Few years ago I was into Market Research & the job description involved travelling to various places, collecting information from people. Being a front line assignment we had a budget for staying which just about managed to get me a decent place to sleep in the night. One morning when I got up I realised that the toothpaste was over and early morning I had to get it as I had to brush. I called the housekeeping fellow and asked him to get me a toothpaste tube, he said it was not possible at least for 15 more minutes as he was busy and so I decided to take a walk down and fetch it myself. Luckily a Paan walla near the hotel was carrying a small tube I bought it and came back to my room. I did not realise that had it not been available there I would have had to wait till the boy got free and then got the stuff for me. ( derived service)
Several years later I was wanting to buy an Digital - SLR Camera and I started my search thru friends, Internet, books & various other places as could be possible. Finally when I did decide that I had to buy it, I had several options from which I had to make my choice. At the store finally I met this sales guy who helped me choose the product that I did. He not only helped me but also gave a lot of information on what I had not got thru my research about that type of camera.
In both the above situations in life I was happy as a customer not only because I got the products but I also got them where I expected them, and with the kind of support that I was looking for when I purchased them. There was a certain expectation that got fulfilled from both the places where I made my purchases, The first place I was able to get the product at the simplest and the nearest shop possible while in the second case it was not only availability but the expert advice I got on purchase.
Customers have expectations from categories in terms of their availability and the form in which these are made available, in the above 2 examples we have just taken 2 categories to understand this concept, however in real life there are several such categories and products which have their own set of expectations demanded by the customers.
Customer may expect that at a jewellery counter one has personalised attendance, while at a Saree outlet in our country one will expect to sit down and choose from the various options not only that but expect that the sales person shows you how the Saree will look when it is draped around you. etc etc.
I think a case has been established to prove the point that every customer has several expectations form categories in terms of its availability and service and the point of purchase which has given rise to so many channels which ultimately contribute to the retailing business.
Retail as conventionally has been defined as a Sale in small quantity to final customers is built on what I believe is the Customer Service level output expectation.
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Sometimes Sir, it happens that the salesman who does door to door selling like Tupperware is considered the best form of retailing to customers without the channel costs exceeding the revenues. Also the direct to customer model of marketing saves the investment of these firms. Sir, does retail mean selling small quantities to improve customer reach and capture the prospective buyer before they reach the actual big shops? If I have my bhaji wala selling potatoes and onions at 1 Re extra at my doorstep would I want to go to Reliance Fresh and buy it for 2 Rs less? Is the customer not being poached by the bhajiwala? Also, near my house in Kothrud, there are these bhajiwala who visit our home daily and since my mother was a teacher earlier and could not spend time in peeling and chopping veggies like cabbages etc. the bhajiwalas charged her 50 paise extra for chopping the vegetable and selling it. Does retailing mean making it easy for the buyer with little extras that matter a lot in retaining your customers?
ReplyDeleteThe fact that the Bhajiwalla comes to your house and sells is an outcome of the his understanding that the customer wants the product at his door step. The value addition he does by giving the bhaji cleaned and chopped is the tool he is using for differentiation within the context of competition he is facing from other reatilers who are tryin to compete with him taking away his customer. Infact he is found such a wonderful tool for differentiation that people ( customer's) are even ready to pay for the differentiation.
ReplyDeleteThe door -to- door salesman has given us insight that a direct sale model could work for some categories. However each channel will find its design on basis of various factors like, The Nature and size of Business, The category of merchandise being sold, the geography that one wishes to address and cover, the number of products and the objectives of distribution. etc.
Today evening I went shopping to the Hinjewadi Chowk for some chocolates and stationary. I was looking through the display of chocolates and was surprised to see a Rs. 5 variant of the KitKat chocolate. (It is a new one with just a single stick of chocolate wafer instead of the two stick variant priced at Rs. 6) I casually asked the person at the counter about how successful it would be given that the Rs 6 variant is already in the market and just a Rupee would not really matter. But what he said was, "The Rs 6 KitKat chocolate is actually not selling at my outlet because people who come to buy it are usually fussing about the extra 1 Re. that they have to shell out with a 5 Re coin. This becomes a problem for them since getting change is a problem,for me too to come up with 4 Rs when they give me a 10 Rupee note is tedious. People have actually switched to other chocolates because of this reason and I find it difficult to push this chocolate". Also, on further interrogation I deduced the fact that people who wait for buses and who are going home on their own vehicles after work are in a rush and the 1 Re. thing can really make them fuss and shift to another chocolate that gets them the luxury of trading with a single five rupee coin.
ReplyDeleteI thought that this might have something to do with the pricing of the product. But is this really a problem? I wanted to know if the pricing team should actually consider this kind of a problem or shrug it off as an isolated incident in one part of the city of Pune.
Also, the channel distributor, in this case, the retailer has stopped stocking the Rs 6 variant altogether and says that he will discontinue it totally and go for the 5 Rs variant alone. I would like to know that did the company not know that by marketing another variant counter to its already existing one, would create competition internally? Has the company overlooked an important aspect of their pricing strategy and market offering? (In this case, the variants of chocolates)