Not Wal-Mart vs
Amazon, but Walmart.com and Amazon
Source: Rural Marketing and Retail
By: Priyanka Siram
Wal-Mart takes small but sure strides towards becoming Walmart.com, and
Amazon chooses to take a few leaves out of the retail behemoth’s book, it is
clear that the global retail business is evolving into a hybrid and for sure, a
more customer-focused entity. Barely one-sixth of Wal-Mart’s size, Amazon isn’t
a serious rival for the former; it is an e-commerce giant, but more than that
it is a major disrupter of the retail industry.
Wal-Mart is a $471 billion megacorp with vastly healthier margins than
those of Amazon. Also, it makes real profits as opposed to Amazon’s iffy
profits. And yet Amazon’s price earnings projections are far higher than those
of Wal-Mart. Despite having had plenty of opportunities to raise its margins,
Amazon has routinely chosen to reward customers with subsidized shipping and
higher discounts. Wal-Mart’s margins are higher, but growth is much lower so
Amazon is paying in margins to grow.
For long Wal-Mart has suffered the collateral damage from the Amazon
model of shopping. Shoppers go to Wal-Mart, scan the bar code and then buy the
product online, quite often from Amazon at lower prices. But Wal-Mart isn’t a
Sears, a J.C. Penney or a Kmart, all erstwhile giants that have fallen by the
wayside even as retailing changed track. Wal-Mart isn’t one of them because the
company has a tradition of snagging the best technology.
In April
2011, Wal-Mart bought Kosmix founded by IITians VenkyHarinarayan and Anand
Rajaraman (who have worked in the past with Amazon) and
set its artificial intelligence tools to mining shopper behaviour. So its
e-commerce sales at just about $10 billion are dwarfed by Amazon’s, but they
have grown nearly 100% over the last one year.
But if Wal-Mart is chasing e-commerce success, Amazon in turn, is also
ready to test a small, boutique store in Seattle. If that experiment works out
it could well build a national chain. With Wal-Mart boosting its online
shopping experience, this means the two rivals could soon coalesce in skills
and objectives. Both firms are now making inroads into one of the last bastions
of traditional retailing—instant fulfilment—through their same day delivery
option.
Source:
Rural Marketing and Retail
By : Shorya
Bhatnagar
Service providers cashing in at Kumbh with special
offers
With the ongoing Maha Kumbh Mela
in Allahabad attracting millions of pilgrims and tourists, the mobile phone
companies have also been quick to cash in on the mega event. Aircel
has launched a special plan in Uttar Pradesh (East) circle to offer low tariffs
and constant connectivity. Valid for 30 days, the special tariff voucher of Rs
161 provides free 30,000 seconds of local or national talk time. Another
voucher of Rs 26 offers STD calls at 30 paise per minute.
Meanwhile, Vodafone has launched a new value added service
‘Vodafone Astrology Subscription Pack’, which provides details
on the significance of the Kumbh with key dates, reports a business daily.However, Shekhawat has said that there had not been any significant upsurge in revenues owing to the Kumbh so far.
Source:
Rural Marketing
By: Nikhila
Sharma
With
69 per cent of India’s population living in rural areas, they present a
significant market opportunity. Today, for instance, close to a third of both
FMCG and durable sales is contributed by rural markets. Overall, rural
consumption in value terms has grown 17.2 per cent per annum in the FY08-10
period. Recent data shows that rural consumption has grown faster than urban in
the last two years.
Based on the growth trend, rural is classified into
following groups –
Diamonds: districts which have
demonstrated consistently high growth from FY07 to FY10. There are 79 Diamond
districts, which have seen a growth of 35 per cent per annum at an aggregate
level. These districts have contributed close to 28 per cent of India’s rural growth
and 15 per cent of rural demand.
Resilient: Districts which have
experienced moderate-high growth each year between FY07 to FY10. There are 119
Resilient districts, together contributing to 31 per cent of rural growth, and
22 per cent of rural demand.
Emerging: districts which have
shown low growth/decline in FY07-08, but have picked up steam from FY08
onwards, showing growth rates of 12 per cent per annum. There are 173 Emerging
districts generate 31 per cent of the demand, but contributed only to 20 per
cent of rural growth.
Laggards: districts which are
growing at a low rate of less than 5 per cent per annum since 2008. There are
201 laggard districts which comprise a third of the rural population,
contribute around 30 per cent of demand but capture just 20 per cent of rural
growth.
The Diamond and Resilient districts require
significant attention, in terms of marketing and sales activities. They are
expected to reap higher returns on these investments. Emerging districts need
to be closely monitored to track triggers including commodity price growth or
industrial developments.
Though the Laggards exhibit slower growth,
players cannot ignore their aggregate demand.
An analysis of rural India indicates that
companies cannot look at it as one homogenous market. Instead of looking at
rural markets as one group, focussed distribution and marketing initiatives by
players in selected districts would enable them to profitably garner a
disproportionate share of growth in rural India.
Source:
Rural Marketing and Retail
By : Shreya
Ramaswamy
How Ramesh Juneja's Mankind
Pharma has changed pharma game with pulp marketing
DIVYA
RAJAGOPAL, ET Bureau Jun 13, 2012,
·
Mankind Pharma has been
witnessing a 16-18% annual growth against the industry average of 13-14%, with
chunky net profit margins of 12-13%.
·
It's also one of the
reasons for this Rs 2,120-crore company becoming India's eighth largest drug
maker, ahead of pharma majors such as Pfizer and Lupin Labs
·
The major reason for
their growth is that they have used the pulp marketing technique very well.
Their ads are in your face and branding not polite, unlike other contraceptive
brands.
·
The story of Mankind
Pharma has the makings of a Bollywood script. In 1984, Ramesh Juneja, a
33-year-old medical representative with Lupin Labs in Indore, decided to quit
his job in 1984 and, along with family members, set up his own formulation
business called Bestochem. By 1999, Juneja felt it was time to strike out on
his own. It was a time when pricing was not considered a barrier for selling
medicines.
·
According to Abhishek
Sharma, head of life sciences at Head Life-sciences at MAPE Advisory, a
mid-market investment bank, Existing players are not catering to the lower and
price-sensitive segment of the pharma market and in rural areas people drop out
from the cycle if medicines are expensive. That's when Mankind stepped in, and
its entry coincided with rural penetration of doctors.
·
The strategy is simple:
go after the masses with products they can afford. Demolish the margins of
giant pharma companies that once ruled the roost in the Indian market.
·
Mankind carved a niche
for itself by storming rural markets and slashing drug prices.
·
An aggressive sales
force meticulously reached places where others couldn't, making it one of the
fastest growing pharma company within a decade.
·
They carefully selected
their products for rural markets, incentivized the distribution channel through
schemes and controlled sales costs through local hiring. And small increments
in MRP directly flow to the bottom line.
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