Stung by the general economic environment which has dented consumer confidence, companies are going the extra mile this festive season, with much more than the customary discounts that rule the roost during the two-month period starting next Thursday with Ganesh Chaturthi.
Companies across the board from retail to telecom, automobiles and consumer goods are throwing a liberal dose of value-adds, in addition to discounts. Value-adds this season are services that go well beyond the conventional sale of products. With product discounts, it serves as a powerful tool to get consumers to buy, experts said.
Future Group's durables and electronics store, E-zone, is running an exchange programme at its outlets where consumers can exchange almost anything - from old newspapers to clothes and utensils - for vouchers that can be redeemed for electronic items. Rajan Malhotra, president, retail strategy, who also heads E-zone says the response so far has been good. "Increasingly, you have to offer a reason for consumers to buy. An exchange programme is one interesting way of doing that," he says.
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Future has timed the exchange programme just when the popular Ganesh festival is round the corner. The scale of the operation is also massive, with Future seeing a good proportion of sales, as much as 20-25 per cent, coming out of the intiative. Rajan says the exchange programme does two things — help consumers get rid of the old items they wish to dispose and also cajole them to buy items they have been intending to buy. "This is a good way to start," he says.
Retailers are not stopping there. To add an extra edge to festivities this year, they’re doing everything from conducting workshops to helping consumer improve their culinary and grooming skills, encouraging them to buy greener and cleaner products, as well as pushing after-sales service aggressively. Some of them are also tying with partners in this endeavour. HyperCity, the hypermart promoted by Shoppers Stop Ltd, for instance, has a tie-up with confectioner Cadbury-Kraft to produce what it calls 'Gems Ganesha' — Ganesh idols prepared from Cadbury Gems. This has a two-fold advantage, explains Darshana Shah, head of marketing, HyperCity. One is the excitement initiatives such as these create. Second, partners are rewarded because there is sale of their products, too; in this case, Cadbury Gems. "We want to go bigger and larger with our activations," she adds.
Stir push
At a time when the general mood remains gloomy, creating excitement and enthusiasm in the hearts and minds of consumers is a good way for companies to initiate sales. Most consumer durables companies say their emphasis on innovative promotions this year would be higher than what it was last year. A spokesperson for Samsung says, "The thrust on value-adds will certainly be higher this year. You have to keep in mind consumer sentiment. Executives at LG, Videocon and Godrej Appliances echo a similar view as they put the final touches to their programmes.
For consumer goods makers, in particular, more value-adds will mean more bundled offers and gifts, besides the mandatory discounts and financing options.
By some estimates, discounts are likely to be nothing less than 40 to 50 per cent this festive, in keeping with the general economic climate.
Not are automobile and telecom companies far behind; they’re laying equal emphasis on both discounts and value-adds this year.Honda Cars India has preponed its promotional schemes this year, according to a senior company official. "We have started a 'Honda Fest' with all our dealers. We are offering car insurance at Re 1 for the City, Brio, Accord and CRV. Region to region, dealers are also offering tailor-made benefit schemes. We are also launching the Brio Automatic (a car) near Diwali. Last year, the situation was different.
The emphasis on value-adds was lower. Plus, the amount of discounts offered was less," he says.
Apart from discounts on petrol variants, automobile manufacturers this festive are also pushing discounts on diesel variants, which did not exist earlier. The amount of discounts are also equal to petrol variants - as much as Rs 15,000 to Rs 50,000 per model.
Auto majors such as Ford and Maruti have gone a step further. Ford is offering gift vouchers and accessories worth Rs 50,000 for consumers who opt for premium products such as the Endeavour (a sports utility vehicle). Maruti is offering car accessories and cash vouchers worth Rs 30,000 to Rs 35,000 for those who purchase their petrol cars.
In telecom, most operators are offering everything from free talk time to dongles, attractive data offerings, rate plans, gifts, etc. Telecom experts say the festive season is a good time for customer acquisition, given that people want to reach out and talk to their near and dear ones.
