In recent times, the Indian consumer durables sector has witnessed a large number of sales promotion offers. This article discusses reasons for its usage, objectives, practices and issues in managing these activities from the perspective of the company, consumers and dealers.The Indian durable goods sector, valued at Rs. 180 bn, is rapidly growing as 300 million middle-class people aspire to own them. Over the years, demand for consumer durables has steadily increased with rising income levels, double-income families, changing lifestyles, availability of credit, increasing consumer awareness and introduction of new models in the country. Also penetration being low in the Indian middle-class, there is a great potential. For example, penetration levels of televisions in India is just 24% as compared to 98% in China, 11% in Brazil, 235% in France, 250% in Japan and 333% in the US. Refrigerators also have good potential for growth in view of a meagre 2% penetration levels. The biggest attraction for MNCs is the growing Indian middle class. (Size- 300 million consuming class as per the NCAER Report: The Great Indian Middle-class: 2001-2002 ). Deep pockets and cutting-edge technology enable the MNCs to compete with local firms, while local firms have to gain leverage through their brands, distribution network and their local knowledge.
Unlike many other industries where it is the customer's need or want which is directly responsible for market demand, in the durable goods industry, interestingly, the critical factor that drives demand is government policies. If the government increments budgetary expenditure on the infrastructure, especially rural electrification, (which was hitherto a neglected area in India), it would spur demand. As the growth of the consumer durables industry has a direct bearing on the economic performance, the focus of the current UPA Government on rural development appears to be in the right direction and may usher new hope for the sector.
Consumer sales promotions are short-term incentives to encourage the purchase of a product or service. Further they act like; Short-term material inducements Tools designed to stimulate earlier and stronger market response `Extra' benefits to consumers Something that transforms a want into a desired purchase action Provides extra worth over and above what is built into the product at the normal price Reduces risk involved in purchase Is an activity used to combine push and pull strategy of a firm. |
