afaqs!

101 Markets 2008: Quality not just limited to metros

By , agencyfaqs!, Mumbai | In Marketing | March 20, 2008
The biggest bills for retail chains are coming from smaller towns and today, people can do much more with Rs 500 per month. Small towns are not just about quantity, they are about quality, too. However, innovation is the key to reaching them

Today, quality & #BANNER1 & # is not restricted to the four metros. People in smaller towns are very brand conscious, too. The post-lunch session of the 101 Markets: India beyond the Metros seminar organised by agencyfaqs! tried to bust the myth that quality was limited to the metros, and stressed that the key to smaller towns is innovation - by talking to the people in these towns in their own language and understanding their psyche.

The session was called Balancing ROI: Metro Quality vs Smaller Town Quantity and it was moderated by Arpita Menon, vice-president, 9.9 Mediaworx. Praveen Tripathi, chief executive, Hansa Consulting; Sandip Tarkas, president, customer strategy, Future Group; and Ajay Chacko, national marketing head, CNBC-TV18, formed the panel.

Praveen Tripathi

Sandip Tarkas

Ajay Chacko

Arpita Menon
To illustrate his point, Praveen Tripathi took the top 20 cities of India, which had the four metros with 12.3 million households on the top. He compared the four metros with the other cities, which together had only 10.3 million households.

In comparison, Tripathi said that the 16 metros had more post-graduates (2.9 million) than the metros (2.4 million). Even the number of working housewives was more in the 16 cities (21 million) than the metros (20 million). Similarly, housewives with post-graduate degrees in the smaller cities (2.6 million) outnumbered those in the metros (2.5 million).

As far as ownership of motorcycles (9.6 million in the 16 cities as compared to 6.3 million in the metros), mopeds (2.9 million and 1 million, respectively), scooters (5.6 million and 3.6 million, respectively), dishwashers and deep freezers were concerned, the smaller towns scored over the four metros

This, Tripathi said, was a sign that "quality and quantity went beyond the four metros".

Sandip Tarkas said that the largest bill ever printed by Big Bazaar was 72 feet - in a small town called Sangli, in Maharashtra, "where a man bought almost the entire shop for a wedding". Giving examples of innovations, he said that small towns liked to have tailor-made clothes. While giving them the options of brands, Big Bazaar has come up with a facility that lets consumers select the cloth and then get it tailored from the store within 48 hours.

He said Big Bazaar had promotional events throughout the country on January 26, and the best performing stores were not in Delhi or Mumbai, but in Lucknow. "These small towns are starved and hungry for more. It is about their psyche as well - that they too can own it," he said.

Ajay Chacko gave a similar example. He said CNBC Awaaz was launched in January 2005, when the monthly tune-ins in the Hindi business space were a mere one crore. Since then, only by using innovations and catering to the needs of small town businessmen, the number had grown to 3.2 crore, of which 60 per cent was with CNBC Awaaz. "There is a need to expand the market, and it has to be different and it surely is in the smaller towns," he said.

Another point that Chacko raised was that there was a quantum shift in people's earnings in 2005 as compared to 1985. "More than 94 per cent of the population in 1985 had an annual income of less than Rs 90,000. In 2005, more than 54 per cent of the population had an annual income of more than that," he said. "Today, if you look at a figure of Rs 500, you can do a lot more with it than you could a decade ago. You can buy a motorcycle, a fridge, a mobile phone at an EMI of Rs 500 today."

All the panellists agreed that the enabling factor for reaching out to smaller towns was infrastructure.

They pointed out that disparities occurred within metros, too. The number of cars was much higher in Delhi than in Mumbai, Tripathi said, only because the sheer size of the roads was almost thrice in Delhi as compared to Mumbai, even though the population of Mumbai was higher than that of Delhi.

While moderating the discussion, Menon raised an important point: "Besides infrastructure, the other challenge is lack of media options in the smaller towns. While English newspapers formed only 7 per cent of the entire readership, they took more than 53 per cent of the revenue coming from advertising." So how were retailers looking to bridge that gap, she asked.

Tarkas replied, saying, "Currently, we are restricted to not using television due to spillover. However, with CAS and DTH, we may be able to reach out to people in the way they like and in their language."

The event was sponsored by STAR Majha, UTVi and Dainik Bhaskar.