a haryana visit

There is a huge cow in Jind, a large town in Haryana, which enterprisingly enters all shops on a particular street in the evenings, literally makes all the right noises, gets food, chomps it calmly, and then moves on to the next shop. Cows are holy in this part of India (as most Indians with a beef belch might agree), and feeding a cow considered as high on the punya register as taking care of one’s parents (taking care, as in regularly being with them, feeding them, generally showing them a nice time, not taking care as in permanently!). The shopkeepers, most of them a generously superstitious lot take care of the punya register religiously. On witnessing the event, I noticed the holy one’s mannerisms too. It effectively blocked the entire entrance of the shop, thus taking care of the practical as well as the spiritual push. I enquired if it comes to the shops every day. The dealer with a laughing shrug mentioned that these days it has started coming in five times a day. They tell me the sale of jaggery (that is gur for the uninitiated. Where is your English dictionary, huh?) along the street has increased dramatically.

She was the best salesman(woman? Cow?) I saw on that visit, and I met quite a few. She got what she wanted, most of the times on a push, gave a feeling of satisfaction and happiness to the ones she raided, AND gave a boost to a totally third industry generating goodwill all along the chain. The paint trade is however, on a different chapter on a different subject’s text book. The subject is biology, and the lesson is Charles Darwin’s “Evolution”.

I was in Haryana towns (I traveled alongside Hissar, Burwala, Hansi, Jind, Nurwana, Uchana, Rohtak, Bahadurgarh, and then Faridabad) to gauge the reasons as to why despite being a much better product and offering indeed better value for it’s price, one of our brands has not yet been able to rout shoddy substitute products from the market. It was going to be a qualitative survey, more of a generation of ideas, than a statistical analysis of the results. I went in with an open mind, though expecting reasons such as inertia and lack of awareness of the final customer. The paint trade in that sense is a queer and perhaps a unique one. The final customer’s involvement in the purchase decision and decision making is minimalistic. He does not know which paint to buy and why to buy. Most importantly, in most cases, he does not WANT to know why does he has to buy a particular paint. However, his involvement with the final product, the painted house is extremely high. And hence, each of the product characteristics matter a lot. Hence, making a brand in this trade is essentially difficult. Most of the times, it is a product of the amount of sales bucks in the market. The purchase decision is highly influenced with painters/ contractors and the dealers. The sway is extremely high, as is the temptation to dirty the market by throwing in money.

On my second day of the visit, having already met quite a few dealers and contractors, I met an old painter seated on a bench outside a very big and respected dealer. By then, I had already found out that the major reason that the painters still pushed the shoddy substitutes to the customers was because the dealers gave them an extra hundred rupees per bag to apply it. The painter looked into my eyes and repeated the fact. I kept on pushing in deeper and deeper as to the real reason why it is applied. I casually mentioned the fact that if the paint does not do well, his own standing gets affected in a market where word-of-mouth is everything. He paused, and showed me his callused and old hands. He said, “Babuji, aapki company ki izzat issey hai. Hum to chahte hain ki aapki company ka kaam karein, par humein bhi jeena hain. Aap batao 150 rupaye dihari mein kya jiyen aur kaise jiyen.” (Sir, your company’s prestige comes in from these hands. We actually want to apply your good product, but we want to live too. You tell us how is it possible to live on a 150 Rs per day). And then in almost desperation, with a hint of tears in his eyes, he said, “Sir, aap itni badi company se ho. Aap humein kuch kyon nahi dete.” (Sir, you are from such a big company. Why don’t you give something to us?). I just cannot seem to forget the sight of those hands.

The paint trade, at the moment is suffering from a savage price war played on the dealer level. The dealer procures the product at a price from us, and adds a very miniscule margin and then offloads it in the market. Forget the products retailing at MRP, sometimes the products get sold for even less than what we sell to the dealers.

When I first got face-to-face with this situation, my first instinct was to return to the books. Amongst all the Harvard Business Review articles that I had saved, I distinctly remembered one which mentioned “How to fight a price war?”. I dug it out, and was acutely disappointed at it mentioning only situations from a product manufacturing perspective, about augmenting the product to prevent responding on a price front. Of course, theoretically speaking, the dealer can offer services which can enable him to charge a higher price than the next corner dealer. But the essential fact remains that all of these would work only on the end customer, who most of the times only does listen to the painter tagging alongside.

The unique irony hence is that the bigger the brand, the more the number of shops that carry it, more intense the price war, lesser the margin on it, and hence lesser the inclination to sell it. The dealers still buy it, for sheer pressure from both sides of his chain, the company sales, and the customer visiting his shop, but if it was his choice, he would rather sell an unknown brand. When selling a local product, he makes a good margin, shares part of the margin with the painter, and ends up selling a poor quality product. That is a market reality. Most of the painters I met weren’t really happy with what they were doing, some of them actually mentioned that they wanted to earn an honest and fair living, but the acute conditions force them to lie to their customers.

I always take pride in my company’s fair dealings with the market, no matter what the commercial aspects entail. It is reflected in the open market policies, developing the market than diving in for the sales, and the efforts it entails to reach various nodes of the supply chain. When the old painter was asking me for at least a 10% cut down the chain, I wanted to tell him that in an 1800 bucks worth drum, there are 1200 bucks worth of just raw materials, and that doesn’t even include the transportation to the plants. Processing in the precise same recipe batch by batch, packing, all in strict ISO compliance manners while maintaining excellent relations with the workers, transportation, supporting a sales force, anchoring the efforts with marketing support, down to the dealer, and then on to the painter. I doubted if anyone, including the company kept a 10% cut. No matter what we try to give to the dealer, he cuts that and drives the selling price lower instead of keeping it to himself. But I just couldn’t say that to the old man’s hands. I just could not.

And lying awake later at night, I realized that this is what evolution is all about. That old man wouldn’t last. He would be replaced by larger contractors who would make money on the more efficient use of labor and assisted services to the end customer. Neither would last the small dealers cutting prices in the market. Price wars would throw them off the ring. And we as a conscientious company intent on sales would keep opening up new smaller counters to fuel the never ending cycle.

That is what evolution is all about. Nice and palatable when read about, logical and acceptable when thought about. Gut wrenching when seen in person.

Then I remembered the smiling small statured man known as Chandu painter in an extremely small town called Hansi. He used to be a painter, hence the name. Today he is a very respected dealer, the first one of Asian Paints in that town. At the opportune moments in life, he put on a factory, self procured the requisite formulae for good paint (he was enthusiastically blushing when telling me of a time he and his brother had to destroy freshly made stock of more than Rs. 75,000 because he had forgotten to put in a vital anti algal ingredient, and the stock had started to smell really bad), and selling it under his own brand in the market. The self indulgent look of utter pride that he carried on his smiling face uplifted my spirits on that early morning, and still does whenever I think of it.

The world isn’t really such a cruel place. You just have to be alive to the possibilities and be flexible. And as Dave Barry would say, Camping is nature’s way of promoting the motel business. Evolution is essentially good.

And as a close friend said, amen to us for not getting old, and for everyone that we have to sell our products to.