New Solar Products for Rural Markets from Philips

The importance of rural markets for corporates is once again highlighted by the plans of Phillips India who are eying the huge and growing rural markets for their new set of products. Also an opportunity for retailiers in rural India to offer a new and utility product to their customers.

PHILIPS SET TO LAUNCH SOLAR PRODUCTS FOR RURAL INDIA
To cater to the rural markets of India, Philips Electronics India is set to launch a range of solar products specifically aimed at rural markets. These include solar and battery powered lanterns, rechargeable and fuel efficient wooden stoves and torches that run without a battery.
The upcoming products would be in the price range of Rs 1000 to Rs 2000. of which the first product would be a Rs 1000 priced solar lantern. This would hit the markets within a month. These would be followed by a range of wooden stoves based on reneable sources of energy.
Source : Hindustan Times – 21st March, 2009

Product Presentation -II

PACKAGING
The method of product presentation is as important as the product presentation and packaging forms a critical part of this presentation.
Given this importance, it is essential that buyers are involved in the development and management of a products packaging. This involves 3 key stages
1. Identifying the purpose of the packaging
2. packaging policy if any of the company
3. the development process.
1. Purpose of Packaging
In a retail environment, packaging serves several purposes . These can be outlined  as

• protection of the product - both in the store as well as in transit
• communicate the brand and product specifications and benefits
• enhance the product
• attract the customer

For packaging to be effective and purposeful, the above criteria should be met
2. Packaging Policy
Packaging policy is normally a reflection of the buying strategy of a company. The approach to packaging could reflect the strategy of convenience, ease of purchase and speed. This is what one would find in a chain of convenience stores that would sell packaged products that are easy for the customer to pick up. Alternately , packaging could also reflect the strategy of service, premium products and quality.. It is important to remember that 'The packaging needs of each product should be identified at the development stage so that the cost of packaging can be taken into account and the style developed in time for the product launch'

Will take up Development of Packaging in my next post.

Samsung and rural markets

Would like to reproduce information on Samsung contributed by Manoj and data on rural markets in India contributed by Manish.
Samsung Electronics :
Chennai, Feb 5 (IANS) Consumer durables major Samsung India Electronics Ltd,
which reported a turnover of $1.7 billion in 2008, is targeting 25 percent growth this year, a top official said here Thursday. 'We don't see any serious slowdown in our sales owing to the economic slowdown. We are confident of achieving our targets this year' with the government's measures stimulating demand and banks easing lending norms, Samsung deputy managing director R. Zutshi told reporters after launching a range of air conditioners. The company is also targeting to double exports to Rs.10 billion (Rs.1,000 crore) in 2009, he added.
'We will invest around $20 million in our Noida and Chennai plants in machinery and moulds,' Zutshi said. Towards achieving the aggressive targets, the company will double the number
of Samsung Plazas to 600 (all franchisee-owned) and increase the penetration of its products in higher number of multi brand showrooms across the country. Speaking about the air conditioner market, Zutshi said the industry sold around two million units last year and the expectation for the current calendar year is 2.4 million units. Samsung India is targeting to increase its air conditioner sales volumes by 200,000 to 600,000 units this year.
Contributed by Manoj
Rural Markets :
According to MART Rural, the rural market accounts for 53% of FMCG sales and 59% of consumer durables sales in the country. Televisions, refrigerators and ceiling fans have gained over radio and bicycles. Data released by market researcher ORG-GFK, showed that television sales rose 29.3% to 10.3 million sets, while growth in refrigerator sales was 12%. Washing machines sales grew 15% while microwave ovens and air conditioners grew 26% and 17%, respectively.
Contributed by Manish

Product Presention - I

SHOW YOUR PRODUCTS TO CUSTOMERS
Buyers spend lots of energy in buying and developing the merchandise before it finally hits the stores. Sometimes, however , it is forgotten that one very critical aspect is the way the product is presented to customers in the store and overlook issues such as packaging and in-store display. The importance of the saying ‘ JO DIKTA HAI WOH BIKTA HAI’ cannot be overestimated. Proper display and presentation can make all the difference between achieving or not achieving sales targets. Remember the following
1. Visual Merchandising : Be involved in the planning of the in-store presentation of your merchandise. Adequately plan the MDQ’s ( Minimum Display Quantities).
2. Communicating Ideal presentation standards :
Effectively communicate to the store staff on how the merchandise should be displayed and the ideal presentation standards. This could be by way of talking to sales staff directly, sending mail before the merchandise arrives at the stores or making a detailed manual at the beginning of each season.
Remember to Look for ways in which the job of the sales staff can be made easier by improving packing and display methods of the product.

Bharti Retail's plan on Private Labels

BHARTI RETAIL EXPECTS PVT LABEL BIZ TO HAVE 40% SHARE IN REV
Leading retail chain, Bharti Retail expects its private label segment to contribute up to 40 per cent of the company's total revenue over the next five years on the back of good consumer demand, a company official said. At present, the private label segment contributes 8-9 per cent to the company's revenue. Bharti retail has private labels in categories including food, apparels and groceries. A wholly-owned subsidiary of Bharti Enterprises, Bharti Retail's neighbourhood format stores operate under the 'Easyday' brand, while its compact hypermarket format stores operate under 'Easyday market' brand. The company has nearly 24 Easyday stores and one compact hypermarket store.
Source : Press Trust of India - News: March 19, 2009

LG Electronic's Plans

Some more news on the action on Consumer Durables. Should be noted that LG is planning a low cost washing machines, TVs and solo micro waves for the rural markets.

"LG TO INVEST RS.600-CRORES
LG Electronics India is looking to invest Rs600crores in marketing and new product development this year even as it alters its overall strategy for India yet again. Having migrated from a "mass" brand to a premium label over the last two years, LG is now once again trying to expand horizons by focusing on the semi-urban and rural markets to generate growth during these times of slowdown. This earmarked investment will be used for developing India-specific products, increasing marketing and advertising spends, and also in expanding sales and service network in the hinterland and in semi-urban areas. Sources instead pointed to the fact that LG is looking at a 15% growth in 2009, to close the year with sales of Rs12,500 crores. As part of its rural focus, LG will launch low-priced washing machines, solo microwaves, CRT (cathode ray tube) television sets and air conditioners while increasing area offices. About 35% of its sales came from the rural market last year and this share would increase to 40% in 2009.
Source : DNA Money: March 16, 2009 "

Private Label Strategy

Comments by Navneet and Manish are valuable and give further insights on the importance of private labels in todays scenario. I had worked on the Private Label strategy and it's formulation some time back which could be interest to you all
Check out this SlideShare Presentation:

Private Label Strategy

View more presentations from chesterp.

Private Labels by Retailers

Retailers are increasingly looking at private labels as a means to increase margins as well as volumes by offering products at prices lower than brands. The latest news on this :

"ADITYA BIRLA RETAIL TO LAUNCH PVT LABELS IN DURABLES, PERSONAL CARE "

"Aditya Birla Retail, the retail unit of Aditya Birla Group, plans to launch private labels in a number of personal care products such as hair oil, hair styling gel, shaving creams and gels, toothpaste under its brand ‘Enriche’ by March this year, to take the advantage of down trading in the economy, said a top company official. The Company is also planning to launch private labels in consumer durables and electronics once it takes the number of its hypermarkets to 14 by FY11, the official said. The Company runs 670 supermarkets and two hypermarkets, under the name ‘more’ and plans to open 200 new supermarkets by FY11.Currently, the company sells consumer durables in its hypermarkets and has tied up with Essar Telecom’s The MobileStore for retailing mobile handsets in its supermarkets. The Company currently has more than 320 private labels in categories such as processed foods, personal care products, detergents etc. These products sell 10 to 15 per cent lesser than that of national brands in respective category. "
Business Standard: February 04, 2009

Ethical Behaviour

Does the acceptance of gifts from a supplier to a buyer constitute unethical behaviour. The questions  that arise
                  What gifts can be accepted ?
                  Should acceptance be associated with the value ?
                  Should promotional material like pens, diaries etc with the suppliers logo and name be acceptable as gifts ?
                  Is it OK to accept a suppliers product on the pretext of trial ?

These are questions that all buyers should ask themselves and answer.

WHATEVER THE COMPANY POLICY, REMEMBER THAT AS A BUYER , YOUR REPUTATION GOES WITH YOU FROM JOB TO JOB. WHEN YOU ARE OFFERED A GIFT, ALWAYS ASK YOURSELF WHAT MOTIVATES THE SUPPLIER TO MAKE THE OFFER AND WHAT MOTIVATES YOU TO ACCEPT.

Let me have your views on this
                   

High White Goods Sales this summer

Seasonal products that do well in the warm summer months in India can expect some healthy sales this season because of the early onset of summer. Leading consumer durable companies like LG, Samsung, whirlpool etc as well as beverage companies like Pepsico, Coke, Bisleri etc are all preparing for an action packed season.
White Goods market leader LG, is expecting over 30% growth in Refrigerators and ACs in the April -June season. ' New product categories supported by intensive marketing and advertising will drive the growth. ' says LG India Director Marketing Mr V Ramachandran.
Samsung too is eyeing a 40% growth in sales of home appliances this season. The company says that categories like refrigeraters and ACs will drive sales.
Source - Economic Times - 14th March 2009
Retailers too need to plan for the coming season and ensure that this spurt in demand is taken advantage of and make up for loss in business in recent months.

Buying - An overview

One of most important and key functions of a retail organization is BUYING. This function has the potential to make or break a company. It is therefore absolutely vital that buyers understand their role within the organization as well as the contribution that this activity has on the overall business.

Some key factors that buyers must remember

1. The corporate strategy of an organization defines the broad framework on which the buying function needs to operate and contribute to the profitability of the company. It can never operate in isolation from the rest of the business.
2. Buying is far more effective if it is focused on achievement of the business objectives and on the customers who buy the products.
3. Knowledge of the market ensures that buyers have detailed information on which to base their decisions of buying. INFORMED DECISIONS ARE BETTER DECISIONS.
4. An hour talking to customers can greatly influence the way a buyer perceives the market and assesses the needs of his customers.
5. KNOW YOUR COMPETITOR. Customers never see your products in isolation. Neither should the buyer
6. Your customer should be the CENTRAL FOCUS of all your buying decisions.
7. A customer focused product range may not attract all your target customers but will attract a majority of your target group as compared to an unfocused range of products. This will guarantee you much higher sales.
8. Always keep in mind the twin company objectives of turnover and profitability.

Does anyone have any more points to add ?? Pl contribute

Rural India - Retail News

Hi Everyone,

This blog is all about retail and will have news about Indian and International retail, information and knowledge about all aspects of retail.

I would like everyone to comment on whatever is being written as well as contribute by adding any information or knowledge of retail that you have and would like to share with everyone.

To begin with, would like to share some pertinent information about Rural India

• 72% of the population in India is rural
• There are over 6 lakh villages
• Contributes to almost half the GDP of India
• Has over 36 lac shops

Rural India Market Size is

• Consumer Durable Rs 500 Billion
• FMCG Rs 6500 Billion
• Agri Inputs Rs 4500 Billion

Of particular interest is the following news item on LG's plan for the rural market

"LG GROUP BANKS ON RURAL MARKETS FOR REVENUE GROWTH
The $40-billion global white goods major LG Group expects rural consumers to push its revenues in India this year. In fact, the semi-urban and rural markets are expected to contribute nearly half of LG Electronics India’s revenues in India. The company also plans to enhance its manufacturing capacity by about 30 per cent by deploying innovative processes in its plants, which will translate into greater efficiency, said sources at LG Electronics India. The company, which has expanded its focus areas to the rural markets, now expects 40 per cent contribution from rural sales to its turnover this year, as the rural sector is growing at a pace faster than urban sector resulting in higher disposable incomes and, thus, mounting purchasing power. Sources said that rural markets were untouched by slowdown and "will contribute major in durable sales". LG aims at increasing its revenues from the blooming rural markets. The company hopes to alter its portfolio and model mix for the rural market, and ensure that all segments are represented at the entry level.
Business Line: February 20, 2009 "