How to gain dominant market share in product distribution

Dagaworld is a dominant player in the fans industry in India. In fact, 40% of all fans sold in our geographies pass through our channel. The question then is - how do you obtain an oligopolistic market share in a highly fragmented and semi-commoditized industry?

The four pillars of marketing are: Product, Price, Promotion, and Place.

In the fan industry for example, there are a few large national players and then a fragmented long-tail of regional players as well as local unorganized and unbranded product. The major national brands are Orient Electric, Crompton, Havells, Bajaj, and Usha. In terms of technology or product, each brand has state-of-the-art production facilities and a good spend on R&D. Thus, the Indian fan industry is capable of producing the world class fans at a low cost, however there is not much differentiation in terms of the engineering and the product. If given a choice, consumers are generally indifferent towards the product and will pick any one that is convenient.

In order then to attract consumers, brands could use lower pricing to drive volumes. However, this strategy too inevitably leads to a price war and all players would subsequently have to lower their prices and thus is will not work to increase revenues in the long term.

The next step brand’s can take is to create differentiation by advertising, promoting, and marketing their brand and their products. This strategy is effective as it creates brand awareness, it educates the customers, and pulls certain customers towards certain brands. The players who have the best marketing strategies will definitely gain market share in the medium to long term. This strategy is still not enough to capture a 40% market share in a particular segment, as all national brands advertise and promote their products heavily. The reason for dominance is the last but not the least: Place. This essentially means product distribution and placement through an efficient supply chain system such that the product is available and is preferred by channel partners such as wholesalers and retailers. This is where Dagaworld shines.

Through a holistic approach of building trust and relationships, enabling technology, providing the best services, and building a deep network of dealers through various business strategies and individualized win-win negotiations, we have been able to change our customer mindset into buying a little more of our products at every purchasing cycle. Over a longer period, compounding has worked its magic and we have achieved an enviable market share and given our brand a strong presence in Rajasthan and Haryana.