Thursday, October 15, 2009

Recession marks the end of ethical marketing















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Sara Tower, University of Gettysburg, New York

“You never stop, especially when things are going good. But what if things are not good?” We are presently facing the first recession after the concepts of sustainability and ethical corporate behavior came into main stream. The blood of business is profit and when you are running short of blood you just try to do everything to regain its level. Because of recession, the corporate are now focusing on the base of their business and there is a clear sign of green-wash.

In the period of recession, companies focus on reducing cost and cutting down expenditure on everything that not comes in their domain of core competency. Now-a-days cutting down budgets on CSR while giving more focus on marketing of products are very common. The question here is how much difference does ethical marketing make?

There are very less number of “true green” buyers and organizations can’t sustain their business on these niche customers. Sustainability is about balancing economic and social as well as environmental aspect. If the price is wrong, then it will not be sustainable, no matter how green or useful it is. So price is very crucial and in times of recession when people are not willing to spend, why focus on these ethical and sustainable product marketing strategies.

Normally ethical marketing practices are cuddly, twee and/or semi-apologetic in nature but in the battlefield of corporate where they face cut throat competition relying on these sluggish practices won’t help much. Companies need to have aggressive and practical look towards the market to avoid the impact of recession.

Counterview

Debanjana Sinha, IIM Shillong

Recession gives the opportunity to marketers to introspect and innovate. In practical situations all firms face budget constraints during such tough times of recession. To counter all this, they may resort to scrupulous means to to get the consumer’s attention. These may include making false price comparisons, providing misleading selling prices, omitting important conditions of the sale, or making very low price offers available only when other items are purchased. Deceptive packaging in the forms of mislabeled contents, size, weight etc can also be employed. But the marketers must keep in mind that long term survival requires innovative strategies. It is commonly believed that marketing cost must be cut during tough times to get a reasonable return on marketing investment. Contrary to this, increased advertising during a recession gives improved market share, when competitors are cutting back. Marketers should concentrate on core brands to channelize the scarce resources. It gives the opportunity to review the value proposition of a brand. Recession can prove whether a brand can provide value for money, even if it is relatively high priced. Firms can set examples by ethically marketing their brands by providing security to consumers in terms of quality. Unethical marketing practice can lead to the loss of the most valuable, loyal and satisfied customers. Cost cut can be achieved by the increased use of direct marketing, using more of radio and print media over TV etc. During recession marketers cannot ignore ethics while promotion. This would ensure maintenance of customer relationship and profitability when good times return.

Film Brand Placement


Shakshi Gupta, IIM Shillong

Introduction
The concept of placing brand in a movie is not new to marketers for the advertisement of the product. This association is very old and in Bollywood, it started with the presence of a Rajdoot motorcycle in the film Bobby. In English movies it dates back to early ‘50s when Gordon's Gin paid to have Katharine Hepburn's character in "The African Queen" to use toss loads of their product overboard. Though, then it was only a blink and gone appearance, but now it has become one of the important channels for the brand communication.

Brand communication is a key component in branding as it determines how successfully brand is established and turns profits. Advertisements and public relations have been conventional and most popular means of brand communication, but with evolving customer dominated business environment they seem to be losing their effectiveness. Thus comes in new form of brand communication: In film placement that works seamlessly with other form of communication methods to achieve success.

Brand placement is practice of including a brand name, product, sign or trademark merchandise within a movie to increase the brand recall or for instant recognition at the point of purchase. It can be implicit or explicit in movie depending on marketers’ requirements and scene in which it is placed. It can be used to launch a new product (Swift Car in Bunty and Babli), demonstrate a long tradition of a brand (Indian Post) or to reinforce the brand image or its positioning in market (Allen Solly in Corporate). It can also be used to showcase the product’s superiority over the competitor (BMW over Mercedes Benz in Tomorrow Never Dies).

Reasons for Success
Advertisements have been the most popular of all the means of brand communication. With increasingly competitive market, people have been surrounded with an excess of advertisement messages, be it while watching TV, struck in a traffic jam or even while travelling by airlines or metro. This has resulted in reduction in their effectiveness. With increasing number of advertisements day by day it is getting extremely difficult for the companies to create a differentiation in their advertisements, impacting the brand recall in a negative manner.
This can be supported by the facts that there has been a significant increase of 18% in off screen advertisements. With conventional advertisements being intrusive, they lose the attention of the audience against the expectation of the marketers. At some point, the customers get tired with them and even annoyed. Thus, there is a need to have a form of communication that is not obtrusive and has high brand recall.

Second reason that the effectiveness of the advertisements is wearing is the use of technology that allows the customer to skip the advertisements while watching TV. It is a common practice to switch over the channel or mute the television when advertisements crop up during a program or a cricket match. In a study conducted by a Media Planning Group indicate that 90% of people with DVRs skip commercials in recorded programming—and just 16% watch the ads when viewing live TV, rather than doing something else or channel hopping.

The 2007 advertisement spending outlook released by the Centre for Media Research indicates that there will be a slight decrease in advertising spending share for conventional media including TV, newspapers and radio. Also there has been a trend for increase in shares of cinema and internet. The figure below depicts the findings.

Advantages of In Film Brand Placement
As compared to conventional 30 second advertisements, in film placements are less intrusive as they are part of a storyline and integrated with the film. It becomes a realistic stage where the marketers get a chance to show the brand value in the plot of the story itself. This tends to be more acceptable to the customers unless it is highly out of place.
he association of brand and movie celebrities is very old. The effectiveness of communication increases when celebrity endorses a product, as people have tendency to imitate those whom they adore. With help of in film placements, the brand gets to be associated with the movie stars.

This is minus the huge endorsement fee that the company pays to a celebrity to be its ambassador. Example can be of Tata Indicom which willingly gave Rs. 2 Crore to be associated with Rajnikanth blockbuster, Chandramukhi. Had it roped in Rajnikanth to be its ambassador, it definitely would have paid a lot more.

The cost of in film placement is two to three times cheaper than the normal advertisement. It can cost anywhere between Rs 5 Lakh and Rs 50 Lakh, depending upon the level and length of integration of the brand in the movie, production banner and actor endorsement. Thus, marketers are now trying to weave brand personalities more tightly with the brand themes.
The in film placements is a better way for the advertisers to showcase the core value of brand. The usage and the attributes of the product are shown in a more effective way as there are integrated in the storyline itself. Advertisers take advantage of the storyline and the characters in the film to demonstrate what brand stands for. Be it Castrol in Chalte Chalte or Motorola in Delhi 6, Louis Vuitton in Sex and the City or Omega Watches in James Bond movies.

Another advantage is that in theatre audience are glued to their seats and thus, cannot switch over the channel. Also as these are not obtrusive, higher brand recall can be expected. Marketers get a chance to specifically target the market. Each film caters to different audience and if marketers place their brands keeping this in mind, the brand can enjoy a higher ROI.
A movie caters to a far wider audience than the traditional advertisements. A movie is not only played in theatres but is also broadcasted on TV a number of times in future. A movie can be watched in-flight; it can be watched on a VCD or DVD. Before movie is released, the brand gets placed in the promos of movie. The advertisers show the part reels of the movie instead of normal advertising campaigns. Goodyear in Tara Rum Pum Pum can be good example, where it showed the film promos as part of its normal advertisements.

Such show reels fall under the entertainment ad category as opposed to the 'commercial' category that traditional ads fall into. Thus, marketers eventually end up paying four to five times less to promote their brand. They are beginning to leverage on films through marketing tie-ups. Thus, it provides multiple windows and becomes a good medium to place a brand on.
Apart from giving advantages to advertisers, it reaps benefits for producers as well. It helps them recover their film budget to a certain extent. For example Madhur Bhandarkar’s Fashion recovered approximately 40% of its budget within film advertising. It had likes of Kimaya, Cellucom, Sunsilk, Lenovo, Reebok and LG among others. Thus the producers are also roping in multiple brands to advertise in their films. Sex and the City had more than 90 placements integrated in the movie (Louis Vuitton, Manolo Blahnik, Guess etc).

Considerations to Successful In Film Brand Placement
Though in film placements are gathering interest from both advertisers and producers alike, it is also important that the product meshes well with script and plot of the film. If this aspect is not taken care of and the product does not have any connection with the narrative, the result can be catastrophic, that cannot be reversed. The placement should seem to be natural to plot and not contrived or forced. Example of wrong placement can be of Coke in Yaadein; where Jackie Shroff would start singing a song with Coke in his hand.

Brand should get its due diligence and should not be used in a movie as a prop. The customers should be able to identify with the brand. Omega watches in middle class family would not have much impact and would lead to dilution of brand. A good synergy is necessary between brand and the movie. For example BMW in the movie Tomorrow Never Dies acts as one of the James Bond’s intelligent weapons to fight against the enemies. The BMW brand's spirit, of appearing as driving-oriented, powerful, and sophisticatedly equipped, is thoroughly conveyed by the charm of James Bond and the plot showing Bond defeating his enemy in an ingenious way. It also portrayed the superiority of BMW over its rival Mercedes Benz. Thus, a right balance needs to be struck to be glamorous and yet get a value for money proposition.

The success of an in film placement lies heavily on the success of the film which is highly unpredictable itself. Marketers need to pay attention to the high risk high return factor in terms of cost and the impact. Attention needs to be given to production house, star cast of the movie and right fit for their brand personality. The release date, approximate budget of the movie, the professionalism involved in the film (to prevent change of script at eleventh hour, delay in release etc) and the possibilities of brand association through promotions are some basic factors that need to be considered.

The time taken to complete a film, from the time to brand getting incorporated in the script, to it being featured in the film and the film being released gets stretched to more than a year. With brands competing in such a competitive environment, it is a possibility that brands have changed their entire positioning. Thus, this constraint is one that needs to be looked into.
Agencies need to do their part well when placing a product in the film. It is the agency, responsible for the placement to analyze the content of the film and its brief storyline and then to decide upon its potential viewer group or target audience, shortlist the brands that would appeal to their target audience, and make a comprehensive marketing plan for promotions during the various stages of a film's release.

Hindi films are made on a few stereotyped storylines. Therefore, associating brands in the right context into the film becomes difficult. So till Hindi movies evolve, there will be limited number of genres and the brands will have to be centred around these genres only. The producers still have not taken this form as advertising as a revenue stream. As a result, embedded advertising still has lot of growth prospects.

The Way forward
This association of films and brands are here to stay and grow even stronger. This relationship can be a win-win solution to both advertisers and film makers. The brands across various categories from garments to cars to jewellery to banks to news channels (Aaj Tak), are approaching agencies specialized in doing this job of in film placements, as it is a great way to connect with the consumer and its environment.

Advertising agencies are culling out separate arms to offer marketing solutions for the flicks. Leo Entertainment, the entertainment marketing arm of Leo Burnett, was the first to go that way. But its first-mover advantage was short-lived as a rash of ad agencies moved in shortly for the same killing. Lintas and Rediffusion Y&R followed with Lintertainment and Showdiff Worldwide respectively, Madison Communications conjured up MATES, O&M launched Ogilvy Live and Percept Group drew out P9 from its filmy hat.

This shows the in-film placement craze among both producers and advertising pros reaching a new crescendo. But marketers need to give careful consideration before fitting their prized brand into just any movie. There's a thin line between 'classy blending in' and 'unacceptable in-your face' kind of placements. Getting the balance right is critical and seamless integration is a very tight challenge. Though Hollywood has perfected art of it, Bollywood still has a long way to go.
Films are now becoming brands by themselves. When big films are thought of as a brand, co-marketing, merchandising, special edition products, whole new opportunities come up. Marketers are seizing many of these and are looking for more. It is after all about great ideas and brilliant execution and they have new partners in today's film-makers.

In summary, in film placement is playing an important role in the current business of marketing communication and is predicted to become even more valuable to marketers. In today's customer-centric market place, the basic rule of brand placement is to be plot-oriented and integrated seamlessly into the content of the program. Only then will brand placement be widely accepted and distinguish itself from traditional marketing communication approaches.

Association in disparate brands


A V Raghu Vamshi, K Raghunandan, IMT Ghaziabad

A Computer brand ties up with a prestigious Car brand. A Mobile Phone brand ties up with another prestigious Car brand. An Electronic equipment maker ties up with a prestigious Bike brand.

Stymied? Mystified? Welcome to the world of ‘Association in Disparate Brands’. The recent news of ‘Toshiba’ releasing its ‘Satellite U500’ laptop with ‘Ducati’ endorsing it has once again taken the focus on to the world of branding where one brand endorses another brand which is unrelated.

‘Association in Disparate Brands’ is not a novel concept. It has been there for a few years now. If one can recollect the associations between ‘Acer’ and ‘Ferrari’ or ‘Asus’ and ‘Lamborghini’ or ‘Fly’ and ‘Hummer’, the concept becomes more lucid. ‘Acer’ happened to be the official IT supplier for ‘Ferrari’ across the world. So, it saw an opportunity to increase the level of its products and had released a unique notebook which was endorsed by ‘Ferrari’ that targeted CXO’s and multimedia enthusiasts. ‘Asus’ had followed suit by associating itself with ‘Lamborghini’. A year ago, ‘Meridian Mobile’, a mobile phone brand had purchased a merchandising license from ‘General Motors’ to use the ‘Hummer’ brand on its ‘Fly’ range of mobile phones.

Some of these are once small companies and they have grown big in the minds of consumers by associating themselves with disparate brands.

So, why do brands need to associate themselves with others brands that are unrelated? What are the benefits that a brand reaps by associating itself with other brands? Are consumers ready to buy products just because they are getting endorsed by brands with higher level of brand equity?

People who are brand conscious are more likely to use specifically those brands that satisfy their
social and esteem needs. For satisfying their social needs, people might use brands to project themselves as someone who is in coherence with the latest fashion trends and who other people can identify with, and they satisfy their esteem needs when other people perceive them as someone who have high status. This is the cardinal reason why high class brands present in the world over survive and are able to command a price premium from consumers. This is also the main principle behind the strategy of ‘Association in Disparate Brands’. Companies are trying to elevate the level of their products by associating their brands with those brands that are perceived to have high level of brand equity. This holds true in the ‘Acer-Ferrari’ case. In the year 2004, ‘Acer’ was perceived as a company that was capable of producing good quality laptops but lacked the luster and prestige of a truly high class international brand. ‘Acer’, in a clever strategic move, elevated the class of its laptops by associating them with one of the most prestigious car brands. This step prompted another company ‘Asus’ to follow suit by tying up with another popular luxury automobile brand ‘Lamborghini’.

If a company attempts to leverage the brand equity of another company which is unrelated or more specifically, a product of another company which is unrelated, by associating with it, then the company needs to make sure that the core values of the brand to which it is getting associated, matches with the product that it is offering. The ‘Acer-Ferrari’ combination is a case in point. What was unique about the laptop launched by ‘Acer’ was that it was branded with the ‘Ferrari’ symbol and dressed in three layers of original patented red ‘Ferrari’ paint. Even the start-up tone of the laptop imitated the hum and accelerating of a ‘Ferrari’. ‘Acer’ has also gone in for a line extension by releasing a slew of laptops under the name of ‘Acer Ferrari’. Following suit, ‘Asus’ had gone ahead and tied up with ‘Lamborghini’, which is again one of the most popular automobile brands. It has released a notebook under the brand name of VX and then it has also gone in for a line extension by releasing a slew of laptops under this brand. What is unique about these laptops is that they are designed just the way the hood of ‘Lamborghini Reventon’ looks and similar to what ‘Acer Ferrari’ offered, these laptops were branded with the ‘Lamborghini’ symbol. Each laptop of VX brand boasts of high technology features, just like the ‘Lamborghini Reventon’ has, that take computing to the next level. Now what is common in both the cases of ‘Acer’ and ‘Asus’ is that the laptops offered the performance that was expected from them and additionally had been endorsed by brands with a high level of equity. The laptops had transplanted the core value of design from the automobile brands. Both the laptops were able to charge premiums from the consumers and because of the premium pricing, consumers considered them as Luxury Goods. These had become Giffen Goods. For ‘Fly Hummer’, it wasn’t the case. ‘Fly Hummer’ mobile phones were launched in colours that were used on the ‘Hummer’ vehicles. The phone also had decent design and construction and was loaded with ‘Hummer’ wallpapers and ring tones to give a complete experience to the customer. But, the ‘Hummer’ brand is known for its robustness and that core value was not transplanted to the product. In addition to this, the phone’s Keypad, User Interface and Music Player did not stand up to the expectations of customers and the phone was also not charging any premium. So, due to the distortion of expectations that the customers held, the phone hasn’t been able to cut ice with them.

This leads us to the fact that in ‘Association in Disparate Brands’, each and every company which wants its products endorsed by other unrelated brands of higher equity make sure that the core values of brands, with higher level of equity, are successfully transplanted to the products being endorsed as they are attempting to differentiate themselves based on other brands’ equity. This is a kind of win-win situation for both the companies as the brand with higher level of brand equity will enhance its brand visibility and the brand with lower level of brand equity will elevate its status in the minds of consumers.

SV - Cadbury Bournville



Winner: Swapnil Motghare, IIM Shillong





Honorary Mention: Ankit & Pooja, NMIMS

The Economic Growth of the Mass Market and its Impact on India’s Cosmetic Industry



Tridib Banerjee | NMIMS University, Mumbai


Brands cater to the Indian cosmetics society through its wide range of products, with continuous up gradations and innovations. The basic idea remains that youth and style do not have a substitute. Couple it with foresight, research and constant innovation, the recipe for success is ready on the platter. The strategy of the networks is redefined in line with its vision of empowering modern India by serving superior beauty and healthcare products through customized and professional services. Growing disposable income and changing lifestyles in urban India have led to greater awareness about personal grooming, health and wellness. The emerging trends stand in good stead for Beauty and Wellness services sector, presenting a large and exciting opportunity. Let us take a closer look into the details of the current status of the brands as far as the cosmetics industry in India is concerned.

India with its huge market potential promised to be a major hit as a destination for the various brands across. While the HUL powered LAKME moved for the mass market, brands like L’OREAL tapped the niche customer segment. Down the years, the legacy of these brands has mesmerized the customers through constant innovations and appropriate strategies. But since the new millennium, the customer demographics took a major progressive move up and now came the necessity to take the marketing concepts to a different level to match up to their expectations.
A distinct increase in the educated population along with their web based knowledge enabled them to scrutinize the gory details of a product and this resulted in a more logical, aesthetic and stringent demand. The result was evident. LAKME showed a clear dip in its sales. Being the major marketer to India’s mass market, their reforms form a basic ingredient of our analysis of the Industry for the “Common Man”. Now, the question arises that what does a brand with a legacy of over 50 years have to do to resurrect its position back among the elite and make its balance sheets healthy?

LAKME’s answer was prompt. They came up with some rudimentary concepts to connect to the customer and reincarnate the theories of direct marketing via the web and media. Be it the “Elle 18” or the “LAKME Fashion Week”, the impetus was to reach out to the mass using punch lines like “WOMEN’S NATURAL BEAUTY” and “WOMEN OF ALL AGES”.

The other interesting initiatives included the “Beauty Saloons” and the “Bridal Sutra” concepts which were targeted to the specific genres with optimum vision at the aspect of “value for money”. They tapped the web market with √©lan as they used facilities like “Ask Lakme” and “Style File”. The very fact that the customer could customize a perceived look for herself gave her incentive enough to hit the saloons and the cash books gradually began to look promising again.

The health sensitive new age customer had to be convinced about the medical consequences of the product and here the nail was hit on the head by a strategic partnership with “AYUSH”. The brand LAKME-LEVER came into existence and the herbal market was catered to with legitimate conviction.

The imperative intent for the cautious approach has been to target the mass market. In order to survive the test of times, it is essential for the cosmetic brands to consciously try and implement/avoid the following fundamental aspects.

IMPLEMENT
  • Convince people that cosmetics are an essential part of daily grooming.
  • Produce multifunctional products.
  • Encourage technological innovations.
  • Synchronize with the latest trends of the industry.
  • Establish the brand loyalty among its consistent customers (Direct marketing if need be).

AVOID
  • Avoid the defectors. In mass market, this is lethal.
  • Avoid reactive policies; proactively encourage interactions and dialogues to get connected to the customer.
  • Avoid being limited to bigger outlets and enhance accessibility to the customer.

One major drawback in the growth approach of cosmetic honchos has been the lack of consolidation of the web services. A popular customer survey reflects a significantly poor segment having adequate knowledge of its existence and usage (clearly evident in figure 1 shown below). Internet and its proper usage may give the industry leaders and new comers the necessary and sufficient leeway to intrude into the fairly open market segment (refer figure 2 below).

In a nutshell, it has been an eventful revamp on the part of the brand, more reactively than proactively and all this can be attributed to one subtle yet unavoidable factor, the changing demeanor of the customer base, India’s mass market.

VAS, Concept, Context , Benefits





JIGYASA LAROIYA DHIR

Have you tried Vodafone health tips? Or may be the Airtel visa bill pay? Do you remember, just 5 years back your mom used to make a list of the household grocery for you to leave it to the kirana store and the merchant will deliver the goods at your doorstep.

All these are examples of the now so popular value added services. Why not? Value added services are ruling the marketing scene through customer satisfaction and revenue for the providers.

Value addition is an age old concept. It exists right from the traditional marketing days. During the advent of marketing, value addition was offered at a nascent level, more for relationship building & for goodwill. The concept was there, but is been rejuvenated by our present day marketers.

When we say rejuvenation, i mean a total revival of the very concept of vas. Now vas is a single marketing tool with lot many purposes like, service benefit, revenue generation, relationship & trust building and even to generate conversation around the brand, product or service.

Value-added services (vas) are unlike core services. They have unique characteristics and they relate to other services in a completely different way. They also provide benefits that core services cannot. We need to understand that vas shares some characteristics and these are typical in almost all categories.

  1. Vas in not a basic service, it rather adds value to the total service offered.
  2. Vas stimulates incremental demand for core service(s) to add up the profits.
  3. Can sometimes stand alone operationally & even for profitability.
  4. Does not cannibalize basic service unless clearly favorable.
  5. Can be an add-on to basic service, and as such, may be sold at a premium price. Example: birthing suites in healthcare industry
  6. May provide operational and/or administrative synergy between or among other services – not merely for diversification

Every VAS will demonstrate one or more of the above characteristics. Furthermore, a value-added service will never stand in stark contrast to any of the above characteristics.

VAS also has a certain time dimension associated with them. Subjectively speaking, a value-added service today becomes a basic service when it becomes sufficiently common place and widely deployed to no longer provide substantive differentiation on a relative basis. Like in telecom, we are as used to of sms as for calling & receiving.

The Relationship of VAS to other Services broadly is divided into two types of VAS. The first service type is those value-added services that stand alone from an operational perspective. These types of services need not be coupled with other services, but they can be. In Telecom, many non-voice services fall into this category. They are often provided as an optional service along with voice services, but they could be offered and used by themselves without the voice service. For example, SMS could be offered and used as a service without voice calling.

The second, and arguably more numerous and important type of VAS, are those services that do not stand-alone. Instead, this category adds value to existing services. While it seems implicit in the definition of value-added, this is an important principle that makes value-added services stand apart from other services.

RE-DEFINING VAS

With the constant change and development in economic conditions, customer insights, product categories, FDI and increasing competition, Business needs to innovate to sustain the product/brand and to survive in the mad rush of options for the customers. And the marketer is the person who is at the helm of this task.

The increasing competition among brands to create a space in the consumer’s mind have had been the biggest challenge since ages. The inception of advertising resulted in warfare between brands. The era of innovation marketing ruled the roost and the war of brand survival became more intense. And the definition of marketing went on to constant changes. Broadly, the change in media & promotions looks like this-

Barter-Print-Radio-Television-Outdoor-Internet-Mobile-Sms-Digital media-OOH

It’s been evident that the business has been on a constant change after the t-word i.e., Technology. The above set of media tools depicts the need of modulations in the marketing due to technological advancements. Not only that the trend of innovations in technology is been rapid and is still growing fast, constantly challenging the marketer to provide innovative solutions and execute perfection. All this has resulted in a dire need to differentiate and add value and that’s how we have VAS.

Media has been ever emerging, by all means trying to allure the consumers. But with the concept of ‘Consumer Awareness’, there was an immediate need for the marketer to get into consumer insight which comes from understanding Consumer Behaviour.

Relevance + Truth = Consumer Insight

This has led to the new phase of Consumer marketing, namely ‘Customised Marketing.

THE TURNING POINT IN VAS STORY

Wikipedia (still) Defines VAS as - A value-added service (VAS) is popular as a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions but, it can be used in ANY service industry (eg. Web 2.0) for the services providers provide for no cost to promote their main service business.

Undoubtedly, the evolution of VAS was through the SMS services, and that was probably the first value add after the mobile calling services which the consumers even experienced. Since then SMS have been equally popular. Yes, because of the competition getting fierce the service providers have made them interesting & playful as well.

The very concept of VAS got popular with the telecom industry trying to get the first among each other by more value addition and less costs. However, due to the technology there has been considerable time taken in offering better & interesting deals. But, by that time various industry segments & categories started picking up VAS as a part of their product/service strategy. So we can say that the success of sms service as VAS is essentially the say that the success of sms service as VAS is essentially the turning point for the marketers in service industry.

VAS as such is a popular term, has emerged as a separate category in the service industry. Almost all the segments of service industry are picking up the concept of VAS and those who have already are looking for constant innovation, because competition is fierce and customer is informed. Let us look at the VAS in the current marketing scene briefly in the Telecom, Media & Entertainment & Healthcare sectors.

VAS ENHANCING THE POSSIBILITIES OF VALUE PROPOSITION

Coming to the Value Proposition being created by Value Added Services, first let us see what is Value Proposition? Creating a value proposition is a work of Craft & Creativity. Your message should deliver the value proposed by facilitating the customer with an answer to, Why the customer should buy this product/service and precisely, why now?

In marketing terms, we can also define value proposition as a Positioning Statement of a Brand. In VAS it is a statement of service & promise.

A value added service has the property to add up to the value proposition through various ways like consumer benefit, convenience in offering, minimal or no cost and then the marketer communicates the proposition in a variety of visual & textual ways.

A LIGHT-HEARTED EXAMPLE

It’s tongue-in-cheek, but demonstrates how the template can be used.

For a 20 somebody from a call center who wants to sort a messed up relationship, our Love Guru Service is a live mobile help, which provides a customized relationship consulting & tips anywhere.

Unlike radio shows, Love Guru takes care of the confidentiality & individuality, and gives an option to keep the consulting personal.

This is because of our unique customer based & customer oriented value added services. Love Guru - the so personalized & customized Mobile Consultant.

Tip for Readers: Try your value proposition on your colleagues, friends etc and more importantly on the prospective buyers, if you are a service provider.


Telecom industry today survives, competes and excels on the basis of Value Added Services. VAS has almost got embedded in the service offerings of all the telecom service providers. The emergence & growth of VAS in telecom has been phenomenal and the competition fierce. The technology has played its role and the customer is getting all enslaved to technical convenience. And for that they are ready to pay because it saves time & effort as well.

VAS in Telecom is popular in the following service categories:

  • Entertainment VAS
  • Info VAS
  • mCommerce VAS
  • Mobile Advertising
  • 3G Technology
  • Mobile Music

If we go by the figures, Value Added Services in the telecom sector is expected to be Rs. US $ 4 billion Industry in India by 2015. Currently the industry which is pegged around revenue of US $1.2 billion will see major growth in the music and mobile gaming segments suggests a PricewaterhouseCoopers report.

Media & Entertainment:

Similarly, there has been a great hue & cry for the content, maintenance and control in the media & entertainment industry. The media segmentation and proliferation has led to the formation of special niche segment of audiences with their own choices and preferences. This has put the service providers to innovate their offerings to get the maximum audience. And that’s why VAS is emerging fast in the Media & Entertainment Industry especially through the Reality Shows, Engagement Marketing etc. IPL, Roadies, Little champs being the latest example. However, Star Plus’s KBC is still remembered as the trend setter.

Technically speaking the following are the future trends which all the service providers eye for higher revenue generation,

  1. Online Radio & Music
  2. Digital TV
  3. Adver -gaming & Mobile Gaming etc

Going by a recent research study, as per the FICCI - Federation of Indian Chambers of Commerce and Industry and KPMG, media & entertainment industry in India is likely to touch US$ 20.09 billion by 2013. The projected growth rate is 12.5 percent per annum for the next five years.

The popularity of VAS is tremendous in the marketing circles. Not only the popularity, the opportunities and scope are outstanding as the very concept of VAS survives on constant innovation. The customer is informed & demanding so are the channels. Latest success story in innovation offering is of Viacom’s most recent biggest success, Colors – the channel leader with its entire well thought of shows.

Healthcare:

Though, there are comparatively larger costs involved in the healthcare industry, the following are the popular category of value added service in healthcare,

  • Private Rooms
  • Spiritual Architecture
  • CAMS – Complimentary & Alternative Medicine Systems
  • Dietary Services
  • Commercial VAS
  • Telemedicine etc

Education, Retail & Professional Services is also fast adopted Value Added Services as an integral part of their service umbrellas. The popularity of VAS and the success rate is the driving force for the marketers who are now planning to offer to its customers something extra.

There are both Growth drivers and barriers of VAS in the Indian Markets. The customer response is so far so good and the marketer is happy for it, and is encouraged to offer something more & different but there is certain lacunae in the system which turns the situation into a wary one. To list a few barriers -

  • Limited focus – On Youth & Entertainment
  • Content Piracy
  • Lack of Infrastructure
  • Limited Pocket Share of the customers
  • High costs to end users
  • Absence of Utility Services
  • Lack of transparency in revenue sharing
  • Underdeveloped WAP market

VAS is emerging, evolving & growing very fast. A start-up venture for the telecom sector is now becoming a stepping stone of marketing innovation. Phillip Kotler said, ‘Customer is the king’ and services marketing is living up to the expectations of the king – the customer. The customer seeks variety, choices, offers, schemes, benefits etc to make a decision which is value for money. As a result of this, each industry category is welcoming the cost effective tool for new age marketers – Value Added Services. VAS definitely is the future of marketing.