The Teleshopping business in India

By : Ajay Grover Ritika Gupta Pankaj Puniani

Introduction Teleshopping networks provided consumers with

miraculous products such as disease curing teas, wondrous 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, lotions, solutions,

toys etc.

Background Note

Customer marketing channels(based on the number of sales levels between manufacturers and consumers)

Mass Marketing

Direct marketing

Teleshopping was originated in the US in the mid -1980s and is another name for Direct Response Television (DRTV) shopping, one of the direct marketing techniques. Since the 1990s, two types of infomercials have been used : 1. Infomercials featured celebrities using products and benefiting from it scheduled between TV programs and at the end flashing a telephone number. 2. In-studio productions with a live audience showing that it was not a mere commercial luring customer.

y In countries like US and Australia teleshopping had

dedicated 24 hrs home shopping channels . Its market in US valued around $2 billion in yr 2000 and presently the Home Shopping Network and QVC are the 2 major teleshopping networks in the US.y However it was not successful in other parts of the world

due to lack of innovation offerings, poor promotion & advertising techniques and lack of awareness among consumers but in the late 1990s teleshopping picked up momentum.y By 2001 its total business in world amounted to over $ 5

billion.

The Indian Scenarioy In early 1990s Indian laws prohibited customers to import products,

without acquiring prior permission from the regulating authorities.y During the mid-1990s, Telebrands India, a 100% subsidiary of

Telebrands Corp., pioneered the concept of teleshopping in Indiay In mid-1995, TSN (another major US-based teleshopping network) and

Asian Sky Shop (ASK), owned by the media giant - Zee[1] , also entered the market. The other major players in the Indian teleshopping market wereTVC,TSNM and StarWarnaco.y The Indian teleshopping network grew at a very slow pace.The

company developed several strategies to overcome the hurdles and make a success of their teleshopping initiatives.

Question 1y Explain the concept of teleshopping and its working

mechanism, benefits and factors that contributed to its success. Discuss the worldwide trends in the teleshopping business and the factors that have contributed to its success in the US. Also, describe the circumstances that led to the entry of teleshopping networks in India.

Concept and working mechanismy Teleshopping works on the principle of the so-called impulse

buying.y It is the infomercials that we usually see on the television. y These infomercials featured products that claimed to provide

miraculous results.y In addition, an attempt is made with interactive elements loyalty

to achieve. "It must be the strange fascination of this community of customers and television presenters, the regular buyers at their Teleshop binds.

Factors contributing to its successy Increasing number of Nuclear families (both husband and wife are

y y

y y

working less time for shopping) offered tremendous marketing potential. Targeted the premium-end TV viewers, with high purchasing power. Offered innovative and value for money products such as electronic goods, fitness devices, home appliances , toys and other range of imported products as the Indian customers were more oriented towards foreign goods. In early 2000s, Teleshopping market players started offering customized products such as Jewellery with birth stones. Also the constant introduction of new products played a major role in attracting the customer attention and hence in its success.

y Two types of products were offered : 1. Utility Products - majority of teleshopping sales such as

fitness devices, healthcare products, household appliances and electrical devices. 2. Value-expressive Products low sales products such as jewellery, apparels & home dcor. Adoption of two types of persuasion modes 1. Functional Congruity- emphasizing the utilitarian aspect of the product 2. Self-Congruity- matching the product user image with that of customers self image. y Advertising the products through infomercialsy

y Dubbed versions of infomercials featuring well-known

personalities. y Giving special attention to their pricing strategies, the prices were brought down to make the products more affordable. y Hectic promotional activities offering early bird prizes, price reductions, money return offers, free accessories and double product packs at the same price. y Strengthening of franchisee base across the country and hence extended to over 90 cities across the country.

Evolution of teleshopping in IndiaIt evolved in India due to the changing societal norms.y During the early 1990s, Indian laws prohibited customers to

import products, without acquiring prior permission from the regulating authorities.y These laws also restricted the repatriation of money, without

the prior permission of the countrys central bank, RBI.

Question 2y 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 answers.

The various strategies followed are :y Targeting the premium-end viewers, with high purchasing power. y Focusing more on offering innovative and value for money

products, which were not available in the market otherwise, which includes a selected range of imported products such as electronic goods, fitness devices, home appliances and toys.y Sourcing their products with help of their agents, both in India and

abroad. In some instances, the manufacturers of the products approached the networks directly for marketing and distribution of their products.y Offering Customized Products such as jewellery with birth stone.

y Introduced new products under the categories Utility y y y y y

products and Value-expressive products. Adoption of Persuasion modes namely Functional Congruity and Self Congruity. Advertising the products through infomercials. Introduction of Dubbed versions of original infomercials featuring well-known personalities. Lowering of prices. Extending the franchisee network across the country. And providing the telephone number of all their distributors at the end of the infomercials

Question 3y Critically examine the problems faced by teleshopping

networks in India. Do you think the market has a potential to grow in the future in the light of the above problems? According to you, what measures should the teleshopping networks in India adopt to address these problems and grow in future?

Problems faced by teleshopping networks in IndiaThe reason for the slow growth of teleshopping market in India are:y Imitation product y Higher prices y Difference in culture and language y Limited reach of products y Criticism y Interactive home shopping

Future Potentialy Increasing Living standard of Indian middle class people

making them more receptive towards trying out innovative products and conceptsy Increasing number of Nuclear families (both husband and

wife are working less time for shopping).y Online-shopping services through retail websites

Measures to be takeny Success depends Highly on ability of marketer to deliver

the goods on time to his valued customer along with other stipulated parameters..y Perceived value of the product should exceed its price. y Air time a critical success factor (enhancing their reach by

repetitive presentation of the product both during peak and slack hours on various channels)y Effective payment system in the country that enables

immediate money transfers at low risk.

y Gifts offers and discounts should be allowed. y Constantly introduce new product varieties. y Teleshopping products should require minimum after sales

services.y Success depends upon unique product, good

pricing and credibility.

Current statusy March 31, 2010 --AAA TELESHOPING PVT. LTD. has very rapidly emerged as

a trustworthy name in the teleshopping industry y July 15, 2010 --Teleone - India's Number One Teleshopping Company offers wide range of Gemstones,Astrology Products,Fitness Products & other Teleshopping Products at lowest price. TeleOne is a tele shopping pioneer in India, offer high quality products at affordable prices. Our products command extensive media coverage on the TV. A strong distribution chain spanning Whole India, supports the marketing team, and helps us reach out and satisfy customer requirements. New products offered are: y Deemark Herbal Hair Oil y ShaniYantra / Saturn Yantra is very effective to remove the malefic effect of Saturn & help spiritually.ShaniYantra / Saturn Yantra is used to Propitiate an afflicted.

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