Leaders are Lazy – The textile war – (Part II). Are they dumb too?!!

New Players. New Game.

Now the second part of the textile war based in Thrissur is being played out in full swing. Jayalakshmi Silks, even with a half finished showroom, could leverage upon its brand value build upon several years of consistent marketing communications. Customers flew in flocks to feel that special Jayalakshmi experience. Though it was an off season, customers from all parts of Thrissur district made Jayalakshmi their shopping destination for a while. As I had mentioned earlier, Kalyan Silks (The leader) suffered the most and it was not much better for other textile showrooms too. Then came another new textile showroom named EMKE Silks from EMKE group.

The Festival Price War

The new entrant once again changed the scenario. People started to flock to the new showroom named EMKE Silks. Jayalakshmi had to split its new customers with EMKE Silks. All others like Kalyan Silks, Pulimoottil Silks, Emmanuel Silks, Seemas, Kalyan Sarees to name a few, faced the brunt and the business was shared between Jayalakshmi & EMKE. Jayalakshmi responded with a price based campaign named BEST price & BEST selection. The price range of their sarees were explicitly stated in their ads to woo the EMKE Silks customers which they believed were price conscious customers. Now came an array of ad campaigns by other showrooms to fight off the 2 new entrants in the market. Unfortunately it was all based on price. Kalyan Sarees – Aadi Sale with a flat 10% to 50% discount, Emmanuel Silks – 10% discount, Kalyan Sarees – Priceless Festival with gift coupons, Seemas – already Aadi sale going on, Pulimoottil Silks – Lowest prices with onam ramzan.

The Outcome?

Unfortunately none of the existing showrooms analysed a simple basic fact. Customers always prefer new showrooms for their festival shopping at least just to have a glimpse of what they have to offer. They are not going to Jayalakshmi or EMKE thinking about the prices. If it was so they would have gone to Seemas or Kalyan Silks which had both offered a minimum 10% discount. So it was just a matter of wait & watch for the existing showrooms. They could have just released ads to remind the customers of their existence instead of shelling out more money for less business which again will downsize their profit margins. Now most of the existing showrooms have announced discounts but business is still with the new entrants – Jayalakshmi & EMKE Silks.

The immediate future?

In this round, Jayalakshmi has fought well with their ad campaigns. EMKE too have responded well to a small extend with their BEST campaign (again the same caption!!). Festival season (Onam & Ramzan) is going to see tremendous business and unsatisfied customers for these two showrooms. It is that point which the existing showrooms should wait for. But to gain customers post festival they should do ad campaigns based on their branding strategy rather than a day-to-day market force based strategy. So once again the game is on, let’s wait and see.