Selling Factors & Techniques

In every kind of market the selling techniques are reliant on the goods and the market itself and
the markets of India are not an exception. In general, India is the only country that offers and has
shown high economic growth rates in the last few years and has a potential market of more than
1 billion people, which makes India one of the most eye-catching markets around the globe. On
the other hand selling techniques in India differ from other nations because of the diverse
consumer behavior. Moreover a significant factor for overseas company when they reaches the
Indian market for first time they should not forget to adapts their products according to the
Indian conditions and preferences. According to a recent survey, the Indian market can be
categorized as follow:

There are more than one million super rich class consumers.
The middle class essentially involves three different segments.
Consumer durables are bought by more than 28 million households, whereas non-

durables are purchased by more than 90 million households.

Personal transport and comfortable lifestyle are the two most important priorities.

In the situation of rural India:

The amount of households departing the low-income groups is increasing. Many

consumables purchased by rural and urban people are equal

Absence of electrification and lack of credit facilities are choking demand in rural areas

At first glance most of the purchasing power in India seems to focus on its urban markets.
However, a large majority of the Indian population lives in the rural areas spread over about
6,27,000 villages. The rest live in 3,700 cities with about 300 have a population of over 1,00,000
inhabitants. It is said that the real India lives in villages. Currently in the villages, there has been
a change in purchasing behavior due to the increase in literacy levels and the explosion of media.
Considerably, most of the purchases are made on the households personal income. Loans and
hire purchase plans represent only 10% of rural purchases. Indian consumers habits are rapidly
changing and this slow subtle change is difficult for many marketers to observe. Unlike the West,
there are very few malls in large towns and cities of India.

There is a layer of teeming marketing of minor and major retailers. In addition, several
companies offer promotional schemes and discount programs at many Indian festivals to boost
the sales. Recently, road shows have been effectively used to sell products. For consumers
sustainable products, which are relatively expensive - financing and buy back serve as incentives
to promote sales. The upper and middle class Indian consumers have a few common
characteristics:

They have more loyalty and trustworthiness to the stores where they shop and not to a

particular brand.
75% of the people like revisiting the shops where they did last purchases for durables and

non-durables.
The non-store retailing has attracted the attention of the Indian consumer.
Being aware of the existence of non-store shopping very few people in reality shop this

way in India.
72% of consumers were aware of the TV/Home shopping; only 5% had used it. DirectMailers managed marginally better, with 54% of respondents saying that they were aware
of this method, and it has been used by only 8% of the respondents

In addition to the traditional sales techniques, the Internet is also now gaining very much
importance as a method of selling. As the number of Internet users continues to increase due to
the reduction of the cost of Internet access, the Indian market of e-tailing is also increasing
rapidly. Although E-tailing is currently only 10 to 15% of the value of e-commerce in India, as
projected, e-commerce should increase by 30 times over the next three years, which will lead to
substantial growth in e-tailing for India. Similarly, experts in the sector believe that online B2B
(business-to-business) commerce is set to take off in India, because it meets a real need and
portals offering such services are based on solid revenue models.
The National Association of Software and the Services believes that the web based business-tobusiness trading will rise in the coming future. There are presently more than dozens of B2B
portals in place and half convinced more than 6,000 companies to list products on their websites.
Although the rapidly growing population of India presents the unlimited opportunities, many
Indian and overseas companies have discovered that for a handful of the product categories,

Only a fraction of the Indian population can be considered as potential customers. Many
companies were disappointed by the response to the products they launched in India over the
past three years. The causes are:

Few of the companies totally overestimated the complexity and size of the Indian market

for their products.

They fell in the predictions for the growing middle class Indian consumers. They offered
world brands at global price, without any personalization or customization. Only

transposing products and brands from other markets did not work as planned.
Last mistake was to enter in India without an effective distribution network, forgetting
that India is a market with inadequate logistics and infrastructure.

A successful sales strategy will recognize and face the existence of strong local competition that
exists in many of the products and categories of services should not be taken too lightly. Foreign
companies must also carefully compare the needs of customers and the quality of the latent
demand with the level of service that they wish to offer in India. India is not a very rich country.
Even among the wealthy middle classes, much of the money is spent on consumption according
to the needs, rather than on luxury goods. So, to introduce foreign products successfully all
comments below should have in consideration.

How IVAN Promotes Furniture Sales

Participation in trade shows for furniture and organizing product seminars and workshops

will make a furniture business stand out in the competition.

Furniture advertisements in leading newspapers, interior and furniture magazines and
journals. Facebook pages twitter accounts and youtube video ads for promotion of their

products.
Concentrated on specific regions and zones and consolidated before expansion rather
than having all India distribution networks of dealers and franchised shops from the

beginning.
The company has held product display shows in some of the leading hotels in India
which gives them an initiative to attract potential customers and retain existing

customers, it has becomes a major factor of promotion for the company.

The Company has their own design studios in India. It has up-to-date interior designers

which assist hotels, office and even households in furnitures and interior decorations.
Planning to launch a design school in India for aspiring and ambitious learners who wants
to contribute their ideas and efforts to the company and help them to stay ahead of the
competition. Also it helps the company to generate higher financial gain, big business and
strong brand equity.

Furniture Sales

An Indian home is usually made up of three rooms (including kitchen and bathroom). While 25%
of the population lives in homes with more than 5 rooms, 4S% lives in houses with fewer than 3
rooms and 16% lives in just one room.

With regard to the furniture itself, in the upper-middle class homes some rooms are furnished in
the Indian style and others in typically European furnishings. The upper classes are very attentive
to design and quality, and the price is rarely a discriminating factor in the consumption of top
range consumer durables (and therefore also in the consumption of furniture). Colonial furniture
is still very common in India, but the fashion seems to be declining slowly.
In general European style furniture is only found in the homes of the urban upper classes, and the
rest of the population relies on shelves and chests. Demand for furniture of international
standards is limited to the larger cities.
It is also estimated that the wealthier classes do not change furniture very regularly: the average
life of a piece of furniture is about 20 years, and some craftsmens pieces are used for as long as
50-70 years.
Further growth in the furniture market should be boosted by the forecasted growth in the
construction sector. Similarly the contract segment should benefit from the anticipated
development in the tourism sector.

There are about 1,000 hotels in India. 10 % of these are 5 star and still many 5 star hotels are
being built. The remaining segment consists of hotels having less than 5 stars. As well as the
international chains present (such as Radisson, Holiday Inn, Intercontinental, Hyatt, Sheraton,
Kempinski, Quality Inn and Le Meridien) there are hotel chains that wholly in the hands of
Indian companies: Taj, Oberois, Park, Siddartha, ITDC (Ashoka), Centaur and ITC.
This will increase by 2,860 rooms over the next two years. A further 6 hotels with 1,600 rooms
will be built over the next 5 years, with investments from Grand Hyatt, Taj Group, Leela Group
and Hiranandanis.
Almost all the new hotels will be built in the northern area of Mumbai, around Sahar
international airport.

Distribution and Sales Channel

Indian companies operate directly on the market and through distributors. A number of
companies, especially those with a predominance of local customers, sell direct to customers
without passing through distributors.
The majority of these companies are involved in the production of office furniture and in some
cases they have dozens of free-lance salesmen working on a commission basis. The larger
companies have their own commercial offices and showrooms in all the larger cities in India.
Many organizations prefer, however, to operate via organized outlets. This enables them to
reduce sales costs and to concentrate on productive aspects and on improving productivity and
quality. In many cases the companies that sell through commercial organizations rely on the
same for customer services and are only directly involved in the case of large quantities.

Introducing foreign products to Indias markets requires careful analysis of consumer

preferences, existing sales channels, and changes in distribution and marketing practices

that are continually taking place.

India is a very big country in terms of area and a new company should in a first approach
forget spread its product in the whole India.

Besides huge distances separate the most populous cities, as example, from Delhi to Calcutta
there are more than 1.500 Km and almost the same distance there is between Delhi and Bombay.
In India it is easily to talk about two kinds of consumers.

On one hand there is the urban population, which is widely dispersed and rather has

higher buying power than the rural areas.

On the other hand there is the rural India, which constitutes 70 percent of the countrys
population; this is more than 700 million people. Usually the rural India habitants have
low incomes than the urban areas. Nevertheless relevant figures show how in the rural
market has been a rapid growth in last years. The main reason for such growth, apart
from awareness created by various media channels (TV and radio), has been the
adaptation of distribution channels to the needs of the rural market.

Certainly there are still hurdles to be crossed in order to penetrate this market.

First problem is one of logistics, the huge differences at an economic and cultural level

among the various areas of the country.

Secondly the distribution system that is not yet sufficiently structured.

But if these are tackled with marketing policies that are targeted and attentive to the internal
diversities (thus not only directed at the part of the population that inhabits the large urban
centers) and based on an understanding of the traditions, habits, and lifestyles that evolve from
being present in the country, in the not too distant future the Indian market could be a source of
satisfaction for many sector companies.
Distribution
Distribution coverage is the prime key point for a company pretending sells its products in India.
Indian consumers are dispersed. They are serviced by an efficient, but fragmented, trade system
consisting of over 4 million retail and wholesale outlets, spread over many urban and rural
population centers. The ability to physically deliver ones goods to the consumers, therefore,
remains a source of significant competitive advantage. Currently in India, Indian manufacturers
use a three-tier selling and distribution structure, which are distributor, wholesaler and retailer.

A typical company operating on an all-India basis could have between 400-2300 distributors,
always depending of the product and the final consumer.
The retailers served directly by a companys distributors may similarly be between 250,000750,000. Depending on how a company chooses to manage and supervise these relationships, its
sales staff could vary between 75 and 500 in number. Typical gross percentage margins for a
distributor, wholesaler and retailer, are 4-5, 3-4 and 10-15 respectively.
Wholesaling is profitable by maintaining low costs and turnover high. Many wholesalers operate
out of wholesale markets and serve the final consumer. India has approximately 4 million
retailers, mostly family-owned or family-run businesses.
In recent years, there has been increased interest by companies in improving their distribution
logistics in their effort to address a fiercely competitive market. This in turn has led to the
emergence of independent distribution and logistics agencies to handle this important function.
Marketers are increasingly out-sourcing some of the key functions in the distribution and
logistics areas, and looking for more reasons to reach the consumer better.
Recent years have also seen innovative trends by companies in utilizing distribution channels for
products with synergy. While there are no major national store chains, departmental stores and
supermarkets are mushrooming in many of the cities, as well as in other towns all over India.
Most cities have well known market districts and retail sales outlets are almost always locally
owned. Buying and selling is often a process of bargaining and negotiation. Outside the major
metropolitan areas, India is an intricate network of rural villages. Poor roads make many rural
districts inaccessible.
India has both organized and unorganized channels for selling goods. Smuggled goods such as
computer parts, cellular telephones, gold and a vast range of imported consumer goods are
routinely sold through the thriving unorganized sector or black market of the economy. By
avoiding taxes and customs duties and using cash transactions, unorganized merchants offer
better prices than those offered by the organized sector. However, with liberalization and more
and more foreign companies coming to India, the volume of business in smuggled goods has
fallen significantly. Most products being sold through the smuggled channel are now sold in
India through direct channels.

In selecting a distributor, the following considerations are important:

Business reputation and business standing;

Business capacity and salesmanship;
Expertise and previous experience in the line;
Financial capacity and willingness to invest in the line;
Creditworthiness.

In addition, an ideal distributor will have the capacity to offer customers the required assortment
of products and services and a willingness to extend credit. The distributor will be able to
provide storage facilities, showrooms, shops, service workshops, salesmen and service
commensurate with the expected volume of business.