Direct Marketing Association : India – Report : DM Tool = Direct Response Television (DRTV)Introduction

DRTV is defined as media activity that permits or requests consumers to directly respond to the

advertiser. Direct Response Television is an important alternative media option. DRTV firms purchase

air time from broadcasters or cable networks to showcase the product and its uses to consumers, who

can phone in to place their orders. The ultimate step in the lifecycle of a direct response television

(DRTV) product is to become a retail product. The exposure of DRTV creates high levels of product

awareness that retailers are eager to exploit.

This is a non-store retail format in which customers watch a TV programme demonstrating

merchandise, and then place orders for the merchandise over the telephone. The key success factor in

the Direct Response Television market is the amount and type of television airtime that the company

gets.

Products using DRTV marketing

Direct response television (DRTV) marketing’s most successful products have been:

Fitness equipment

Housewares

Beauty products

Healthcare

Coins and collectibles

TV has become an attractive medium. Having 24-hour home shopping channels wouldn’t have been

possible two years ago. Non-store formats, including electronic commerce, are a growing business that

would soon be the order of the day with several players. Industry players expect the segment to take off

as customers begin to accept the idea of buying from the comfort of their drawing rooms.

There are three ways in which a DRTV company communicates to the customer.

1. Through an infomercial, where, between scheduled TV programmes, advertisements for the products

are aired and orders solicited from the viewers.

2. Through a 30-minute/60-minute capsule covering various products sold by the company, with in-

depth product demonstrations.

3. Through dedicated channels, which carry programmes on television shopping, advertising products

offered by a company, along with demonstrations and prices.

The value chain

Selection of a variety of winning-merchandise.

Vendor relations to ensure quality.

Getting TV Airtime .

Sales pitch on the phone when the customer calls to enquire.

Strong support .

Efficient payment mechanism.

Logistics.

What works in India

Electronics are a draw in India, too. Others in the list of favourites include kitchenware, health and fitness-related products and jewellery. The most popular product is a massage seat. We advertise this for one hour every day.

On the procurement front, the Indian shopping networks buy in bulk from both local and international

manufacturers. What makes retailing through television attractive is the savings on infrastructure. There

is no need to set up numerous shops in various cities, hire an army of salespeople, or transport goods

for which there is no demand. Home shopping networks market goods and services directly to the

consumer, bypassing retail.

Payments are made usually by cash, credit card, cheque or demand draft. “Ninety-nine per cent of the

transactions are on ‘cash on delivery’ basis”. Many of these items find their way to retail shelves once

their television campaign ends. Chain retailers often have “as seen on TV” sections in their stores.

So, are consumers and players ready for the next stage of the teleshopping revolution?

Touch and feel is very important in the Indian context and hence the need for franchisee outlets. But

this increases the cost of products and also a lot of duplication and passing off happen at these outlets.

Jewellery linked to religion and astronomy seems to be the hottest selling product currently. The female-

male shopper’s ratio was 90:10 during the early days, but now it has come to 60:40. Players believe

that consumers are willing to make big ticket purchases even through a phone call.

Top Players

* Asian Sky Shop (a Zee TV company)

* Telebrands India are in collaboration with Telebrands of USA…

* Vinod Agarwal (TVC) has his stand-alone shopping channel.

* A TV Channel called CT

* A TV Channel called CT is running informercial type ads.

Top-selling Exercise Products

1 ABKING PRO SYSTEM

2 Ab Slim

3 AB Isolator

4 Air Press Massager

5 Acu Slim

6 Cyclone Diet

Top-selling Personal Care Products

1 Liquid Sense

2 Slim ‘n Lift

3 The Helsinki Formula

4 Anti-tobacco Mouth spray

5 Eagle Eyes

6 DENTAL WHITE

Example of “names of brands” (TVC SkyShop)

1 Lovely Curves

2 Ayur Slim

3 Blue Stuff

4 Cinderella

5 Diabacare

Potential Suppliers

Pentavox Herbals.

Himalaya Healthcare.

Dabur.

India Surya Herbal Products.

Mehar Health care.

Size of the Market

Market Share

* Telebrands India……. 20 %

* Asian Sky Shop……… 15 %

* TVC…………………….. 5 %

* Telebuyindia …………..5 %

* Others………………… 55 %Footprint

* Telebrands India….. National

* Asian Sky Shop……..National

* TVC………………….. Mumbai

* Telebuyindia…………Tamil nadu

* Others : 55 %……….National , regional, city-specificSales Distribution

* Telebrands India … National sales

* Asian Sky Shop …… North Indian sales

* TVC …………………. Mumbai

* Telebuyindia……….. Tamil Nadu

* Others : National , regional, city-specific

Home shopping networks

A relatively new phenomenon in India’s retail and broadcasting markets–do not depend on advertising

revenue; their business model is based on commissions paid by brands for sales generated. Home-

Shop18, the 24-hour shopping channel from Network18, said it has till date clocked around Rs300 crore

in sales and will look to double that in the com- ing year.

The Shopper’s Show

Levi’s, Whirlpool, LG, Samsung, Reebok… the list goes on. These are among the 500-odd brands that

are available on the country’s first 24-hour home shopping TV channel, HomeShop18. The channel has

also started selling insurance and could soon be retailing real estate—the last thing one would have

ever imagined a home shopping channel selling inIndia.In existence for over a decade, teleshopping

programmes on various television channels had earned the rather dubious distinction of selling

products like slim sauna belts and amulets with magical properties. The fact that the companies behind

these programmes, which includes the likes of TVC Sky Shop Ltd and Telebrands India , have

continuously bought air time, even on the top rated TV channels, for such a long period did indicate that

there was a market for home shopping. But reputed brands were staying away from the medium.

So it did surprise many when the two-year-old online and on-air retail marketing and distribution venture

of media conglomerate Network 18 started operations in a market where home shopping programmes

were viewed with much scepticism.

Statistics

India has about 112 million television households currently and it is expected to reach 130 million

homes by 2011. In the past 10 years, this segment has seen more than a dozen players, including

TeleBrands India, TVC and MSO IncableNet’s Shop 24 Seven M-Plex. The total turnover is unofficially

estimated at just Rs250-300 crore-a tiny fraction of the Rs12 trillion Indian retail industry. But there is no

denying the potential: US-based QVC Inc., a home shopping network that focuses on electronic

retailing, totalled net sales of more than $6.5 billion (Rs27,300 crore) in 2005.

Teleshopping, which has grown to about Rs 250 crore, is now projected to double in next five years.

The tele-shopping industry has had an annual growth rate of 20 per cent. This growth is anticipated to

accelerate to 50 % in the next few years. The future outlook of this industry in the next 5 years horizon

is bright. Tie-ups are taking place between Indian firms and large foreign firms. The shopping networks

assumed that customers would come from tier II and tier III towns that lack adequate supply of

consumer goods. But they discovered that the calls were coming as much from Mumbai, Delhi,

Hyderabad and Bangalore as from Muzzaffarnagar and Bareilly. And the calls were generated both from

cable TV households and direct-to-home television homes, the latter being considered affluent

customers.

Statistics also reflect heightened consumer confidence in home shopping. From 0 to 30,000 calls in two

years is heartening for Home Shop 18. Since Star CJ is yet to launch its 24- hour channel, the number

of calls is obviously lower. Total teleshopping business in India is worth Rs600 crore and includes

several other telebrand companies based out of Indore.

Issues

Apart from the interface with the customer, teleshopping networks are working to upgrade content and

products, too. Currently, the quality of programming and products are not up to the mark. For that

matter, the logistics need to be right. Industry analysts believe networks need to improve the quality of

products and their range.

Currently, only certain kinds of products are available on home shopping. Their products are still not

comparable to hyper-marts. They’ll only succeed if their product range is good and pricing less. That will

be convenient for customers. Lower prices can be one of the key advantages networks can offer

customers. Marketers can save costs incurred on conventional marketing through various marketing

channels, boost their sales and pass on the margins saved, as discounts, to customers.

Better programming will go a long way in improving consumer confidence. “Consumers are finicky with

the touch and feel elements to it (products). They need to have better product catalogues and

credibility. Once they become credible, advertisers would definitely follow. It’s a combination of numbers

and credibility.

In home shopping, there’s a considerable gap between the purchase and delivery of product and

chances of the customer developing doubts about his investment are high. Initially, deliveries were

turned back or orders were cancelled after a couple of days. So, two years ago, the numbers looked

something like this: only 30% of the people who placed the order actually concluded the deals. Today

70% of the people stick to their decision.

In India, typical middle-class women do not talk to strangers on the phone. Earlier, home shopping call

centres received calls only from men or children. In small town India, it is not proper for a college-going

daughter to place the order on the phone but it is okay for the school going son to do so.

But that’s changing. Women are calling up more frequently and companies are appointing female call

centre employees.

Questions:

1. According to you what would be the way forward for DRTV? How can the issues be overcome?

2. How should DRTV strategize in order to compete with online shopping?

3. What advancements can be made to improve DRTV experience?

4. Design overall marketing strategy for DRTV.