In the fast changing world of ours, consumers continuously want improved products at lower prices at their doorsteps. It is here that innovation plays a significant role and can provide to the firm the desired competitive advantage. Innovation often leads top redesigning the market strategy. The multiplex revolution is one such case of innovation in film viewing in the last five years or so. It created a new paradigm in film watching. From run down theatres offering stale refreshments and stinking toilets, multiplexes offered the customer an experience of watching the latest movie in a plush environment with facilities like excellent cafeteria and state of the art wash rooms. All this came at a price higher than the previous experience. But the customer did not complain. The pioneer of the multiplex concept has been PVR, a Delhi based group. It has the largest chain and has India’s biggest 11 screen multiplex. This was possible because of the international expertise it gained in its partnership with Village Road Show, an Australian company. PVR Cinemas were the first to offer computerized and online ticketing. It was also the first to develop a loyalty programme for cinema viewers.
The complexity in Indian markets has increased manifold today. Its challenge to marketer’s imagination and innovation has intensified. The story of growth in the market continues unabated. Unlike the developed markets of US and Europe where markets are mature and even saturated, India is a mix of developed and growing markets. While the metro Mumbai may be falling under the first category of developed market, smaller cities may be identified as growing markets. Besides, them, large sections of rural India still continue to remain underserved. Hence today the challenge for the marketer is that of reaching to all these underserved markets and simultaneously retaining their market share in the developed market. The challenge is to service the poor and price conscious customer as also to simultaneously meet the demands in the affluent market. What makes the task even more complex is that the poor have the same aspirations and expectations as the rich or the affluent markets. To this, one has to add the expanding Indian middle class whose dream is to continuously improve upon their lifestyles. A market of more than one billion people and an economy growing at an average rate of 9 per cent over the period 2003-2007 is perhaps too difficult to be ignored by any corporate or marketer. No wonder all the known global brands like Vodafone, Wal-Mart, Tesco, BMW, Honda, Toyota, and fast moving consumer goods (FMCG) majors like Procter and Gamble (P&G) Kellogg and others want to have share of the market. Even the Indian companies like Onida, Tata Motors, Mahindra, Shoppers Stop, Big Bazaar, Barista, and Café Coffee Day have scaled up their operations. Most of them have operations in almost all cities and in Mumbai, Delhi, and NCR they have multi point operations.
The challenge to serve both the affluent and poor simultaneously has lead the marketer to innovate. The low income (poor) market, for example, got the marketer to innovate on product design and delivery mechanism. The example in the cellular phone industry best illustrates these developments. In order to cater to the poor named ABCD (i.e. ayyas, bais, carpenter, and driver), cell companies evolved the strategy of life time free prepaid sim card and offered to customers the facility at a price of Rupees 100 and less. The customer could get free incoming calls for life while for every one minute of an outgoing call from his/her cell phone pay between 40 paise to a rupee. Not only the handset manufacturer Nokia developed a product only for the Indian market and priced it at about Rupees 1,000. The other manufacturers like Benq offered it at as low Rupees 700. All this lead to a phenomenal growth in the cell phone industry which adds some millions of subscribers to its base each month. It was not that the handset manufacturer ignored the affluent market. Nokia and other majors like Motorola, Samsung and LG also developed high end series priced at Rs 20,000 and above. These handsets offered advanced facilities like blue tooth technology, 3G spectrum, multi-media with camera and came powered with Microsoft’s MS office. This made the product more than just the telecom handset used for making and receiving calls. The same marketing strategy is visible in the airlines, readymade garments, cosmetics industry and most other product categories. All of these today offer products and services with multiple pricing option.