IAA debates; Metro Markets are losing their sheen to Tier II & III Towns

The Indian chapter of International Advertising Association, a name that has always brought marketing and advertising fraternity together with its valuable debates and discussions conducted another debate on the most talked about notion, "Metro Markets are losing their sheen to Tier II & III Towns for Consumer Products/Services," which was presented by the Dainik Bhaskar group.

The debate that took place at Gallops, Mahalaxmi Race Course, last Friday, saw a full packed room which was further divided into two, separating 'for the motion' and 'against the motion' audience respectively. Moderated by Mini Menon, Executive Editor, Bloomberg TV India, the speakers 'for the motion' were Atul Phadnis, CEO, What’s-On and GM (APAC), Gracenote and Sadashiv Nayak, CEO, Future Retail Ltd. The speakers that were 'against the motion' included Ronita Mitra, Senior VP, Brand Communication & Insights, Vodafone India and Amitabh Pande, Senior Director – Consumer Insights and Strategy, PepsiCo India Region.
The debate started with Atul Phadnis, who was speaking ‘for the topic’, believed that the developing countries are undoubtedly important for the marketers as an efficient amount of growth is witnessed from those markets. He said, “May it be a big marketer or medium sized enterprise, the focus has shifted onto tier 2 and 3 markets. If we dig deep and compare the growth of both the markets we can see the fact that in last couple of years, metro markets grew by 4 percent and rural markets grew by 6% and this clearly shows the core strength for the marketers.”

Phadnis also stressed upon the fact that metro markets have higher costs hence the cost of resources also rises which clearly increases the cost of the products and services. He said, “Tier 2 and 3 cities give you an opportunity to set up resources (factories) at a much lower cost and hence the price value of certain items can be negotiated thus growing the opportunity for tier 2 and 3 consumers. With so much of competition metro markets are facing a point of saturation.”

Another interesting point that Phadnis got into everybody’s attention was that digitization is also growing rapidly in tier 2 and 3 cities. He said, “Undoubtedly the growth is much faster in tier 2 and 3 cities as compared to the metros. The bandwidth is doubling year on year in these cities.”

Presenting his points against the topic, Amitabh Pande stated that no matter that developing countries are important but the top priority will always be metro markets. He said, “Metro markets can never lose their sheen, metro markets have been shinning and will shine. Marketers are taking a lot of efforts to sustain in the metros markets and are leaving no point to stand ahead of the competition.”

“Companies that are growing at the rate of 30 percent every year have substantial amount of their business coming from metro markets,” Pande added.

Sadashiv Nayak in support of topic said, “Metro-ites spend large amount of their lives in travelling and in traffic whereas people in tier 2 and 4 cities are much closer and give large amount of their lives in working. Cities are polarizing.” Ronita Mitra supporting her side made points like education; infrastructure and man power lies in metro cities. She said, “Higher SEC consumers are in metros. Technology may be available in the smaller towns but the adoption rate is much higher in metros hence metros are bullish markets for the marketers.”

In a media statement issued earlier, Srinivasan K Swamy, President, IAA India Chapter & Vice President – Development, Asia Pacific, IAA and Chairman & Managing Director, R K SWAMY HANSA Group,  on the new season of IAA Debates said, “The IAA Debates has traditionally seen industry leaders deliberate on topics of vital importance to the stakeholders we serve. We have had debates on the relevance of print and TV in the digital age - whether social media is a good business, the role of creative becoming more critical with media fragmentation. I am happy that the new season of IAA Debates is kicking off with a topic of much relevance to the fraternity.”

In a media statement issued earlier, Pradeep Dwivedi, Chief - Marketing & Corporate Sales Officer, D B Corp Ltd. added, “We are delighted to partner with IAA in bringing the thought-provoking industry debates again to the entire advertising & marketing fraternity. The great French essayist, Jospeh Joubert, once famously said that ‘It is better to debate a question without settling it than to settle a question without debating it.’ At Dainik Bhaskar, it is our constant endeavour to contribute to this spirit of discovery and hence be a harbinger of change and evolution. We look forward to the upcoming Dainik Bhaskar-IAA debates as an important step in that direction.”

The IAA Debates hosted so far have been in Mumbai, Goa, Delhi, Bengaluru, Hyderabad and Chennai. The Debates have featured senior advertising, media and marketing professionals such as Prasoon Joshi, Vikram Sakhuja, Lloyd Mathias, Josy Paul, Pratap Bose, Deepika Warrier, Anupriya Acharya, Arun Anant, Arunabh Das Sharma, Partha Sinha, Monica Tata, Vikram Chandra, Punitha Arumugam, Mahesh Murthy, Virginia Sharma, Ashok Lalla and Zerin Rahman, speaking for and against the motion.