Tuesday, March 21, 2006

On margins and packaging

Many years back, buying stuff loose was the only way one could buy things like rice, pulses, sugar etc. For those who are not familiar with Indian market jargon, loose means, buying items that are not pre packaged or branded. You choose the weight and it it is weighed and packed right in front of your own eyes. For run of the grocery items like rice, wheat this is pretty much the way it is in most places. But for pulses and some other items, like spices branding was seen as the way forward. The good brands are really good, but there are many little brands that are little more than loose packages with a label and no real control on quality.

This week on our weekly visit to the wholesale market we came across a shop that was selling stuff loose just like in the good old days. For most items, the difference between his price and the price of a "labelled" "in house brand" was a good 3 odd rupees per kilo. And with the high end brand, the difference was much more. The quality of his items, seems, atleast to the eye, far better than the packaged stuff we were used to buying. We promised to check out this section of the market once again next week or so.

The point being, if you see a lot of these "branded" "no brand" stores coming up near your place, be aware that they are little more than your old grocery store in disguise - with more margins and little else to offer. The art of packing stuff in putting in a label in each packet also reduces the scope of something that the Indian consumer is famous for - bargaining.

"It is the printed price" they say. Well, you printed it, there is no sanctity in that. It is just way to ensure that their margins are not lost.

The question to ask is, Is there any value add in the brands that you buy or is it just packaging and a fancy label?

1 comment:

Camouflaged Being said...

I dont think I agree with you here. If brands have their pros and cons and so do the 'loose' stuff.
While its wrong to say that brands/ branded stores are just a fancy label and upmarket prices. People buy them, use them and consumers are no fool, you would agree. Aspirations drive Indians but realisation of aspirations is what propels a repeat purchase.

PJ