We will listen to our customer as we fight for market share

This is one time when the customer can have his say, seeing how car prices have fallen—and the rates at which these prices have dropped are even greater than the excise duty cut announced by the government. This is called a buyer’s market where there is more supply than demand. For Indian companies, the choice is clear—get close to the customer and compete for market share. If the total market did not grow, much the only way to grow is to grab someone else’s share of the market.

Experts point out that a slowdown in demand could prove the perfect time to grab market share, revenues and customers. And the focus clearly should be beyond the immediate slowdown. As Sudip Bandyopadhyay, Chief Executive Officer, Reliance Money says: “It is now crucial to grow the business and think about longterm growth. We must think about business building for the long term and not worry so much about the quarterly growth figures. Investments must be made now that target long-term growth.”

One advantage for consumer-focussed firms is the decline in commodity prices, which should allow for cost reductions. Yet, the larger picture is grim, what with growth likely to be under pressure. The October production numbers have already indicated that quite a few sectors are feeling the heat. Rohini Malkani, Chief Economist at Citibank, adds a strong word of caution in her report dated December 12, 2008.

“Our GDP estimates for 2008-09 and 2009-10 at 6.8 per cent and 5.5 per cent, respectively, factor in investment growth at roughly 4.4 per cent and consumption sustaining at 6 per cent levels despite a contraction in export growth. While the government fiscal stimulus package and monetary measures are positive, they are unlikely to reverse the slowdown in growth, and downside risk to these numbers appears to be increasing.” Amidst this scenario, there will be little else that companies can do other than hold on to their own customers; it will take some courage and some strategy to be able to succeed at grabbing share from rivals. But that may just be what differentiates the men from the boys.