Indo-Bhutan International Conference On Gross National Happiness Pages: 113-117

Vol 02, October 2013

Customers Exploitation and GNH: From the Perspective of Marketing Strategies

Shad Ahmad Khan B.Com (Hons.), MBA (Marketing) Lecturer, Gaeddu College of Business Studies, Royal University of Bhutan, Bhutan Introduction The concept of GNH is directly related with happiness of the people within the territorial boundary of a country. With reference to the Indian beliefs that More happiness is shared more it becomes, it is clear that Happiness follows the principal of sharing, that is development of everyone. In the corporate world the concept of competition is somehow hampering this statement. And majority of the competitive strategies are put forward by the marketing strategies of the organization. Marketing strategies are the basic guidelines on which the building of product/services is laid down. Marketing being an activity which starts even before the existence of the product (in the form of market research) in identifying the consumer needs and remains even after the sales of the final product (in the form of after sales services). Thus, they have a comparatively longer duration of relationship with the consumer than any other activity in the organization. These lines suggest that the marketing activity is the medium of forming relationship with the customers, and it has been a proven fact that better the relationship better will be the quotient of happiness. Majority of the organization target on forming the long term relationship with the customers, but knowingly or unknowingly many a times they apply such type of strategies that a customer finds himself/herself exploited or unhappy. 100 percent of the business activity has some amount of marketing activity involved. This activity can be organized or disorganized but their presence is always remarkable and evident. If the similar type of activities gets more leverage in the market the Dream of spreading GNH will not get fulfilled. The country could be able to quantify International Journal of Business Intelligents (IJBI) www.ijbui.com the GNH of the nation, but attaining the real GNH will always remain under Question. Therefore, the spread of GNH can be improvised if a proper amount of control is put to the marketing activity, for which the proper analysis is to be done in the planning or strategy formation phase. Thus, there is a need to identify that what type of marketing strategy can govern a good and ethical implementation of the activities which may facilitate the growth of Happiness among Consumers and thus contributing in the overall GNH of the Country. The need is to suggest the measures so that these activities can overcome their exploiting face and can survive on the humane and ethical principles. The following text tries to analyze individually some of the known marketing strategies viz, skimming strategy, penetration strategy, situational strategy, and season strategy. The paper also makes an attempt to suggest the methods through which these strategies can become socially acceptable and economically viable. Skimming Strategy The skimming strategy is adopted by the brands or products which are already well settled in the market and are under-going positive, over and full demand state. The main target of the firms in this stage is to cut the fruits of the tree they have planted that is, to earn more and more profit. Many times the profit level they choose earn is more of exploiting nature. As it is truly said, Brand always charge premium. The consumer may be buying the product in order to fulfill his needs and desire but do he feels happy? The DLF IPL tickets sold at a high price of from Rs.625 to Rs. 12,500 per head, (Ref.

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Indo-Bhutan International Conference On Gross National Happiness Pages: 113-117 http://in.bookmyshow.com/cricket/mi/ ) is high in terms of happiness as the experience they sell is priceless. In order to make this type of experience Eternal one has to make sure that the facility is not in reach of everyone, and the easiest way of ensuring this is by way of targeting the affordability of the Consumers. The prices of Asian Paints Royal, i-phone blackberry; has been kept deliberately high so that their status value can be restored as premium brand. Here these brands want to give the feeling of exceptional to the consumers. The consumers feel happier as more such type of feeling is served to them. At the same time the prices of the necessity products if charged high results in negative happiness as it acts as a burden on the pocket of the consumer. For example the prices of refined oils like saffola, sunflower; if placed high definitely the consumers who cannot find it fitting it into their budget will go for a low priced or low quality product but there will be some sort of sadness in their mind of not buying that product. Maslow in his hierarchy of needs theory has suggested that the people will have a negative force working inside their mind for not fulfilling any of the level of the need. But the negative happiness will be more in terms of the necessity product for an individual as compared to the luxury product. The task is to make a happy-happy or win-win situation for Skimming strategy. In order to suggest the methods one should also not forget the aspect of the producers. Ultimately everyone undertakes a business for a profit motive and this profit acts as a happiness tool for the producers, who are also the part GNH. The solution of this question is getting rid of extra-profit. There is large amount of difference between profit and extra-profit. Without considering the supernatural profit, if one talk about extra-profit, it means any amount charged in excess to the normal profit. For instance, the cost price of an article is Rs. 200 and the normal profit percentage is 25%. This means that the selling price is 250, Rs 50 as Profit. If the seller is selling the International Journal of Business Intelligents (IJBI) www.ijbui.com

Vol 02, October 2013

article at the price of Rs. 400, the amount Rs.400-Rs.200-Rs.50 =150 will be the extra profit. The devastating aspect of skimming strategy is that majority of the organizations charge extra profit instead of normal profit. According to forbes, the most popular name or brand in the world is Coca cola. The cost price of producing the Fizzy beverage is 25 paisa per 200 ml. but the same is sold in the market at a price of Rs. 8. The company claims that they incur huge amount of expenses in the advertisement and the distribution of these beverages. These brands are already well placed in the minds of the people, then why to incur so many amounts on advertisement whose ultimate burden will be borne by the Consumer. The earning of extra profit is also not denied by these companies, if the companies may cut some of their advertisement expenses and extra-profit and can reduce even Re.1 per unit, they will mark a huge difference in the happiness level of the consumers. Penetration Strategy The penetration strategy is the strategy which the marketers apply during the introductory phase of a product. The prices kept are usually lower than the normal prices prevailing in the market. They want their product to be accepted in the market and thus they apply all the tactics and means, ensuring their survival of their product. The point to note is that these marketers are not targeting to penetrate into the market, but such tactics they penetrate into the Competition. In the initial stage the consumer remains the winner or the beneficiary as the already existing products have to either reduce their prices or have to improve their quality or quantity. There is the feeling of cut throat competition in the market, which can never be the building block of GNH. The principle here should be of sharing, here if they apply the Blue Ocean Strategy, there is always some space for the new entrants the only thing is getting into that space.

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Indo-Bhutan International Conference On Gross National Happiness Pages: 113-117 Another bad face of this strategy is that many a times the marketers make many false promises which leads to dissatisfaction amongst the consumers. The marketers in this case become so blind in selling their product that they forget the long term survival of their product. They not only break the trust of the consumer but also hamper their happiness. The marketers should think about the long term relationship with the consumer, their main target should not be just first time purchase but it should be re purchase. If the target becomes repurchase, the marketers will try to avoid the false promises and statements. The entire focus of the marketer during penetration strategy is, how to deal with the prevailing competition and create a space for the offering of the organization. The marketers normally follow Red Ocean Strategy to deal with the completion. The Red Ocean Strategy can never be a driver of GNH as it follows the principle of Survival of the fittest. The marketers should follow Blue Ocean Strategy, and start thinking beyond competition. The blue ocean strategy states that everyone has some space in the market. The need is only to identify and fit into that space. For example, if 10 saree shops are present in a particular lane, and one day somebody opens the 11th Shop. There will be some customers for the 11th Shop also. The target of the marketer should be how to deliver best to those customers and increasing sales through quality and services instead of reducing the prices or launching the scheme which may affect the prices and sales for others. Season Strategy Season strategy is adopted to meet with the seasonal demand of the product. The Marketers normally increase the demand during the season as the products undergo full demand state or overfull demand state during that point. The Prices of Air- conditions and geysers go up during the months of AprilJuly and November- February respectively (In case of India and other south Asian International Journal of Business Intelligents (IJBI) www.ijbui.com

Vol 02, October 2013

Countries). In this case also many marketers go for an exploiting path where they take the advantage of the demand by charging high prices. Some of the organizations also deliver the substandard quality to the consumers. It has been reported that if the same products are offered in the off-season they easily come at the discounted rate of 15 to 40 percent, after selling the product at off seasoned price also they make profit. This figure suggests that the firms were extra profit oriented during the season. The Airline Companies increase the prices of air fares during the season of Hajj; they know that the pilgrims will be going for Hajj at any cost, they call it business but in turn they harass the pockets of the pilgrims. During night hours there is increase in the taxi fares. The price control has been one of the phenomenons of controlling demand but in real life it has become a technique for making more profit. This has a reverse implication on the happiness of the people. The quality of the product or services could be very good. But even the performance of the product could not give the amount of happiness which it could have given if it were priced ethically. Here the main focus of the marketers should be delivering Value for Money.

Polyester Fibre and Yarn Prices (Ref: http://db.emergingtextiles.com/) The above graph stats the level of price during various months of three year. One can clearly take note of the months in which the prices have gone up, those moths are November to 115

Indo-Bhutan International Conference On Gross National Happiness Pages: 113-117 January. In the three years it can be noted that majority of the times the price increasing months are cool months or winter months. With the start of the summer season the prices starts falling. The drastic shoot up of prices in the year 2011, could be a result of inflation. But the fashion of the graph of going up and down almost remains the same for all the three years. Here one should not forget that the fibre which is stated above is polyester, which is considered as a very low grade or sub-standard fibre. Wearing of cloths made of this fibre is not recommended for the hot weather, but because of its low price (as compared to other fabrics available in the market) many people prefer to buy this fabric in the cool months. This is an example of seasons demand and the effect on prices. Situation Strategy These strategies are spontaneous in nature. They are formulated to deal with a situation. Strategies are governed by the principle of domination and need. If in any condition the marketer found himself dominating position and the consumer in needy position. Most probably the marketer/seller tries to exploit Consumer in this case; and vice-versa. For Instance, when somebody is walking on the road in search of a taxi in odd hours, he will be more prone to pay higher sum to taxi driver, if he gets any. Here the customer was in need and the Taxi Driver was dominating, as taxi driver had nothing to lose. The marketing departments of such type of field where the situational factors are high always prepare a set of plan where they preset the decisions to be taken in such situations. Many marketers formulate their situation strategy in advance. They try to forecast all the possible situations which are going to occur and formulate a strategy for each of them this type of strategy making should be promoted, as these strategies not only lay good standards for the organization, but also help the consumers to know the policies of the organization well in Advance. International Journal of Business Intelligents (IJBI) www.ijbui.com

Vol 02, October 2013

In Bhadohi, Uttar Pradesh, India, there is a Hospital named as Zia Heart Care Centre, they have a clear cut policy with regards to the fee collected from the patient. The amount of money varies from the hours of the Hospital. Their fees changes as per the following fashion: 8:00 am to 11:30 am INR 10 4:00 to 8:00 pm INR 20 8:00 pm to 10:00 pm INR 50 Doctor of Call INR 100 Home visit INR 250 By these clear cut directives, the customer already knows the slabs, and plans his appointment with the doctor according to his budget and time. In emergency cases nothing is hidden. In such type of things the Consumer and the Seller both can form a good relationship having a longer life. Recommendations for Promoting GNH [1] For skimming strategy, the ethical strategy can be governed by identifying the type of offering made by the marketers i.e. necessity product or luxury product. [2] The marketer should avoid extra profit, they should charge normal profit. [3] The extra profit can be charged till the organization is able to overcome its previous losses. As soon as the losses have been recovered they should level down the prices. [4] Selling experience owes a higher amount of money as compared to selling solution to needs. [5] In the penetrations strategy, the marketers should avoid making false promises. [6] During Penetration the marketers should focus on customers rather competitions. [7] The price war always has a negative impact for the new comers, hence should be avoided, and the war can be fought in terms of services and quality. [8] The marketers should adopt Blue Ocean Strategy rather Red Ocean. [9] The marketers should take the advantage of the seasons demand to the level its not 116

Indo-Bhutan International Conference On Gross National Happiness Pages: 113-117 exploitation. It means that the profit margins should be ethically acceptable and economically viable. [10] The marketers should not compromise with the quality with the situation of high demand. [11] The focus of the marketers should be in forming good relationship with the consumers.

Vol 02, October 2013

[12] The target of the marketers should be delivering Value for Money. [13] The marketers should be in a position to forecast all the situations likely to be faced by their organization. For each situation they should have a clearly stated strategy, enabling their policies transparent to the users as well as providers.

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