Posted August 14, 2008on:
Okay the situation of inflation is glum, in India, that is. But the FMCG companies are showing some 32 teeth on their wide faces. Everyone is experiencing double digit growth rates including that behemoth HUL. Anyways cutting to brass-tacks, here is the low down. Customers are down-trading on certain categories typically which are not amenable to “value calculations” and not down-trading on other “value conscious” categories. But at the same time consumer spending is not going south, YET.
But what is the relation to anesthetizing pain? Read this –
[Consumers are] not weighing the current gratification vs. future gratifications. They experience an immediate pang of pain [when they think of how much they have to pay for something]. That perspective has a lot of implications. For example, it helps to explain why credit cards encourage people to spend; they anesthetize the pain. – From neurosciencemarketing
What does this imply for machinations during these times when inevitable price increase across certain categories is being seen already? Well first one –
· Forget individual transactions, they cause more pain.
· Focus on single price for multiple items
Bole toh? Every time I, imagine me being a family man, go to buy my favourite biscuit I see and say “kitna costly ho gaya hai, kuch aur sasta khareedte hain”. So instead if I am offered something, larger, which covers my consumption for few weeks hiding the increased costs behind the larger pack I might buy it.
Offer bigger packs in times of inflation and probably the other way round during normal times, that is.
Bigger packs of not just the same items but similar items as well [bundling ?]
PS – I love the word “anaesthetize”. I think thats the reason why modern warfare works better medieval warfare, discounting for the impact of technology. More on that and marketing later.