Case StudyOn

The Teleshopping Business In India Presented by:

Anshita Balraj

MeghnaRavina

Khushboo

You should be offering what is not available in the market.

BASIC CONCEPT

Face-to-face selling Direct-mail marketing Catalog marketing Tele-marketing Television shopping

TYPES OF DIRECT MARKETING

Teleshopping was the name given by Michael Aldrich in 1979.

He developed concept online shopping ,e-commerce, wired city.

He is inventor, innovator and entrepreneur.

Introduction

Teleshopping is an another name for Direct Response Television Shopping(DRTS).

Shopping by TV , Phone or Computer.

Increasing networks and channels, it is the best way to select the right product for you sitting at home .

Teleshopping networks became operational in 1990s in India.

Telebrands brought this concept first in India .

The other major players in the Indian teleshopping market were Asian sky shop, TVC, TSNM and Star Warnaco.

Background note

Teleshopping networks provided consumers with miraculous products such as- disease curing teas, kitchen & household equipments, weight reducing medicine etc

The products claimed to provide miraculous results. Such as reduce weight & get into shape without exercising or dieting.

The range of products included creams, potions, solutions, toys etc.

Focus has now shifted to other range of products due to behaviour patterns of consumers.

MIRACULOUS PRODUCTS

Require minimum after sales services.

Air time is one of the critical success factors.

Effective money transfer system.

The distribution channel is highly effected in any

country.

Success factors

Today’s Live Teleshopping is a serious and immensely successful growing sales channel, which uses TV contemporarily for an optimal customer consulting service and for product statements - provided the overall concept has been planned out professionally and the appropriate premium teleshopping channel has been chosen as a partner!

Today’s scenario

Explain the concept of teleshopping & its working mechanism ,benefits & factors that contributed to its success. Discuss the worldwide trend in the teleshopping business & the factors that have contributed to its success in the U.S. Also describe the circumstances that lead to the entry of teleshopping networks in India?

Question 1

Concept was initially introduced in Italy around 1980.

Then appeared in the U.S. and two years later were introduced in France.

During the mid-1990s, Telebrands India, a 100%subsidiary of Telebrands Corp. entered Indian market.

Concept of Teleshopping

Teleshopping works on the principle of called impulse buying.

It is the infomercials that customer’s usually see on the television. These infomercials featured products that claimed to provide miraculous results.

Cont..

Buying time slots on popular channels that had high penetration and enjoyed good viewership among the target customers.

Providing a special product code for every product and displaying it along with its price.

Setting up call centers in various cities, on the basis of the scale of operations and the extent of penetration expected.

Providing viewers with telephone numbers of these call centers and asking them to call their nearest call centre for further enquiries or to order the product.

Working mechanism

Provide customer with miraculous products such as disease curing teas, weight reducing machines.

Increasing number of Nuclear families offered tremendous marketing potential.

Targeted the premium-end TV viewers, with high purchasing power.

Factors towards its success

In early 2000s,Teleshopping market players started offering customized products such as Jewellery with birth stones.

Dubbed versions of infomercials featuring well-known Personalities.

Giving special attention to their pricing strategies.

Strengthening of franchisee base across the country and hence extended across the country.

Cont..

During the early 1990s, Indian laws prohibited customers to import products, without acquiring prior permission from the regulating authorities.

This was a major reason for the evolution of teleshopping in India unlike US, where teleshopping evolved due to the changing societal norms.

Circumstances to Entry

Discuss the strategies followed by major teleshopping networks in India with specific reference to each element of the marketing mix . Do you think the allegations against products claiming to offer “miraculous benefits are justified”? Give reasons to support your answer

Question-2

Focused more on offering innovative and value for money products, which are not available in the market.

New products were introduced constantly to attract customer attention and ward off competition.

It included selected range of imported products as electronics, fitness devices , home appliances & toys.

Strategies

They adopted 2 types of persuasion modes: Functional congruity and Self congruity.

The products were advertised through infomercials which were aired in 1- 2 minute time capsules.

The pricing strategy was changed from prices ranging previously from Rs.5003 to as low as Rs 200 to Rs 12000 with majority of products falling in Rs 1000- 5000.

For effective distribution, the networks focused on strengthening their franchisee base across the country.

Promoted use of credit cards.

Cont.

Analysts had put allegations that the people who advertised were paid to speak well about products.

They criticized networks for trying to deceive the viewers .

Yes ,it is justified as the models who are advertised doesn’t use the product themselves but falsify as they are paid for it.

Moreover even if customer buys the product and it turns out to be adverse then they don’t have anyone to whom they could approach. So they are not reliable.

No after sale services available. The prices charged are also higher .

Justification

Critically examine the problems faced by teleshopping networks in India. Do you think the market has a potential to grow in the light of the above problems? What measures should the teleshopping networks in India adopt to address these problems and grow in future?

Question-3

Lack of education and awareness among people. Low rate of women employment. Low penetration of TV's and telephones. Feel and touch concept is of great importance. Abundant supply of imitation products. Occasional habit of shopping. The higher prices were a major hindrance in the growth

of teleshopping networks.

Problem faced by teleshopping network in India

Contd. They dubbed most of their infomercials into

the regional languages. Hence , they failed to have the impact on

the customers. Another major problem was the growing

criticism for some of its products. Continuous innovation of new products.

Growth in future

The market cannot grow with all these problems. These problems need to be solved as soon as possible to make the market profitable for teleshopping.

The problems need to be curbed by adopting effective measures by the teleshopping networks in India.

On time delivery to valued customers. Air time – a critical success factor. Effective payment system that enable immediate

money transfer at low risk. Gift offers and discounts should be allowed. Perceived value of the product should exceed its price.

Measures to overcome problem in indian market

Market growth – Rs 250 crore in 10 years, Projected to double in next 10 years.

Earlier Female-Male shopper ratio was 90:10 , Now ratio is 60:40 .

Increasing Living standard of Indian middle class people.

FUTURE OF TELESHOPPING MARKET IN INDIA