Consumer Experience Management in Speciality Retail

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The fun of experiential marketing .. and how to make consumer experience the centre of Retail..and act as a differentiator of th business....

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Consumer Experience Management in Speciality Retail

  1. 1. Consumer Experience @ Retail Peshwa Acharya
  2. 2. Areas to be touched upon …. 1. The Retail context 2. Definition of Consumer Experience 3. How to build the consumer experience .. 4. How does it help in building the brand and business Peshwa Acharya 2
  3. 3. Organized Retail Story – India & Retail Basics Peshwa Acharya 3
  4. 4. Some Statistics India is the 4th largest economy in the world in Purchasing Power Parity terms (PPP) after USA, China and Japan. India’s GDP growth has averaged about 6% per annum in the last 10 years (1994-2004) India’s GDP growth forecasts for the years 2005-2010 in between 7% to 8% per annum. The private final consumption expenditure in India was estimated at INR 1,690,000 crore (USD 375 billion) during 2003-04. The services sector – led by IT, telecom, healthcare, and retailing - accounts for almost 50% of the total GDP. Peshwa Acharya 4
  5. 5. Some Retail Statistics Retailing, at INR 930,000 (USD 205 billion) crore in 2003-04, accounted for 35% of the GDP. Organised retailing at INR 28,000 crore in 2004 is only 3% of the total retail market, but is growing at over 25% per annum. It is estimated to be 10% of the market by 2010 at INR 140,000 crore. The sector is fragmented with over 12 million outlets and only 4% being larger than 500 sqft in size. In comparison there are 0.9 million outlets in USA catering to more than 13 times the market. Peshwa Acharya 5
  6. 6. A Nation of Small Retailers • We are a nation of small shopkeepers with a shop for every 84 people. Over two thirds of the 12 million outlets are located in rural areas. • Paan-Beedi shops : 3 million plus outlets nationally - The Indian version of convenience store (Besides the ubiquitous Kirana store) • Largest selling format for a few consumer products and beverages • Weekly Bazaars / Haats / Melas - Traditional open ‘Malls’ of India serving 10-50 villages • Destination for textile, apparel, household, food & grocery for rural and semi-urban Indians Peshwa Acharya 6
  7. 7. To illustrate : Outlets in Chennai Shop Type Number Grocers 13691 General Stores 1911 Chemists / Druggists 2170 Pan/Beedi/Cigarette shops 7395 Hardware Stores 935 Co-op Departmental Stores 86 Private Departmental Stores 174 Others 5762 Total 32125 Source : KSA Database So many channels – in the city with the highest share of organized retail Peshwa Acharya 7
  8. 8. Total retail market Rs. 9,30,000 crore Peshwa Acharya 8
  9. 9. Organized retail market Rs. 28,000 crore (3%) Pharma Entertainment 2% 1% Books, Music, Gifts 3% Food & Grocery Health & Beauty 14% 1% Watch/Jewelry 17% Footwear 13% Clothing & Text Durable 36% 10% Home 3% Peshwa Acharya 9
  10. 10. Features of Indian Retailing till date Geographically distributed and diverse market with poor infrastructure Inefficient supply chain with many intermediaries Distributors have enjoyed a lot of power Situation well suited for small convenience stores Manufacturing dominated economy; largely a sellers market until recently Service sector coming of age only now Strong presence of unorganised / small outlets Tax avoidance has been endemic Barrier for organized retailers to offer convenience & value Peshwa Acharya 10
  11. 11. Features of Indian Retailing till date Many communities made retailing their family profession for generations excellent in service and customization largest drawback is scalability and consistency Infrastructure for organized trade poor business constraints…cost of real estate, multiplicity of taxes, supply chain complexity, power deficits etc Mostly under-Capitalized Cost of capital has been high Not considered an industry yet No significant international know-how & best practices available as negligible FDI in this sector Many Reasons why big box formats have been slow to emerge Peshwa Acharya 11
  12. 12. The Changed Retail Landscape Peshwa Acharya 12
  13. 13. Change in the last decade A few organized retailers to a Rupees 30,000 crore industry From 10x6x300 days to now 10x7x365 days From unknown companies to Retail companies amongst the top 500 retailers in Asia From father-son shopkeepers to several retail rupee billionaires From supermarkets to department stores, discount stores, hyper-markets, specialty malls all virtually at the same time Peshwa Acharya 13
  14. 14. The Change of Guard Post-Liberalization Post-Liberalization Pre-Liberalization - Foodworld - Food Bazaar - Bata - Big Bazaar - Giant - Raymond - Subhiskha - Star India - Titan Bazaar - Garden - Shoppers’ Stop - Lifestyle - Vimal - Westside - Globus - Bombay Dyeing - Pantaloons - Vivek’s - Canteen Stores - Crossword - Planet M - Co-operative - MusicWorld - Tanishq supermarkets - Wills Lifestyle - Health & Glow - Ebony - Be Emergence of largely retailers from manufacturer-retailers Peshwa Acharya 14
  15. 15. Experience in relevant markets justify the sentiment 40% 35% 30% 25% 20% 15% Share 10% 5% 0% l na nd nd zi ra hi la la B C Po ai Th 10-12 years for organized retailing to achieve 20% share Peshwa Acharya 15
  16. 16. Change Drivers : The Consumer Changing demographics A younger earning population, brand conscious 54% below the age of 25 years 81% of population below 45 yrs More acceptance of new concepts Changing aspirations, lifestyle orientation More nuclear families with dual income High income households has grown by 20% p.a. since 1995 totaling 44 million More money to spend and easier financing options More positive outlook to spending Time poverty : “Convenience over-riding price consideration” Lifestyle values Global lifestyle : media exposure and overseas travel Peshwa Acharya 16
  17. 17. Consumer Class Map Climbers ( $500 - $900) Cash - constrained benefit Rich (Above $ 4,500) seekers:Have at least Benefit Maximisers: Own one major durable (mixer, Cars, PCs sewing machine / television) Consuming ( $900 - $4,500) Aspirants ($350 - $500 ) Cost -benefit optimisers : New entrants into Have bulk of consumption : Have branded consumer goods, 70% bicycles, radios, fans of two- wheelers, refrigerators, washing machine Destitutes ( Less than $400) Hand - to - mouth existence : Not buying Peshwa Acharya 17
  18. 18. Income classes across India by size Million Households (Pop) 1995 -96 2001 - 02 2006 - 07 URBAN 4.0 (23) 1.9 (11) 5.2 (30) The very rich 1.2 (7) 2.6 (15) 0.8 (5) 40.8 (230) 16.6 (93) 26.5 (150) The consuming 32.5 (186) 75.5 (432) 46.4 (265) class 16.8 (94) 17.4 (98) 13.7 (77) 81.7 (472) 74.4 (429) 54.1 (312.2) The Climbers 0.7 (4) 7.1 (40) 3.9 (22) 20.2 (117) 33.1 (192) 44.0 (253.9) The aspirants 5.3 (30) 0.9 (5) 2.6 (16) 33.0 (190.4) 24.1 (140) Peshwa Acharya 18 16.5 (95) The destitute
  19. 19. Change Drivers : Macro Environment Easy availability of credit Banks and financial institutions are lending aggressively Cost of funds have come down Customers attitude to credit has changed Globalisation of MNCs (Retail & brands) - Lifestyle, Gautier, Shoprite, Marks & Spencer, Metro - HLL, P&G, Nestle Easing of import barriers - India is importing a large array of ranging from food to furniture - Ease of restrictions would further accelerate growth Peshwa Acharya 19
  20. 20. Change Drivers - Entry of serious players Indian corporates leading the FDI not fully allowed yet, show still several international Reliance players Pantaloons -Trent - Dairy Farm, Singapore - K Raheja Corp (Foodworld) - RPG - Landmark, UAE (Lifestyle) -Zee Group - Medicine Shoppe, USA - Nicholas Piramal - Metro, Germany (cash & carry) - ITC - Shoprite Hyper, South Africa - Godrej - Marks & Spencer - Hathway Investments - Benetton - Raymond - Apollo Hospitals • Many Others testing waters -Tatas, Bharti, UB, Jubilant, HLL, Mahindra.. Peshwa Acharya 20
  21. 21. Other Change Drivers Successful Retail Models The last 3 years have seen successful, scalable and profitable retail models in many categories Retail Infrastructure Extensive investment is taking place from 2004-2007 • Approx 340 Malls under development at avg investment of US$ 15 million $5.0 Billion • Brands & Anchor investment $5.0 Billion • Total Investment $10.0 Billion Peshwa Acharya 21
  22. 22. Change Drivers - In support Financial institutions upbeat on the sector Several Indian & International FIIs setting up specialized division for retail funding Government support taking shape Infrastructure development Policies favouring growth Tax and duty structure rationalization (VAT) FDI policy? Peshwa Acharya 22
  23. 23. Organized – The Next Sunrise Industry Growth of Organized Retail 25.0 21 20.0 $ bn 15.0 10.0 7.5 6.0 5.0 4.2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Year Organized retail is projected to grow at the rate of 25-30% Estimated to exceed USD 21 bn by the end of the decade Contribution to retail sales is likely to rise to 9% Peshwa Acharya 23
  24. 24. Great growth ahead India moving at faster pace towards consumer driven economy Demand for competitive goods & services by Indian consumers like global counterparts Organized retail can be a major driver of our economy It can attract large Investments (India ranks # on the 2005 AT Kearney’s Global Retail Development Index) HK Japan Singapore Taiwan Germany Indonesia Retail Power Philippines UK China US India Industry Distributor Retailer Consumer Consumer driven controls controls driven dictates Peshwa Acharya 24
  25. 25. Definition … Consumer Experience Consumer Experience is the entire experience the consumer gets from entry to exit in our store. It includes actual and perception based experience. Peshwa Acharya 25
  26. 26. Why Consumer Experience Consumer Experience is the key differentiator ………. An excellent execution of consumer experience will lead to many direct and indirect benefits. Consumer stay time will increase in the store More stay time leads to more opportunity for up-sell/more-sell thus leading to increase in avg. bill value Higher chance of repeat purchase and loyalty Positive word of mouth Makes the customer less price conscious Consumer experience is very key for competitive edge. Peshwa Acharya 26
  27. 27. Consumer Experience – Strategy Sales Interactions Consumer Post purchase hand holding Store Design & Branding Experience Actual Purchase Peshwa Acharya 27
  28. 28. Elements – Sales Interactions Customer Welcome Store staff manners, grooming and availability at the right time Store staff knowledge and helpfulness Easy billing and product dispatch to the car/home Staff training Peshwa Acharya 28
  29. 29. Elements – Post Purchase hand holding Loyalty program After sales service Product install/demo and problem solving Product Knowledge This leads to repeat visit and positive WOM Peshwa Acharya 29
  30. 30. Elements – Great Purchase Product availability Correct product assortment based on the consumer profile Product price and latest promotions Demo and content running on the product Product information Product hygiene Honest pricing Competitive prices on all products and services Latest promotions Special Deals Actual purchase Simple and quick billing Product delivery and installation Peshwa Acharya 30
  31. 31. Elements – WOW ! Store design Store layout and design Easy identifiable departments Product adjacencies Place to keep bags Right height fixtures and product display Comforts within the store Amenities Space to move around Comfortable lighting and temperature Trolley or basket Soothing colors Proud to visit Store covet value Latest Technology and Fashion display Experience zones Peshwa Acharya 31
  32. 32. Store Design Store Design is key to consumer experience and to give the WOW effect. What percentage of the store area be allocated to the consumer experience zones ? Recommended : 10 - 40 %.... Depending on product category Peshwa Acharya 32
  33. 33. Store Design… the science behind …. Some Tips to Store Design : 1.Shopping Science : Racetrack works 2.Comfort Zones : “ butt brushes “ avoid 3.Eyes Right : usually 4.Location, Location, Location : Product adjacency 5.Finish Line: E-POS provides data mine. Peshwa Acharya 33
  34. 34. exceed expectations = experience Peshwa Acharya 34
  35. 35. exceed expectations = experience Peshwa Acharya 35
  36. 36. customer experience is at the core of a successful Retailer’s strategy Peshwa Acharya 36
  37. 37. customer experience : meaning Peshwa Acharya 37
  38. 38. customer experience : thrusts Peshwa Acharya 38
  39. 39. strategic thrusts ….Business First Pan-India multi-brand retailer first mover advantage Establish distinct brand identity currently re-sellers have focused Differentiated Value Proposition Best Value / Price consumers are value conscious & seek best deals Assortment Width & Depth consumers seek choice. Service consumers seek convenience. single Peshwa Acharya 39
  40. 40. customer experience : brand single most important success criterion “brand image” Brand Positioning Consistent Brand Values Consistent Brand Personality Consistent Brand Proposition Consistent Brand Key Differentiator Consistent Brand Reason to Believe (credibility) target segment & target markets Peshwa Acharya 40
  41. 41. Peshwa Acharya 41
  42. 42. customer experience : touch points Peshwa Acharya 42
  43. 43. customer experience : customer lifecycle & touch points Peshwa Acharya 43
  44. 44. CRM : strategic fit Pre-Purchase Purchase Pre-Purchase Post In-Store In-Store Purchase Out-of-Store Marketing Promotions Programs Customer Experience Programs CRM Program Interest-Group Prog. awareness consideration selection usage preference & familiarity & first visit to store & first purchase & learning's & recommends Peshwa Acharya 44
  45. 45. at store level > at city level > state level > national level Peshwa Acharya 45
  46. 46. at store level > at city level > state level > national level Peshwa Acharya 46
  47. 47. 10days prior 10days post 30th -40th day Teaser Unfold Reminder Media Play Marketing Budgets x% of Revenue Scheduling : Launch Month vs. Balance 11 ; 30% : 70% Launch Media : Local : Radio, Outdoor, Events, DM, PR Will vary city to city (media effectiveness & costs) Collaterals Peshwa Acharya 47
  48. 48. CRM : strategic fit Pre-Purchase Purchase Pre-Purchase Post In-Store In-Store Purchase Out-of-Store Marketing Promotions Programs Customer Experience Programs CRM Program Interest-Group Prog. awareness consideration selection usage preference & familiarity & first visit to store & first purchase & learning's & recommends Peshwa Acharya 48
  49. 49. exceed expectations = experience Peshwa Acharya 49
  50. 50. exceed expectations = experience Peshwa Acharya 50
  51. 51. customer experience is at the core of our strategy Peshwa Acharya 51
  52. 52. customer experience : meaning Peshwa Acharya 52
  53. 53. customer experience : thrusts Peshwa Acharya 53
  54. 54. customer experience : objective Build Fit-to-Customer Brand Energetic Modern Empathy Trust Young Fun brand prompt world-class concerned right product buy latest enjoyable pro-active kind safe product usage tech-savvy Build Fit-to-Customer Interactions - see-try-buy – real product touch & feel people - service – non-intimidating, concerned, kind & trust-worthy (tech supported) Build Fit-to-Customer Purchase Conviction product - see it first at Reliance – conveys you find the latest at RR (reduces fear) - if it is not at Reliance, it’s not good for you – conveys choice vastness Build Fit-to-Customer Usage Safety - range of value added services offers service - ownership thru’ direct contact (no intermediaries) accessibility thru’ network Build Fit-to-Customer Convenience & Preference solutions - single point contact - end-to-end “home electronic purchase & usage” solutions Peshwa Acharya 54
  55. 55. customer actions by transactional “point of contacts” suggestion here need personnel play Peshwa Acharya 55
  56. 56. customer experience : touch-point builds car park / lifts / escalators first impression, guided maps, video feeds store transparent window with live action +, ….. detailed under store design brief (w-i-p) assortment display Guided tours (build service quotient thru assistance & interactivity) visual merchandising In-store catalog / brochures product side catalog= aim is to achieve 0 cost to RR / service side by sbu product demo touch, feel & use, All products that can be should be in a functional state experience zones category wise experience zones, lifestyle benefit vs. feature sell. signages clear, simple & brand compliant, revenue earners service personnel / uniform to convey young & energetic personality for the store brand & create an easier atmosphere should have live human interactivity for prompt assistance e-kiosk cashier point store exp. feedback prompt thru’ instant gratification, prompt rewards club benefits Peshwa Acharya 56
  57. 57. car park & lifts first impression WOW less space 45 seconds window guided maps familiarize with : store layout assortment prod./service range glimpse through video wall (lcd panels) build enjoyability through: live feed of store activities Peshwa Acharya 57
  58. 58. alive shop window first impression WOW when things work changing sets -living room -kitchen -bedroom -gaming with people interactions instills desire/aspirations news value /pr Peshwa Acharya 58
  59. 59. info desk rr guided tm guiding customer flow tours your right to know just then buy 15 -personalized attention -knowledge ohms impedence tweakers min -conviction these wont be jargons anymore Peshwa Acharya 59
  60. 60. Peshwa Acharya 60
  61. 61. e-kiosk control innovation interactive engaging -product search -product availability -product range -service range -human assistance Peshwa Acharya 61
  62. 62. product display / demo product placard - price clarity “best deal perception” - product literature - service literature catalogue strategy - finance literature demo kits - demo manual, cust.feedback form, associate feedback (insights) Peshwa Acharya 62
  63. 63. cashier points / exit signage placement : - stocking “program calendar for next month” - stocking “feedback forms on today’s visit experience” + response benefit drop box + write-up table - signage displaying rewards club “benefits” forms placed -visiting card (with invoice) -Before invoicing touch screen for “single input” overall shopping experience rating out of 10. (Being viewed by Helpdesk and low scores to be requested post invoicing for understanding why & suggestions for improvement atm , financing helpdesk, invoice – next purchase rr incentive coupon Peshwa Acharya 63
  64. 64. delivery/installation deliver with a “free accessory” “with compliments” delivery style + feedback request + rewards club membership offer catalogue visiting card (info on connect points) service range and offers mapping home , for making customized ‘fit for you’ offers more event based home visits (new home, newly married) Peshwa Acharya 64
  65. 65. customer program: carry-bags In-Store Delivery Bag made of Paper (smaller items, ipod box, cd/dvd’s, ) Big Items Home Delivery Safety box fitments on the edges/sides Ease of Movement wheel fitted bases, accompanied on home delivery for ease of movement cloth roping with pre-made handle fitments for ease of lifting Personnel fitments: gloves, shoes, knee caps, arm bands, helmets Financial Feasibility, Supply Feasibility Peshwa Acharya 65
  66. 66. customer program: in-store personnel Customer Facing Personnel Uniforms : Design Option 1 (Youth) technology savvy values young friendly …in purchase of technology …courteous …energetic products “key fear” is they keep …helpful getting outdated in short span. top t-shirt dress style 1. friendly & inclusive rationale 2. young and therefore energetic 3. young and technology savvy “in touch with latest” 4. ease in wear & look (quality fabric) 5. ease in sourcing 6. comparatively cheaper cost colors black rationale young & technology savvy what compliments best trousers (grey) + black (shoes) key emoticon badge ; displaying consumer motto (message to consumer) Peshwa Acharya 66
  67. 67. customer program: service personnel Customer Facing Personnel Uniforms : Design Option 2 (Executive) technology expertise values premium friendly …in purchase of technology …courteous …expert products “key fear” is they keep …helpful getting outdated in short span. top shirt dress style 1. corporate snob value (friendly tie/badge) rationale 2. technology expertise 3. needs care in maintaining 4. ease in sourcing/replenishment colors white / blue (plain/stripes) young & technology savvy rationale what compliments best trousers (grey stripes on black/plain black) + black (shoes) key emoticon badge (consumer motto (message to consumer) Peshwa Acharya 67
  68. 68. customer program: in-store personnel Best Buy : Blue T-Shirt , Grey Trousers , No Tie and White Badge Peshwa Acharya 68
  69. 69. customer program: service personnel Best Buy : White HS-Shirt , Black Trousers , Black Tie Peshwa Acharya 69
  70. 70. experience out-of-store mobile vans : test drive the product at your doorstep Peshwa Acharya 70
  71. 71. customer programs branding program customer program brand- name would immediately connote a set of meanings enhancing enjoyability quotient Peshwa Acharya 71
  72. 72. customer program: targeting families rr sunday popcorn tm 120 targeting families Peshwa Acharya 72
  73. 73. customer program: targeting women rr indigo wednesday tm targeting women Peshwa Acharya 73
  74. 74. customer program: targeting men saturday rr tm live targeting men Peshwa Acharya 74
  75. 75. day 1 fun & lively rr sunday popcorn tm 120 rr tm rr tm Peshwa Acharya 75
  76. 76. week 1 footfalls : “wom” fun & alive atmosphere range services deals Peshwa Acharya 76
  77. 77. a good first month deals month 1 Peshwa Acharya 77
  78. 78. customer program: targeting families rr sunday popcorn tm 120 sundays are for families. be together. 120min of engaging family programs at rr power bet sunday steal neo play auction deals gaming many products await your best bid? array of products at today’s special price gamer of the day Peshwa Acharya 78
  79. 79. ll customer program: targeting women rr tm Peshwa Acharya 79
  80. 80. ll customer program: targeting men rr tm lounge play music gaming deals Peshwa Acharya 80
  81. 81. customer program: convergence Peshwa Acharya 81
  82. 82. customer program: convergence “child-parent” little artist rr tm contest click in-store & entries in drop-box every hour “winner” click (props-flower vase, people,etc) edit touch-up, print drop & win win Peshwa Acharya 82
  83. 83. customer program: convergence seasonal Mar/Apr/May Nov/Dec/Jan Peshwa Acharya 83
  84. 84. customer program: convergence seasonal product new home starter pack – purchase packages services - arrangement checklists (free) - enlist & arrange “inv card designers & printers, photographers, videographers , sound-sys providers, lighting & genset providers bridal make-up artistes, venue choices /caterers, event management agencies, honeymoon travel packages & CD carry kits in-store photography services (prints/frames/print couriers) - online service Nov/Dec/Jan Mar/Apr/May Peshwa Acharya 84
  85. 85. customer program: wedding gift online - service consumer can build gift choice list for invitees to choose from, avoiding repetition of same item avail best deals from store (different price points) : flower bouquets to small/mid appliances. successfully running in west Peshwa Acharya 85
  86. 86. customer program: rr endorsement “What Works” , “Product +” RR store recommendations : “Rahul says, Shyamolie says, Siddharth says RR endorsement icon : “along with a panel of consumer feeds” RR credibility : “in-store signage’s, product sections, RR referrals / buzz : “in-house publication, in-Mag, in-hotspots Peshwa Acharya 86
  87. 87. customer program: gifts No Fees, No Expiry Value Adds: Free Gift Card (choice & customization) Free Gift Wrap (choice) Purchase Visit thru a dedicated host Call Samir… Delivery Date & Time Peshwa Acharya 87
  88. 88. ll customer program: targeting families rr all in a moment tm at entry point or category sections, - a participation form dropbox -announcement of lucky participant 40min -live across tv panels, names & game show coverage -participants on stage to chose gift option on touch-screens -live screening of what was won, -participant to take it or bank it for bigger play next week (sun) - win small appliances (5k x 12 winners per 12hours = 60k) Peshwa Acharya 88
  89. 89. ll customer program: look mascot Peshwa Acharya 89
  90. 90. customer category actions Peshwa Acharya 90
  91. 91. category: IT - gaming luxury addictive (sampling) price deals console rentals : deposit & charge & later “console value-price picks” console value-picks Rs20,000 One Year Manufacturer Warranty Per 20days Rental = Rs20,000 / 12m = Rs1600 + 50% = Rs2500 + Deposit of PDC Rs20,000. adjustable if purchased Post Two Times Trial Sampling Sales Price = Rs15000 “25% Rebate” 3times (2.0m)= 40%, 4times (2.5m)= 50%+ game rentals + gaming zone Peshwa Acharya 91
  92. 92. starting point : instill desire / wants something missing Peshwa Acharya 92
  93. 93. starting point : instill desire / wants Peshwa Acharya 93
  94. 94. starting point : instill desire / wants dont you judge a book by its cover Peshwa Acharya 94
  95. 95. starting point : instill desire / wants + people feelings aspirational ambience Peshwa Acharya 95
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