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Unit 14: A Review of Retailing: Environment and Operations

 Marketing a super-premium product such as a Rolex watch is relatively easy. Just go for Notes
the income class above ` 106,000 per annum (in 1995-96) as per Table I above. This class,
Table I shows, comprises 5.8 million households. But the problem lies in the fact that the
5.8 million households are spread all over India.
 The prime market for consumer products in India is aware of the cost-benefit or value for
money, aspect. Their concept of value incorporates socio-cultural benefits in addition to
product utility.
For example, many households in the “consumers” class and the “rich” class may have two
television sets, but both the sets may not be top-of-the-line. Thus, while they may be demand for
an additional TV set in many households in the two mentioned classes, it must not be mistaken
as demand for the higher priced TV models.
The prime consumer market in India therefore is not a market for absolute premium products,
but for something between the “high end popular brands” to the “premium brands.”

Task What is the impact of culture change on consumers buying habit?

14.3 New Approaches in Retailing – New Ways for
Old Retail Approaches

Retail marketing professionals are flocking online in hopes of cashing in on the new economy.
While armed with knowledge and the eagerness to deploy their grandest ideas the second they
arrive at their door/desk/start-up cubicle space, these gurus find within days that their past
retail experience will only take them so far.
In the online world, even the basics aren’t always easy and successful. Retail marketing for e-
commerce means finding new ways to deploy old techniques. The basics of traditional offline
tactics don’t easily translate online — even such “good as gold” standbys as thank yours, buddies
and coupons.
Gone are the days of establishing relationships with customers through the old-fashioned “thank
you.” Remember training your customer service representatives to thank your customers by
name? While you could look at the name on the credit card or customer account, the anonymity
of the Internet makes it much tougher to thank someone by name.
You can drop a cookie into a computer and welcome Ms. Smith to your Web site, but with
privacy issues and uncertainty about Internet security, it takes a while to get and build trust.
Even sending a thank-you note after a purchase is difficult in these days of e-mail spam paranoia.

To avoid the spam factor, marketers must think of new ways to show their respect and gratitude
for their customers. One simple way to build that customer relationship is placing a welcome
gift, kit or thank-you note in their first shipment. Customers love being surprised by receiving
more than they paid for. That alone immediately establishes a relationship. Place a coupon in
the box, and you’ve got a good chance of getting that customer back. It is important to build a
relationship in that first shipment.
Other basic techniques, such as referral programs, don’t always work in online retail. In the
bricks-and-mortar world, customers referring new customers get a special coupon, bonus offer
or gift. It’s an easy and low-cost way of acquiring a customer with a small incentive.
Online, though, confirming a customer referral is much more difficult. Customers can create a
separate user name and password and refer themselves. By even slightly changing an address or
name, a customer can reap the rewards of a referral repeatedly and undetected.

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