|By Marketwired .||
|November 26, 2012 08:50 AM EST||
BOSTON, MA -- (Marketwire) -- 11/26/12 -- Holiday shopping retail winners will be those that deliver value and best features in one prized package, according to research from The Boston Consulting Group (BCG). "Cheap" or "Expensive" are no longer the watch words of success.
"U.S. and other developed market consumers are stressed to the limit. The majority are stating an intent to cut back their spending," said Michael Silverstein, BCG senior partner and co-author of "The $10 Trillion Dollar Prize: Captivating the Newly Affluent in China and India" (Harvard Business Review Press, October 2012). "You need to pry their money from their wallets with the best match of features and economy."
It is true in the emerging growth economies of China and India. Chinese and Indian consumers want a complete range of products and benefits packaged at a price point that sizzles with value. When Indian consumers experience the perfect mix of quality and value, they will often say "paisa vasool," "I got my money's worth." It is the highest praise, and, globally, it will become more relevant: Around the world, consumers' budgets are squeezed -- and they are growing more skeptical of promotional sales and worried about the future, according to BCG data.
"'Paisa vasool' can become the global watchword to creating greater value, offering more features for less money and attracting consumers who become your advocate," said Silverstein. "It is a concept that grows out of the natural frugality that characterizes many Indians and Chinese who grew up with little and often heard stories from elders of deprivation. They try to stretch incomes as far as possible -- and are quick to complain about and discredit a merchandiser for poor value, low quality or misrepresentation. They're also quick to endorse products and merchandisers that inspire 'paisa vasool.'"
Reality of Sluggish Recovery in West Ups Demand for New Kind of Low-Priced Goods
He added, "This may have been an emerging market concept, but 'paisa vasool' is demanded in New York, London, Paris and nearly everywhere else in the West. Low-priced goods with deep, rich features will become the fastest-growing segments of all markets as consumers everywhere struggle to make ends meet. Our consumer research suggests that the true tragedy of the financial crisis -- and the likelihood that there is not going to be a strong recovery anytime soon -- is finally dawning on consumers and altering spending patterns."
According to a recent BCG survey fielded in conjunction with "The $10 Trillion Prize," 91 percent of consumers in the U.S. and U.K. said they are planning to spend less or not increase spending in the next year. (In contrast, 40 percent of Chinese consumers said they will spend more.) Fewer than a quarter of Americans and U.K. residents said they believe their children will have a better life than they did, and only 27 percent of Americans and 21 percent of U.K. residents believe there will be a full economic recovery.
Paisa Vasool Examples
The recipe for consumer business success is extreme value. There are, according to BCG, "paisa vasool" success stories in China and India that translate to or can be instructive for Western markets...
- In India, Godrej Group has a powdered hair dye packaged in three-gram containers that sell for 15 cents. The company sells the product in 1.1 million retail outlets and has 65 percent share of the hair dye market.
- In China, Coca-Cola sells the "RMB 1 Coke" in smaller, lower-tier cities. Coca Cola is now the largest beverage maker in China and has a 25 percent market share.
- Tingyi's Master Kong instant noodles deliver the Chinese market a superb combination of price and quality -- great taste, a variety of flavors (customized by regional preference) at a low price, 40 cents (versus 65 cents charged by a competitor).
- India-based Mahindra & Mahindra's SUV for the global market, the Scorpio, costs half as much as competitors but offers a full range of features and styling.
"Paisa vasool" can apply across all consumer needs and categories. Examples in Western markets include: the Toyota Corolla (going back to the early 1970s), Hyundai, Swatch, Costco, Family Dollar, Ikea and McDonalds.
Paisa Vasool Strategy: No Mean Feat
"A 'paisa vasool' strategy is much more complicated to develop and execute than it seems. It requires a combination strategy -- one that delivers the right manufacturing capabilities, a retail network with broad distribution, innovation in ingredients, creative packaging that yields gross margins and the ability to move fast," Silverstein said.
The "magic" of "paisa vasool" involves, among many other things...
- Having a set of high-velocity stock-keeping units that earn a disproportionate share of category profitability.
- "Screaming" value and defined benefits at the point of sale.
- Leveraging local suppliers when searching raw materials.
- Driving five percent or more productivity improvements at the product level every year.
- Stripping out all unnecessary packaging materials.
- Reaching even the most remote markets.
"'Paisa vasool' is the hottest spot in consumer markets because it thrives in the 'more want and have less' reality," Mr. Silverstein said.
For more information, please go to http://www.bcgperspectives.com/10trillionprize.
To arrange a conversation with one of the authors and/or receive a copy of "The $10 Trillion Prize: Captivating the Newly Affluent in China and India," contact Frank Lentini of Sommerfield Communications at (617) 939-9094 / [email protected].
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 77 offices in 42 countries. For more information, please visit bcg.com.
Bcgperspectives.com is a new website -- available on PC, mobile phone, and iPad -- that features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back almost 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed via PC, mobile, iPad, Facebook, Twitter, and LinkedIn.
The Boston Consulting Group
Global Media Relations Manager
Tel +1 617 850 3783
Fax +1 617 850 3701
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo, November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be.
Sep. 3, 2015 10:48 AM EDT
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts, GM of Platform at FinancialForce.com, will discuss the value of business applications on wearable ...
Sep. 3, 2015 10:45 AM EDT
SYS-CON Events announced today that Micron Technology, Inc., a global leader in advanced semiconductor systems, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Micron’s broad portfolio of high-performance memory technologies – including DRAM, NAND and NOR Flash – is the basis for solid state drives, modules, multichip packages and other system solutions. Backed by more than 35 years of technology leadership, Micron's memory solutions enable the world's most innovative computing, consumer,...
Sep. 3, 2015 10:00 AM EDT Reads: 280
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some form of XaaS – software, platform, and infrastructure as a service.
Sep. 3, 2015 10:00 AM EDT Reads: 1,596
Containers are not new, but renewed commitments to performance, flexibility, and agility have propelled them to the top of the agenda today. By working without the need for virtualization and its overhead, containers are seen as the perfect way to deploy apps and services across multiple clouds. Containers can handle anything from file types to operating systems and services, including microservices. What are microservices? Unlike what the name implies, microservices are not necessarily small, but are focused on specific tasks. The ability for developers to deploy multiple containers – thous...
Sep. 3, 2015 10:00 AM EDT Reads: 109
As more intelligent IoT applications shift into gear, they’re merging into the ever-increasing traffic flow of the Internet. It won’t be long before we experience bottlenecks, as IoT traffic peaks during rush hours. Organizations that are unprepared will find themselves by the side of the road unable to cross back into the fast lane. As billions of new devices begin to communicate and exchange data – will your infrastructure be scalable enough to handle this new interconnected world?
Sep. 3, 2015 09:30 AM EDT Reads: 202
While many app developers are comfortable building apps for the smartphone, there is a whole new world out there. In his session at @ThingsExpo, Narayan Sainaney, Co-founder and CTO of Mojio, will discuss how the business case for connected car apps is growing and, with open platform companies having already done the heavy lifting, there really is no barrier to entry.
Sep. 3, 2015 09:30 AM EDT Reads: 209
SYS-CON Events announced today that the "Second Containers & Microservices Expo" will take place November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
Sep. 3, 2015 09:30 AM EDT Reads: 650
Consumer IoT applications provide data about the user that just doesn’t exist in traditional PC or mobile web applications. This rich data, or “context,” enables the highly personalized consumer experiences that characterize many consumer IoT apps. This same data is also providing brands with unprecedented insight into how their connected products are being used, while, at the same time, powering highly targeted engagement and marketing opportunities. In his session at @ThingsExpo, Nathan Treloar, President and COO of Bebaio, will explore examples of brands transforming their businesses by t...
Sep. 3, 2015 09:30 AM EDT Reads: 281
WebRTC services have already permeated corporate communications in the form of videoconferencing solutions. However, WebRTC has the potential of going beyond and catalyzing a new class of services providing more than calls with capabilities such as mass-scale real-time media broadcasting, enriched and augmented video, person-to-machine and machine-to-machine communications. In his session at @ThingsExpo, Luis Lopez, CEO of Kurento, will introduce the technologies required for implementing these ideas and some early experiments performed in the Kurento open source software community in areas ...
Sep. 3, 2015 09:00 AM EDT
Akana has announced the availability of the new Akana Healthcare Solution. The API-driven solution helps healthcare organizations accelerate their transition to being secure, digitally interoperable businesses. It leverages the Health Level Seven International Fast Healthcare Interoperability Resources (HL7 FHIR) standard to enable broader business use of medical data. Akana developed the Healthcare Solution in response to healthcare businesses that want to increase electronic, multi-device access to health records while reducing operating costs and complying with government regulations.
Sep. 3, 2015 08:30 AM EDT Reads: 317
The Internet of Things is in the early stages of mainstream deployment but it promises to unlock value and rapidly transform how organizations manage, operationalize, and monetize their assets. IoT is a complex structure of hardware, sensors, applications, analytics and devices that need to be able to communicate geographically and across all functions. Once the data is collected from numerous endpoints, the challenge then becomes converting it into actionable insight.
Sep. 3, 2015 07:45 AM EDT Reads: 106
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal an...
Sep. 3, 2015 05:15 AM EDT Reads: 2,022
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
Sep. 3, 2015 05:00 AM EDT Reads: 496
The 3rd International WebRTC Summit, to be held Nov. 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, announces that its Call for Papers is now open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 15th International Cloud Expo, 6th International Big Data Expo, 3rd International DevOps Summit and 2nd Internet of @ThingsExpo. WebRTC (Web-based Real-Time Communication) is an open source project supported by Google, Mozilla and Opera that aims to enable bro...
Sep. 3, 2015 05:00 AM EDT Reads: 1,594
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes about through a Communications Platform as a Service which allows for messaging, screen sharing, video...
Sep. 3, 2015 04:00 AM EDT Reads: 738
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal today!
Sep. 3, 2015 02:30 AM EDT Reads: 1,688
In his session at @ThingsExpo, Lee Williams, a producer of the first smartphones and tablets, will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater. He will explain how M2M controllers work through wirelessly connected remote controls; and specifically delve into a retrofit option that reverse-engineers control codes of existing conventional controller systems so they don't have to be replaced and are instantly converted to become smart, connected devices.
Sep. 2, 2015 11:15 PM EDT Reads: 242
SYS-CON Events announced today that IceWarp will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. IceWarp, the leader of cloud and on-premise messaging, delivers secured email, chat, documents, conferencing and collaboration to today's mobile workforce, all in one unified interface
Sep. 2, 2015 06:00 PM EDT Reads: 474
SYS-CON Events announced today the Containers & Microservices Bootcamp, being held November 3-4, 2015, in conjunction with 17th Cloud Expo, @ThingsExpo, and @DevOpsSummit at the Santa Clara Convention Center in Santa Clara, CA. This is your chance to get started with the latest technology in the industry. Combined with real-world scenarios and use cases, the Containers and Microservices Bootcamp, led by Janakiram MSV, a Microsoft Regional Director, will include presentations as well as hands-on demos and comprehensive walkthroughs.
Sep. 2, 2015 04:45 PM EDT Reads: 408