Marketing

I just started taking a marketing class in UT Austin from yesterday. But time and again I was reminded of my experiences in India, a trip that I got back from two days ago. Here are a few great examples of how I found people marketing simple products and making great sales.

Chai Stop
You might think I am talking about a “Starbucks Type” joint. There are indeed places like that – Coffee Day for example. But what I am going to tell you about beats that any day I feel. A large majority of the Indian population doesnt really think of going to places like Starbucks or Coffee Day. Its simply too expensive. These are your average Joe folks who start early in the morning, take the bus, get to their work a couple of hours later. They leave work late and you can find them at 7 pm, 8pm 9pm at bus stops waiting patiently for the bus to take them home for a quick dinner and a few hours of sleep before the maddening rush of the next day.
Near on such bus stop at a corner where an opening connects the highway to the feeder side road stood a man with 2 or 3 flasks of tea. He stood right at that point where pedestrians walk, where scooterists have to slow down and turn to get off the highway. Thats also the place were people have to slow down to get onto the highway and it is on the way to the bus stop (probably 10 – 15 yards away from the bus stop). His Chai is a welcome break, an almost unnoticed refreshment in the dust and sweat filled commute of the people who stop by. Unnoticed but almost addictive in the comfort it provides. His teenage son periodically comes back with filled flasks and takes back the empty ones.
At Rs 10 per cup (half the size of what you’d get in Coffee day and a third in price) its almost irresistable. Its Chai after all. In the minds of those buying it how different would it get between Coffee day and this guy’s flask? Even with an estimation of every 10th person passing by him and a total of 200 – 300 people a day, he makes an estimated Rs 2000 – 3000 a day. Even very conservatively a sum of 1000 results in a tax free earning of 24,000 a month and a whopping range of (Rs 2,88,000 – Rs. 8,64,000). My sister’s driver makes Rs 8000 a month. So to make as much as him this “chai in a flask” person only needs 34 customers a day at Rs. 10 per cup. Comparing this to Coffee day … from one customer Coffee day makes Rs 30 (including taxes). This guy makes Rs 20 – 30 on the same amount of chai TAX FREE (depending on the coffee day cup volume vs this chai wallah’s cup volume) on the same volume of chai sold. And he is at a busy intersection.

Kalmane Coffee

A spectacular way in which you can take a mispronounced word and turn it into a product brand. So imagine a very poor street vendor who doesnt know how to properly pronounce coffee and instead says “Kaapi”. Imagine this happening all over a country with a billion people.  Kaapi – a word known to everyone, amusing, maybe frowned upon yet recognization and something that evokes that comforting feeling of that simplicity of life and the warm fresh aroma of coffee. Now take this word and name all your coffee offerings with Kaapi. And you have Kalmane Coffee.

Though unfortunately I couldnt sample their coffees because their coffee shop at the Phoenix mall in Bangalore didnt have any of the 5 or 6 options I chose on their menu.

Vitamin Bedsheets

An aunt of mine went to buy a bedsheet for her son in Austin, to send along with me. The salesman showed her a special bedsheet, so he said. He announced it as a vitamin bedsheet. Wrap yourself in it and you’ll have vitamins go into your body. No need to take any pills. Seeing through his gimmick she asked, what about when its put in a clothes washer. He said “This is special ma’am. It wont lose its vitamin content”. I bet any less educated or less knowledgeable of the ways of the world, maybe she’d have been impressed and would’ve bought it. I say this as I hazard a guess that it obviously it worked on a lot of others or else he wouldnt be using this approach to make the sale.

Ice Gola/Gus Gola

While I growing outside the school or at the bus stop there’d this guy who had a wooden box on the wheels and serving ice during summer on a stick and he’d pour a syrup on it to make it sweet. It probably cost 5 paise or 10 paise. (100 paise = 1 rupee and to give a perspective today 50 rupees approximately is the exchange rate with a dollar. At that time it was probably 30 rupees.)

During this trip I found how simple marketing can make this into a dramatically profitable business. Starting a company/service called Gus Gola someone created a brand and recruited people to work as servers and setup nice looking colorful stalls. The workers have attractively designed uniforms and the mobile stall itself looks very clean and  tastefully done. There are now about 30 different syrups and a sign clearly stating that the ice is made from mineral water. The guy making the gola wears gloves. But all this is on a street corner so I am not sure if it really matters. But the marketing definitely does the trick. The procedure is still the same, the product is still the same and the place still the same. All that has changed is the packaging.

What this has done is that its brought this product out from the perception that its a poor man’s delicacy. The price is higher hence its worthy of the middle class consumption. The mineral water reassures the middle class mothers that the gola is safe for their children and the cool ads and colors makes it appear that its worth spending the $30 on it.

One such company came up and succeeded. 10 other guys started similar companies and named their products similarly.

Want to sell ice? All you have to do is make it sweet and market it.

Tata Nano

A couple of years ago Tata introduced the “cheapest car in the world” – the Tata Nano. However due to mechanical and other engine problems its reputation took a hit. The company worked hard to fix many of these and price rose from approximately $2.5 K to slightly above $3000. Still despite all the hype the actual sales didnt exceed 50% of the targets. Asking around a bit I realized that the car was marketed as the poor man’s car. Even poor men do not want to be labelled poor men and definitely dont want to be associated with the poor man’s car. Consequently the poor men preferred buying more expensive cars at second hand or just brand new more expensive cars. Here is an example of where a marketing campaign actually ended up hurting the product sales that it was supposed to help increase. .

 

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