Selling Onions @ Rs. 9/kg- Crazy or brilliant?

ankurOnions, a staple food in India, known to bring down government during elections has been a hot topic since the past few months.

If I ask you to sell onions at Rs. 9 per kg, when the current market price is Rs. 60 per kg, what would you say? Well, you’ll say no, not just because you don’t want to sell onions but also because it’s quite evident that this deal isn’t profitable.

Would you believe if I told you that a leading marketing website did the exact same thing? Yes, Groupon India launched on September 3, a crazy deal- Selling onions @Rs.9 per Kg, when the market price was Rs. 60 per Kg. Despite being a seemingly obvious loss making deal it turned out to be brilliant for them. Want to know how? Keep reading…

Their objective was to create a buzz around their brand and awe their customers. Ankur Varikooo, head, APAC Emerging Markets said “Rs.9/kg was chosen because of the shock value (this price was last seen in India in 1999). Onions were home-delivered across 78 cities in India (free of cost). Only 1kg per delivery address was allowed. We released 3000kgs of onions everyday for 7 days – with the intent of selling 21,000 kgs in all”

Considering this, they sold more than 22500 kgs of onions over a period of 7 days. Their site crashed the very 2nd day considering the never witnessed before crowd. They got over 16500 new buyers on the site over these 7 days. 3000 of their previous buyers were activated who haven’t bought anything from them since the last 90 days. Their brand search on Google increased by over 400%. Business went up by almost 60% and is now stabilized over 12% above the base rate. The deal generated a lot of press coverage, not only on Indian platforms, but abroad too. The deal was nationally trending over twitter for over 28 hours. This activity generated a lot of customers that actually covered all the losses they bore for this activity.

Groupon stuck with the basics of marketing concepts with this campaign. Let us look at the 4Ps of marketing concept here.

  1. Product: they chose a product with which the common people can relate.

  2. Place: India has over 140 million internet users. Groupon targeted the new age era where it belongs. Since a majority of people come online in order to look for discounted products, they chose the best platform.

  3. Price: Groupon decided to sell the product at about 1/8th of its price ensuring the demand of the product and also added a clause of delivery of only 1 kg of onions per address. This led to the registration of at least 3000 new users each day for 7 days.

  4. Promotion: The campaign not only ended promoting the products they offer, but the promotion of the website itself.

Therefore to summarize it, by spending about 1 million rupees, they earned a buzz and PR of about 10 million Rupees in form of increased sales and new customers/brand building.  If that isn’t brilliance, what is?

Definetly a great example of out of the box thinking!! A marketing strategy which in my opinion, need a case study.

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