Shot To The Heart

Thursday, July 7, 2005


Marketers are using every P in their arsenal… Whether it?s product innovation, pricing, placement strategy or promotion, the target is the same: Penetration, the biggest P of them all.

There are millions of Indian consumers who?ve never tasted a Coke or a Pepsi, visited a mall or flashed a credit card in their entire lives. They live, eat, and shop in a world that most brands we know of aren?t a part of ? they?re the much-hailed market, once famously described as the market for bathing, as opposed to the market for soap. Management guru CK Prahalad summed up its potential in his writings on the fortune at the bottom of the pyramid. He exhorts marketers, ?The real source of market promise is not the wealthy few in the wealthy world, or even the emerging middle-income consumers.?

It?s taken years of trial and error, value-added products and premium brand propositions for marketers to come to realise that the only means of gaining greater marketshare is by delving deeper into the Indian marketplace to acquire more and more customers. For India Inc, efforts are now being focused towards one ultimate objective: achieving what can be termed the most crucial P ? penetration.

Says Dipak Jain, dean of the Kellogg School of Management, ?Penetration has to be driven by the other four Ps.?

The obsession with penetration stems from the realisation that companies are yet to tap the full potential offered by both urban and rural India. Carbonated soft drinks (CSDs), for instance, form just 3% of the total beverage consumption in India. Organised retailing, according to market figures, is just 3-4% of the total retail market in the country, and plastic money is only just catching on in metropolises in India, with a vast market existing in the tier II towns and cities. So across the board, marketers in India are attaching overriding importance to this fifth P ? think Hindustan Lever with its Project Shakti ? and using all the other Ps to drive category growth and push brands, products and services into newer geographies. Increasing marketshare is the mantra, and the higher the extent of penetration, the higher the resulting marketshare, goes the belief.
Story found here.

Source: The Economic Times