Whether Low Cost A Drag ?
In a country where cost has always been a decisive factor, sudden the buyer is now looking something beyond price.
Remember good old days when before making a purchase decision for auto vehicle standard question used to be 'mileage kitna deti hai' . This sentiment was recently encashed by Maruti in one of their TV campaign.
But if you see the recent trends, you will find changed behaviour of consumer, besides price, he now looks for experience among the other things. Probably, this change has compel some of the brands who have entered in the Market as cheaper tag, to change their strategy. Big Bazar has focussed their latest Rs 100 crore advertisement campaign 'Making India Beautiful' instead of old tagline 'issei Sasta Kanin Nahin'. So 160 strong store chain is emphasising on something more aspirational.
Indigo also started as low cost airlines. But today its branding and recall are not so much about how low its fares is but it's on time performance.
Take an example of US retail stores. Walmart is always treated as cheap store on the other hand Target, Safeway, Sears pay more attention on store branding, selection of stuff. Realising this in the recent times, Walmart is also working hard to remove it's cheap tag and perception. On the contrary, COSTCO sales at much cheaper rate not because cheap stuff but because of value packs or bundling deals, despite this, it never positioned itself as a cheap store.
In order to sale cheap , operations need to be extremely tight, with no flab. It also depends upon scales of operation and negotiating power. Indigo manages it's competitive price by sticking to a tight operation, spending more revenue-earning time on air than the industry standard.
In Indian Market low cost is still valid as the consumer is price conscious. This has stumped many foreign brands such as Nautica. So even those brands who have changed their advertising strategy like Big Bazar and Indigo, have not abandoned their low cost vestiges. Indigo still offers no frill services rather than full service model, on the world's current best selling single aisle aircraft Airbus A 320. Even for that matter Big Bazar is still competitive price wise despite it's changed advertising strategy.
Remember good old days when before making a purchase decision for auto vehicle standard question used to be 'mileage kitna deti hai' . This sentiment was recently encashed by Maruti in one of their TV campaign.
But if you see the recent trends, you will find changed behaviour of consumer, besides price, he now looks for experience among the other things. Probably, this change has compel some of the brands who have entered in the Market as cheaper tag, to change their strategy. Big Bazar has focussed their latest Rs 100 crore advertisement campaign 'Making India Beautiful' instead of old tagline 'issei Sasta Kanin Nahin'. So 160 strong store chain is emphasising on something more aspirational.
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| Big Bazar changing perception |
There is an interesting case of Tatar Nano car. It was advertised as worlds' cheapest car. The initial response was beyond expectations but gradually there was a big fall in demand. The aspirations of the consumer, who might not want to be associated with a low cost brand was the major reason for the dip in sale. Later the company realised that consumer want something beyond the price, imagery and quality can not be trade off for it's low cost positioning. The car has now a different advertising strategy, glamour, excitement and thrill are some of the new elements added in campaign and sale started picking up gradually.
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| Instead of budget airlines it is positioned as on time airline |
Take an example of US retail stores. Walmart is always treated as cheap store on the other hand Target, Safeway, Sears pay more attention on store branding, selection of stuff. Realising this in the recent times, Walmart is also working hard to remove it's cheap tag and perception. On the contrary, COSTCO sales at much cheaper rate not because cheap stuff but because of value packs or bundling deals, despite this, it never positioned itself as a cheap store.
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| COSTCO : not positioned as cheap store but still price is best |
In order to sale cheap , operations need to be extremely tight, with no flab. It also depends upon scales of operation and negotiating power. Indigo manages it's competitive price by sticking to a tight operation, spending more revenue-earning time on air than the industry standard.
In Indian Market low cost is still valid as the consumer is price conscious. This has stumped many foreign brands such as Nautica. So even those brands who have changed their advertising strategy like Big Bazar and Indigo, have not abandoned their low cost vestiges. Indigo still offers no frill services rather than full service model, on the world's current best selling single aisle aircraft Airbus A 320. Even for that matter Big Bazar is still competitive price wise despite it's changed advertising strategy.
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