FMCG cos hit upon unique point of sales

BOTTOM OF PYRAMID

Tie Up With Barbers, Dhabas

FMCG marketers have found a new league of extraordinary consumers: Kanwariyas in Bihar, barbers of Meerut, Mumbai's dabbawallas, devotees at Kumbh Mela, highway dhaba owners and resident welfare associations. 

    Companies such as Emami, Godrej, Dabur, PepsiCo and Perfetti Van Melle are chasing these unlikely customer groups to keep demand ticking at a time when prices of grocery items like soaps, shampoos, hair oils and beverages inchup. And it's working. 
    "In Bihar, what our (Himani) Fast Relief brand sells in one month is equivalent to its sales from the remaining 11 months," says Aditya Agarwal, group director of Emami, which sets up massage parlours for Kanwariyas (devotees of Lord Shiva who walk 40-50 kilometers every day for a month to reach the Ganges on Maha Shivratri) on their routes during the Kanwariya season, particularly in Bihar. 
These parlours provide free massages to the Kanwariyas and retail the company products. Himani Fast Relief pain reliever and Navratna hair oil are hot favourites in Bihar during the Kanwariya season. "These are low-cost, effective ways to reach core target consumers," says Mr Agarwal. Huge opportunity for creating awareness 
LOW COST and out of the box. Many marketers have embraced this kind of direct group marketing to drive up demand, as prices of various grocery items have increased 3-5% since the Union Budget. 
    Godrej is tapping one-lakh barber shops to push shaving creams and hair colour, Dabur has tied up with dhabas (for its candies), Kumbh Mela (to push its Amla hair oil) and beauty pageants (for Fem bleach), PepsiCo has tapped resident welfare associations for Tropicana juices, and Perfetti Van Melle has tied up with Mumbai's dabbawallas to sample its Mangofillz candies. 
    Some 50,000 barbers in towns like Meerut, Nashik and Ghaziabad now useGodrej shaving creams and hair dyes and accessories sporting its brand. The company is now in the process of tapping another 50,000 barbers in tier-2 and tier-3 cities, as its pilot project, which ended in December last, proved a success. 
    "If we can physically reach half-a-million barber shops in this country with our products, we perhaps don't even need to advertise," says Dalip Sehgal, MD of Godrej Consumer Products, which makes Godrej shaving cream, Expert and Renew hair colours and Cinthol talc. 
    It sells special kits to barbers, which include products and accessories, for Rs 150 each and conducts workshops and seminars for them. "More than points of sale, the barbers are a great endorsement for us," adds Mr Sehgal. 
    Such strategy, even if it doesn't result in heavy sales, gives huge opportunity for creating consumer awareness. 
    Dabur has set up camps called 'Champi Clinics' for its Amla hair oil at the Kumbh Mela now taking place in Haridwar. The company has also joined hands with 'Nukkad Natak' companies and puppeteers to spread the message of oral hygiene and with street-food outlets (dhabas) for its post-meal digestive candy Hajmola. 
    "There's a large, untapped set of consumers we can reach out to through such exercises," says Dabur CEO Sunil Duggal. He said the company plans to cover over 1,000 street-food outlets across the country. 
    Dabur's Fem bleach brand also sponsored a beauty pageant in Punjab, attended by 5,000 women, who are potential consumers. 
    Last month, Italian confectionery maker Perfetti Van Melle's Indian arm sampled two lakh Mangofillz candies with Mumbai's dabbawalas, who distribute two-lakh lunch boxes to the city's office-goers daily with clockwork precision. Mumbai is known as a big mango candy market, and it was the first time the company was tapping the fruit-based candy category. 
    "The sampling worked well for us. We would consider it again," says Sameer Suneja, CEO of Perfetti Van Melle India. "Through the dabbawalas, you know you are reaching a focused target audience."

Telcos set to make billion-$ calls at 3G spectrum fair

 TELCOS will wade into this week's 3G spectrum auctions with aggressive bids starting at over a billion dollars, squaring off against each other to win crucial airwaves that are finally up for grabs after a delay of three years. The government has set mock auctions on Monday and Tuesday and the actual bids on April 9. 

    Analysts have billed the auctions as a fiery contest because at stake are airwaves that will enable cellphone companies to break into high-speed internet and video-conferencing services and help them transcend the tribulations of a cut-throat market. 
    "Of the six companies that have pitched for a pan-India 3G spectrum, Vodafone, Airtel, Idea and Aircel are facing a serious 2G spectrum crunch," said Com First India director Mahesh Uppal, a telecom consultant. "For these companies, 3G spectrum is critical and they cannot afford to let go airwaves." 
    The base price for pan-India 3G airwaves is Rs 3,500 crore and Rs 1,750 crore for broadband wireless spectrum bids, due on April 11. The government is auctioning three slots of 3G airwaves in 17 telecom service areas and four in the other five. Only two slots are up for sale across the country for broadband airwaves. 
    State-owned BSNL and MTNL already offer services on 3G and broadband wireless frequencies. 
    The bids would be very aggressive and it is unlikely that companies would bid less than a billion dollars, given that the base price is $780 million, said Mr Uppal, a former member of telecom regulator Trai. 3G services were due for launch in 2007, but have repeatedly been deferred amid troubles over freeing up airwaves and setting bid prices. 
    Telcos now offer services on 2G spectrum, but further allocations in this medium have been on hold till the government finalises a new allotment method. Before March 2009, when the allocations were stopped, telcos got spectrum based on subscriber numbers. 
    Uninor has cited the lack of clarity on 2G spectrum and became the only incumbent operator to stay away from the 3G bids. 
    Still, the spectrum pinch and intense bloodletting through price wars in a crowded market make it imperative for cellphone companies to migrate to a medium that will help them offer new technologies. Telecom analysts say big companies such as Bharti Airtel and Vodafone Essar will go all-out to corner 3G airwaves in all the 22 circles, as they plan to shift their top-end customers who already use compatible phones to 3G services and take the load off their spectrum-starved 2G networks. TECHNOLOGY ROAD MAP Big companies will go all out at 3G auction 
    WE EXPECT intense competition for the three available spectrum slots," said a JPMorgan report last month, adding that the auctions could "stretch balance sheets amid ongoing price wars". 
    Billion-dollar bids will not make the auctions a no-contest, because other companies in the fray are no slouches, said telecom analysts. Dual-technology holders such as Reliance Communications (RCOM) and Tata Teleservices are also targeting 3G airwaves across all circles with gusto while others such as S Tel, Videocon and Etisalat are taking a stab at select telecom circles. 
    Tata Teleservices may turn out to be among the highest bidders, as its partnerfor GSM services, Japan's NTT DoCoMo, is a strong global player in high-end services, said a telecom watcher. 
    RCOM CEO Sayed Safawi said the country's second-largest mobile operator would bid aggressively. "Unlike some players, 3G is a technology road map for us," he said, adding that RCOM does not need 3G airwaves to shift customers due to a spectrum crunch. 
    RCOM and the Tatas already offer high-speed data services called EVDO, or evolution data optimised, a 3G wireless standard used to provide wireless broadband services through data cards. Mr Safawi said high-end services were likely to be limited to the top 100 towns initially. 
Most operators have raised funds that are more than double the base price ofRs 3,500 crore, another sign that the bids will be evenly matched. 
    Vodafone Essar, the country's secondlargest GSM operator, has raised a fiveyear Rs 10,000-crore loan from SBI, Punjab National Bank, Canara Bank and Bank of Baroda to finance its 3G bid, said bank executives familiar with the lending plan. The interest rate of 13.25% for the first two years will be tweaked based on the average prime lending rate of the public sector banks, they said. 
    Idea Cellular has collected nearly Rs 9,500 crore for the bids. The company has Rs 6,000 crore from domestic banks and about Rs 3,000 crore through foreign borrowings, said executives with direct knowledge of the matter. 
    Executives of Bharti Airtel, India's largest telco by customers and revenues, had earlier told ET that the telco will use reserves of Rs 8,000 crore to fund its 3G bid. 
    All top cellphone companies have also bid for broadband wireless access spectrum that enable high-speed data communication over wireless links and provide better coverage than fixed-line broadband systems as a backup plan in case they do not win the 3G auctions. 
    A section of the industry doesn't see stratospheric bids for the 3G airwaves, however. They believe players will have the Subodh Kumar Committee report that recommends that the 3G bids must be the benchmark for future allocations of 2G airwaves in mind. 
    Companies disagree. "Serious longterm players will go for 3G airwaves, as it is an advancement of technology," said a Vodafone Essar executive, adding that companies will finally get a sense of how the market values spectrum.