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The biggest problem in India is thinking they can permanently buy customer loyalty by offering big discounts in the beginning. This is where the 'intense compe
by kamaal 2y ago
The biggest problem in India is thinking they can permanently buy customer loyalty by offering big discounts in the beginning.
This is where the 'intense competition' is dangerous part comes from. After you have spent billions on subsidising prices for the customer, newer companies come, and do the same. The customers see no issues in now buying from the newer companies. The older companies find themselves in a hard position with no profits and big debts.
In India customers are loyal to only one thing 'cheap prices'. Thats all there is to this story. Many times even if there is no real competition, you are often competing with the customers mindset itself.
- kelipso 2y agoYeah profiting after getting network effect or monopoly or growth is a function of customer inertia in the face of rising prices. And India has way lower inertia to than US.
- MichaelZuo 2y agoHow does this explain the phenomena of e.g. Repeat Mercedes-Benz buyers, even when other automakers offer the same luxury features at a lower price point (such ad Audi, BMW, etc...) ?
- eig 2y agoThere’s a big difference in customer psychology when you’re dealing with a luxury good vs tech products.
- glimshe 2y agoMost of Indian consumers (or consumers anywhere) aren't Mercedes customers. The luxury market is notoriously price insensitive.
- MichaelZuo 2y agoThe same applies for Toyota customers in India, or so I've heard, viz. Nissan, Hyundai, etc...