Strategic tools for the practising manager

KIT

The retail market for consumer durables and information technology (CDIT) is estimated at $11 billion and comprises about 4 per cent of India's total retailing market.

This market is expected to grow at 12 per cent per annum and eventually grow to a size of $15 billion by 2008.

The organised CDIT retail market is valued at $800 million. It comprises 7.3 per cent of the overall CDIT retail market and 10 per cent of the total organised retail market.

About 45 per cent of the consumer durables market is present in the top 784 urban centres. The top 119 A and B type cities together form 35 per cent of the market. Non-metros and other cities also sell significant volumes.

The urban consumer durables market is growing annually at the rate of 7-10 per cent and is moving towards a replacement and upgradation market; whereas the rural market is growing at a faster pace of 25 per cent a year, although on a lower base.

Consumers prefer to buy durables from multi-brand outlets located in destination markets. Most consumers prefer to visit two to three outlets before making a final purchase decision.

Brands and prices are key considerations for choosing a retail outlet. Comparatively, the retailer loyalty in this category is low.

Selections from management journals
NUGGETS

When making a purchase, a consumer has a choice between using frequent-flier miles, cash, or some combination thereof. Which will he or she choose?

Another consumer has an opportunity to participate in a special programme to get a free car wash after paying for a certain number of washes. What's the best way for the car-wash owner to motivate the customer to participate?

Such questions are serious business for airlines, hotel chains, credit-card companies and other corporations that offer loyalty programmes to customers. Wharton marketing professor Xavier Dreze and Joseph C Nunes of the University of Southern California's Marshall School of Business have spent several years studying how these programmes can be structured to generate the most revenue for companies offering them.

The lowdown on customer loyalty programmes: Which are the most effective and why?
Knowledge@Wharton,
6-19 September 06

Floyd Landis'potential as a product endorser dropped faster than a cyclist speeding down a mountain road when he tested positive for synthetic testosterone, after winning this summer's Tour de France.

Sports columnists denounced him even as the companies that had invested tens of millions in him and his team dropped their sponsorships. Landis, of course, isn't the only celebrity or athlete who managed to misbehave this summer.

Consider sprinter Justin Gatlin, French soccer player Zinedine Zidane, actor Mel Gibson and Philadelphia Phillies pitcher Brett Myers. Yet as marketing experts and others note, celebrity wrongdoing is more than just fuel for gossip columns. Athletes and celebrities push all manner of products and services, and their downfalls can tarnish the brands and companies they endorse.

Star blight : The perils of celebrity endorsements
Knowledge@Wharton
6-19 September 06

"The perils of these endorsements are consistently underes-timated," says one expert.

Read both these articles at http://knowledge.wharton.upenn.edu/