Customer engagement & Loksabha election advertising in Kerala.

Reach out to customers or face the music. A new brand communicates better than the big brands. Customer engagement & loksabha election advertising in Kerala.

A 500 crore budget by the ruling party, 300 crore budget by the opposition party and undisclosed but definitely low budget by a new entrant makes up for the Lok Sabha Election Advertising Campaign 2014. Advertising to the customers in Kerala market always brings up interesting analysis whether it is a new product or an existing product. It turns out all the more interesting when it is a national election which is the biggest festival of all. All the political parties are trying to woo customers (read voters) by advertising their products (read candidates) and the most interesting part is the big names in advertising are behind creating each campaign.

Glaring mismatch

All the while we ad fraternity cry to clients that knowing the target audience and reaching out to the TG is more important than old fashioned advertising technique of spending a lot of money on bombarding all the media. Then here comes an election campaign where all the parties are made to do the same thing that we ask every client not to do. Every time a change in a copy of an ad is met with disdain by us adpeople and here comes an election campaign with glaring use of misappropriate words.

Local Markets differ

It is a fact that India now has more diversified local markets. Unlike in the old days where a single national campaign would work across all the markets (of course because the ads were mostly targeted to the urban market in each region), now every national campaign is either translated/adapted or even made in local languages taking into consideration the subtle cultural nuances in each region. The local markets have upgraded in their knowledge/info thanks to the technological advancement. Especially the easy accessibility of the internet & smart phones has changed the rules of the game like never before.

Kerala market is all the more unique

High rate of literacy, high rate of English knowledge, different dialects even in their mother tongue (Malayalam) across the state, hypocracy in ideals, always ready to experiment are just some of the key features of Keralites which makes it a unique market. And coming to figures, Kerala has the highest gender electoral ratio which stands at 1,079 women to 1,000 men. 9,06,420 more women than the male voters to be exact as per the figures released by Chief Electoral Officer for 2014 polls. Now comes the most interesting figures – 8.1 percent of the total electorate in the state are first-time voters, 19,33,844 to be exact. Apoliticisation of campuses in Kerala has resulted in making these first- time voters non lenient towards any one political party and the majority of them would vote based on issues or specific candidates. This number of new voters is much greater than the winning margin of LS polls in 2009, in 17 out of the 20 constituencies in Kerala. So the target audience is quite clear in this campaign but yet all the leading parties have gone haywire in their advertising communication.

Why the money gone down the drain?

Communication blunders & wayward selection of media

Congress: 

The campaign thought or the idea behind the campaign is quite interesting provided the fact that it tries to convey that the party has a broader outlook & is inclusive of all sections of society at the same time promoting its brand ambassador Rahul Gandhi as a person who leads from the front. Now let us have a close look at the outdoor campaign and there comes the glaring mis-match in communication. The meaningful Hindi words in the national campaign was translated to Malayalam painstakingly but resulted in words of the meaning which may have to be analysed and interpreted by Malayalam professors if even an educated Keralite should understand. Instead of the campaign being simple it became all the more complex where it doesn’t connect to the uneducated or the educated.

BJP: 

The campaign revolves around the brand ambassador Narendra Modi alone and instead of a campaign that showed what BJP could do right if elected, the campaign focussed on what the other brand (read congress) did wrong. And the worst communication blunder is seen on the outdoor campaigns of BJP where no sense has gone into the translation of the Hindi words into Malayalam. For those who don’t know Malayalam here comes the explanation - A retranslation of the outdoor campaign of BJP from Malayalam to English goes like this “Lots of atrocities against women happens, this time it’s the turn of Modi Government”!!! Is BJP asking for a chance to do the same? Maybe the translators or the agency people know about it. God save them.

Left Front: 

In shortest words LDF campaign can be defined as wrong positioning. Elections are for Lok Sabha and the voters especially the new ones think it at a national level whereas the whole LDF campaign revolves around the disadvantages of the Kerala ministry. The PR & better use of their cadre party system though has done much damage control still doesn’t clearly know who will buy them and who will not. The use of independent candidates to woo the non political votes in some constituencies seemed to be a smart move but only the results will tell us whether it has backfired as the new products were not backed up with good advertising support. Also the low usage of digital media & the high usage of outdoor (flex put up at every single street) doesn’t seem to be a good proposition in this market.

AAP: 

For a new brand entering a new market, they have outclassed the big brands in their PR & Advertising that too without spending too much money. First thing they put up famous personalities in their chosen field who were well known especially among women & youth in Kerala. Maybe they knew that most of the Kerala media have political leniencies and won’t give much space for their candidates unless they were famous. They overcame this scenario through its candidates where it became the products-speaks-for-itself case. Second when Congress, BJP and the Left Front concentrated more on high cost media like outdoor, electronic & print, AAP used customer engagement, one of the most powerful tools in modern advertising, and low cost advertising to reach out to the target audience. For this AAP candidates went down to the target customers directly by conducting grama sabhas (nobody thought it could be done in a sophisticated market like Kerala) and the first direct communication to reach the voters in most constituencies were from AAP candidates through their B&W leaflets inserted in newspapers. The content of the leaflets were so specific to each districts that a lot of time & energy seems to have invested in the study of each market where the product has to be sold. Third, the high usage of digital media has helped AAP to reach out to its customers at relatively low cost. Fourth, they gained free PR from activities by its brand ambassador Arvind Kejriwal at a national level and at the same time at the local level they were involved in every single issue happening on the streets as they didn’t mind whether another party was already involved in each issue. But does that mean this new brand will outsell all other brands? Ofcourse No, But only the results will tell us how much this new brand eats into existing market share of the bigger brands.

In short,  the selection of outdoor as the main media for bigger brands is just opposite to the new age advertising of reaching out to specific target audience & let them experience their product before making a decision. A mass media like outdoor drains out all the money in this case and especially the first time voters & the women voters will expect to meet the candidates or atleast be able to know what each of them stands for. Time is fast running out for all the political parties as the election date is on April 10th, so dear candidates its better late than never to beat the road and reach your voters directly if they should take notice of your worth as a candidate.

On a lighter note, it is better to keep in mind that it is said that nobody can sell a product in Kerala market unless accompanied by a dream. So next time for election campaigns keep in mind that better weave a dream around your candidature or the product will be pushed out of this market for ever in no time.

Branding & Advertising by a Kerala client - Some myths

Business world is undergoing drastic change day by day and the media is getting cluttered both in terms of number of advertisements and avenues for advertisements. To plan and advertise for your brand in the long run is the only solution to keep ahead of the competition and this needs consistent approach in branding activities. Most of the Kerala brands are not finding it easy to scale up their brand visibility and some of the myths about branding prevailing among the Kerala clients are worth noting in this context:

What is branding?

In simple terms we can define branding as all the activities that go into bringing the name of your product/company along with its qualities/services to a top of the mind recall bracket in a customer’s mind while making the final purchase decision.  It is important to make the customer emotionally connected to your brand  rather than trying to get attention for a short period. This is the one single differentiator that makes the change over from just ‘a customer’ to ‘a loyal customer’ and branding should be seen as a long term investment decision rather than a short term business booster. The first and foremost decision of a client should be how we should project our product/company and who would be our customers. The latter part (identifying target audience) is more relevant but lacking in any discussions about branding in Kerala. Just check out the successful brands from anywhere in the world and their focus on this long term perspective will be more clear. There are quite a few myths related to branding & advertising that rules a client’s psyche. Though I admit that some of these myths are some of the most common ones all over the world, here am trying to point out more from a Kerala perspective.

5 myths that rule the Kerala market

1.     An Ad that attracts everyone !!!

Though this is a common problem faced, atleast once in his life time, by every advertising professional, this misunderstanding has a big relevance in the Kerala context. One out of 2 clients we meet would put forward this suggestion of targeting every one out there. Its time to come to face the fact that there is no such advertisement method to attract every single person of a population. Its time to realize that people are different in every way and we can only get a group of people with almost similar tastes & preferences to address our advertisement. The lack of proper focus on who you would want to buy your product (target audience) is the main reason behind this proposition. Without a target audience every rupee you spend on advertisement or branding will be just like throwing away in a gamble. Just a look at the world famous brands will help us realize the folly of trying to target everyone at the same time. Just imagine a Mercedes ad saying anyone can own it and an ambassador saying its luxury incarnated.

2.      Common man can’t understand!!!

This is the most interesting misconception among clients in Kerala. “Though I can understand, you can understand & my sales people can understand, I don’t think the common man will understand” Here it goes. Please friends, let me know who is this common man who doesn’t understand? Especially in a market like Kerala where we have high literacy levels, high exposure to all kinds of media & high levels of brand awareness how can we judge that the so-called common man is less informative & intellectually less inclined than ourselves. This again comes out of the confusion due to non identification of a target audience. Without a target audience in mind the client is confused whom to address and so tries either to complicate or oversimplify an advertisement message and the end result is that it doesn’t connect to anyone out there.

3.  Creativity in advertising

Totally admit that advertising is not a completely creative work and an advertising professional has no liberty as an artist or sculptor. Creativity in advertising goes only to that extend where the message is communicated to the target audience. But to communicate that message the ad should connect in some way with the target audience. The success of an ad is only as much as getting a customer notice about the product/brand. The success of the brand/product goes beyond that like fulfilling the promise in an advertisement and after sales service to keep that customer loyal. Most of the clients misinterpret that an advertisement is something that increases their sales from the very next day which is almost impossible in a real market situation. So keep in mind that advertising is a tool to project a character for your brand/product, the character in itself depends on the brand or product itself.

4. I know all about advertising/branding

The quintessential fight between clients and advertising professionals in Kerala is the notion of every client that they know all about advertising/branding. The truth is that unlike the earlier days a lot of studies & corrections are happening literally every day in the fields of management & marketing. New principles are being experimented and old ones replaced or renewed as the business world is undergoing a sea of changes. Advertising, like any other marketing management disciplines, is a professional field where lots of changes are happening and the client would benefit if they let the advertising professionals do their job unless they are deviating drastically from the brand’s principles. Most of the clients in Kerala have not realized that bygone are the days when anyone could use a computer operator, prepare lay outs and release an advertisement. Advertising like any other branch of business is now a field which needs specialized skill sets and above all experienced specialists. Here it is important to note that in Kerala every company engaged in advertising business is treated as an agent & called an advertising agency rather than an advertising company or brand consultant. Most of the Kerala based advertising companies have also contributed to this by doing just that kind of job like a mere agent or agency would do. But times have changed and only those companies who can add value to the brand/product can survive in modern world of marketing communications and there are quite a lot out there who can do that. . Its time to stop spending a lot of time on the artworks or ideas and coming up with phrases like “I don’t like the colour or I don’t like the font” and concentrate more on identifying the target audience and propping up the product quality or service quality. Once decided to entrust your brand with an advertising company let them do their job and bring you wonderful results.

5.    Beat the competitor on you ad spend alone

The media in itself is undergoing lots of changes and the customer gets new avenues almost every day to get information in the modern world of communication. In Kerala market clients believe the more you spend the more your brand gets customers. Just think for yourself - will you go to a showroom in a remote location just because you saw their TVC. No way. Its pathetic to see every small town showroom spending huge sums of money on ad spends in Television & print and closing down shop within 3 or 4 years. Target customers are scattered around and to reach them there should be involvement of a smart media agency that is specialized in media planning & buying. Gone are the days of so called 360 degree advertising companies unless they are huge multinational advertising companies and again whether to avail their services depend upon the scale of operations and ad budget for your brand. Its time to realize that the field of advertising have already split into creative & media and is further splitting down as digital agencies, mobile advertising agencies and so on. So just spending a huge amount of money as ad spend won’t work anymore in this cluttered media space just find the right partners and reach your target audience using the best available creative ideas through the right media vehicle. Instead of raising your voice higher to unknown faces,  better talk to your prospective customer directly.

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.

Leaders are lazy (The textile war)

Now the textile showrooms in Kerala has shifted their fighting arena to Thrissur. Spreading their wings to an all Kerala presence, Jayalakshmi has opened their branch in Thrissur which happens to be their 4^th textile showroom in Kerala. The fight for consumer space will reach an all time high in the coming days.

Background:

Thrissur is famous for its textile showrooms & jewellery showrooms and is well known for the traditional pattu saree. Kalyan Silks, Pulimoottil Silks, Emmanuel Silks, Kalyan Sarees, Seemas are some of the bigger players in the market while there are umpteen number of textile showrooms which are of mid size and small size. There are other bigger showrooms of yester years like Elite Fabrics, Fashion Fabrics which still cater to a particular segment of customers especially during festive seasons.

The Ad war:

The opening of Jayalakshmi was expected to jolt the existing players in the market as they are well known among Thrissur customers so much so that customers used to travel to Kochi for their wedding purchases. Jayalakshmi started off its ad campaign with teasers which tried to gain eyeballs by making the customers guess about the celebrity who is inaugurating the showroom. The ads made people guess different names like Kareena, Katrina, Aishwarya etc. We were interested how would the leaders of the market, read Kalyan Silks, would respond to Jayalakshmi coming to their home turf. Out of nowhere came Kalyan Sarees (mind it regardless of the similarity in the name, both are different) came out with their comparative ad directly fighting with Jayalakshmi. It said “nobody is coming to Thrissur”. This has made the market interesting. Though the same concept was tried earlier by Mudra itself (they are the incumbent creative agency for Kalyan Sarees), and it was considered by many as a cheap fight, it was a smart move for the brand Kalyan Sarees. This reasoning just because Kalyan Sarees all of a sudden came into limelight and people started talking the names of Jayalakshmi & Kalyan Sarees at one go. Just months back it was Kalyan Silks which was expected to be the direct competitor for Jayalakshmi and the tables turned all of a sudden. Was it a good ad? No. But it was a good strategy and a good example of how to use an opportunity to position a brand.

Leaders are lazy:

Just as I have written in my earlier posts, market leaders have a tendency to go lazy once they think they are the undisputed leader. Here once again the market leader was just basking in its glory and sitting lazy and not planning to face the new competition. Kalyan Silks made mistakes on two fronts. On one side it went to fight its own replica named Kalyan Sarees which was the first stepping stone for Kalyan Sarees to get a grip on their own in the highly competitive market. Arrows on hoardings showing the real Kalyan, trying to educate the customers that both were different was not a good plan for a leader. They just gave space to a brand which till now had tried hard but was never in the same level. On the other side it failed to have a strategy or advertising plan to keep their market share intact when a same level competitor was getting ready to come to its home turf. And when their real competitor came they were trying to fight off a smaller competitor.

Meanwhile Jayalakshmi which is considered as a competitor for any textile showroom in Kerala made all the mistakes of a lazy leader taking its fight to unknown territories. Instead of using their reputation as a tool they tried to use the old tried & tested formula of advertising. The concept of their campaign was - Katrina nor Kareena nor Aishwarya is bigger but Jayalakshmi is. After their teasers, they came out with their launch ad saying Why u need any celebrity while Jayalakshmi is coming to Thrissur. Again a wrong strategical move where instead of announcing the leader is coming here they were confusing the customer. There was no promise of quality or service which is known to be their forte. Here we should mention their earlier campaign of ‘History will change when special people arrive’ used in their Calicut inauguration was a good one and again there what they did was changed their whole game plan just before the launch trying to woo all the customers saying about the price range of their product. They just didn’t understand that the Calicut customers were travelling to their early Kochi showroom not because of low prices but because of quality which matched the customer perception. Till now from what I have heard Jayalakshmi could not turn a match winner in Calicut. And in Thrissur their showroom is open but  parking area is still under construction and interior works still not completed!!

Lets wait and see:

Its interesting in the coming days, especially during the onam season, to see how these textile showrooms are going to fighting it out. It will be more interesting just because no study has been conducted about the market place and it is doubtful whether there is space for so many of them without any product differentiation among themselves. Some will win & some will lose. Lets wait and watch how the gladiators fight it out in this arena.

Gold’s own country

Evolution:

Over the years it was quite interesting for those who watched the evolution of jewellery advertising, especially from Kerala market. Mind you, Kerala is known more as Gold’s own country rather than God’s own country now.

Flashback (1990 – 1995):

Jewellery advertising took the major share of all the media space in Kerala and jewellery retail showrooms widened their branches to every nook & corner of Kerala. All the jewellery groups were vying for the same market share and this eventually lead to an all out fight among them. Mudslinging ads on quality & price were the order of the day. It was those days when an average gold customer (here read gold jewellery customer) didn’t have standards to compare either the quality or price. Not even a single jewellery group thought about branding or positioning which involved long term planning. It was interesting to see retail jewellery advertisements in the back page of leading newspapers with contradicting claims, ofcourse placed next to each other. The messages were quite interesting, some even hilarious;

Lowest price – later this lead to price wars (customer ended up being a loser with low quality gold in their hands)

Biggest showroom – including biggest in Kerala, India, world & universe being the messages (till this date I don’t have a clue why this is used repeatedly in most retail ads from Kerala. Have anyone thought it from the customer’s angle. Is there a customer who would go to a showroom just because it is too big, unless otherwise he could ride his vehicle inside the showroom?)

Marriage – every single ad was used to lure the marriage target audience towards gold purchase. It was, for the most part still is, as if inviting you into a jewellery showroom only if your son or daughter is getting married in the near future.

Quality – it is hilarious to look back to this aspect in ads those days. 916 gold was just being introduced in the market. Kerala jewellery, Bengal jewellery, Calcutta collections were used to denote different quality jewellery. BIS as a standard for gold jewellery was in its nascent stage.

Making charge – this is the single most terminology in god jewellery market which even today the consumer can’t comprehend. Lowest making charges were the order of the day which even extended to ‘No making charges’. There was even a TVC of a jewellery retailer which said ‘’Why pay making charges for your jewellery when you don’t pay making charges for your shoes?”!!!

916 – the ultimate salvation

Then came the standardization in gold jewellery market. BIS logo & 916 are integral part of any gold jewellery ad in Kerala. Though most consumers didn’t know what 916 meant, they demanded the retailers for this feature in the product. Most of the jewellery groups started thinking about branding & positioning. Also they expanded to nearby states (Kerala jewellery retailers are now the leading players in Tamil Nadu, Andhra Pradesh & Karnataka). This resulted in the entry of Brand ambassadors , which of course is the easy way out to make an impact. The hunt for filmstars were on. Mohanlal for Malabar Gold, Mammootty, Dileep, Prabhu for Kalyan Jewellers, Madhavan for Joy Alukkas, Vijay for Jos Alukkas, Vikram for Josco Jewellers and the list goes on. Most of the smaller players who didn’t dream that one day consumer will demand for a quality standard for Gold jewellery were shocked and are still reeling under its impact. Those who cried out no making charges & lowest prices are now out in the dark not knowing where to head next.

Today

Some smart marketers in the jewellery retail sector in Kerala saw the future early and they invested on their long term plans to create an identity for their brand. I still remember when one jewellery brand introduced MRP tags on their jewellery, most people thought they were crazy to invest on this message but they are one of the jewellery brands which is most associated with the word ‘Trust’ in the present jewellery market. Today gold consumer has more evolved and knows that quality comes with a price. Even the so-called marriage-gold consumer sees Gold as an investment and is not ready to compromise on the quality of the product they purchase. Ofcourse the steep increase in the gold bullion prices have made a huge impact on the gold consumer. Those marketers who have invested on their brand identity are now expanding their customer base and consolidating like never before.

For eg., Joy alukkas - one of the first group to invest heavily & consistently in branding now stands above most of the other retailers in their brand identity.

Malabar Gold – consistently created communication messages around culture which even used social messages like clean city as a tool. Now has extended this plank to culture & traditions in weddings across India.

Kalyan Jewellers – always created communication messages which were way ahead of the rest, they are one of the brands that now has top of the mind recall among Keralites

Jos Alukkas – though late in recognizing the need for effective branding, has now grown leaps and bounds in creating a better brand identity

Bhima – consistently tried to communicate about quality gold and for Keralites Bhima gold stands for quality now.

Tomorrow

Consumers will become more demanding in this sector. Those who advertise for this month’s sale are living in fool’s paradise. Gold will be seen as an investment product rather than just a dowry product. Investment & determination to create a USP for the brand is the only way ahead. This needs consistency in communication messages. Designs & product innovations will be the future of gold jewellery market rather than price. Jewellery retail showrooms which provide top class customer service & latest designs only will thrive. With the entry of bigger players into retail jewellery market, competition will get tougher and only those who foresee the future of gold jewellery will come out winners. Almost always a jewellery client when confronted with the question who are we talking to or who is our TG, the answer would be mass market!! Its time to move ahead and decide who your mass is.

Recession and Retail Market – Kerala - Part II

Who said Kerala was affected by recession, everyday new showrooms are opening up! Don’t think we can make the payment in time, there is huge cash crunch. Business is dull even in this wedding season; don’t know how to go forward…

These are some of the talks heard out there in the market nowadays. So as I had promised here is a sequel to the earlier part (though I hate sequels).

What happened to the Kerala Retail Market after the initial recession mania period? How has clients adapted their marketing/advertising strategies to maintain momentum?

Dubai syndrome

The news reports of Dubai facing financial crisis, hit the Kerala market hard in the last quarter of 2009. Suddenly business people felt the cash crunch more than ever before. Some of the businessmen I spoke to made it clear that it is going to be real tough times ahead as already they felt it difficult to raise funds from their NRI investors, which was so easy earlier. As the NRIs in Middle East feared for the worst and either stopped or withdrew from big investments once again the dependence of Kerala on its NRIs came to the focus. As investments dried out on one side and consumers spending less on the other side the business houses started facing cash flow problems. Small business houses started feeling the pinch in the last quarter of 2009 and the first quarter of 2010 didn’t make anything better. Though it was wedding season and vacation time for Keralites during March, April, May, interactions with several businessmen shows that sales volumes have gone down when compared to the previous year same period. Most retailers, both new and old felt the heat of the squeeze on their margins.

Brand Value came to the fore

Coming back to where we left off in the earlier post, what happened to the new retail showrooms (especially in textile & jewellery sector) that came up during the recession period? Could they succeed in their journey, how did the big retailers react to the situation? It is indeed interesting to look into these aspects.

The bigger retailers, who were already established in the Kerala market, though initially slow to react to the onslaught of new comers in smaller towns, realized the change in customer attitude. A sudden change in the marketing and advertising strategy was quite visible in Kerala Retail market. The big player’s ad campaigns started to communicate mainly about the tradition, lineage and quality of products they were offering. Ads of Seematti (textiles), Kalyan (jewelers), Kalyan Silks (Textiles), Jayalaxmi (Textiles) etc. in the last quarter of 2009 and first quarter of 2010 clearly showed the shift in the big player’s strategy. This was the time to bank upon their brand value which they have created over the years by spending huge sums of money. Also we could see most of them changing their brand identities (new logos, new color schemes and so on) during this period.

The second quarter of 2010 shows a clear indication of the new comer small town retailers faltering on their way. The reasons for this fall must be high expectations from the shift in customer preference to smaller towns (which clearly was a temporary shift), amateurish business planning, huge ad spends, huge capital investments and so on. Gradually the customers started to come back to the cities for their purchases, recession panic started receding, purses started loosening but with care. Once again brand value came to the fore and those retailers who had build up their brands, which had acquired a certain customer faith earlier, were the winners now. Slowly but steadily their customers started coming back and more interestingly, the new retailers in the big towns are not seen as successful as the old players in winning back their lost customers. This in turn helped the existing big players to get a new crop of customers too. So once again brand value came to the fore and those business houses which had the patience to create a loyal customer base through consistent advertising & marketing strategy were the winners of this round of uncertainty.

The festival seasons (Onam) in Kerala is fast approaching and let’s wait for the final outcome of this intriguing period in the Kerala retail market. Now the biggies are really investing in new store launches (even in smaller towns) to spread their wings and establish themselves. Will this benefit in the long run with economy of scales or will this turn a waterloo at least for some of them? It will be quite interesting to find out.Let’s wait and see.

Recession and Retail Market - Kerala

Has recession affected the kerala retail market?

This is a question I have been asked by several people during the past several months. Its interesting to notice the changes that is happening in the kerala retail market at present.

Just like most of us, one year back, the word recession was not there in average Keralite’s vocabulary. The kerala retail market was booming like never before. Consumers were busy spending their bucks on anything they can lay their hands on. Even after India Inc. declared that it was also facing the economic downturn, people of Kerala seemed oblivious of the situation. The scene suddenly changed with the news of Gulf NRIs returning to their home state (the fact still remains debatable). The consumer state slowly started slowing down their spending and meanwhile the retailers in the local market found their funds being dried up - banks tightening their lending to businesses on one hand and business slowing down drastically on the other hand. Panic started creeping into the local retail market and especially the downfall of the real estate sector made the scenario worse.

Out of all these chaos there was some interesting consumer movements in the small town retail markets. People started to cut down their purchase budgets, be it a wedding purchase or a festive purchase, by localizing their purchases. Earlier an average consumer in the state found pride in taking a huge bandwagon of their friends and families to big retail showroom located in nearby and even far away cities. Consumers who once boasted of their purchases being made in big retail showrooms in the cities flocked to their nearby retail showrooms in the local markets. This helped them to cut down the cost of such purchase expeditions.

End Result?

On one side its an alarming situation for the big retailers in the cities and on the other side it’s a windfall for the small retailers in local markets. Again there is another interesting aspect in these local markets. The consumer who earlier used to visit one big retail shop in the city for all his needs now scouts through different retail shops, be it a textile shop or a supermarket, in the local markets to satisfy their needs. This resulted in a situation where the business is being split up between several shops and only those who have the capacity to keep their stocks live can handle this jump in business. Meanwhile here is a huge spurt in new store launches in most of the smaller towns (On one single auspicious day (August 17th) there were more than 10 showroom inaugurations in and around Thrissur which is one of the cities in Kerala). The reverse flow of business to smaller towns has created bigger retail showrooms in such local markets and this again undermines the small retailers in the smaller towns.

It would be interesting to see how the market responds now once the recession panic is out of the minds of the average consumer. Will the biggies be able to pull back their customers, is it the smaller towns which are going to retain this new customer or is it an entirely new breed of small town biggies that is going to emerge? It’s a catch 22 situation.