitude and it worked well for him. 15 Jaguar and Land Rover cars were on the streets of this not-so-big city, getting noticed and inquiries started pouring in. Plus the word of mouth from none other than the who’s who of the city helped him tremendously.
Tough times are calling for some tough calls, and manufacturers and dealers are tackling them with some innovative approaches.
- Roshni Jhaveri
Some implications of the distribution of our ‘demographic dividend’
A Unicef report titled ‘The Situation of Children in India : A Profile’ tells us that India is home to 20 per cent of the 0-4 years’ child population of the world, which is significantly larger than the number in China even. The number of live births in our country is estimated to be 27 million, which again constitutes 20 per cent of the total number of live births in the world. Reason enough for this to be a really important market for any business that sells products or services to babies, toddlers or kids, whether in the mass segment or premium.
A comparison of the change in the population pyramids of various countries – we looked at these in this post a few weeks back – tells us that India will continue to be an attractive destination for such firms at least another 15-20 years. Though the decline in fertility levels means that the base of India’s population pyramid in 2026 will be narrower than that in 2001, it will continue to be larger than that of other countries for some time still.
The Census of India’s Population Projection Report has some interesting data on the composition of this increase in population. You can access the entire report here, some points from the same below (in blue font) :
- 22% of the total population increase in India of 371 million during 2001-26 is anticipated to occur in Uttar Pradesh alone.
- In fact, nearly 50% of India’s demographic growth during this period of twenty five years, is projected to take place in the seven erstwhile BIMARU states (Bihar, Chhattisgarh, Jharkhand,Madhya Pradesh, Rajasthan, Uttar Pradesh and Uttaranchal); i.e. of the projected increase in population of 371 million in India during 2001-26,187 million will occur in these seven states.
- In contrast, the contribution of the four southern states, namely Andhra Pradesh, Karnataka, Kerala and Tamil Nadu, to the total increase in population size of the country during 2001-2026 is expected to be 47 million -13% of total demographic growth of the country.
This raises a few points relevant to companies selling age or life-stage related products. Those selling products for babies, toddlers or kids would do well to keep in mind that a large chunk of their market in 2026 will be in the erstwhile BIMARU states. They need to plan for building a good distribution infrastructure in those regions and for generating demand after understanding those customers, their sociocultural backgrounds, lifestyles and needs etc. This will be especially critical for companies aiming at scale and large revenues.
If however, they are strong in the southern states and intend to remain geographically focussed, they need to think about where growth will come from once the penetration reaches saturation level. The selected strategy could be in the domain of brand extensions / new products to existing consumer and customer segments, or targeting new consumer segments, but neither option has easy quick-fix solutions.
With due apologies to those that object to the idea of education as a business, another point to ponder over is the supply (or lack therein) of good quality education at every level. This is a service that has been in short supply all over India, more so in the BIMARU states, is this changing at all ? There is some anecdotal evidence I’ve heard of the student mix in colleges in the south changing as the percentage of those from the North increased. But for those at primary and secondary level, studying outside the state (and away from parents) is not an option. What options do they have ? But this runs into the topic for the next post on the topic, which will look at some of the sociocultural implications of this demographic shift.
- Zenobia Driver
Advantage Mobile
Ask any Indian housewife for her mobile phone and check for the ‘saved’ numbers. Apart from her family (including the favourite niece in Canada) and friends (his best friend from school in Florida), work numbers (if she is a working woman),doctor ,restaurants etc., there is another irreplaceable list. One that literally makes her weep if she loses her phone.
This list includes, apart from the mobile number of the household help (of course every self-respecting house help in the city has a mobile), the sabziwala (vegetable vendor), fruit wala, plumber, electrician, pan wala, dvd wala, istri wala (ironing man), dhobi(washer man), and AC/Washing machine repair wala. What is amazing is that, the other day I happened to stop by on the road to buy a jasmine plant from a redi wala (person selling things from a hand cart) selling plants, and asked him where I could find him next. Out came his mobile and he promptly asked me to save his number for future use!
And while I may know the physical location of the fruit and vegetable vendors, I certainly don’t know where exactly my electrician and plumber are located. I call on their mobiles, they arrive and do the job. C’est Finit (That’s it). My kabaadi wala (collector of waste / old newspapers/ bottles) is a phone call away and do I even need to know where he recycles the stuff ?
These businesses thrive on the mobile phone. Their numbers are their visiting cards and their customer referrals happen when we hand over their mobile numbers to friends and family over a meal,when someone inquires if we happen to know a decent plumber or AC repair man. Maids and drivers who are looking for jobs in an area often just give their numbers to the building watchman, who then will give them a quick ring in case there is a ‘job opportunity’ in the building. If someone is low on ‘balance’, you will most likely get a ‘missed ‘ call and then call them back. Even my mother uses the missed called method, to let the friend who accompanies her for their morning walk know that she is on her way.
The system works…. curious though it may seem. There is a whole new business model in operation here and it has spawned a whole new way of expansion and growth for these small self -made mobile owning entrepreneurs, who make up an indispensable part of our world, and dare I say, the Indian economy.
Who needs bricks and mortar then, when you have the Advantage Mobile!
By,
Sita
Brand New Year
It was in the ancient times[700 BC] that the Romans first dedicated New Year’s Day to Janus , the mythological God of gates, doors and beginnings. Legend has it that he has two faces, one looking forward and one backward, and the first month of the year, January is named after him. This tradition of celebrating New Year on January 1 then faded away and it was only in 1751 that New Year began on January first, once again.
With the expansion of Western culture and the Gregorian calender being adopted by many countries, the celebration of New Year’s day on January 1 has become pretty universal. This is so even in countries [such as India, China etc.] with their own New Year’s celebrations on other days. For example, the Chinese New Year [also called lunar new year] occurs about 4 to 8 weeks before spring [Lichun] and the exact date is anywhere between 21st January and 21st February. It is the most important Chinese celebration of the year.
In India it is celebrated in various regions, mostly between March and April; Gudi Padwa in Maharashtra, Ugadi in Andhra, Cheti Chand among Sindhis, Varusha Piruppay in Tamil Nadu and Baisakhi in Punjab, etc. For the Jewish it is Rosh Hashanah [Hebrew for Head of the year], when apple slices are dipped in honey and eaten with blessings recited for a sweet new year. The Zoroastrian New Year coincides with the Iranian new year of Nowruz (or Navroze) and is celebrated by Parsis and Persians throughout the world.
New Year celebrations often vary from country to country and reflect ancient traditions within their cultures. In Scotland, the New Year is called Hogmanay. Here one can find barrels of tar set on fire and rolled down streets of villages. This odd but significant ritual symbolizes that the old year is burned up and the New Year is going to begin. In Japan, late in the evening of December 31st, people would eat a bowl of buckwheat noodles called Toshikoshisoba [year-crossing noodles] and listen for Buddhist temple bells to ring 108 times at midnight to purify the 108 sins that plague every human being. Homes are often decorated with pine or bamboo, both considered to be symbols of long life. In Spain people eat 12 grapes at midnight: one for every time the clock chimes twelve. In many parts of the USA, black eyed peas are eaten for good luck in the coming year. The Dutch eat Donuts to bring in good fortune and ancient Persians gave eggs as New Year gifts symbolizing productivity. In other parts of the world the humble cabbage is eaten for prosperity.
In Venezuela, Bolivia, Mexico and Argentina, do not be surprised to see people carrying an empty suitcase around the house or even down the block at midnight on New Year’s eve. They do this to ensure that they travel great distances in the coming year. In China they burn crackers at midnight to scare away the evil spirits and even seal the doors and windows of their houses with paper to keep the demons out.
The tradition of making new year resolutions may seem like a modern one; the promise to lose weight, to go easy on the alcohol etc, but the truth is that this ritual is as ancient as the Babylonians. In those times the most popular resolution during the new year was to return borrowed farm equipment!
Bill Vaughn once wrote that on New Year’s eve, an optimist stays up until midnight to greet the new year, while the pessimist does the same, but only to make sure that the old year has left. And so, whichever way we chose to do it, the time has come to bid goodbye to the fables and foibles of the year gone by, and to welcome the New Year 2013 with open arms, black eyed peas or a suitcase, whatever one fancies. After all it is going to be a Happy New Year.
- Sita Lakshmi Narayan Swamy
Farewell
It’s been a somber end to the year here in India, and I felt that the poem below aptly wraps up the reality of the year gone by – all the joys and sorrows, highs and lows, that keep the carousel of life spinning. The Year
What can be said in New Year rhymes,
That’s not been said a thousand times?
The new years come, the old years go,
We know we dream, we dream we know.
We rise up laughing with the light,
We lie down weeping with the night.
We hug the world until it stings,
We curse it then and sigh for wings.
We live, we love, we woo, we wed,
We wreathe our prides, we sheet our dead.
We laugh, we weep, we hope, we fear,
And that’s the burden of a year.
But let me also heed the slogan I read on the board outside a church in Bandra, ‘Never let a bleak past cloud a future happy new year’ ; And in that spirit, express my hope that 2013 will be better and happier than 2012, and will bring all our readers success, prosperity and joy.
Updates
On Lifebuoy colour changing handwash :
Over a year ago, we’d written about the Lifebuoy team’s efforts to change the hand-wash habits (or lack of the same) of Indians in this post. The post called attention to one aspect of Lifebuoy’s Swasthya Chetana campaign, the ‘glowgerm’ demonstration that children were invited to take part in. This involved applying a white powder to the palms of their hands, then washing with water only. Hands were then held under an ultra-violet light and the powder glowed where dirt remained, showing that hand-washing without soap was not enough. The children then repeated the process, this time using soap, only to discover the UV light showed no trace of the powder. This countered the common misconception that ‘visibly clean’ is ‘hygienically clean’, and, in an easy-to-understand manner, drove home the message that even clean-looking hands are dirty until washed with soap.
Now they’ve used colour changes to make another point with their latest product, Lifebuoy colour changing handwash. This time, the foam turns green after ten seconds to signal that all the germs have been wiped out. Am sure that the change in the colour as they scrub will grab every kid’s attention and ensure that they don’t wash the soap off immediately but scrub for a full ten seconds, at least while the product and the effect are still a novelty. As a communication tool, felt that the hulk mascot worked well too. You can view the ad for the product here.
On the frozen yogurt market :
One of the trends we commented upon last year was the increasing popularity of hip frozen yogurt stores which could be termed cafés in terms of their popularity as hang-out places for youngsters.
The rapid expansion of this market has seen more competitors entering, read about the entry of foreign brands including the U.S based ‘Red Mango’, Canadian ‘Kiwi Kiss’ and others here, here, here and here.
- Zenobia Driver
