Taming the Masses

Chacha acknowledged buzzerbattoo's contribution to his success by using a cellphone as his election symbol ... a real symbol of progress. The suggestion coming from the same Csell Zee's salesman ... er ... sales manager now, who sold him the cellular, introducing it as the "best cordless"! Chacha won the election, but buzzerbattoo became the hero of the town and a household name. Reaching the masses!

Benchmarking Mass Market

Does cellular qualify as a product for mass market? Globally, the definition of mass market has been generally linked to the penetration levels, i.e. percentage of the population. In the developed nations, a colour TV penetration of 50-60 percent, and the penetration of credit cards, VCR, etc. of 20-30 percent represent the mass market. Accordingly, the Scandinavian markets with mobile phone penetration of 20-30 percent and even Hong Kong with 20 percent are considered to have truly reached the mass-market levels.

However, it is important to also take into account the duration over which such levels were attained; therefore, a mobile penetration of 10 percent and still growing rapidly can be considered a candidate for the mass market, deserving aggressive marketing and network roll-out strategies focusing on capacity, distribution, service quality, brand loyalty, etc.

However, for developing markets like India, we have to rewrite this definition, benchmarking with Indian penetration levels and growth rates of mass consumer products like TVs, audio systems, refrigerators, credit cards, and even telephones.

Therefore, probably one can presume that in the metros, the present fixed telephone penetration of 10-15 percent (with over one million phones in Delhi and Mumbai each) represents the mass market. However, with the sharp growth achieved during the short duration of the last two years, cellular phones have the potential to be part of this segment soon, most other products having taken more than 10 years to reach such levels. Even the growth of credit cards, now over two-and-a-half million in circulation, has mostly taken place in the metros, with over 80 percent share and that too, over the last three years.

Talking of the total Indian market, a penetration of only about 5 percent for TVs (compared with 12.7 percent in China and 42.6 percent in Hong Kong) and less than 2 percent for products like refrigerators and washing machines though may appear like nascent stage but still implies fairly large volumes, calling for significant investments in distribution network and marketing. One survey reports that out of 170 million households, 22 percent have B&W TVs, 7 percent colour TVs, 17 percent audio players and 2 percent have washing machines.

Limits To Growth

As we penetrate from Vasant Vihar to Vasant Kunj to Vasant Gaon in Delhi, from
deluxe cars to 800s to scooties, from travellers and anonymous callers to trendy youngsters, to the insecure as well as the budget-conscious, the need to sustain growth and reach the deeper layers of price-sensitive segments necessitates mass-
market techniques and tools which can be of many types. Nevertheless, substantial investments are required by the marketing, network, and customer-care strategies needed to take the market to such penetration levels. As the subscribers grow, bringing benefits of economies-of-scale, revenue per subscriber may come down and bad debts may go up, needing a trade-off.

The Tools

The many components of mass-market strategy include no-frills cost-effective phones, aggressive distribution strategy with large number of outlets close to users, off-the-shelf ready-to-use product packages, customer education (mass-promotion), and affordable pricing. Even the dealers may work on absolute minimum margins, making more on the

accessories and other products. For a focused strategy, TIM of Italy treated the mass market as a segment using pre-paid and establishing it as a successful mass-market tool with over 1.5 million subscribers now. And so did the operators in the Indian metros. Pre-paid itself has different technical solutions intelligent network offering a high capacity, more secure and user-friendly solution.

However, even Italians may never fully discover what led to such a frenzy ... as the subscribers just lapped up more and more TIM cards put on the shelves. Would India be the repeat ... the signs are already there!

But, may be, someone knows the masses even better ...!