|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
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
Dec. 18, 2014 12:30 PM EST Reads: 509
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 18, 2014 11:30 AM EST Reads: 717
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.
Dec. 18, 2014 11:00 AM EST Reads: 2,066
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...
Dec. 18, 2014 10:30 AM EST Reads: 2,203
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data a...
Dec. 18, 2014 10:15 AM EST Reads: 2,033
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 18, 2014 10:00 AM EST Reads: 1,719
ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ -- IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...
Dec. 18, 2014 10:00 AM EST Reads: 1,851
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada. Our partner network encompasses some 300 of the world's leading systems integrators and security s...
Dec. 18, 2014 09:30 AM EST Reads: 1,832
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 18, 2014 09:00 AM EST Reads: 1,156
Nigeria has the largest economy in Africa, at more than US$500 billion, and ranks 23rd in the world. A recent re-evaluation of Nigeria's true economic size doubled the previous estimate, and brought it well ahead of South Africa, which is a member (unlike Nigeria) of the G20 club for political as well as economic reasons. Nigeria's economy can be said to be quite diverse from one point of view, but heavily dependent on oil and gas at the same time. Oil and natural gas account for about 15% of Nigera's overall economy, but traditionally represent more than 90% of the country's exports and as...
Dec. 18, 2014 06:00 AM EST Reads: 642
The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session at @ThingsExpo, Ryan Bagnulo, Solution Architect / Software Engineer at SOA Software, focused on desi...
Dec. 17, 2014 11:15 PM EST Reads: 1,236
"At our booth we are showing how to provide trust in the Internet of Things. Trust is where everything starts to become secure and trustworthy. Now with the scaling of the Internet of Things it becomes an interesting question – I've heard numbers from 200 billion devices next year up to a trillion in the next 10 to 15 years," explained Johannes Lintzen, Vice President of Sales at Utimaco, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 17, 2014 11:00 PM EST Reads: 1,313
"For over 25 years we have been working with a lot of enterprise customers and we have seen how companies create applications. And now that we have moved to cloud computing, mobile, social and the Internet of Things, we see that the market needs a new way of creating applications," stated Jesse Shiah, CEO, President and Co-Founder of AgilePoint Inc., in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 17, 2014 08:00 PM EST Reads: 1,277
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the industry’s first all flash version of HyperConverged Appliances that include both compute and storag...
Dec. 17, 2014 06:30 PM EST Reads: 1,177
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
Dec. 17, 2014 11:45 AM EST Reads: 1,421
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
Dec. 16, 2014 11:45 PM EST Reads: 1,259
Code Halos - aka "digital fingerprints" - are the key organizing principle to understand a) how dumb things become smart and b) how to monetize this dynamic. In his session at @ThingsExpo, Robert Brown, AVP, Center for the Future of Work at Cognizant Technology Solutions, outlined research, analysis and recommendations from his recently published book on this phenomena on the way leading edge organizations like GE and Disney are unlocking the Internet of Things opportunity and what steps your organization should be taking to position itself for the next platform of digital competition.
Dec. 15, 2014 11:45 PM EST Reads: 1,630
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Dec. 15, 2014 10:30 AM EST Reads: 6,856
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at @ThingsExpo, Andrew Bolwell, Director of Innovation for HP's Printing and Personal Systems Group, discussed how key attributes of mobile technology – touch input, sensors, social, and ...
Dec. 15, 2014 10:00 AM EST Reads: 1,937
In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect at GE, and Ibrahim Gokcen, who leads GE's advanced IoT analytics, focused on the Internet of Things / Industrial Internet and how to make it operational for business end-users. Learn about the challenges posed by machine and sensor data and how to marry it with enterprise data. They also discussed the tips and tricks to provide the Industrial Internet as an end-user consumable service using Big Data Analytics and Industrial Cloud.
Dec. 15, 2014 10:00 AM EST Reads: 1,611