Indian consumers not only buy everyday products under deals; they are actively seeking bargains for many aspirational products.
In 2012, not only will consumers continue to hunt for deals and discounts, but they will do so with relish if not pride. Deals are now about more than just saving money: it’s the thrill, the pursuit, the control, and the perceived smartness, and thus a source of status too.
Flip through the pages of any newspaper, magazine. Combo offers. Buy 1-get-1-free schemes. Price advantage if purchase via the internet. Deals manifest in many forms. Not a single day passes in the sky without mention of one or the other deal. While deals have become the order of the day, such enticements of consumers reach astronomical propositions during important festive seasons like Dusshera, Diwali, Christmas, New Year and more. While for the company, there is spurt in the sales; the consumer — the king — stands immensely benefitted.
Over the 13 years that I have been in India, and as a curious marketer, I have some very interesting trends when it comes to deals. At one end of the spectrum are marketers who “thrive” on deals only and offer deals almost year long, at the other end of the spectrum are brands who just do not give any offers or deals. Some are on the mid path — doling out offers and deals only on “special” occasions like festive season, the brand’s milestone achievement etc.
Let us view the deal of deals from a consumers’ perspective. What’s in it for the consumer? That’s the moot question. Well, over the years, the business of deals has gone through a paradigm shift. Deals were predominantly seen as “money savers” and perceived to be a “middle class phenomena” and the freebie that you got in a deal raised questions about its quality and generally seen as old stuff kept to be discarded. No longer. Today, deals cut across socio economic strata. And why not - when the quality of the freebie instills a sense of pride.
Quality and price do not exist as isolated concepts in consumers’ minds. They are interrelated. Deep and frequent discounts or promotional offers, often account to lower the quality perception of the brand in consumers’ minds. This could be a subconscious reaction of a consumer who may believe that the quality has been lowered. In this case, on a value rebound, consumers begin to perceive the everyday price is too high. They wait and time their purchases to coincide with promotional offers on their preferred brands. This is true even for brands where brand loyalty exists.
Also Read
According to a market research by AC Nielson, between January-March this year, over 39 per cent of consumers were actively looking for better deals while shopping as compared to 30 per cent a year ago. And, with the advent of online shopping, it has become easier for consumers to compare products, prices and deals quite easily. Daily deal sites are on a rise. Consumers have easier access on deals by recognised brands on a daily basis. More so, easier categorisation, extensive product offerings and better deals are inevitably shifting focus of consumers to price and pick the best deal. With a user base of more than 10 million, and the daily deal sites reaching every nook and corner of the country, the internet space is offering a lot of choices for consumers to choose from. Deals, promotional offers, discounts are surely going up. Consumers not only buy regular products under deals, but also look forward to deals for many aspirational products like cameras, mobiles, computers and accessories, apparels, jewellery, home and kitchen appliances, toys, gift items etc on the online platform.
At the same time, with consumers becoming more and more discerning as well as quality conscious, it is important for marketers to offer qualitative deals — else facing the danger of eroding consumer brand loyalty. Consumers not only want quality, but are also willing to pay for it. The same logic will apply to deals as well — it is the quality of the deal that will determine its success and sustenance of the brand and its image and reputation.
According to a recent survey, the Indian economy is touted to be the second largest economy after Japan by 2020. With the corporate India witnessing increased competition, consumers becoming more aware, sales promotions generating positive impact on top line and above all, consumer acceptance, deals are sure to upsurge in the coming times. And as we see more and more of promotional deals, the onus shifts to brands to motivate the consumers to buy their products.
The author is MD & CEO, Amway India