The Economic Growth of the Mass Market and its Impact on India’s Cosmetic Industry

Tridib Banerjee | NMIMS University, Mumbai

Brands cater to the Indian cosmetics society through its wide range of products, with continuous up gradations and innovations. The basic idea remains that youth and style do not have a substitute. Couple it with foresight, research and constant innovation, the recipe for success is ready on the platter. The strategy of the networks is redefined in line with its vision of empowering modern India by serving superior beauty and healthcare products through customized and professional services. Growing disposable income and changing lifestyles in urban India have led to greater awareness about personal grooming, health and wellness. The emerging trends stand in good stead for Beauty and Wellness services sector, presenting a large and exciting opportunity. Let us take a closer look into the details of the current status of the brands as far as the cosmetics industry in India is concerned.

India with its huge market potential promised to be a major hit as a destination for the various brands across. While the HUL powered LAKME moved for the mass market, brands like L’OREAL tapped the niche customer segment. Down the years, the legacy of these brands has mesmerized the customers through constant innovations and appropriate strategies. But since the new millennium, the customer demographics took a major progressive move up and now came the necessity to take the marketing concepts to a different level to match up to their expectations.
A distinct increase in the educated population along with their web based knowledge enabled them to scrutinize the gory details of a product and this resulted in a more logical, aesthetic and stringent demand. The result was evident. LAKME showed a clear dip in its sales. Being the major marketer to India’s mass market, their reforms form a basic ingredient of our analysis of the Industry for the “Common Man”. Now, the question arises that what does a brand with a legacy of over 50 years have to do to resurrect its position back among the elite and make its balance sheets healthy?

LAKME’s answer was prompt. They came up with some rudimentary concepts to connect to the customer and reincarnate the theories of direct marketing via the web and media. Be it the “Elle 18” or the “LAKME Fashion Week”, the impetus was to reach out to the mass using punch lines like “WOMEN’S NATURAL BEAUTY” and “WOMEN OF ALL AGES”.

The other interesting initiatives included the “Beauty Saloons” and the “Bridal Sutra” concepts which were targeted to the specific genres with optimum vision at the aspect of “value for money”. They tapped the web market with élan as they used facilities like “Ask Lakme” and “Style File”. The very fact that the customer could customize a perceived look for herself gave her incentive enough to hit the saloons and the cash books gradually began to look promising again.

The health sensitive new age customer had to be convinced about the medical consequences of the product and here the nail was hit on the head by a strategic partnership with “AYUSH”. The brand LAKME-LEVER came into existence and the herbal market was catered to with legitimate conviction.

The imperative intent for the cautious approach has been to target the mass market. In order to survive the test of times, it is essential for the cosmetic brands to consciously try and implement/avoid the following fundamental aspects.

IMPLEMENT

• Convince people that cosmetics are an essential part of daily grooming.
• Produce multifunctional products.
• Encourage technological innovations.
• Synchronize with the latest trends of the industry.
• Establish the brand loyalty among its consistent customers (Direct marketing if need be).

AVOID

• Avoid the defectors. In mass market, this is lethal.
• Avoid reactive policies; proactively encourage interactions and dialogues to get connected to the customer.
• Avoid being limited to bigger outlets and enhance accessibility to the customer.

One major drawback in the growth approach of cosmetic honchos has been the lack of consolidation of the web services. A popular customer survey reflects a significantly poor segment having adequate knowledge of its existence and usage (clearly evident in figure 1 shown below). Internet and its proper usage may give the industry leaders and new comers the necessary and sufficient leeway to intrude into the fairly open market segment (refer figure 2 below).

In a nutshell, it has been an eventful revamp on the part of the brand, more reactively than proactively and all this can be attributed to one subtle yet unavoidable factor, the changing demeanor of the customer base, India’s mass market.

VAS, Concept, Context , Benefits

JIGYASA LAROIYA DHIR

Have you tried Vodafone health tips? Or may be the Airtel visa bill pay? Do you remember, just 5 years back your mom used to make a list of the household grocery for you to leave it to the kirana store and the merchant will deliver the goods at your doorstep.

All these are examples of the now so popular value added services. Why not? Value added services are ruling the marketing scene through customer satisfaction and revenue for the providers.

Value addition is an age old concept. It exists right from the traditional marketing days. During the advent of marketing, value addition was offered at a nascent level, more for relationship building & for goodwill. The concept was there, but is been rejuvenated by our present day marketers.

When we say rejuvenation, i mean a total revival of the very concept of vas. Now vas is a single marketing tool with lot many purposes like, service benefit, revenue generation, relationship & trust building and even to generate conversation around the brand, product or service.

Value-added services (vas) are unlike core services. They have unique characteristics and they relate to other services in a completely different way. They also provide benefits that core services cannot. We need to understand that vas shares some characteristics and these are typical in almost all categories.

1. Vas in not a basic service, it rather adds value to the total service offered.
2. Vas stimulates incremental demand for core service(s) to add up the profits.
3. Can sometimes stand alone operationally & even for profitability.
4. Does not cannibalize basic service unless clearly favorable.
5. Can be an add-on to basic service, and as such, may be sold at a premium price. Example: birthing suites in healthcare industry
6. May provide operational and/or administrative synergy between or among other services – not merely for diversification

Every VAS will demonstrate one or more of the above characteristics. Furthermore, a value-added service will never stand in stark contrast to any of the above characteristics.

VAS also has a certain time dimension associated with them. Subjectively speaking, a value-added service today becomes a basic service when it becomes sufficiently common place and widely deployed to no longer provide substantive differentiation on a relative basis. Like in telecom, we are as used to of sms as for calling & receiving.

The Relationship of VAS to other Services broadly is divided into two types of VAS. The first service type is those value-added services that stand alone from an operational perspective. These types of services need not be coupled with other services, but they can be. In Telecom, many non-voice services fall into this category. They are often provided as an optional service along with voice services, but they could be offered and used by themselves without the voice service. For example, SMS could be offered and used as a service without voice calling.

The second, and arguably more numerous and important type of VAS, are those services that do not stand-alone. Instead, this category adds value to existing services. While it seems implicit in the definition of value-added, this is an important principle that makes value-added services stand apart from other services.

RE-DEFINING VAS

With the constant change and development in economic conditions, customer insights, product categories, FDI and increasing competition, Business needs to innovate to sustain the product/brand and to survive in the mad rush of options for the customers. And the marketer is the person who is at the helm of this task.

The increasing competition among brands to create a space in the consumer’s mind have had been the biggest challenge since ages. The inception of advertising resulted in warfare between brands. The era of innovation marketing ruled the roost and the war of brand survival became more intense. And the definition of marketing went on to constant changes. Broadly, the change in media & promotions looks like this-

Barter-Print-Radio-Television-Outdoor-Internet-Mobile-Sms-Digital media-OOH

It’s been evident that the business has been on a constant change after the t-word i.e., Technology. The above set of media tools depicts the need of modulations in the marketing due to technological advancements. Not only that the trend of innovations in technology is been rapid and is still growing fast, constantly challenging the marketer to provide innovative solutions and execute perfection. All this has resulted in a dire need to differentiate and add value and that’s how we have VAS.

Media has been ever emerging, by all means trying to allure the consumers. But with the concept of ‘Consumer Awareness’, there was an immediate need for the marketer to get into consumer insight which comes from understanding Consumer Behaviour.

Relevance + Truth = Consumer Insight

This has led to the new phase of Consumer marketing, namely ‘Customised Marketing.

THE TURNING POINT IN VAS STORY

Wikipedia (still) Defines VAS as - A value-added service (VAS) is popular as a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions but, it can be used in ANY service industry (eg. Web 2.0) for the services providers provide for no cost to promote their main service business.

Undoubtedly, the evolution of VAS was through the SMS services, and that was probably the first value add after the mobile calling services which the consumers even experienced. Since then SMS have been equally popular. Yes, because of the competition getting fierce the service providers have made them interesting & playful as well.

The very concept of VAS got popular with the telecom industry trying to get the first among each other by more value addition and less costs. However, due to the technology there has been considerable time taken in offering better & interesting deals. But, by that time various industry segments & categories started picking up VAS as a part of their product/service strategy. So we can say that the success of sms service as VAS is essentially the say that the success of sms service as VAS is essentially the turning point for the marketers in service industry.

VAS as such is a popular term, has emerged as a separate category in the service industry. Almost all the segments of service industry are picking up the concept of VAS and those who have already are looking for constant innovation, because competition is fierce and customer is informed. Let us look at the VAS in the current marketing scene briefly in the Telecom, Media & Entertainment & Healthcare sectors.

VAS ENHANCING THE POSSIBILITIES OF VALUE PROPOSITION

Coming to the Value Proposition being created by Value Added Services, first let us see what is Value Proposition? Creating a value proposition is a work of Craft & Creativity. Your message should deliver the value proposed by facilitating the customer with an answer to, Why the customer should buy this product/service and precisely, why now?

In marketing terms, we can also define value proposition as a Positioning Statement of a Brand. In VAS it is a statement of service & promise.

A value added service has the property to add up to the value proposition through various ways like consumer benefit, convenience in offering, minimal or no cost and then the marketer communicates the proposition in a variety of visual & textual ways.

A LIGHT-HEARTED EXAMPLE

It’s tongue-in-cheek, but demonstrates how the template can be used.

For a 20 somebody from a call center who wants to sort a messed up relationship, our Love Guru Service is a live mobile help, which provides a customized relationship consulting & tips anywhere.

Unlike radio shows, Love Guru takes care of the confidentiality & individuality, and gives an option to keep the consulting personal.

This is because of our unique customer based & customer oriented value added services. Love Guru - the so personalized & customized Mobile Consultant.

Tip for Readers: Try your value proposition on your colleagues, friends etc and more importantly on the prospective buyers, if you are a service provider.

Telecom industry today survives, competes and excels on the basis of Value Added Services. VAS has almost got embedded in the service offerings of all the telecom service providers. The emergence & growth of VAS in telecom has been phenomenal and the competition fierce. The technology has played its role and the customer is getting all enslaved to technical convenience. And for that they are ready to pay because it saves time & effort as well.

VAS in Telecom is popular in the following service categories:

• Entertainment VAS
  
• Info VAS
• mCommerce VAS
• Mobile Advertising
• 3G Technology
• Mobile Music

If we go by the figures, Value Added Services in the telecom sector is expected to be Rs. US $ 4 billion Industry in India by 2015. Currently the industry which is pegged around revenue of US $1.2 billion will see major growth in the music and mobile gaming segments suggests a PricewaterhouseCoopers report.

Media & Entertainment:

Similarly, there has been a great hue & cry for the content, maintenance and control in the media & entertainment industry. The media segmentation and proliferation has led to the formation of special niche segment of audiences with their own choices and preferences. This has put the service providers to innovate their offerings to get the maximum audience. And that’s why VAS is emerging fast in the Media & Entertainment Industry especially through the Reality Shows, Engagement Marketing etc. IPL, Roadies, Little champs being the latest example. However, Star Plus’s KBC is still remembered as the trend setter.

Technically speaking the following are the future trends which all the service providers eye for higher revenue generation,

1. Online Radio & Music
2. Digital TV
3. Adver -gaming & Mobile Gaming etc

Going by a recent research study, as per the FICCI - Federation of Indian Chambers of Commerce and Industry and KPMG, media & entertainment industry in India is likely to touch US$ 20.09 billion by 2013. The projected growth rate is 12.5 percent per annum for the next five years.

The popularity of VAS is tremendous in the marketing circles. Not only the popularity, the opportunities and scope are outstanding as the very concept of VAS survives on constant innovation. The customer is informed & demanding so are the channels. Latest success story in innovation offering is of Viacom’s most recent biggest success, Colors – the channel leader with its entire well thought of shows.

Healthcare:

Though, there are comparatively larger costs involved in the healthcare industry, the following are the popular category of value added service in healthcare,

• Private Rooms
• Spiritual Architecture
• CAMS – Complimentary & Alternative Medicine Systems
• Dietary Services
• Commercial VAS
• Telemedicine etc

Education, Retail & Professional Services is also fast adopted Value Added Services as an integral part of their service umbrellas. The popularity of VAS and the success rate is the driving force for the marketers who are now planning to offer to its customers something extra.

There are both Growth drivers and barriers of VAS in the Indian Markets. The customer response is so far so good and the marketer is happy for it, and is encouraged to offer something more & different but there is certain lacunae in the system which turns the situation into a wary one. To list a few barriers -

• Limited focus – On Youth & Entertainment
• Content Piracy
• Lack of Infrastructure
• Limited Pocket Share of the customers
• High costs to end users
• Absence of Utility Services
• Lack of transparency in revenue sharing
• Underdeveloped WAP market

VAS is emerging, evolving & growing very fast. A start-up venture for the telecom sector is now becoming a stepping stone of marketing innovation. Phillip Kotler said, ‘Customer is the king’ and services marketing is living up to the expectations of the king – the customer. The customer seeks variety, choices, offers, schemes, benefits etc to make a decision which is value for money. As a result of this, each industry category is welcoming the cost effective tool for new age marketers – Value Added Services. VAS definitely is the future of marketing.

THE LINK BETWEEN POPULATION DYNAMICS AND VIRAL MARKETING

Arpan ghosh | IIM shillong

Introduction:

Can marketing be done in the same way that an epidemic spreads in a certain population? This paper is a set of ideas that I feel shows the relationship between the laws of the natural world and the business world. It seems that the extension of the Cournot’s Duopoly Model in economics from two to n competitive firms follows the same graphical representation as that of the population of a particular species living in a closed ecosystem. This would prompt the thought that the behavior of an organization (both the firms and the animal population being organizations with defined hierarchies) would remain essentially the same whatever be its surrounding in the sense that the Darwinian laws of competition and the survival of the fittest seem to apply. Now the question is can this hypothesis be extended to the social setting where a human population also has the same hierarchical structure albeit not as explicitly stated or properly defined as that of a school of fish or a colony of ants. This is where I believe that population dynamics will meet swarm theory. I believe that the overall size of the population in a closed ecosystem (population dynamics) will be affected by Darwin’s laws but how the existing population behaves at a particular moment can be mapped by swarm theory. The center of the population and its outline will define the entire population and this can be utilized by today’s modern marketers for their benefit.

Objective and Problem:

The idea that I am proposing in this paper has been worked upon before, but not in the same form. The concept of viral marketing involves spreading an idea in a certain target market through “word of mouth” .But this process, I believe , is unstructured and uncontrolled in the sense that the advertisers cannot be certain whether their message will reach the right people, cover the entire market or have the desired effect. Now what I want to do is to see if somehow, if I want to advertise (spread an idea), can I identify the centers of power (the people) that will be the most potent amplification points for the spread to the entire population?

People believe friends, family and acquaintances much more strongly and willingly than they do the typical salesman. That means that if I am targeting only the 10 most influential (in real not nominal terms) people from a population of 100 to carry my idea forward, I am in effect increasing both speed and brand equity while cutting costs drastically.

Methodology and hypothesis:

Now, again the question is - how does one identify the center(s) of a population. This problem will be compounded by the fact that the population size will keep changing during the period of determination, the individuals power to act as the center may vary and the biggest problem of them all- The search for the power points will have to be conducted from the boundaries towards the center of the population spread.

This is where chaos should play a part. As individuals are iteratively eliminated to get to the real center of power, a small miss in the initial assessment may ultimately lead to a completely different entity than what I was looking for and render the whole study useless. I believe that given a particular population, every individual/ organism should have a viral potential. We can plot these on a graph and then try to plot the “most critical path” (MCP)- a connection between all these high viral potential individuals. This will form the main conduit of information flow throughout the population. Any other communication or interaction with others in their sphere of influence is a bonus. The communication flow has to be along the MCP to allow the spread to the entire population in the most efficient manner. Other communication will result in redundancies. That means that we have to identify the “center” and then work outwards in order to find local solutions .When we reach the outer edge of the population we have to make a path from the center (global solution) through the local solutions.

Thus taking both methods together, I believe that this will be a 2 stage search in which we will first work outside- in, eliminating local solutions along the way in order to get to the global best fit according to the viral potential magnitude. Once this recursive elimination is over, we will have to work outwards again, picking the eliminated local maxima and studying their interaction effects with the non- solutions in order to determine whether they or the global solution have a higher influencing power on that point of the population.

The viral potential will solely be the influencing power of the solution in a positive manner in order to spread the company’s requirements in the fastest and least costly manner. This leads to the intuitive result that I can fiddle around with viral potential that is increase it with positive reinforcements or decrease it with negative ones. But here again economies of scale will kick in as increasing the reinforcements beyond a certain point will lead to decreasing results as the sphere or the level of influence cannot increase beyond a certain point.

We can define a parameter for the level of influence that a particular solution has on the surrounding points. As soon as the level of computed influence drops below the defined level, we have to look for a solution that better influences the points and thus optimize our agents for the maximum impact.

Global Optimization and Search Method:

One way to solve this problem is to do a search of the feasible solution set and look to optimize the solution. This would be a constraint bound programming where we would be maximizing the objective function. I believe that this should be a 2 stage search – the first to identify a global maximum that should be the starting point of the propagation. This type of search I believe has already been incorporated in memetic algorithms (MAs) or hybrid genetic algorithms. This will lead to a kind of a concentric search where the constraints will be used to obtain feasible solution sets in each iteration thereby evolving newer populations. This should ideally lead us to the starting point of propagation, the individual having the highest or lowest value of the objective function.

In another perspective for a more evolved search we can look at a meta- Lamarckian MA that have the candidate solutions competing based on incentives to generate local improvements. An improvement of this process will be a third generation MA that will have the constraints and the search parameters also evolving along with the progression of the search for feasible solutions.

Conclusion:

The idea for this approach is in a fledgling stage, but the benefit if an optimal search method can be developed will be huge. Any organization will be able to pinpoint the individuals it has to target to ensure that its product or idea is spread to each and every target in the population. Thus potentially, before the product launch in a country or region the entire market size, regional distribution and demographics can be estimated. The only limitation of the solution, if it is possible, at this juncture is the scalability of the model and the huge computations required for calculating the viral potentials and doing the global search.

Umbrella Branding : A Marketers Dillema

View

Gunasekhar A, IIFT Delhi

Umbrella branding sends a common signal to consumer, conveying credible information about unobservable product quality. Further it saves the firm a lot of money in new brand building. But, the degree to which a brand’s signal is bonded is a function of not only the amount of money at stake (either in terms of sunk costs or future profits), but also the degree to which this money is vulnerable to future consumer sanctions.

Most often Customers are informed imperfectly about product attributes. Bad news travels fast. This lethal combination can pull down the sales and future revenues of all the products under the same brand on a single mishap.

A company that gets into using a single brand across diverse categories aimed at diverse target groups, it may on paper have economies, but it can’t do an efficient selling job. Transferring brand value and emotional appeal of a product for a set of customers to another product for a different set of customers in a different category is a difficult and costly job with low success rate. It has to find the fit and an overlap not only with its products but also with customers.

Moving up a value chain with an umbrella brand is almost impossible. You cannot convince a customer that all of a sudden, this brand on this product alone is more than what it is used to be, while it stands same for all other products. He wouldn’t have convinced but confused.

Independent brands can be better processed, more robust and better positioned. Umbrella brands can be a hindrance, when the firms want to diversify or move-up the value chain.

Counterview

Abha Sinha, IIM Shillong

In this era of recession, when companies are worried about their advertisement budget, umbrella marketing offers them a solution. Brands like Videocon, Johnson & Johnson and Kellogg’s use the same name for the entire range of their products. It provides a cost effective and intelligent option to explore. The consumer is exposed to the same brand name repeatedly, so it has a much better brand recall. Asian Paints despite having several diverse sub-brands prefers umbrella marketing. Whenever a company comes up with a new product, a lot of money goes into marketing of the product. But if it comes with a familiar name, it can always lead consumers to trial purchase and has a product acceptance advantage. It is likely that a successful umbrella brand will enable a company to spend only a quarter of advertising budget in their campaigns as compared to others. For instance, after having rolled out Amul Milk in pouch form in Delhi in 2003, GCMMF was able to tap 5,000 retail outlets in just five to seven days without even spending a single penny on advertisement. Now-a-days brands want to have an intense ethical image. Any ethical practice or CSR practice adopted by a brand will have a positive effect on all the products. In case of individual brand marketing, it may be difficult to build ethical image for each brand of a company. In case of brands like Amway and Ayush which prefer direct marketing, companies always prefer to use sole brand name to connect better with the consumers.

Therefore, when a product line stands for the same values and has the same emotional link attached, umbrella marketing is the way to go. It however, poses a collective responsibility among the brands to maintain the quality of standard.

Pantaloons Retail (India) Ltd - Strategy in the Face of Economic Downturn

Saishree D | Tapmi, Manipal

When Kishore Biyani started Pantaloons Retail (India) Ltd.(PRIL), he must have hardly expected to hit in such a manner in the short time frame. What started off as India’s first brand for formal trousers back in 1987, transitioned into what is now the country’s largest retail giant with its footfall in every arena the modern-day consumer believes to be part of his/her lifestyle. How has retailing helped shape the needs of the modern-day consumer and direct his/her quest in fulfilling these needs?
PRIL, the flagship company of the Future Group, operates through a large number of formats that target different aspects of consumerism. These largely centre on:-

• Sports and Fashion - Pantaloons, Central, Brand Factory etc.
• Food – Food Bazaar, Fair price etc.
• Home products – e-Zone, Staples, Home Town etc.
• Leisure and Entertainment – F123, Bowling Co. etc.

Assessing the damage
To ascertain the strategic moves PRIL has adopted given the current economic scenario, we must first examine the environment it operates in as a result of this slowdown. We will then be able to understand the necessity for these strategic steps. This has been explained using the Five Forces Model prescribed by Michael Porter.

Threat of Entry – MODERATE
PRIL’s rivals Shopper’s Stop and Vishal Retail only grew by 3.3% and 17.8%, with operating margins falling over last year‘s. This hardly seems a lucrative opportunity to any big names scanning the horizon. In addition to this, the latest budget did nothing to spur growth when it
made no mention of the relaxation in FDI norms for the retail sector – a longstanding demand by the major players in the sector, along with recognition as an industry. However, considering AT Kearney’s predictions of the potential in the Indian retail market, the threat of foreign entrants looms large in the near future with the first Wal-Mart in India opening just a few weeks ago.

Threat of Suppliers – LOW
Market share generally reflects the focal firm’s influence over its consumers, competitors and suppliers. Rather than the traditional ‘Producer-push’ format of supply-chains, large retailers enjoy the advantage of the ‘Consumer-pull’ format. The Pantaloons’ supply-chain is said to be the most cost-effective in the world.

Threat of Substitutes – LOW
Substitutes to this sector may largely come in the form of Internet, wherein direct selling of consumer goods may take place. But considering this phenomenon has not gained momentum in India, its chances of posing a major threat to the sector is fairly low.

Threat of Buyers – HIGH
The retail sector has always faced trouble retaining consumer-loyalty. The gloom of the meltdown has spread rather rapidly in the consumption segment with same-store sales in most retail chains dropping to abysmal numbers. In the current scenario most consumers prefer deferring purchases of retail items, and hence pose the largest threat.

Threat of Rivalry – LOW
PRIL’s immediate competitor, Vishal Retail is running out of cash and closing stores all over the country. Although they have no hopes of opening these outlets just as yet, they do plan on reworking their format through expansion by way of franchisee units. Many foreign ventures with domestic firms are falling out while previously established foreign retailers are looking for alternate strategies.

PRIL’s strategic moves
The growth in the retail sector has now dropped to below 7% and consumer spending has tightened. Pantaloons’ sales fell in February, and the company saw dipping consumer demand and rising costs. But despite these conditions, Edelweiss Securities expects Pantaloons Retail (India) Ltd. to survive the carnage pretty well. In fact, PRIL’s shares rose by over 60% come March. This, when PRIL’s competitors are completely pulling out of the sector! How has PRIL managed to do this?

PRICE

• Kishore Biyani’s ability to forecast the future definitely paid off for PRIL. Back in January 2008 the CEO initiated the cost-cutting campaign ‘Garv se kaho hum kanjoos hain’. Through emails to his employees, Biyani made sure to instill awareness of the dim future amongst each of his employees and to devise processes to meet the requirements within 6 months.
• PRIL started converging back-end operations 6 months ago, and plans on continuing in the future. This exercise that primarily involves converging the back-end operations of all similar lines of businesses has proved profitable in terms of cost-saving on resources.
• The company took steps towards strategic realignment and cost-control techniques way back in 2006. Through a series of scenario planning exercises and continuous review of business plans, it was able to bring out the best possible levels of ‘efficiency, productivity and resilience to the external environment’.

PLACE

• As per Fitch Ratings, the company is now concentrating on supply-chain efficiency, high-margin private labels, and reworking lease rentals. PRIL is one company that has always promised value and quality at lower prices.
• Hence maintaining low prices is at the heart of all strategies they will be implementing in the future.
• The company has also succeeded in cutting its 5-level supply-chain structure to a 2-level one.
• A very strategic decision in terms of real estate helped the company gain considerable cost advantage over its competitors. It had acquired land for reasonable rates a few years ago, as it expected the increase in real estate prices.

PROMOTION

• In addition to all the above, PRIL also introduced shopping festivals, end of season sales, exchange fairs and days dedicated to low-price shopping. Through a partnership with McKinsey & Co., they were able to develop a process-driven approach towards discount planning and inventory management.

OTHERS

• Future Group had plans of restructuring its flagship retail company into a holding company (under the name of Future Markets and Consumer Group) early this year, but put these plans are on hold in the hope of the new budget’s FDI norms for the retail sector. Despite the disappointment the budget posed, these plans will not be completely scrapped but pursued in the near future when the situation starts looking up for the sector.
• The new budget has brought out incentives for consumers to get back to their old spending habits, like the abolition of Fringe Benefit Tax and the increase in income tax ceiling. PRIL hopes to exploit these opportunities to motivate consumer spending.

PRIL is currently India’s largest retail chain and continues to dominate the sector while its competitors bite the dust. An insight into this company’s immunity reveals how its restructured strategy worked to its favour.

SV - Rayban

Winner: Kunal, NITIE

Honorary Mention: Krishnakant, TAPMI