The Need for a Paradigm Shift

Indian marketers are under assault from a number of factors. Organized retailing has thrown up powerful retailers who cannot be dictated to. Increasingly sophisticated consumers are demanding more for less. The plethora of media options has resulted in fragmentation of mass-communication reach and effectiveness. To understand and evaluate the impact of brand variety on the Indian consumer, all these externalities need to be taken into account.

The Rise of Organized Retailing

With organized retailing gaining rapid acceptance and popularity, the fight for shelf-space has begun in earnest. Proliferation of SKUs has added to the mayhem. Brand switching is induced by both manufacturer and in-store promotions, merchandizing and retailer. The undiscovered country, Business world, Apr 7, 1999 4 Economic Times, Apr 24, 2002 In urban India, the preoccupation with convenience-shopping and hygienically packed goods has led to an increase in national, regional, local and store-level brands. Earlier, small brands remained so as they could not match the distribution might of the MNCs. The growing reach of organized retail chains has lowered this key entry barrier. The resultant increase in brand variety has in turn led the consumer to opt for multiple brands for multiple occasions rather than an all-encompassing brand.

Changing Consumer Preferences With rise in the disposable income level, the Indian consumer is willing to spend more on personal needs and indulgences. In a scenario where ‘cool’ means the latest, variety-seeking behaviour is becoming the norm than the exception. Increasingly, people sticking to the ‘old faithfuls’ are seen as predictable and boring Customer’s willingness to try a new brand nowadays matches or even surpasses their loyalty towards a familiar brand. The reasons for variety seeking are many. Dan Herman says that buying a new brand can be psychologically instrumental because it –

• Strengthens the self image of someone who is current
• Nurtures a feeling of liveliness and connectedness to what is happening in the
• World around us
• Provides a refreshing, renewed, stimulated and invigorated feeling
• Facilitates mood management
• Increases confidence in purchase choice because new often means improved quality

The rapid advancements witnessed by the country in areas like education, communication; information technology and transportation have created a sense of freedom in the minds of the populace. The influence of community in shaping purchasing decisions has diminished to a great extent. The fast pace of development has removed the surprise element in any new brand introduction.