Innovation within emerging markets

India_home_appliancesThe Hindu

More than the analysis, which is based heavily on fundamentals such as distribution networks in India’s vast hinterlands, what caught my eye were the stories about the TTK company’s innovations centered around their Prestige brand of pressure cookers. Now, they just need to redesign the pressure cooker itself. I own two Hawkins pressure cookers because it has been passed down to me that their infitting lid design is safer than the over the top fit of the Prestige. Exploding pressure cookers are a common horror story.

Still, I digress, back to TTK’s overhaul and revenue growth for Prestige – the biggest change they made, in the Indian context, was creating a franchise chain of showrooms for their products under the "Prestige Smart Kitchen" brandname. Apparently their sales are up in the double digits, the showrooms are affordable entreprenuerial ventures in the smallest towns and even NGO’s have got into the act in the absolutely rural areas.

Singer India was a long term exhibit design client of mine, through one design studio or the other over 6 years, and we’d got to know their Delhi dealers and distributor well. Most of these products are really truly available in the worst locations, in horrible dusty and dirty shops with little knowledge of display. TTK did take a risk, as the article exults, and to great success, when you consider the biggest hurdle, even in India, is how to penetrate the great rural market. While urban India has a 94% percent penetration of pressure cookers, rural India has only 22%. Guess which population segment is larger?

The bottomline seems to be the customer experience, great to see it in contexts other than just the latest MP3 player and the box it came in. Here’s a snippet,

Brand managers suffer from a couple of maladies. One is the
unshakeable belief that their product is the best thing that has ever
happened to the human race. The second is the secure belief that they
know everything that needs to be known about their consumer. And yet,
as a general rule not enough on-going research happens to map changes
in consumer’s expectations and experiences with their respective
products.

Even less research takes place to understand the feelings of
the consumer at the dealer outlet. Research done at the pressure cooker
outlets suggested that the outlet was hardly anything to write about.
The display was unappetising, at best. The dealer’s salesman was often
untrained and not infrequently, unfriendly. Transactions tended to be
conducted without bills and prices varied, leading customers to believe
that dealers lacked transparency. Hardly surprising that even though
the consumer had the money, she did not have the desire to browse at
the dowdy outlet. In fact, the category’s share of the consumer’s
wallet was shrinking.

What’s really interesting is that while a certain percentage of customers browsed the showroom but ended up haggling with the dealer’s outlets for the product, there were just as many purchased at the full retail price from the showroom floor. Both the franchisees and the dealers were happy.

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7 Responses to Innovation within emerging markets

  1. neelakantan says:

    I have been to quite a few Prestige smart outlets and to be honest, I am not impressed. It is just the usual stuff – non stick utensils, cookers etc, which seem to be there to beef up margins. Apparently their range can take up more than regular non stick but beyond that, they have little to offer.
    Coming to product development, they had a cooker by the name of “Smart”. (I was planning on a post on this one, perhaps will) We purchased one thinking it would be good for all of TTKs goodwill, but it is now arbitrarily withdrawn, and we spent a long time trying to get it working right. Were we offered anything in exchange, no – typical of some Indian companies – we were dumb enough to buy it, so we pay for it.

  2. niti bhan says:

    Neelakantan, it seems I got carried away by a news report and my older memories of what things were like. I look forward to your post on “Smart” – the story is a familiar one in India. But, just for a moment, even if their range wasn’t impressive in the showroom, do you think it would make a difference if their displays were in mofussil towns rather than delhi, bombay, bangalore etc? i.e. their outreach into new areas?

  3. neelakantan says:

    See, again I am not sure. The way I see it, this is like kiranas and convenience stores. Many a time they use packaging only to prevent customers from haggling and bargaining. The Smart kitchen to me seems more aimed at beefing up margins. So, in the smaller areas, while the displays may be impressive, customers might visit a smart kitchen, ask the prices and then prefer to go to the smaller store and try and get a small discount over it.
    I had written more here about innovations in the kitchen, but perhaps I will post about it 🙂

  4. niti bhan says:

    Neelakantan, I think that seems to be their intent, to use the display and packaging to a) increase the number of customers to come and see their products and b) increase sales through both dealers (when customers go there to haggle for a cheaper price) or through the franchise. See the article.

  5. neelakantan says:

    If I were their customer who picked up the stuff from their smart kitchen outlets, I would feel cheated…

  6. niti bhan says:

    between the MSRP there and the haggling with the dealers? Neelakantan, I’m asking if that is ‘cheating’ or misrepresentation in any way? Isn’t it an example of jugaad for the customers? And that applies to anything, like us getting two cylinder connections and our neighbour being able to get only one? While I understand what you’re saying, the discrepancy is one equivalent to window shopping in a retail outlet and then finding a ‘deal’ online, no?

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