Use Value-Based Pricing to Increase Market Share
Friday, August 22, 2008
New Delhi: Marketers often fail to realise that every brand is in a continuous state of launch, says veteran ad-man and marketer Alyque Padamsee, who is also chairman of the London Institute of Corporate Training, at the two-day CII Marketing Summit on the theme, “Marketing to the bottom of the pyramid- How relevant and in what measure achievable in the Indian context.”
Padamsee, who now has his own creative shop A P Advertising,? says this was more so in a country like India where the end-market is yet to be fully tapped, while addressing a session, “Now to Wow! Building great customer experiences: The power of advertisers” at the Ninth CII annual marketing summit.
“It is the desirability of a product that determines its value, and it is this that enables a product to find its own distribution and marketing network,’’ he said, pointing out that the ’bottom of the pyramid was actually a huge marketing opportunity.
Padamsee said, “Every year, nearly 10 million people are moving one level up in the value chain, with attendant needs and desires. It is this segment that industry must tap. While a trickle down effect was already taking place, when it came to new products reaching this segment, what was needed was the ability to marry innovation and cost to enable industry to fully exploit this market.”
Dispelling the notion that this untapped segment of the marketplace had different needs on account of lower literacy levels, Padamsee said that in reality, it was an aurally smart segmen. He said given the rapidly changing lifestyles, the segment presents an opportunity ’’that should not be missed.”
Pointing out that the human desire to want more was universal, Padamsee said that the increasing spread of media was creating new demand that the industry must seek to meet.
Make your bottom of the pyramid strategy for the rural foray
Addressing the same session, Piyush Pandey, executive chairman and national creative director of Ogilvy and Mather India (O&M) said the only choices that marketers needed to make with regard to the untapped markets were “to either go in as an invader and reap short-term gains, or go in as an explorer and win long-term rewards.”
Pandey said that in order to tap the bottom of the pyramid, a bottom-up approach that relied on native intelligence to establish a local connect was absolutely essential. He pointed out that a key differential for companies tapping into rural markets was their ability to convince their consumers and involving the community at large in their marketing.
It’s the value-proposition, not the advertising
Chintamani Rao, CEO of Times Global Broadcasting said it was the value proposition that a product had, and not good advertising that determined its success. He said this was specially true for untapped markets, as exemplified by the policy followed by Henry Ford, the founder of Ford Motor Company, of first determining the value that a product should have and then manufacturing the product to fit that price band.
“By repackaging a product in a Re1 sachet, for example, one is surely increasing its reach and market share, but innovation can take such share even higher,” Rao said.
Be prepared to start from scratch
Arvind Wable, executive director and CEO (Delhi) of Draft FCB-Ulka said that for creating new markets, specially at the bottom of the pyramid, it was important that marketers “forget what they had learned so far, and begin afresh”.
Wable said that while technology could be a key enabler in opening the new markets, advertisers would necessarily have to incorporate this.
“While brandspeak remains important, it is important that companies use innovative marketing techniques to make their products affordable,’’ he concluded.