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Feature
Special offers boost sales in retail marketing
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Saturday, 14 May, 2011, 08 : 00 AM [IST]
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Rajesh Gandhi
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Total retail sales in India are projected to grow from Rs 18,610.12 billion in 2011 to Rs 36,900.64 billion by 2015, according to the Business Monitor International (BMI) India Retail Report for the second-quarter of 2011. Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organised retail infrastructure are key factors behind the growth forecast.
With the expanding middle and upper class consumer base, there will also be opportunities in India's tier II and III cities. Propelled by the increasing disposable income, the food sector has been witnessing a marked change in consumption pattern. Driven by the growth of organised retail coupled with changing consumer habits, food retail sector in India is set to more than double to Rs 7050 billion by 2025, according to a report by KPMG.
As in all other marketing, there is a two-pronged approach to push retail sales viz ‘Push Strategy’ and ‘Pull Strategy.’ Special offers are an integral part of the Push Strategy. There are special offers for the trade like Distributor Bulk Buying schemes as well as for the consumers like Buy 1 Get 1 Free. For the distribution partners, Vadilal also has target-based special offers. This helps in boosting sales. In the retail supply chain of the booming food & beverages industry, where there is a lot of competition between local and international brand, changing tastes of consumers and fluctuations in the cost of raw materials, it is difficult to survive in the market without any marketing promotional activities. They are a vital marketing tool to counter competition.
In the ice cream industry, Vadilal has been a trendsetter for special consumer offers. Special offers are done in such a manner so as to give maximum value for money to the consumers. In the year 2003, Vadilal launched for the first time its ‘1+1’ scheme for Party Packs to counter the ongoing price war in the ice cream industry. This special offer scheme became so successful and was so well accepted by the consumers that it has become an industry standard for selling Party Packs and other competitors too are following this model.
The launch of this scheme was so successful that it resulted in an immediate growth of 45-50% in Vadilal’s retail sales. Vadilal's 1+1 offer on Party Packs has changed the way Party Packs get sold. It is now a regular SKU with Vadilal.
Another special offer of Vadilal ice creams which has been a super success is the ‘Dhanteras’ offer. Keeping in mind the traditional importance of Dhanteras in India, Vadilal launched its Dhanteras offer 15 years ago. And the offer has been so well received by the consumers that every year consumers wait for this offer. As a part of the Dhanteras offer, Vadilal offers a high-utility item like high-end water jugs, insulated lunchboxes, etc. along with the Party Packs free of cost.
Such special offers boost ice cream sales especially in the off-season period. On an average, it boosts the sales by around 10%. These special offers also encourage the consumers to try new flavours and varieties. Vadilal also comes out with special offers during ‘Uttrayan’, the famous Kite Festival of Gujarat. Such special offers add a distinct flavour to the celebrations and festivals. However, just launching the special offer is not enough. The offer has to be communicated effectively too. Our experience shows that proper advertising of the special offer leads to an additional growth of 10-15% in retail sales.
Following the success of the special offers in the ice cream market, Vadilal is now replicating this model in its processed foods business too.
(The author Managing Director of Vadilal Industries Ltd)
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