Once upon a time, there was a speciality restaurant in Happy Land. It was set up with the intention of providing much-needed specific health food item to the populace. The government thought this health food was so essential that it provided a monopoly to the speciality restaurant. Soon its managers figured the general populace was not interested in the health food it was set up to provide.
They hit upon a brilliant idea, where they started offering education-cum-entertainment programmes in a part of the restaurant. Consumers would have to pay extra for these. This idea was a hit with patrons and owners, as patrons liked the edutainment and owners liked the excellent margins. The margins were so good that the management hired canvassers to bring in consumers for the edutainment show, on fat commissions.
The government then allowed competing businesses in Happy Land and soon there were a host of edutainment-centres-cum-token-health food restaurants all over the place. The first instinct of the new players was to break the canvassers for the old restaurant by offering them higher commissions.
Soon, the new players started focusing on consumer segments. The health food movement had started growing and the restaurant started offering the most popular health food on a standalone basis. Meanwhile, a host of players had become active in the standalone edutainment business, offering those programmes on a very cost-effective basis (primarily by cutting their own margins, as well as not having any canvasser costs). But, this also had only limited success, as it did not have the health food-bragging rights attached to their business.
These standalone edutainment providers clamoured to be allowed to raise prices and pay canvassers fat commissions, just like the health food-cum-edutainment businesses. Instead the government asked the health food restaurateurs to reduce their cost of edutainment and placed limits on the commissions that could be paid to canvassers.
In a nutshell, everybody was unhappy. Why?
The health food restaurateurs - whose business was not growing and was increasingly moving towards the lower-margin pure health food business.
Standalone edutainment providers - because consumers preferred the overseas edutainment providers.
Government - because the consumers were increasingly spending their money abroad
Consumers - they were getting edutainment from abroad, which may or may not give them the same value that it has given in the past
What were the players doing?
Health food providers- Wanted the rules to go back to the good (bad) old days, when business could be driven by increasing edutainment programme prices and paying high commissions to canvassers. This is still work in progress.
Standalone edutainment providers - They have now started fighting and hope to make a mark in newer markets
Government - is wringing its hands and imposing duties and taxes and trying to otherwise make the overseas edutainment providers more expensive and, thus, less attractive.
What could be the solution? Health food providers can use canvassers to sell health food, rather than just edutainment products with a small token health food component. Also, some consumers are demanding newer varieties of health food, which is not available or available only at a high price, they can help stimulate demand in this nascent market All Indian companies and the government need to educate the consumers about why the overseas edutainment programs are not that beneficial anymore.
Are you able to relate to this?
Read the article again, with this key
Health food providers - Life insurance companies
Standalone edutainment providers - Mutual fund sector
Overseas edutainment provider - Gold
The writer is CEO, Apnapaisa.com
