Have you ever noticed the kids who are busy selling at Traffic Signals- from tissue paper to calculators, glossy magazines to Indian prints of best-sellers- they seem to have pedelled it all.
The overall logistics here works something like this:
Multiple traffic signals in an area are “managed” by a single “dealer” who issues the daily ration of goods to be sold in the area to each kid. The dealer would in turn get his assortment of goods from various company reps & bigger dealers. He would carry all the possible products you would see across signals in his “area”. The kids would then daily turn up at the dealer’s godown amp; based on their judgement, past experience amp; the pressure of the dealer- pick up the products to be shown & sold at the signals that day. They have to pay the dealer a minimum for each consumed item (like the cost price) amp; they can keep the margin (introduces flexible selling price). This means that the kids are given some room for price negotiations & they can swing profits by a mix of volume & price manipulations.
But have you ever stopped to wonder as to what products make it to this “channel” & why?
How do these traffic signal salesboys decide on their product mix- one of the most important of the 4 Ps in marketing.
Consider the following facts:
– One can target only the communters through this channel- amp; the primary way to communicate to them is the product display- most of the cars would have their windows up amp; music playing inside- so the kid has to get the customer interested – by just displaying the product as he walks past the vehicle.
– Not all products will sell through this channel. One obvious way to find those that will make the cut is to put them through the “time test”- can a person decide on buying it in 20 seconds? Ask yourself- how many things have u bought with that small a decision cycle.
– Since there is no service or product guarantee associated with this channel- the product has to have minimal involvement- which typically means a lower priced product. The typical ticket size here ranges from 30-50/- Rs.
– Inventory carrying capacity: These kids dont have a push-cart that they can carry to the market- so they can only sell as much as they can carry . Which means if they choose a product which is bulky, they cannot carry too many of those-cannot sell too many items-low revenues
– Most branded players would not want to leverage this channel due to fears of customer complaints & some serious dilution of the brand.
– The rising interest in Chinese goods has shifted the product mix to mostly electronics & other gadgets. Though a healthy # of them still sell books & car utility stuff.
My gut feel is that they tend to focus on either utility (water bottles , window screens amp; hats during summers, tissues or cleaning clothes) or obvious value difference (have seen people buying Da Vinci Code for Rs 40/- & a lighter for Rs 15/-)
But if you were to work on a serious project, wherein you are told to strongidentify items that can maximise revenue for these unique salesboys- what would you do?