Panwala, the 5th P of marketing

MARKETING: FMCG companies leverage the spread and consumer-connect of panwalas to sell a growing array of products.

Ghanshyam can be seen all over the town in search of blood for his son who is in hospital. Just when doctors are all set to lose hope, Chhajju panwala enters and gives his blood. The boy recovers and Ghanshyam is eternally indebted to the panwala. So much so, he gives up his favourite brand of mint for whatever Chhajju recommends.

Perfetti Van Melle’s new Chlormint ad ends with a message against irrational Ghanshyam-like behaviour — it’s the consumer who needs to choose the brand he wants to experience and not the panwala. Unless, of course, he has saved your son’s life and you know of no other way to repay his debt.

What the ad recognises is how the panwala is capable of influencing consumer choice and improve sale of one brand over its rivals. The panwala, in a growing category of products, has become the 5th P of marketing after product, price, place and promotion.

Prianka Sihota, brand leader, McCann Ericsson India, the creative agency behind the ad, says the panwala community has always been at the centre of of the Perfetti business plan in the country. “The current campaign for Chlormint draws its essence from the insight that consumers often do not exercise their right to choice of purchase and under a retailer’s influence take whatever is given to them,” she says.

Fast-moving consumer goods companies ( FMCG) seem to have recognised the advantages the panwalas offer. Post the sachet revolution in India, the panwala has diversified his product range from pan and cigarettes to bottled water to shampoo sachets, potato wafers and other snack food items, aerated beverages, candies and at times even pens and condoms.

In a way, this has been driven by the ever-tightening regulations around the sale of tobacco. As a result, the panwala’s dependence on tobacco has come down sharply over the years. The panwalas aren’t complaining, though. One in New Delhi says he has made enough to run a fleet of taxis, another admits to dabbling in the markets.

The biggest advantage they offer to any marketing-led company is their spread across the country. Pan has been a national addiction for long and panwalas can be found in pucca as well as ramshackle structures in every nook and cranny of the country.

Industry estimates suggest there are 14 million panwalas currently in business. Little surprise then, ITC leveraged its network of panwalas to good effect when it diversified into candies and snack food.

FMCG companies say the USP of panwalas is their location. A panwala is not very difficult to spot, which makes him a convenient point of purchase for impulse-purchases right from candy and biscuits to beverages. “There is no denying that a panwala has a significant role to play in the sale of confectionery,” says Perfetti Van Melle India CEO Sameer Suneja.

“Indians spend a lot of time on roads, parking lots or public transport transits. Panwalas are usually located near these spots. Hence, they make for great sampling points where one can pick up smaller convenient snack packs or even buy water,” says Mudra Max President CD Mitra.

Brand specialist Harish Bijoor has another interesting take on the growing importance of the panwala in the marketing plans of FMCG companies. “A panwala sits atop a perch dispensing products.

That itself indicates that he is in a position to hand down some knowledge to his customers and because of the one-on-one interaction he has with a host of people, they listen to him. That’s his advantage over any modern retailer.”

There’s more. A growing number of FMCG companies now use the panwala network to test-market their products. There are some serious advantages that a panwala offers over modern retail stores. As a pan shop is small in size, products normally get a good display and better service since only small amounts are stored at these units.

The verdict is clear: Even as modern retail stores mushroom all over the country, the traditional panwala’s importance has not diminished in any way and he continues to re-invent himself.

“Marketing people need to work with what I call the ‘panwala paradigm’. Look at the spectrum of products he stocks right from grocery items to now even recharge coupons for your phone. Tomorrow, he could double as a bill collector or even an insurance agent,” says Bijoor.

Ignore the panwala at your own peril.