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Are we moving from contextual marketing to contextual discounting?

Guest Author
29th Feb 2016
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Brands have upped their marketing efforts from buying various timed-ad-slots on TV to more real-time and contextual activities in the digital world. Customers have started to appreciate this. Some brands have set this trend and many have followed suit.

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I’m sure, you remember the Super Bowl power outage that happened in February 2013 and how swiftly brands took to Twitter to market themselves creatively. If content is king, then contextual content is God.

The next day, media that generally focussed on technology/marketing were majorly writing about this Super Bowl marketing, which generated massive PR for these companies.

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Fast forward to February 2016 (exactly after three years of Super Bowl). In India, we’ve our own version of Super Bowl – the India versus Pakistan cricket match that happened on Saturday night.

During this cricket match, a very strange branding phenomenon emerged.

Most of the brands were trying to capitalise the cricket match by offering discounts and cashbacks. While the thought of sending out a brand recall contextually is appreciable, the core message here is to make a sale by offering discount.

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Some brands played extremely creatively by saying that a promo code will work only if India wins. Now, beat this! This also means that this contextual discounting effort was planned well in advance by many brands.

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Where is Indian e-commerce heading? Discounting bloodbath? Is this the future of marketing?

This raises many questions.

  • Have brands moved towards the mindset that discounting is the only way to make a sale?
  • It is very painful to see some brands factoring in “discounting costs” in their fundraising plans. How would an investor digest this and write a cheque? The founders of the startups cannot be blamed for factoring this cost, they are forced to do this because “others” are doing this in the market. In this case, the “others” are always big and established players. Product innovation is losing in lots of money.
  • Discounting can be used as an effective strategy to invite users to taste/experience your product, but looks like this is a never-ending strategy. When is discounting going to stop in e-commerce?
  • I’ve been a customer of a ‘food-tech’ startup (based out of Bengaluru) before and after their funding. I’ve started receiving “Promo codes” from the company after their funding. I’ve always paid full price for their products before funding. After their funding, I’ve started paying using promo codes. Same is the case with another grocery delivery company. Does a funding news mean more discount?

In the airline industry, there is a governing body – DGCA – that keeps a hawkeye on prices being offered by airlines.

Looking at the way the e-commerce industry is heading towards, I strongly believe there is a need for many such “discounting-police” that keeps companies in tight hands from offering a product at below cost price.

About the Author

Karthick Prabu has over a decade of experience in travel technology. He is the CPO of RoomsTonite, a mobile-based last minute hotel booking app. His previous experience includes stints at Travelocity, TravelCLICK, Port of Singapore Authority, SITA, and Rezopia.)

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

Feature image: shutterstock

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