Resellers should take their cue from the larger cities, and avoid repeating mistakes. They should adopt a long-term strategy and focus on quality, service, support, policies and ethical business practices and adopt a well-grounded business model
Manufacturers, distributors, market research agencies-everybody in shortare talking about India's up-country markets. Various studies have pegged the growth rate in the C, D and E class cities from a modest 60 percent to as high as 100 percent and more. According to IDC, smaller cities have started chipping in significantly . Thanks to this, the contribution of the top eight cities in the country has come down from 70 to 50 percent.
But foraying into this market is fraught with tough challenges. Extremely low brand awareness among both channel partners and end customers is the biggest hurdle. The only thing that works here is price. Not many manufacturers are focusing on developing these markets. And not much investment is being made into creating opportunities, as the sad state of the infrastructure has proved to be a big deterrent. The cost of logistics including traveling to these cities, transporting goods, setting up service centers and providing service is very high. The business is profitable, as the competition is low. But the cost of manpower and infrastructure is high doesn't make it a lucrative option for most manufacturers.
Distributors need to provide partners a level playing field. They should devise policies that are beneficial to them and ensure that bigger dealers from other cities do not spoil the market here by indulging in price undercutting. Resellers should be offered the products at a price that motivates them to buy from the distributor. The focus should be on creating brand awareness through exhibitions, road shows and dealer meets.
Resellers too need to follow certain principles if they want to prosper. They should take their cue from the larger cities, and avoid repeating the mistake of looking at the business from a short-term perspective. They should adopt a long-term strategy and focus on quality, service, support, policies and ethical business practices. They should adopt a well-grounded business model. Customers today look at complete solutions. Dealers in the large cities are already focusing on providing customized solutions. Channel partners in the smaller towns too need to focus on solution selling instead of pushing standalone boxes.
Price undercutting, lack of strong logistical support, service and customer awareness are the key issues faced by the dealers in the C, D and E class markets. Hence, resellers need to be circumspect in their dealings. They should select a few good brands, and should take the support of manufacturers and distributors when required.
Dealers should also select the right partner, one that can provide the right set of products and prompt service. They should select a partner that has been in the business for a long time, has strong business policies and promises stability. But more importantly, channel partners need to stay united to address common issues that may crop up. No matter what, one thing is certain, the opportunity is there, and high growth assured.
Manufacturers, distributors, market research agencies-everybody in shortare talking about India's up-country markets. Various studies have pegged the growth rate in the C, D and E class cities from a modest 60 percent to as high as 100 percent and more. According to IDC, smaller cities have started chipping in significantly . Thanks to this, the contribution of the top eight cities in the country has come down from 70 to 50 percent.
But foraying into this market is fraught with tough challenges. Extremely low brand awareness among both channel partners and end customers is the biggest hurdle. The only thing that works here is price. Not many manufacturers are focusing on developing these markets. And not much investment is being made into creating opportunities, as the sad state of the infrastructure has proved to be a big deterrent. The cost of logistics including traveling to these cities, transporting goods, setting up service centers and providing service is very high. The business is profitable, as the competition is low. But the cost of manpower and infrastructure is high doesn't make it a lucrative option for most manufacturers.
Distributors need to provide partners a level playing field. They should devise policies that are beneficial to them and ensure that bigger dealers from other cities do not spoil the market here by indulging in price undercutting. Resellers should be offered the products at a price that motivates them to buy from the distributor. The focus should be on creating brand awareness through exhibitions, road shows and dealer meets.
Resellers too need to follow certain principles if they want to prosper. They should take their cue from the larger cities, and avoid repeating the mistake of looking at the business from a short-term perspective. They should adopt a long-term strategy and focus on quality, service, support, policies and ethical business practices. They should adopt a well-grounded business model. Customers today look at complete solutions. Dealers in the large cities are already focusing on providing customized solutions. Channel partners in the smaller towns too need to focus on solution selling instead of pushing standalone boxes.
Price undercutting, lack of strong logistical support, service and customer awareness are the key issues faced by the dealers in the C, D and E class markets. Hence, resellers need to be circumspect in their dealings. They should select a few good brands, and should take the support of manufacturers and distributors when required.
Dealers should also select the right partner, one that can provide the right set of products and prompt service. They should select a partner that has been in the business for a long time, has strong business policies and promises stability. But more importantly, channel partners need to stay united to address common issues that may crop up. No matter what, one thing is certain, the opportunity is there, and high growth assured.
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