Notes on Marketing, Sales & Distribution

Marketing

Stay in touch with your audience through content. Educate your audience through content, it’s easy to educate educated audience. For uneducated market(people with low self confidence), Influencers are the key along with branding at the point of sale.

Taral would talk to 25–45 year old men. Pumps, controllers, electrical durables are selected by men while tiles etc by women.

Positioning

Top brands excel at delivering all three manifestations of brand purpose – functional benefits, or the job the customer buys the brand to do (think of the pick-me-up Starbucks coffee provides); emotional benefits, or how it satisfies a customer’s emotional needs (drinking coffee is a social occasion); and societal benefits, such as sustainability (when coffee is sourced through fair trade

Taral is affordable, innovative and sustainable.

The challenge with positioning durable goods

The problem with having only one consumer durable product as portfolio is that people don’t usually buy them more than once every ten years. So retention year over year is nearly zero.

By the time you’re shopping for a new pump, you’ve likely forgotten the brand you bought it from, and you’re going to survey the market again.
This means that companies have a hard time making a lot of money from a customer they acquire, so it needs to be getting new customers.

But, that becomes harder, because there is less customer loyalty so the CAC to LTV ratio is unsustainable. The conclusion is, you need to have every product of the consumer durables category to stick in the heads and reduce CAC.

Sales & Distribution

Tailored local solutions, hyper realistic (P-M fit)

Brand is a story.

Hybrid distribution channel. Distribution is no longer a strong enough moat after platforms like JioMart. Innovative, product first companies would prosper and distribution is no longer a differentiator as it has been historically.

For targeting rural markets, the hybrid strategy of offline & digital marketing(B2B, Amazon, flipkart marketing) is the way.

Tapping Rural customers in emerging markets

FMCG in India is likely to reach a valuation of Rs 14 lakh crore per annum by 2025. The rural market, having 69% of the population, has a market share of 38%. Rural markets are growing faster than urban markets.

Unique about the rural market

• Aspirational, brand conscious
• People lack self confidence. find offers too good to be true.

How to tap them

Apart from the rural markets there is an emerging Next Billion Users (NBU), a segment of users getting online for the first time.

• Address social issues.
  Example: Women are under-appreciated in rural areas. Empower them by making them an integral part of the system at scale(sales)
• Distribution at grassroots level. Service support at grassroot levels.
• Their touchpoints: Youtube Whatsapp, MXplayer, sharechat
• Empower customers:
  -Include local languages,
  -Transparency across all levels of hierarchy- from board rooms, grassroot level employees to customers at village level.

Aggregation model: Aggregation platforms help companies — both big and small — get to the farthest regions faster and cheaper.

Distribution: It is no longer the moat it used to be historically. Infrastructure, logistics, order tracking, delivery confirmations, geo-tagging of vehicles, etc. — all these are now consolidated and established with the help of technology making a level playing field for players.

CK Prahalad

In 1980s western monopolies tried to enter emerging markets. Questions CK thinks companies should ask when entering emerging markets.

• Who is the emerging middle-class market in these countries, and what will effectively serve their needs?
• What are the key characteristics of the distribution networks in these markets, and how are the networks evolving?
• What mix of local and global leadership is required to foster business opportunities?
• Should the MNC adopt a consistent strategy for all its business units within one country?
• Will local partners accelerate the multinational’s ability to learn about the market?

Notes: Market share and segments

Indian water pumps market is segmented into- positive displacement & centrifugal pumps. Major players KBL, KSB, CRI, Shakti

Over 800 pump manufacturers with a few over 100 Cr

Self-priming: CG, Texmo, Sharp, Lubi, Jyoti

New Players: Havells, Bajaj, Usha, Surya, V-Guard, Oswal, Roshni

Assuming 2000Cr self-priming market- 1200–1300 is catered by major players. 700–800 by SMEs

AS of 2021, there were 10 lakh solar pumping systems. 1.8 crore grid-connected and 70 lakh running on diesel.

Temporal and geographic demand

Demand breakup:
March-May 35%
June-September 20%
October-December 20%
January-March 25%

Gujarat, Rajasthan, Madhya Pradesh, Chattisgarh, Jharkhand, West Bengal are situated near the tropic of cancer and have considerably high temperatures throughout the year. Hence huge demand due to scarcity of water.