IndianMaze

It is the sale season in the capital. All and sundry shops are showing big blown signs of "SALE". Customers run to get the bargains for all they wanted to buy. Somehow, sales on garments appear to be the biggest draw. There are many caveats to the sales. I spent good couple of hours trying to understand the psyche of "SALE" by outlets. As one shopkeeper mentioned to me, the key objectives of a sale are: - push non-moving stocks - push volumes - keep real discount levels low It is the 3rd point that got me intrigued and then I looked for what is actually happening. 1. Sale declares " upto 75% off SALE " Only about 10% goods are at the highest slab of discount. Almost 50% are on the lowest slab of discount which invariably is 20%. 30% of goods are not on sale. So the effective discount is 20%. 2. Buy 1 get 25%, Buy 2 get 1 free, buy 3 get 3 free. The hidden thing is that goods of higher price are billed and lower price are given free. Garments get sold o...

I was very happy to see today's newspapers in the Capital. In particular I am referring to the supplement on Luxury goods with Business Standard mentioning that tough times are good for true luxury products. But the more interesting one is in ET mentioning restaurant sales up significantly in the last 1 week. I had mentioned these two sectors as possible gainers in the slowdown time in my post of 12th November http://indianmaze.blogspot.com/2008/11/downturn-who-are-gainers.html? Incidentally the same question came up in an interesting lunch over panchratna dal, sham savera..... What is bugging top managers at this stage was the hottest topic over lunch and surely fresh green chillies added to the discussions. More on that later when I have some more time at hand. It's off to routine chasing the long to do list of mine.

Are there buyers waiting to buy things with a waitlist of 4-6 months in the current times? Honda Hybrid's recent action and response both have left me with more questions than answers! A 38% discount leads to a jump in sales by 100 times (30 cars in 4 months vs 100 in 4 days) and that too for a future delivery to be completed by March 31, 2009. Takeouts - - Honda has been able to liquidate all the stocks imported into the market - will have these cars run on Indian roads and give complete inputs on the performance on an ongoing basis - tested the price elasticity for the car - a similar multipoint research would have costed at least 50 % of the cost incurred by this method (assuming hiring Booz or McKinsey or so) But are consumers buying it because it is "cheap" or "value for money" or because there is a hefty discount and so a great short term bargain to flaunt! Time will reveal what is the insight but I am keen to know. Comments welcome.