Saturday, August 4, 2012

Will only cheap products succeed in Indian markets?

In most of our interactions involving marketing products for India, one hears the generalized view that "In India, unless the product is cheap it will not succeed".

From my experience in marketing technology devices, the price of any tech device depends on the cost incurred by the customer due to the problem the device is trying to solve, and also the other alternatives available in the market. That the tech device is able to solve the problem is of utmost importance, and not the price.

The best example is the Akash tablet. At 2500-3500 rupees you have a really clumsy device which does not solve anyone's problems. Instead, at 6500- 9000 rupees you have various tablets, including the micromax funbook, which address the customer's need to have a handy device with which to browse the internet. One would rather pay a little more and have something which works, rather than save a little and end up with something which is useless.

Innovation need not be focused on making 'cheap' products, rather the innovation could be in a business model where a moderately priced product is made affordable in a pay per use or some other revenue model. My belief is that in the same way rural India warmed up to the sachet SKUs for urbane products like shampoos, Indian customers may pay premium on smaller affordable units that work.

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