How do you rate David Warner as a player? The answer to this question is a no brainer and I personally feel that 9 out of 10 will say they rate him very high as a player as far as his skills & techniques are concerned.
So with that logic he should have been the most expensive player for IPL(2019). However SunRisers Hyderabad got him at a very low price of INR 1,79,083 only. This proved to be a game changer for them and the impact score for Warner was 698 , which was the highest in IPL. This was far ahead of star players like Virat Kohli (482) and that too at almost double the price.
Warner was the most “Value for Money Player” of the IPL.Star power at a price that is very affordable.
When we look back and see success of some brands , we find that mass selling brands have some products that are perceived as a “Value for money” product by the customers. This acts like a hook for the company, a hook which can create pull for the other products and make life easier for the sales team to place their entire range and snatch shelf space from the competition.
Parle -G a brand that we have all grown with,follows a simple strategy of creating pull with their base product – at Rs2/- per pack. Some call it “Predatory pricing” but as a strategy it’s benefiting the company.
- Question is
- Has this strategy benefitted Parle-G?
- How can normal smaller dealers draw benefits out of this strategy?
- How Parle-G benefited – Parle-G has worked aggressively on “cost leadership”. They might be maintaining the low cost entry level product but behind this a shrewd strategy plays an important part.
- Strategy – Parle-G focused on maintaining an easy threshold price level without compromising on profits. They kept the price level the same but when the cost pressure came they reduced the weight of the pack. They used the concept of “Just Noticeable difference” beautifully. Customers focused on price but failed to notice the reduced quantity.
- Advantage – This strategy helped Parle-G create pull on retailers counters and thus helping them push their other “value added range” .
- How Others (Dealers and Distributors) can use this strategy – Dealers generally miss the concept of bundle pricing and they don’t keep products that can create a hook for them.
- They can relook at their product basket and find some niche products that fetch average margin but help them push their other products to the retailers/ customers.
- They need to understand the concept of just noticeable difference, generally fear of losing customers forces them to take the path of least resistance to discounts.
- They need to improve the service levels as this can change the battlefield completely.
