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The IUP Journal of Marketing Management :
Emerging Trends in the Marketing of Consumer Durables in India
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The annual market for consumer durables in India (excluding computers and communication products) is currently of the order of Rs. 25,000 cr. In recent years, intense competition has led to a decline in prices. Consequently, market growth has mainly been in terms of quantity, rather than value. Further, the increase in quantity is propped up by consumer financing, promotions and discounts. Distribution is fragmented, and there are 40,000 consumer durable dealers in India. Organized retailing is catching on, but has overheads due to expensive real estate, air conditioning and higher manpower costs. One tries to offset this by negotiating lower prices with durable manufacturers. The Indian consumer is brand-conscious, but not necessarily brand-loyal, and might even pick up a reliable private label if it offers good price and quality values. Retailers such as Reliance, Future Group, Hyper City and E-Mart, therefore, plan to launch low-priced private labels by importing in large quantities from China and Thailand. Domestic durable manufacturers are responding by expanding their product range to ensure higher bargaining and shelf power with the trade. They are also exploring the possibility of cross-category tie-ups with non-competing partners from other industries to tap each others' points of influence, particularly in smaller/rural markets. Consumer durable penetration is one of the lowest in India and the untapped potential is evidently enormous. However, as Indian consumers continue to attach a high degree of importance to value for money, both manufacturers and traders would be compelled to explore every conceivable method to improve operational efficiencies, in order to achieve substantial and profitable business growth.

The Indian consumer durables market has undergone a major transformation since the liberalization process, initiated in 1991. The market size, product penetration, the variety and technology of products sold, have all experienced a quantum leap. Improved product choice and decline in real prices, matched by increased consumer incomes have driven the market growth rate to dizzy heights.

However, in recent years, the consumer durable industry is in doldrums. In spite of a comparatively low product penetration, there is a slowing down in demand growth for many products. Intense competition has pushed down prices and profit margins, putting the manufacturers and traders in a quandary. At the same time, the industry is facing a point of inflection due to the advent of modern retailing formats. The recent changes and their implications for the marketing of consumer durables form the focus of this paper.

 
 
 

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