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 Direct
Marketing 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.
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.

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.

By 2001 its total business in world amounted to over

$ 5 billion.
The Indian Scenario
In early 1990s Indian laws prohibited customers to import products,
without acquiring prior permission from the regulating authorities.

During the mid-1990s, Telebrands India, a 100% subsidiary of

Telebrands Corp., pioneered the concept of teleshopping in India

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 were TVC, TSNM and Star Warnaco.

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 1
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 mechanism
 
Teleshopping works on the principle of the so-called impulse
buying.

It is the infomercials that we usually see on the television.

These infomercials featured products that claimed to provide

miraculous results.

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 success
 Increasing number of Nuclear families (both husband and wife are
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.
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 décor.

 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 customer’s self image.
 Advertising the products through infomercials
Dubbed versions of infomercials featuring well-
known personalities.
 Giving special attention to their pricing strategies, the
prices were brought down to make the products more
affordable.
Hectic promotional activities offering ‘early bird’
prizes, price reductions, money return offers, free
accessories and double product packs at the same
price.
Strengthening of franchisee base across the country
and hence extended to over 90 cities across the
country.
Evolution of teleshopping in India
It evolved in India due to the changing societal norms.

 During the early 1990s, Indian laws prohibited

customers to import products, without acquiring prior
permission from the regulating authorities.

These laws also restricted the repatriation of money,

without the prior permission of the country’s central
bank, RBI.
 Question 2
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 :
Targeting the premium-end viewers, with high purchasing power.

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.

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.

Offering Customized Products such as jewellery with birth stone.

Introduced new products under the categories Utility
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 3
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 India

The reason for the slow growth of teleshopping market in

India are:-
Imitation product
Higher prices
Difference in culture and language
Limited reach of products
Criticism
Interactive home shopping
 Future Potential
Increasing Living standard of Indian middle class
people making them more receptive towards trying
out innovative products and concepts

Increasing number of Nuclear families (both husband

and wife are working – less time for shopping).

Online-shopping services through retail websites

Measures to be taken
Success depends “Highly on ability of marketer to
deliver the goods on time to his valued customer along
with other stipulated parameters..”

Perceived value of the product should exceed its price.

Air time – a critical success factor (enhancing their reach

by repetitive presentation of the product both during
peak and slack hours on various channels)

Effective payment system in the country that enables

immediate money transfers at low risk.
Gifts offers and discounts should be allowed.

Constantly introduce new product varieties.

Teleshopping products should require minimum

after sales services.

 “ Success depends upon ‘unique product’, ‘good

pricing’ and ‘credibility’….”
Current status
 March 31, 2010 --AAA TELESHOPING PVT. LTD. has very rapidly
emerged as a trustworthy name in the teleshopping industry
 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:
 Deemark Herbal Hair Oil
 Shani Yantra / Saturn Yantra is very effective to remove the malefic
effect of Saturn & help spiritually.Shani Yantra / Saturn Yantra is
used to Propitiate an afflicted.
THANK YOU