The high rate of inflation, increasing consumer loan rates, dollar price fluctuation and volatile international market conditions have resulted in the slowdown of the Indian market. This unpredictability of the market seems to be playing a bit of a spoilsport in business. The rising inflation has brought about a change in the needs and wants of the consumer. Many consumers are purchasing products based on their “needs” rather than”“wants”.

There are assumptions in the market that the demand for buying products will be slightly less during this festive season, but while considering the strong emotional value of the festival and auspicious element of buying, consumer will tend to close their buying decision during this time frame. IT vendors seem to be positive about higher sales during this festive season.

Anil Arora, Business Group Head, PC, Mobile and DAV, LGEIL, says,”“During the festive time period, there is definitely an improvement in consumer buying behaviour, the decision taking time reduces, ready stock delivery and ‘true value’ offer helps customer to choose a brand. In Indian market especially in the festive period, the consumer emotions also play a key role in their buying decisions. Therefore, in spite of slowdown, people may delay their investment decision, but would like to fulfil their household requirements. From LG perspective, we have designed consumer offer and channel support programme in such a manner, that both consumer and channel get the advantage of LG products.” 

Kapal Pansari, Director – Marketing, Rashi Peripherals Pvt. Ltd., says, “The current slowdown is more of sentimental opinion rather than a true fact. If you see the malls in the country, they are all crowded. With the purchasing power going on steadily in the last couple of years, there is an inherent product demand. Besides, IT products available at retail stores have created a spurt in buying. Therefore, we will see an increased demand during the festival season. Besides, most brands are wooing end-users with special offers and various onsite and offsite promotions which are further driving the demand upward. In fact, we, along with our vendors, are making a lot of efforts at the retail malls and the retailers in terms of branding and awareness to drive up the demand. Also, we are now observing a very interesting trend in the gifting segment, people are moving away from offering sweets (which is good in taste but not good for health) to gifting various IT products.”

Subrotah Biswas, Country Manager, India & SAARC, Logitech, said, “Despite the rising inflation, we have lined up new products for the Indian market. We believe that these products would be well accepted in today’s scenario too. We have products at various price points that cater to the different market segments and this, we believe, will help us maintain our wide reach despite the rising inflation. We continue to lead the market with innovative products and strengthen our product portfolio with products at various price points. During this festive season, we plan to launch a wide range of new products that include – Nano series (V450/ V550), Pure-Fi Series (iPod speakers with a unique mobile Bluetooth product for all mobiles), R5 and LS11 2.0 PC speakers (to capture the entry and design-conscious consumer segment), upgraded webcam range (E2500, E3500, S5500, S7500), and some exciting gaming products – Driving Force GT (PC/PS2/PS3 compatible wheel), G11 Gaming Keyboard, etc.”

In keeping with the practice, this year also all the major IT vendors have announced several schemes, special offers and discounted prices for channel partners as well as end-users. Confident of sales, Nitin Malhotra, Kingston Country Manager, India, says,”“During the festive season, people tend to leave aside the worries of slowdown. People save money and keep aside some amount for the festive season when they get in the mood of shopping. As you may have observed, though the inflation is rising, the spending on activities like dining out, entertainment, home renovation, has not fallen in proportion to inflation. Similarly, I am sure you will find people who have already planned for buying, at all possible shopping places. Yes, there might be a drop in the total spend by a consumer, but I would not say that will be in proportion to the rising inflation. With the range of products we are offering, say, a pen drive, which has now become a necessity, hence fits in various categories like festive gifting, not only in the personal space but even in the corporate world.”

“Keeping in mind the inflation, we feel it is increasingly important to provide customers with various promotional schemes. For instance, we introduce various finance / EMI schemes, discount offers around the time of festivals. These enable Canon to realize sales and to be a part of celebrations. Such initiatives definitely excite customers and therefore they respond to the exciting offers which, in turn, increase our sales. In the light of the slowdown of the market, I would like to bring to your notice that despite the slowdown, Canon has always faced a growth in its sales. These schemes help Canon to realize sales vis-à-vis the slowdown in the market. This is undertaken with all seriousness since Canon India has a long-standing commitment to its consumers. Time and again, we have been adding value for our customers with cutting-edge products,” adds Shunichi Senda, Director, Imaging Communication Products, Canon India.

“The festive opportunity applies to home appliances and gadgets. High-end equipment business is dependent on business needs and has little dependency on the emotional quotient,” informs Surajit Sen, Director – Channel, Alliances and Market, NetApp India.

Schemes being offered: 
LG is focussing on pushing both Desktops and Notebook products. There is a natural increased demand during this period from consumers, and home buying is maximum in this period. Consumers tend to buy Desktops or Notebooks for their family or loved ones. It has recently introduced the unique and most rewarding programme to maximize channel business and their profitability for upcoming festive season – the LG One 2 ka 4 Channel Partner Programme. It provides a wonderful opportunity for the partners to drive home a Chevrolet Spark or take a relaxing holiday in Pattaya, Thailand; and win a whole range of other exciting products–– from LG products, digital cameras, mobile phones, iPods and much more. The duration of the programme is from 1st September to 30th November, 2008.

For every sell-in and sell-out of eligible products, the channel partner can earn valuable points. These points can be redeemed for a host of fabulous gifts. As soon as he earns 2,000 points, he can start redeeming his gifts. Or, he could accumulate his points for bigger gifts later on. The programme also offers exceptional benefits such as: 
* Earn 100 Welcome Points as soon as you register 
* Earn points for buy in 
* Earn points for sell out 
* Earn bonus points when you participate in future promotions

ViewSonic has introduced schemes varying from incentives to mega vacation trips and combo buy offers to benefit the partners more on buying more. Gigabyte has just concluded “HAR MINUTE GIGABYTE” Gold scheme, which has coincided with the current festive season.

On the occasion of Diwali, Canon has introduced a special festive offer for its customers to increase the gaiety of the festival. Canon tries to make the festival more special by introducing scratch & win offers with prizes up to Rs.3,050/- for customers. A customer can win a TCL wireless headphone or Reebok T-shirts by the scratch card. Also, on the purchase of select DVD camcorders, consumers are entitled to a free LG DVD Player. In addition to these, Canon is also offering interest-free EMI schemes for customers to avail of. On the occasion of Diwali, Canon has also launched new products for the Indian market. Canon has launched the PowerShot A 1000 IS, PowerShot A 2000 IS, PowerShot SX110, Selphy CP770 and EOS1000D. The scheme is valid throughout the country till November 10, 2008.

Logitech has introduced two schemes on the occasions of Dussehra and Diwali. Both the schemes are applicable when products are purchased from registered dealers – LORDS. The ongoing Nau DO Baarah scheme is applicable when products are purchased from the LORDS. The scheme is split into two levels. In level one, if the partner buys a combination of Internet Pro or Internet 350 that totals up to 9 units along with two units of either EX 90 or EX 100, the partner gets a NT200 free. The partner can take home 2gm gold coin if the total number of Internet Pro or Internet 350 bundles is 11 instead of 9. The combination of Internet Pro or Internet 350 can be any ratio as long as there is at least one unit of each product and the total is 9 (level 1) or 11 (level 2) units. The partners can enjoy the benefits of this scheme till November 30, 2008. Another interesting scheme that Logitech has is Nehle pe Dehla. If you buy a combination of any nine Logitech 2.0 speakers and any ten Logitech 2.1 speakers, you get a “NT200” free. The Nehle pe Dehla scheme will start on October 16, 2008 and extend up to November 15, 2008.

During this festival, Kingston is taking a different route by educating its channel partners on how to identify right products and also how to find the right channel for buying, i.e. authorized distributors, approved dealers, etc. With respect to scheme, they are planning to launch a loyalty programme for all its channel partners. Taking a step ahead, it is also offering value-added pen drives to end-consumers through various BTL activities.

The main objective of festive scheme is to help benefit the partners and the end-users. Any scheme, if implemented in a structured way, can contribute 10–15 per cent business growth. LG is expecting higher sales in the notebook category, apart from increase of 30-40 per cent in each product category. Canon believes this is the right means to realize the dream to attain Rs.1,000-crore revenue by the year 2010. Logitech wants to maintain its strong growth trend of around 40 per cent and ensure a strong positive sentiment in the market.

Schemes help consumer to see the value addition from the brands which they are choosing. Typically, schemes work as an icing on the cake, but the cake should be attractive enough to choose. Schemes and incentives play a critical role for a company. With a crowded market place and a variety of products available, it is essential for companies to engage with their partners on a continuing basis.

Not only do these programmes help boost sales, they are also an excellent motivational tool for channel partners. Such initiatives definitely excite partners and therefore they respond to the exciting offers which, in turn, increase sales. The importance of schemes and sales cannot be discounted. The company and vendors benefit a lot from the schemes.

Schemes can be effective only when they are true to the objective. If so, they go a long way to benefit the business, thereby creating goodwill for the brand. “At ViewSonic, the primary focus of our schemes is to benefit the partners by virtue of which it can push the stocks when market is low or additionally boost the market even when the going is good,” says Gautam Ghosh, Country Manager, ViewSonic Technologies (India) Pvt. Ltd. Logitech says its marketing investments are more focussed on activities that involve the channel partner, as well as the end-consumer. Supporting partners to carry out end-user activities and events, along with a sales target-oriented scheme, has been found to be the most effective sales initiative and helps in overall sales promotion.

Schemes usually help maintain business momentum in the market through overall excitement. More than the direct impact to sales, it is an overall motivation factor, which helps in keeping the brand awareness “top of mind”. Generally, these have a very positive effect, especially during the lean periods. In the last year or two, we see seasonality of sales going down and sales becoming more or less consistent all the year round.

Rajan Sharma, General Manager – MB and VGA BU, Gigabyte, India, says, “Schemes work as catalysts to ensure fast and effective penetration for sales. They also help in forming long-term bond with the channel. If implemented systematically, vendors can utilize schemes to tap into unknown territories and areas hitherto unknown. This means opportunities to tap new regions, new customers, enter unknown markets.”

Malhotra adds, “Schemes help customers to take that last step in buying a product. Just take a little care that customer should not start discounting the value of product he is buying. The key factor is that it helps in motivating them and increasing the loyalty factor. Also, it helps them to get that extra benefit which in the normal course of business they would not get it.”