Fair Or Unfair: Who Decide?

Over the ages, business practices have always bordered on a thin line between
right and wrong. Gradually, some semblance of orderliness crept in with some
accepted practices being followed by all. But often there comes a time when one
group of traders will come up with their own version of business practices,
which could be detrimental for all the others in the community.

That is what channel partners in Ritchie Street are facing. It is not a new
pheno­menon, but just a variation of an accepted practice of local publicity
drives.

Most of the local traders distribute advertisement pamph­lets and display
banners at prominent locations mentioning the best deals they have. There is
nothing wrong in this practice. Except that now, some partners are complaining
that a group of dealers are mentioning unrealis­tic prices on these collateral
and in turn they are losing out on business.

A body blow to business

According to some channel members, unrealistic prices quoted on the
pamphlets are forcing them to sell without margins as end-customers are
referring to the prices offered by other dealers on the pamphlets. “This
practice is putting pressure on dealers and we have to sell our products without
any margin. If this continues, then it is going to affect the trade to a great
level,” claimed A Rakesh Jain of Supreme Computers, Chennai.

Echoing the same view, Vinod Jain of Computer Planet said, “The traders
should not play with price. Quoting unrealistic prices sometimes leads to
bitterness among the end-customers. As a result the trader community will start
facing difficulties.” He also asserted that traders should use innovative ways
of advertising, instead of following such practices.

However, Jain feels that the main reason behind resorting to such practices
was the lack of space available in the market. “We can't blame all the traders
who are advertising on the streets as their shops are not in the vicinity of
customers. Everyone wants business but the practices should be fair and it
should not be a setback to others,” he claimed.

On the other hand, Navin Sethia of Delta Peripherals claimed that the
pamphlets are not affecting the market in a big way. “There are many other
issues in the market like credit payment, and once these problems are solved,
other problems will get solved automatically. Those who are following bad
marketing gimmicks are creating a negative impact for themselves and they will
pay for it,” Sethia asserted.

Nothing wrong in it

While many showed their anger, the traders who were using pamphlets as a
mode of advertisement stuck to their stand. Akthar Hussain of Challenger
Computer said, “We are following this model due to the market pressure. Other
competitive players are also using this method and we don't want to just stand
and watch, as we will lose our business. We even tried to stop the practice,
however, we couldn't withstand the pressure from competitors and hence resorted
to issuing pamphlets.”

If and when everyone in the market agrees to the terms and conditions of all
traders, Hussain said he too would abide by the rule and stop using such
marketing gimmicks.

L Kannan of Mithu Com­puters had a different point. According to him, these
adverti­sing strategies are not gimmicks. “I am just making customers aware of
the real price in the market by issuing pamphlets, besides sounding my presence
in the market, without which I can't survive. Few players, who have established
themselves in the market may not need this, but since I am new to the market I
have to make my presence felt here,” Kannan claimed.

Of the 15 players who are circulating the pamphlets, a few partners are not
even present in Ritchie Street and most of the prices quoted on the pamphlets
differ from the actual price, which is being provided to the end-customers.

But Kannan denied this observation. “I was the one who started this practice
two years back and many started following it since they felt it was the way to
survive and compete with the big guys in the market. There may be some
difference in the prices and that happens due to the configuration customers'
want. Everyone in the industry is here to do business and not to cheat
customers,” he said.

Need for regulation

Most people would accept this as a regular facet of business and see nothing
wrong in it. Indeed, business is all about offering the best products at the
best prices. And if some sellers know how to manipulate the prices to bring in
more revenues, then this is just fair trade practice.

Nonetheless, there are others who feel that some sort of regularities should
be brought in for growth in the market. It is also understood that the lack of
unity among traders is leading to such issues.

Moreover, partners feel that only IT Traders Welfare Association (ITTWA), for
traders in Ritchie Street can bring in certain rules and regulations by uniting
the IT dealers' community. However, when questioned, no one knew why the
association is not active.

When The DQ Week contacted Yaspal S Jain, VP, ITTWA, he refused to comment on
the association and its activities. However, he stated that some action was
indeed needed against those who are spoiling the market using such marketing
practices.

Should this issue be taken up seriously or should it be taken as a correct
business practice, which is being used well by some smart dealers? That is the
moot question and a lot of debate has been going on amongst partners in Chennai
about it.

NR SETHURAMAN

sethuramannr@cybermedia.co.in