Thursday, November 24, 2011
Review by Sria Majumdar
Penguin Books India| Paperback Edition, Price Rs. 399 approx.
I have seen the book in bookstores many times, and passed by the stand, making a note to buy it the next time. The next time came only when the professor in my Consumer Behaviour class recommended it as one of the best books to understand the Indian consumer. I decided the time had come, and picked up the 2007 edition of the book from the library. I mention the year specifically because half of the book deals with numbers and statistics, and that kind of a book loses its relevance in 4 years. But not this one. Read on to know more about one of the most interesting books I have read off late.
The book stems from the single idea that MNCs and most marketers do not understand India. To them it is the country which promised a consumption explosion, only to deal a blow to all the financial projections and expected sales volumes of companies. Rama Bijapurkar, one of India’s most respected thought leaders on market strategy and consumer behaviour, talks about how a multi layered schizophrenic India needs a multi-pronged customized strategy- not a direct transfer of the global best practice. Winning in India, she says, requires companies to accept that all emerging markets are not the way developed markets were in their infancy, and in India’s case- one should forget about thresholds of income above which consumption ‘takes off’. The question that MNCs should ask is not ‘When will this market be ready for my “global” strategy?’ but ‘What is the right strategy to unlock the potential of this market?’
The book is wonderfully organized, with beautiful writing style interspersed with numbers to lead authenticity to all the arguments. From the mixed messages consumer India sends out to marketers, to understanding the diversity in demography, psychography and social cultures- the book discusses the purchasing power of India, why consumer India cannot be neglected, how to predict and read change in India and understanding the ‘Bottom of the Pyramid’. The book explains apparent contradictions in consumer behaviour such as rising incomes leading to downgrading to cheaper FMCG products, and poor monsoons leading to reduced sales of toilet soaps but increased motorcycle sales in rural India.
The book has a foreword by C.K. Prahlad and an afterword by Narayana Murthy. Do I still need to give it a verdict? Rama Bijapurkar has a way with words that makes all the heavy information ridden text an interesting and even gripping read. If you are interested in history, economics, culture, philosophy or marketing, you will appreciate how the book tries to decode the inscrutable Indians.
Must Buy! Grab the latest edition, and read it at leisure. I guarantee that it will worth your time, and definitely better than that consumer behaviour book you are reading. Be it understanding the SEC classifications, or the myriad behavioural issues of Indian consumers; in Narayan Murthy’s words ‘It is highly recommended for students who need credible insights and data to understand and prepare themselves for the creative market called India’. Bibliophile or not, don’t miss out on the book!
Review by Sria Majumdar
Harper Collins| Paperback Edition, Price Rs. 300 approx.
The name of Al & Laura Ries is enough to get a book on the best seller list for days together. That coupled with a name like ‘The Origin of Brands’, and you have got the attention of every marketer-bibliophile combination on the planet. Known as legendary marketing strategists, Al & Laura Ries have many books to their acclaim - The 22 Immutable Laws of Branding (1998), The 11 Immutable Laws of Internet Branding (2000), The Fall of Advertising & the Rise of PR (2002) and The Origin of Brands (2004). The dynamic duo consults for the top corporations around the world from Microsoft to Ford to Disney and Frito-Lay. Their books, including this one, are famous because they are revolutionary in their ideas and simple in the concepts.
What Charles Darwin was for evolutionary biologists, Al & Laura Ries are for branding specialists. The Origin of Brands draws from Darwinism and the similarity to the ‘Origin of Species’ is breath taking. The book takes the reader through the whole process of brand creation as well as sustaining the brand. Developing new ideas, the importance of being first, building new categories, competitive positioning, public relations as a weapon, brand protection and knowing when to exit a brand- the book discusses each process in excruciating detail. It has a healthy blend of examples and theory in every discussion to substantiate the authors’ point of view.
The book starts with the analogy to the great tree of life. Just like species diverged to give rise to other species, categories evolve and give rise to new categories over time. Replete with numerous examples, the book focuses on 5 key ideas- divide and conquer, survival of the firstest, survival of the secondest, the power of pruning and creating a category. Ries emphasizes that the ladder to success for a brand and business is divergence; not convergence. While most marketers tend to access the size of the market before entering a product category, the question Ries asks is ‘What was the size of the cola market before Coca Cola entered?’ The topics are listed in a sequential manner, and the Rieses explore every aspect of brand building through this wonderful book.
The book is sheer reading pleasure. It gets you hooked on because of the analogy to evolution and it manages to keep the interest alive right till the very end. The aptly named chapters, (‘Bad Ideas Never Die’ is my favourite!) and the easy to read language, makes a branding specialist enjoy the book. Unlike many other management books, this book is thrilling enough to make you finish it in one sitting. Some of the concepts discussed are certainly debatable, (and there are examples which contradict the theories propounded by the Rieses), but that’s the joy behind reading the book. It makes for perfect discussion at a marketing club gathering!
Must Buy! The book is easily available in bookstores or online stores. Priced at Rs.300, the book makes sense for every branding specialist who wants to understand the world of brands and logos.
Review by Priyanka Pandit and Sria Majumdar
Hyperion Books | Hardcover Edition, Price Rs.1100 approx.
Sitting down to write my last BookMark, I feel more than confident that this column would continue shining bright, bringing to you the gist of the books every Marketing enthusiast must read. The biggest reason behind this confidence is Sria, an extreme bibliophile counting “Marketing” as one of her passions, who shall be taking over the column full-time from next month. For this special “occasion”, we decided to review one of the ten bestsellers by the marketing brains behind Apple’s early successes, Guy Kawasaki.
Known for the enthusiasm he professes, be it in writing, public speaking, marketing or consulting, Guy Kawasaki has served as the chief evangelist at Apple and is the co-founder of the RSS aggregator Alltop.com and Garage Technology Ventures. His books, including this one, are famous because they are filled with how-to-do-it steps along with real life examples which validate his thoughts.
The book draws from Guy Kawasaki’s experience in marketing the Macintosh back in the 1980s when people could not think beyond IBM and MS DOS. In order to disrupt the market, customers were turned into evangelists. According to Guy, clear and shrewd thinking, guts, hard work and a willingness to think out of the box are essential to drive the competition nuts and take on Goliaths. The book begins by asking fundamental questions about the nature of business and products and services. ‘Knowing Thyself’ is the key to understanding customers and competition. Like Sam Walton, Guy is also an advocate of following the competitor religiously, playing fair and grabbing a niche market share. He also advises competition and cannibalization but strongly believes a nemesis is essential to drive innovation.
The structure of the book speaks volumes about the thought process of the author. Guy Kawasaki asks marketers to first explore within before knowing the customer or understanding the enemy. The next section talks about focusing on the customer, concentrating on the decisive point of the product/service and finally converting the customers into evangelists. The focus on the customer is re-emphasied in his section on building brand loyalty. Guy advises the reader to use ‘molehills’ well, and leverage them to gain the differentiating advantage. Packaging deserves a special mention in the book, replete with examples of companies which have turned this P into a selling point. He ends on the note that in order to succeed, one must ignore conventions and grab opportunities with both hands.
3/5. Although it seems like common sense at times, it is a sheer reading pleasure for a marketing enthusiast. The theory is replete with numerous interesting examples and the easy flow of language keeps the reader tuned in. The methodical approach and clear guidelines make the book useful for a student as well as for a marketer looking out for ways to rejuvenate his product.
The book is easily available in bookstores or online stores. Priced at Rs.1100, the book does burn a hole in the pocket for a student. However, it is definitely worth the visit to a nearby library.
We hope you readers continue to send in your suggestions for books you would like to have reviewed, as well as for any special inputs on how we can improve this column. Keep Reading!
Sana akhtar | IIM S
What started off as a modest mill manufacturing cheap and coarse woollen blankets and low priced woollen fabric has come a long way to become India’s largest branded fabric and fashion retailer. The Raymond Woollen Mills, as it was then known, was acquired by the Singhania family in 1925 in Bombay. Raymond Group today is one of the leading producers of worsted suiting fabric in the world and includes the brands Raymond, Manzoni, Park Avenue, ColorPlus, Parx, Notting Hill and Zapp!.
Raymond was one of the first companies in the Indian textile industry to use advertising in a major way to promote its products. All of Raymond’s marketing revolves around its ‘The Complete Man’ campaign. The campaign started as an attempt to create a man with whom the target audience could connect. Raymond’s research revealed that men did not really aspire to be muscular and well-built. The Raymond Man is thus portrayed as a caring, sensitive, fun loving man with a deep sense of accomplishment in the way he carries himself.
Raymond also focused extensively on distribution aspects and set up its exclusive retail showrooms. ‘The Raymond Shop’ boasts of being the largest retail store in the country with more than 500 stores in prime locations, in more than 200 cities in India.
In 1986, Raymond launched Park Avenue, its first ready to wear men’s formals targeting the young middle class corporates who are fashion conscious but need to wear formal clothes on a daily basis. Later, ‘Park Avenue Woman’, a range of business wear for women was also launched. The brand leveraged its expertise in clothing and the association that consumers make with looking good in a corporate environment to extend its line to include accessories and men’s toiletries to evolve as a brand that stands for complete grooming.
Having focused on formal wear for a long time, Raymond launched Parx, premium casual lifestyle brand targeted towards the age group 22-30, in 1999 to extend its image to that of a free-spirited leaping stag, endorsing the philosophy of ‘living easy’. Recently Parx decided to enter the emerging deodorants category. To create distinction is an already cluttered market Parx executes its brand essence in a playful tone. It stays away from overt sexual imagery that is prevalent in the category and gives its campaign a fresh, youthful and relaxed tone. While Parx was positioned at the lower end, Raymond acquired ColorPlus to target the premium customers which gave it a strong foothold in the Indian ready to wear segment.
Seeing a need gap in terms of availability of a greater range of branded and quality merchandise for children and infants in India, Raymond entered the kids apparel segment in 2006 with Zapp!. Zapp! designed an exclusive kids' loyalty programme to carve a niche for itself in a segment which saw top-of-the-line brands stepping in with aggressive marketing strategies. Zapp! Club, the customer loyalty programme, gives an individual experience to each child, making them a part of exciting events and offers them gifts such as bandanas, wristbands and tattoo stickers.
The latest from the Raymond Group is the launch of ‘Raymond Finely Crafted Garments’ and ‘Neckties & More’. While ‘Raymond Finely Crafted Garments’ offers top of the line fabrics to the complete man, ‘Neckties & More’ adds flair to a man’s outfit through other accessories like ties, tie-pins, belts, cufflinks and bags.
Raymond with its fine offerings and consistent personality based advertising has made a place for itself in the Indian market. What remains to be seen is whether ‘The Complete Man’ will be able to tailor himself according to the demands of the new generation without compromising on his values.
Sana akhtar | IIM S
How many times have we cursed the Indian railways for their poor service and invariably delayed trains? How many times have we frowned at the tobacco stains on the platforms and the stink rising from the garbage on the tracks? How many times have we wondered if the railways could ever match their foreign counterparts?
The Indian Railways despite all odds still manages to be the largest rail network in Asia and second worldwide. This 150 year old institution has seen some major improvements in the recent past. Their initiative to join the internet bandwagon to facilitate online ticket reservations has indeed made life easier for a large part of the population. Providing a reservation system that efficiently serves more than half a million people every day was no easy task, but the Indian Railways have managed to pull it off remarkably well. In addition, the station enquiries and Interactive Voice Systems have been successfully in use in a number of stations.
Until a decade ago, however, things were quite different. The man behind the successful transformation of the Indian Railways from an ailing, nearly bankrupt sector to a profit making organisation, the former Railway Minister, Lalu Prasad Yadav, became the darling of the masses. He was invited to renowned institutes like ISB, Stanford and Harvard to deliver managerial lessons. According to Lalu, he saw the railways as a commercial enterprise and not a social welfare institution and it was this vision that helped him take the railways to new heights.
The Commonwealth Games in India saw the Railways in a new avatar. Ogilvy came up with a refreshing campaign projecting the Indian Railways in a new light- that of being a responsive organization with a human face. The TVC which ends with the catchphrase- “Desh ka Mel-Bhartiya Rail”, shows that the organisation connects people, places and hearts. The ad appeals to the entire nation and is a welcome change coming from a PSU.
Branding of the Indian Railways was taken a step further when the Railways flagged off their first branded train named after Kurkure, owned by Pepsi. The railways decided to brand the trains and give them advertising space on the coach board and the train’s body and rake in profit. The success of the ‘Kurkure Express’ has inspired them to extend this marketing initiative to more number of trains.
The Indian Railways have also been instrumental in promoting tourism in the country. They have developed niche products and have created opportunities to travel in India at the desired level of luxury or economy. Besides promoting luxury trains like ‘Palace on Wheels’, ‘Deccan Odyssey’ and ‘Golden Chariot’ the railways are a lso in the process of establishing world class stations and opening new routes to popular destinations. Trains like the ‘Bharat Darshan’ also enable the average income person to travel in comfort
The Indian Railways have indeed created a brand for themselves but they have to take it further from here. With a little more focus on hygiene and infrastructure and cooperation from the people the Indian Railways will soon be able to match their foreign counterparts.
Sana Akhtar, SAMITA S PATNAIK | IIM S
Titan, in the Indian context has become synonymous with watches. The brand which started as a joint venture between the TATA Group and Tamil Nadu Industrial Development Corporation in July 1984 has grown to become India’s leading watch brands capturing over 50% of the market share.
Titan brought about a paradigm shift in the Indian watch market offering quart technology with international styling at a time when the only technology prevalent was that of the bulky and reliable mechanical spring.
Titan brought in the ritual of gifting watches and it benefitted hugely from the campaign which included a series of films depicting strong emotional bonds and moving personal moments. In a time when watches were considered no more than a time keeping device, Titan positioned itself as a fashion accessory and introduced the concept of “Matching Watches To Clothes”. It roped in Aamir Khan as its brand ambassador to match with the brands new persona.
Talking of the communication of Titan requires a mention of the sonic branding done by the brand- Mozart’s 25th Symphony which is arguably Indian Advertising’s most memorable track and has seen a number of innovations ranging from Indian Classical, Indian Folk, Operatic to Rock and Funk.
In an attempt to increase its volumes Titan introduced brand Sonata which was a huge success in itself owing to its cheap prices but it fell heavily on the mother brand Titan which was perceived as a premium brand. Realising this mistake Titan took away its brand name from Sonata which was then endorsed by Tata.
The World Of Titan, another pioneering effort from Titan, was born to introduce the concept of retailing in the watch market. This network of exclusive showrooms helped the brand establish itself as one of the most prestigious and visible retail brands in the country.
Titan’s latest tagline, “Be More”, encompasses all that the brand stands for-leadership, innovation and pride in the consumers’ mind and appeals strongly to every contemporary Indian. The campaign, conceptualised by O&M, seeks to nurture and maintain the appeal of the iconic brand and invite consumers to cherish Titan as a symbol of their own identities. The Titan Aviator series, the Titan Octane collection, Titan Raga crystals for women, and Titan Heritage each represent a different identity. Titan also targeted children and youth with its brands Dash and “The Cool Watches”- Fastrack.
Realising that the only way to sustain the fashion accessory perception is by continuous innovation, Titan has come up with several sub-brands to connect with the various facets of deep-rooted human yearnings for self-expression. The Raga focussed on different roles that a woman plays, that of a mother, a wife, a girlfriend and how from 9 to 5, she becomes a professional after fulfilling her other roles. The target was the woman in metros from Sec A homes and former Miss India Gul Panag was roped in as the brand ambassador.
Xylys, another offering from Titan, brought about a redefinition of sorts in the premium watch segment. It was targeted at new generation achievers who go beyond the obvious who know who they are and set their own standards and live by their own values. It is a style statement for those who stand apart from the crowd.
The most stellar example of Titan’s innovation is the Edge, positioned as the slimmest watch in the universe. This technological marvel received the Best Design Award in the Lifestyle Product category.
Titan has indeed created a market for itself with careful strategies and constant innovation. Coupled with passion and energy, the brand Titan has a very promising future.
Wednesday, November 16, 2011
Ramanuj Vidyanta, TAPMI
"Positioning Dairy Milk as a dessert will generate more business"
The Indian palate has always been famous for the variety and quality of sweets that it contains. No matter from which part of this vast country you belong, the taste of sweets has always been successful in exciting your taste buds. The Indian cuisine is virtually incomplete without the presence of sweet as the dessert. The profitability of this industry has also attracted companies like Haldirams, Monginis etc to venture into this arm of the Food and Beverage industry.
This diversification of the national players along with the entry of new vendors has further intensified the competition for the local halwai or mithaiwala. The attraction of this industry is the surety of the demand owing to the preference of sweets in the Indian cuisine.
When Cadbury’s launched its campaign of “Kuch meetha ho jaye”, it directly targeted in positioning Dairy Milk as an alternative of the traditional mithai and in turn it made Cadbury’s as the direct competitor of a Haldiram’s, Gangurams’, Sweet Bengal etc. So what is in it for Cadbury’s? Positioning Dairy Milk as a dessert allowed it to portray Dairy Milk as a chocolate which can be consumed daily which is a smart strategic move to ensure sales growth. It also differentiated Dairy Milk from other chocolates in terms of the target customer as a dessert for the whole family and not only for the kids.
Hence Cadbury’s decision to position Dairy Milk as a dessert opened up new avenues of marketing it in terms of a new target customer and instances of purchase. This could lead to generating higher business by an increase in sales within the newly formed target customer or the newly created purchase occasions.
Rahul Sehgal,IIM S
"Cadbury’s move may not be the smartest since it could cannibalise its own USP”
There are very few brands in the world which make their presence felt so strong that the brand name gets synonymous with the product itself, Cadbury is one such brand. The most commendable achievement of Cadbury has been its unique marketing communication through which it has been able to position its products appropriately .
The most recent campaign launched by Cadbury is the ‘Meethe mein kya hai?’ campaign. This campaign clearly intends to portray Cadbury Dairy Milk as an alternative to the dessert or the traditional Indian sweet. This move has been taken up with a very clear intention of pepping up sales by competing with the traditional Indian sweet. However, this may not be a very right move to make and it may have its own negative repercussions.
So far, with all its campaigns, Cadbury has tried to portray Dairy Milk as an offering for a joyous occasion and that has been its USP, but with this campaign it’s clearly taking a different stance hence exposing it to a potential risk of cannibalizing its own USP. The food habits of a common Indian man have still not evolved greatly and if given a choice, he would still prefer having a Rosagulla, Jalebi or a Gulab Jamun rather than a chocolate (read Dairy Milk), after his meal. Even after this campaign, the target audience will mostly remain the kids and the youth, but not the middle aged and the elderly members of the family. Also, the belief of a common man to use a sweet as an offering to the deity during a traditional Indian Puja or celebration drives a Mithaiwala’s business, and it’s hard to imagine Dairy Milk take that position. So, there is good reason to believe that Cadbury’s strategy to portray Dairy milk as a daily proposition will face a stiff challenge and only time will show if this strategy has enough mettle.
Mohammed Rehan Menon | XIMB, Bhuwaneswar
Owing to its rich and varied topography, diversified culture and captivating festivities, India offers immense tourism delights not only to foreign tourists but also for domestic tourists. The most important role is played by the tourism board and the hospitality industry to maintain a steady growth of tourists. Not just a place to put up for tourists, hotels today provide a complete experience of tourism and hospitality by providing tourism packages, delicious local, international and continental cuisines, sightseeing and sometimes even rural tourism. Though tourism department merely needs to promote tourism through ads, hotels need to make sure that they have an effective and robust sales and marketing strategy in place not just to reach to a wider audience but also handle any turbulence and volatility in market.
From 222.75 million in 2000, the total domestic and foreign tourists in India have increased to 655.15 million in 2009, a staggering 194% growth. The direct contribution of travel and tourism is expected to be around US$ 82.61 billion which is around 4.5% of GDP. After transport, a major chunk of expense borne by a traveller is on accommodation and food. This presents a very large market for hotels.
Current Sales Models
Currently hotels follow the following models for their sales channels:
Global Distribution System (GDS) - Travel agents access one or more of these systems to search hotel listings and make reservations. This is a commissionable model where the online player charges a commission of around 8-15% to the hotels after the stay of guest.
Internet Distribution System (IDS) – These are portals where people intending to travel can make the hotel reservation himself. Often search engines like Yahoo Travel section, MSN etc are powered by these IDSs to reach out to a maximum audience.
Merchant Model – Under this mode, the hotel sell their inventories (rooms) at a discount of around 25% to the third party online players. Here, the customer pays the gross rate to the merchant side and the merchant site than pays net rate.
Through own websites – This model is picking up in India where prospective tourists can directly visit the website and make their reservation. However, apart from few big hotels, generally most of the hotels do not still have their own website.
Issues with current models
Prima facie, it is clear that hotels are paying a huge sum in the form of commissions or discount rate to the third party players to get the bookings. Further, the turnover of a hotel also depends on the efficacy of these operators. Since GDS and IDS work on commission basis, hence a bias creeps in to rank hotels on their sites, with higher commission paying hotel being ranked higher. The flip side of a merchant model is that the Online Travel Agencies (OTA) can drop any hotel from its site if it is not generating sufficient revenue. Another major problem with merchant models is the rate parity issue. Hotels often give different discounts to different OTAs which instantly become public. This adversely affects the hotel’s other distribution channels and leads to brand erosion. Further, these models are often suited to large hotels that leverage their large inventory to get substantial discount. Small and independent hotels lack collective bargaining and end up paying either heft commissions or high discount.
Hospitality e-business strategies (HeBS)- a pioneer in hotel internet marketing research and solution firm has developed a model to show, how indirect channel is eroding the bottom line of hotels. Though this model is for US hotels, it can be extrapolated to Indian hotels also, given the similarity in commissions and discounts followed. Expedia, a leading travel website in US, has acknowledged that over 60% of its revenues come from hotel reservations. In its 2007-2010 SEC (Securities and Exchange Commission – US counterpart of SEBI) filings, it gives the data of the total merchant bookings made and the net commission earned by Expedia3.
Thus we see a multi-billion dollar leakage from the revenues of the hotels. It is clear that hotel reservations are financing these OTAs’ operations and allowing them to make a killing by charging exorbitantly high commission at the cost of bottom line of hotels.
Indirect channel is also a hassle for the tourists. The biggest problem faced by the tourists is that of information asymmetry. Third party operators provide lopsided information based on the commission and discount they receive from specific hotels. A tour operator will display the vacancy status based only on the rooms sold by a particular hotel. Once those rooms are sold, “No Availability “is displayed by them leaving no choice for the tourist but to book another hotel. Often tour operators do not provide real time confirmation and the tourist realises this only after arrival at the hotel. Further, due to the involvement of third party, hotels do not have complete flexibility to help a stranded guest. Many tour operators also charge many hidden fee after advertising dirt cheap rates. A non-human interaction prevents customers to make specific requests while booking. For all these reasons, it is advisable that hotels adopt a direct online sales route by making their own website and customizing the details to suit their location and business.
Marketing Strategies through internet
Simply making a website may make the sales task easy for a hotel. However, it is equally important for them to adopt robust internet marketing policies and be able to reach maximum audience which consists of people overloaded with information. Below are some of the techniques which a hotel can use:
• It is very important to ensure that the content development meets all the compatibility and restrictions. For example, IE does not fully support advanced transparency features, which results in low quality GIF formats. No user would be interested to visit a site which crashes due to such reasons or is unable to display all the embedded features.
• Using SEO has become the common trend in e-commerce sites. Search engine optimization (SEO) is designed to raise a site’s ranking in the search engine’s “natural listing”. Most of the users prefer to access the first four or five sites shown in the search results and hence SEO is an important technique. These is done by identifying keywords often used by net surfers and optimizing the site content to have such keywords at maximum places. For e.g.: a tourist wanting to visit a hotel in Jaipur may search for “Hotel Jaipur near railway station”. Hence the site should have such a combination of keyword at many places which will allow the spider (the search engine program) to easily reach the hotel’s site.
• Links should be embedded in images and content to be easily reviewed and indexed by the search engines.
• Pay per click (PPC) model is an effective and cost-efficient way to advertise your hotel. Advertiser need to pay only when a user clicks on the ads. The advertiser needs to bid on keywords which he thinks his target user would look for. When the user views a page with matching content, the ad would be shown, on clicking which he might be taken to the hotel’s website. This is cost-efficient and a much better way to reach vast market.
• Social media marketing is the latest trend to create a sudden buzz among the audience. Asking fans to comment for a special discount package, offering promotion on designated days or off season, incorporating engaging pictures of the amenities of the hotel are some of the techniques which hotels can use while marketing themselves on social media.
• Hotels often follow a “silo” approach towards various forms of internet marketing, developing some in-house while outsourcing others. A centralized plan will enable comprehensive marketing programs with all efforts complementary to each other and hence being symbiotic in relation.
• Hoteliers need to constantly analyze and evaluate their marketing efforts to ensure a positive impact on RevPAR(Revenue per available room) or GOPPAR(Gross operating profit per available room). A host of analytical tools like Adobe online marketing suit, DART etc are available which collate the data from various sales points and give an analytical report.
Web 2.0 provides enough potential for an hotelier to adopt a direct channel. The visible problems are complexity of available technology and the reluctance to adopt a new channel in this cut-throat competition. It is high time hotels realise how their bottom lines are getting eroded by third party operators and hence take steps in the right direction.
Tuesday, November 15, 2011
An Interview with Ajay Manrai
Professor of Marketing, University of delaware
In this month’s Vartalaap we feature Ajay Manrai.He is a Professor of Marketing in the Department of Business Administration and Faculty Director of the Graduate and Executive Programs at the Lerner College of Business and Economics at the University of Delaware. With a Ph.D. in Marketing from the Kellogg Graduate School of Management, North western University, Dr. Manrai talks to Markathon about cross cultural and cross national consumer research, International Marketing and his stint as a research ambassador through the ‘Fulbright-Nehru Research Scholar Award’.
Q1: Based on your interest in cross cultural and cross national consumer research, what would be your advice to Indian companies expanding overseas? What key insights are important to be successful in developing countries of the Middle East and Africa?
Well! These are really two separate questions. Please allow me to take one at a time.
First, my key advice to a company expanding overseas: Work exceptionally hard in two areas namely, self-referencing criteria (SRC) on part of the company and deal with consumer ethnocentrism. There are two major obstacles to success in international marketing. SRC is an unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decision. Ethnocentrism is the other side of the coin – it is the resistance a company faces in acceptance of its products abroad because consumers prefer their own country products.
Remember that cultures are not good or bad, right or wrong but simply different. The company expanding overseas ought to develop global awareness and the ways to acquire the same are –
1. Knowledge of Cultures, History, Global STEP Trends, that is, Social/Cultural, Technological, Economic/Financial, and Political/Legal trends.
2. Tolerance of Cultural differences
3. Development of Personal Relationships in Other Countries
4. Culturally Diverse Senior Executives and Managers
While there are differences, I wish to point out that there are also similarities across cultures and nations. The challenge of international/global marketing demands a company to Globalize the elements of marketing mix (4Ps) to benefit from similarities in the domestic and international environments whenever possible, and adapt the elements of marketing mix to adjust to the differences in the domestic and international environments whenever needed AND TO KNOW WHEN TO GLOBALIZE AND WHEN TO ADAPT.
Your second question deals with specific regions of the world. For example, most countries in the Middle East have wealth (buying power) but culturally very different than India. Islam is the predominant religion in Middle East and it is pervasive in society, politics, and business. For example, Islam does not allow payment or earning of interest income on money and thus businesses have to find alternate creative ways of pricing to incorporate cost of funds. Likewise, knowing local culture could help avoid awkward situations which could ruin potential partnerships. For example, Islamic women may run a business but they do not shake hands with men as their Western counterparts. As another example, it is an absolute no-no to carry wine bottle (as you would do in the West) if you were visiting an Islamic family for dinner invitation. In contrast to Middle East, most African countries are not wealthy and thus many marketing ideas relevant to marketing to the BOP would be more applicable in that region of the world. There is also political instability in many parts of Africa and that needs to be factored in assessing the risk in entering such markets.
Q2: How is international marketing different from marketing within the country in terms of positioning and communication strategies?
The steps involved in designing the positioning and communication strategy in international marketing are similar to the ones employed in domestic marketing – that is understand the attributes/benefits critical to your target market and then effectively communicate and deliver the same. Like I said before, the key is to understand the similarities and differences across cultures and nations and then decide to globalize and/or adapt the marketing mix including positioning and communication. For example, McDonalds promotes the same high quality, clean, fast, reasonably priced fast food in USA and India and the golden arches are prominent in their advertising as well as in stores in both the countries. However, Big Mac in USA has been transformed to Mac Aloo Tikki or Chicken Maharaja in India. Likewise, Mattel, makers of famous Barbie Dolls incorporate the differences in cultures via adapting the outfits and appearance of Barbie Dolls to different cultures as illustrated in the pictures below. Interesting, Mattel had tried in the past using a standard (American Barbie) across cultures and nations and dearly paid for it in terms of loss of sales and profits.
Q3: According to you, what frameworks/models work best to capture and represent consumer perceptions and preferences? What tools are ideal for a marketer, given time and cost constraints?
Welcome to marketing research! We are fortunate that we have two pillars on which the marketing discipline rests – qualitative andquantitative. I think both are equally important. We could gain at least preliminary insights about consumer perceptions and preferences via qualitative techniques like focus groups and in-depth consumer interviews but these insights need to be corroborated by a follow up quantitative study with a scientific sample and using techniques like perceptual mapping via factor analysis and multidimensional scaling and preference decomposition techniques like conjoint analysis. For example, over time the conjoint analysis has become a very popular technique in business for market segmentation and product positioning. I think anyone concentrating in marketing ought to be familiar with both the qualitative (such as focus group) and quantitative (such as conjoint analysis) methods.
Q4: Congratulations for receiving the prestigious ‘Fulbright-Nehru Research Scholar Award’. During your stay in India as a research ambassador, you would be researching the similarities and differences in the marketing strategies of Indian companies, and multinational companies with origins in both the United States and abroad. Could you throw some light on the motivation for the research and expected similarities and differences you perceive, prior to the research?
Thank you! The international marketing literature points out the importance of comparative marketing studies and yet one finds very few such empirical studies with large samples. My guess is that it is hard to conduct such comparative studies on a large scale as it requires resources and access to the key managers in a foreign country. In short it a tough problem. That is a key motivation and driver for me, that is, to try and tackle a hard problem. Besides I am fortunate that I had access to companies and key managers via the alumni networks at IIM Ahmadabad (my alma mater) and IIT Delhi (also my alma mater) as also my contacts in the Indian industry because I worked in India for a number of years before going to USA to pursue PhD in Marketing at the Kellogg School, North western University.
Q5: With increased competition in the Indian markets, companies are becoming more sensitive to the strategies of competitors. What according to you is the way ahead in competitive marketing?
The key to success in the market is “Differentiation.” It is easier said than done because in this day and age when over time competition could mimic all your moves and try to commoditize the market. This makes it particularly hard to keep a balance among three things – brand equity, market share and profits. As the brand equity erodes and consequently the company’s ability to maintain market share at a premium price, the profits decline. One way to stay ahead in the competitive game is by rediscovering the product or “offer” constantly via innovation. It requires investment in building intellectual capital (R&D) so that new products could be introduced periodically to keep an edge over competition. No doubt it would cause cannibalization but that is better than losing out to competition. There are numerous examples of this phenomenon - Intel, Miller, Kodak, Auqalisa, Eli Lilly, Pfizer and so on. The companies, such as, Intel, which engaged in innovation kept their market leadership while those, such as, Kodak, which did not innovate fast enough lost market leadership and profits. A law of marketing is – “Nothing is forever.” Even Viagra (a little blue pill for Erectile Dysfunction, a quality-of-life drug by Pfizer) was hugely successful until 2010 (sales $1.9 Billion). The New York Times (April 14, 2011) reported that the new longer lasting Cialis (by Lilly, $1.7 Billion in sales in 2010) would take over Viagra in sales in 2011. How did Cialis achieve this (despite entering the market as a number 3 after Viagra, which led it by 4 years; and Levitra, which led by only a few months)? Cialis did it by creative positioning of promoting the drug as a way to relaxed romantic approach to sex (using its unique “extended duration” – 36 hours attribute) as compared to “rushed,” exciting, winning, “playboy” positioning of Viagra created via Mark Martin, NASCAR race driver in 40s and jokes in the popular media.
Q6: In the Indian context, which method of advertising and sales promotion works best?
In advertising as a rule of thumb TV is by far the most effective media in India but also expensive. It works particularly well in India because of widespread penetration of TV in Indian rural and urban markets and also for its appeal particularly to rural markets where the literacy rates tend to be lower. Of course, it varies from state to state within India. The social [Facebook], electronic [Internet], and mobile [SMS] media are also becoming popular but nowhere close to TV yet. I think the print media is the less effective in India as compared to TV and social/electronic media.
Q7: According to you, is marketing communication within the company lacking as of today? How can companies better in house communication?
No, I think Indian companies have made a dramatic progress in communicating internally compared to the state of affairs 30 years back when I was working in India. For example, let us take Anand Group of Companies. I worked for Gabriel India Limited, an Anand company, until 1982. We had good in house communication even then. However, now their internal communication is truly exceptional – five stars. In 1982 they used to be a group of four or five companies in Automotive ancillary field and today they are a group of 19 companies with more than 40 physical plants all over India ranging from automotive to water purification to hospitality industry and numerous collaborators all over the world. They have an impressive Newsletter about company activities and achievements, which is shared with employees, suppliers, and partners. In addition, face to face periodic meetings at various levels, Electronic Bulletin Boards, E-mails, Sports events for employees and their families, Community events around festivals and religious holidays, hostels for young male and female employees, bungalows in one location for senior managers, Intranet and Internet are some of the other ways Anand promotes in house communication. These methods may be useful to other companies looking to improve ways to promote internal communications.
Q8: What, according to you, are the key qualities of a marketer? Any Words of advice to our readers?
A marketer has a difficult role in a company. She/he needs to interface with internal and external publics relevant to the marketing decisions. As we capture it in Five C’s of marketing: understanding Consumers, Competitors, Collaborators (partners, suppliers etc.), Context (external environment – opportunities and threats) and Company (strength and weaknesses – internal analysis) is critical to marketer’s success in marketing decision making. Thus, the qualities, such as, individual attributes - analytical, perceptive, inquisitive, genuine, creative, balanced, passionate, motivated etc., leadership skills – interpersonal relations, communication skills - both written and oral, and empathy would make a person a good marketer. While “some” individuals may be born with “some” of these qualities, I think most of these qualities could be developed and improved upon with perseverance, patience and practice. Overall, I would say that both “nature” and “nurture” have a role to play in making a good marketer.
Priyak Purkayastha | MDI,Gurgaon
It is not possible to precisely define each and every thing in this world, neither it is necessary to do so. Even the greatest of the geometricians cannot define a point. We use a point to define all other entities in geometry, yet we cannot define a point. It is considered to be a concept. Drawing parallel to it, various articles and books have defined “brand” in various ways, but truly speaking it can best be defined as an indefinable concept which can only be realized through experience. Given this abstract definition of a brand, it is not tough to realize that brands are not something that can be used exclusively by the marketers only. It is knowingly or unknowingly used and utilized by everybody starting from a kid who wants to be his / her teacher’s pet to a notorious “Bhai” (Don) of Mumbai. This article will focus on some of the branding lessons that a marketer can learn from a terrorist group!!
Functioning of a Terrorist Group
The horrors of 9/11 and 26/11 shook the entire humanity and today the entire world is aware of the terrorist groups like Lashkar-e-Toiba, HuJI, Al-Qaeda etc. A careful analysis shows some of the notable features of their operations.
1. They never fade into oblivion. They are aware of the fact that public memory is ephemeral and hence they keep reminding the entire world of their destructive abilities by executing small yet frequent attacks.
Example: The recent series of blasts in various parts of Pakistan or the series of blasts in various cities like Ahmadabad, Delhi, Surat, Jaipur etc in 2008 is a testimony of this fact.
2. Most of the times they keep giving ultimatums to the security agencies of the world in order to keep them on their feet all the time. Thus common people remain terrified all the time anticipating yet another dreadful assault.
Example: Al-Qaeda’s constant threat to the US through the news agency Al Jazeera.
3. When people get acquainted with threats and ultimatums and start taking them for granted, they come up with massive mass attacks killing hundreds which continues to terrify common people and the security forces of different nations for a long time.
Example: Attacks like 9/11 and 26/11 were preceded by lot of threats and ultimatums.
4. After any attack in any part of the world, they publicly take the responsibility of the attacks. This is particularly true for a newer group who tries to shoot into fame and limelight.Example: A group named Indian Mujahedeen claimed the responsibility of the series of attacks in various cities of India like Jaipur, Surat, Ahmadabad, Delhi etc in 2008.
5. This owning up of attacks often leads to confusion where more than one group claims the responsibility (or from their perspective, credit) of one attack. This is done generally to increase their reputation and attract funds. Thus like any other competitive market, there is competition among the terrorist groups.
Example: Just after a series of 17 blasts in Ahmadabad on 26th July 2008, both Let and HuJI claimed the responsibility. Later it was claimed by a new group named Indian Mujahedeen.
6. There exists fair amount of differentiation in the way the different terrorist groups undergo their operations. Security agencies often identify the appropriate terror outfit related to an attack just by observing the mode of attack.
Example: All the attacks by Indian Mujahedeen in 2008 were accomplished using timer bombs consisting of microprocessors and quartz which were placed on cycles, cars and inside food containers in busy market places of various cities. LeT attacks, on the other hand, reveal the use of modern technologies.
The points and the examples mentioned above describe a distinct process by which a terrorist group cuts out a place of its own amidst competition from other groups. This is true irrespective of the past history of that group. This process is followed by both the established groups like LeT, HuJI as well as newbie like Indian Mujahedeen.
Branding Lessons to be learnt
The purpose of any branding exercise is to caste a permanent effect on the consumer’s mind. It is true that a terror attack leaves a much larger and unimaginable imprint on a human mind and hence it is easier for all the terrorist groups to brand themselves. However irrespective of this advantage possessed by the terrorist groups, marketers can still take some leaves out of their books and apply some of their branding strategies. These are elaborated below.
Continuous and Consistent Communication
The terrorist groups never fade into oblivion as they keep on appearing in the headlines by creating destructions and damages at regular intervals. The recent series of happenings in Pakistan are the testimony to this fact. Groups like ULFA, HuJI, LeT reappear in public memory every now and then and the security forces of the concerned nations have to remain alert all the time. This is the key aspect of brand management.
Creating a buzz is very common in branding. Buzz marketing helps to develop the brand, but the key is to sustain it through continuous communication. Often brands die down after reaching great heights as they lack consistency in communication. In the 1970’s the brand Liril (HUL) was created through an excellent piece of advertisement portraying the liberalization of Indian women, bathing under a waterfall in a two piece bikini. It was a contemporary idea and hence influenced the consumers’ minds instantly. However due to lack of proper communication and relevant advertisements in the ever-changing era, the brand has lost much of its sheen.
On the other hand, many brands have gained long term success through continuous and consistent communication. Brands like Coke, Pepsi, McDonalds remain embedded in consumers’ mind through different promotions and offers and constantly developing their packaging and pricing strategies.
Clarity and Authenticity of Promise
The reason for failure of many brands is that they fail to deliver the value that the consumers expect from them. Hence there exists a gap in the value promised and value delivered and this creates a negative image for them. Today Nike is synonymous to Performance or Axe to Sex Appeal or Gucci to Style and Fashion. However these have not been created overnight. These iconic brands have shown clarity in their communication with the customers and have delivered that over the years.
An analogy can be established with the way the terrorist group functions. It has become a day to day stuff to read about terrorist threats in various parts of the world. The threats are targeted towards specific groups or events or individuals. These terrorist groups are capable enough to rise up to the occasions. Threats towards mega events like the World Cup or individuals like the Prime Minister and Home Minister are well communicated through the media. There’s not much beating about the bush as far as their threats are concerned. These are clear, specific, timely and well directed.
The authenticity of the promise of the terrorists stems from the fact that there is hardly any lull as far as terror strikes around the globe are concerned. Small terror activities keep happening across the world especially in the Middle East and the Subcontinent and they are punctuated by the bigger ones like the 9/11 or 26/11.
While designing the communication strategy, brand managers need to be specific about those promises that their brand can deliver to the customers. Hence both clarity and authenticity need to be kept in mind in their message strategy.
Providing Greatest Experience to the Customers
Conversations through satellite phones for the 26/11 attack revealed that the terrorists were specifically instructed to kill as many people as possible so as to create a massive impact on India. The impact was indeed huge and common people were emotionally and psychologically shattered by the magnitude of destruction. The same thing happened in the 9/11 attack where the magnitude of the terror had left a permanent imprint on the minds of not only the Americans but also the entire world. The sole idea behind both these examples is to understand the fact that whenever the terrorists go for a destruction plan, they plan it huge with the aim of providing the worst experience of terror to the common people.
Marketers need to follow the same principle of providing greatest experience to the customers so that it has a permanent imprint on the customers’ minds. Thus the focus should be on Customer Experience Management. The process of providing best experience to the customers is not restricted to the marketing department; rather it is a combined effort of the entire organization starting from its strategic vision, mission and values to the sales department. Marketers play an important role in this as they need to align their brand strategies to the mission and core values of providing best customer experience.
Toyota has maintained this strategy by ensuring that once a customer has a Toyota experience, the customer would not go for any other competitors. This has indeed been successful as most customers who bought Toyota once bought more Toyotas. Creating repeat purchases through customer loyalty and superior customer experience should be a dream for any marketer.
Differentiating from Others
Just when the security forces across the world were becoming aware of the suicide bombers in the streets and daily transports, the world was taken aback by the use of aircrafts in the attack of 9/11. It shook the entire world by virtue of its sheer unpredictability and innovation in terrorism. That’s what the terrorists had been looking for. However this is not a one-time incident. Indian Mujahedeen took the Indian government by surprise by repeatedly implementing small attacks in various cities using RDX in food containers. The subtle nature of their attacks made the lives of Indians miserable. During the 26/11 attack, the terrorists took the sea route to stump the security of this nation. All these examples are cited to bring out one basic similarity. Terrorists don’t use predictable measures; rather they use differentiation and innovation as their measures of success. Every time they plan out different measures and hence differentiate from the rest all the time.
In today’s world, where all low cost airlines provide the same experience and all colas taste the same, differentiation and innovation are of utmost importance. Today product differentiation has almost ceased to exist except in the technological domain like iPods and iPads. Differentiation through price is not sustainable in the long run and can have serious financial implications on the business. Availability is a key factor but trying to differentiate through availability and location is temporary as it can be easily replicable. Thus we see a cluster of stores developing in the same locality within a short time in order to take advantage of the benefits of location. Often brands try to differentiate through promotion but it usually turns out to be an expensive affair.
Thus the key question is what the brands should do to differentiate from others. This critical question can be answered if we analyze what the terrorists had been doing for years. These terrorists are differentiating themselves through “customer experiences” making each encounter as horrendous as possible to the security forces, the government and the common people.
Brands need to differentiate themselves through the experiences they provide to the customers. This includes the 5th “P” of marketing sustainable in the long run and can have serious implications that is the PEOPLE which forms the interface between the brands and the customers. Customers choose the brands not by price or availability or product difference, rather by the experience they have while interacting with the brands. Hence differentiation through customer experience is the order of the day.
All the examples cited in this article are the most devastating ones in the history of mankind. These are referred multiple times in this article only to highlight the effect they had on the common people which was precisely what the terrorists had aimed for. The crux of this article can be best understood if we realize that the sole aim of the terrorists is to inflict terror in the minds of the common people, whereas the aim of successful brands is to provide delight to the customers. Comparison has been made between how successful the terrorists and the brands are in realizing their own aims.
Monday, November 14, 2011
Isha Agarwal, Urvashi Jain | NMIMS, MUMBAI
A 30 foot Pizza hut logo on a space rocket, an advertisement put on an egg, a man popping out of water to show a banner to those having a boat ride!! - do you think advertisers are going crazy? No, they are going AMBIENT. We saw advertisements on TVs, read them in newspapers, heard them on radios, but now they are everywhere. Advertisements are now not restricted to the first contact point(home) or the second contact point(work).They are now creeping into the third world ( as they say it) of people – when they are simply walking or doing leisure activities. Well, such advertising has a name to it-ambient advertising.
The term ambient started making a buzz in the British media jargon in around 1996, but now it is an established term in the advertising world with a boom in this industry abroad and a growing one here in India. Ambient advertising is placing advertisements in unusual and unexpected places with unconventional methods. For ambient advertising the world is an advertising stage and everything is a potential advertising medium- golf hole cups, the sand on beaches and even the sides of cows!!
According to a study, the North Americans are exposed to on an average 3000 ads per day. Pretty mind boggling huh! This is the amount of media clutter today where consumers are becoming immune to traditional media of advertising. Add to this increased competition in crowded areas, proliferation of brands and short term focus in industry. These form the major reasons for the birth of Ambient advertising which aims to look at more innovative avenues to catch the eye of the ‘jaded’ consumer. Moreover it’s cheaper and more effective.
The best aspect of ambient advertising is that it has a huge scope for creativity and idea innovation. In fact this is the major reason why it attracts immediate attention apart from general visibility for the brand and pulling them to the point of purchase. With the rising demand of point of sale communications, no wonder why these ads are mostly put within 50 meters radius of the selling point. The main aim of these ads is to just introduce the brand and that too at a time when the public is least expecting it. The ‘unusualty’ of the message raises the level of interest and increases the willingness to expend energy to process the message. If you walk on the street and see an 8 foot long comb stuck on the entangled electric wires, you are bound to notice it, read ‘Rejoice Conditioners’ on it and then realize their aim to send you the message that rejoice conditioners can make your entangled hair smooth. Ambient advertising was first aimed at capturing only the 16-24 age group market owing to the media it used and the humorous message content, but now with its growing popularity it covers a very wide audience.
Ambient advertising has been doing very well abroad where public spaces are well organized and are in a controlled environment. That’s why they are easily visible on sidewalks, washrooms, parks etc. But in India where such things are uncontrollable and infrastructure is abysmal, ambient advertising is yet to become ubiquitous. But it has started in a big way in malls. An example of this is the attractive advertisement of JUICE salon in a mall in Mumbai where each of the steps of the escalator showed different hairstyles. One of the most important things in ambient advertisements is that the target audience and the utility of brand should be well bridged with the advertisement. If pedigree wants to promote a dog adoption drive then it needs to advertise in a place where many dog lovers can be tapped, which is public parks and not building escalators or petrol pumps.
Ambient advertising though has many advantages like being cost effective, more interactive and creative is not free from some disadvantages. Firstly, if the idea is copied and becomes common then it ceases to surprise. Also there are no set means to measure the effectiveness of this medium as compared to traditional media like TV, newspapers. Sometimes ambient ads may become too intrusive and invite a call for repulsion from consumers if they are perceived as invading their leisure times. In Sao Paulo, a clean city law was passed where all the ads –be it on billboards, taxis, shops- were all taken down.
Ambient advertising though has many advantages like being cost effective, more interactive and creative is not free from some disadvantages. Firstly, if the idea is copied and becomes common then it ceases to surprise. Also there are no set means to measure the effectiveness of this medium as compared to traditional media like TV, newspapers. Sometimes ambient ads may become too intrusive and invite a call for repulsion from consumers if they are perceived as invading their leisure times. In Sao Paulo, a clean city law was passed where all the ads –be it on billboards, taxis, shops- were all taken down.
But ambient advertising will always hold its case of bringing that ‘wow’ factor in advertising which hardly any other media can do consistently.
And the huge scope for more innovation keeps the spirit of advertisers high, when the whole world is your canvas- then why not!!
Pe ‘DEGREE of Innovation’
This was done by Pedigree to create awareness amongst people about dog adoption .Yellow Pedigree dogs were placed throughout Sydney and Melbourne which aroused the curiosity of the people in huge numbers which ultimately resulted in large scale dog adoption
KINGFISHER – The “HANDLE” that rocked the world
This was interestingly done in India where Kingfisher beer mugs were aped as door handles on various restaurants in India. This led to people taking notice of it without fail whenever they entered a restaurant, which did wonders for the sales of Kingfisher beer.
In Switzerland a vegetarian chain restaurant fixed over-sized forks to trees in major parks and main outdoor shopping areas which resembled a piece of broccoli. Such an act symbolized freshness of the restaurant’s food and managed to catch the eye balls of the people in great numbers.
ASEEMA – “Where potential meets opportunity”
Aseema Charitable Trust wanted to promote the culture of educating the children in Mumbai in India. They came up with an innovative idea of putting an abacus on the roads of Mumbai so that literally every child could “count”. The ingenuity of this did marvels for Aseema.
REJOICE – STRANGLE THE TANGLE
P&G this time took advantage of tangled phone lines which were a common sight on the streets of Bangkok. To promote P&G’s line of Rejoice conditioners, a large green comb was placed on the telephone lines (which resembled long strands of tangled hair) reading: “Tangles? Switch to Rejoice Conditioners.”
Sunday, November 13, 2011
"Tata chemicals has just become the first branded national player in pulses. Will entry into this segemnt, which has so far been avoided by big players, work?"
Arun Yadav, IIT KGP
Let’s begin by exploring the current market condition for pulses. India’s pulses production is around 16.5 million tons for the current year while demand is around 18 million tons. This gap is currently bridged through imports. The per capita income of India is increasing at a fast pace. As the income increases,the demand for non-cereal food, and hence the demand for pulses, is also expected to grow. After paying the cut to middleman, farmers get only 50% of what their produce costs in the retail market. The main difference is due to the inefficiencies of supply chain. Low productivity of farmers is another problem which further reduces their income.
The entrance of Tata Chemicals into the pulses market can be well justified as they have good presence in the FMCG market through Tata Salt and its variants. The main business of the company comes from fertilizers and chemicals. Tata Chemicals has 690 rural outlets known by Kisan Sansar in the Northern and Eastern parts of the country. Tata Salt-iShakti distribution chain currently spans 1.5 million outlets. Rallis, its subsidiary, has a customer relationship programme called Kisan Kutumb in Southern and Western India. Together, they touch the lives of over 5 million farmers across the country. Tata chemicals can teach farmers to increase their productivity by using good seeds and fertilizers. They can also reap the benefits of having a strong supply chain. It will help them to reduce the total cost involved. Needless to say, Tata will have the first mover’s advantage too. All the following arguments support the move taken by Tata Chemicals but the final fate is always decided by the market itself.
Payal Bangar,IIM S
Tata Chemicals forays into the selling of pulses under the “i-Shakti” brand extending from salt. This would involve in them going for contract farming; providing the farmers with the necessary production inputs like seeds, fertilizers etc. and selling an agreed quantity of pulses at pre-determined rates, schedule and quality levels. This concept is not new in the agro-industry, however in India contract farming has more demerits than merits that it can boast of. The primary problem that may arise is, if the farmers side-sells their products in the market rather than selling to Tata Chemicals as per the contract. The selling can be done to either a different buyer or another competing company offering a price higher than that specified in the contract. Another reason for the side-selling is that the other buyers generally pay in cash which is a more lucrative offer than waiting for prolonged periods for money to be paid through the proper channels by the company. Governance is major issue and the final profit margin will be very low.
Another frequent problem that arises is that the farmers use the inputs supplied for other cash and subsistence crops. This will be a clear loss for the company as the crop yields will be reduced and the quality will be affected. Also, the Retail sector is not organized specially for sale of the pulses etc. hence customer perception will have to be changed. Due to these problems faced by the company it will not be feasible for Tata Chemicals to go for selling of pulses by contract farming.
Is the launch of 6 new world cup flavour by lay's justified or adding to the confusion of the brand reality?
"Is the launch of six new world cup flavours by lay’s justified os would it confuse the brand loyal customers?"
Anshul Kumar,BIT Noida
Lay’s, the global leader in the saltynack industry, enjoys huge popularity with its customers and has earned consistently large profits from its business. From customer’s perspective, introduction of new flavours would be a clear positive on the basis of conventional thinking.The reason being, Lay’s is a renowned brand and with the introduction of new flavors, could expect that customers who have developed trust in the brand would not have hesitation in not only accepting but welcoming new variants in the product portfolio. It could also be argued that new flavors would entice existing customers as well as possibly gain new ones. From Frito Lay’s perspective, adding to the existing offering would leverage the existing brand equity and enable inexpensive market launch of new products. It could also be viewed as a competitive thrust to gain advantage over its rivals in the market place with an enhanced product offering. The firm would be able to spread the cost of advertising and promotion over a larger group of variants and thereby bring down unit marketing cost which should in turn contribute to improved profits and profitability.
The company should do a thorough study of the sales performance of its existing variants. Those variants which show a declining sale trend or have reached a plateau can be discontinued. Such products can be replaced by new ones.
It should be the effort of every firm to keep its existing customers happy and to attract new customers. An obvious area for this critical marketing requirement would be new product introduction. So this is a step towards the same objective, which is taking advantage of World Cup for its new offering.
You go to a store to buy a packet of chips of your favourite brand. You know the flavour you want but what you see on the display is a number of new flavours which look almost same as what you buy ordinarily and the shopkeeper is trying his level best to persuade you to buy the new flavors that he has just stocked, wasting your time and his energy.
This is the story behind every shopper who knows which flavour he likes and wants to buy that. With the company trying to push new flavours in the forefront, more often than not, the old flavours are pushed to the background irritating the customers who have been company’s regular buyers for a long time.
Moreover, how many of these flavours would actually be sustained is another question because most of these flavours are launched near some event to grab consumers attention and interest and are killed after a few months. It’s not for the first time that Lay’s has launched new flavours or has held a competition related to it. This technique has been used by them before also to spike their sales and is being repeated because of positive result it generated, not taking into account the discomfort it causes for the brand and flavour loyal customers.
Adding on to this grievance is launching of new brands of chips like by Parle etc. which have same color packaging done as Lay’s to confuse the customer. In such a scenario, when in a shop the customer sees a variety of bag of chips he is bound to get confused and lose faith if the flavor that he picked out doesn’t please his taste buds!
Kumar raunak | IIft, delhi
Marketing at source : the no-nonsense marketing
Whenever we think of marketing campaign, the two ubiquitous words across the marketing fraternity, things that first come to our mind are glitzy television commercials, giant billboards at posh locations and high profile celebrity endorsements. These product promotion tactics have captured much of the creative bandwidth of most of the marketing managers associated with companies from diverse sectors. The underlying philosophy for these marketing and advertising tactics has been that launching a high decibel mega campaign on television and other forms of media creates a pull effect among target consumers and draws them to the distribution outlets. This philosophy indeed worked when we had lesser number of competing brands and products in every sector and some of the communication media were relatively new, like television. Take for example Hamara bajaj campaign by bajaj scooters in the late 80s and early 90s when the television medium was relatively new and the two wheeler market was not cluttered with umpteen brands. This campaign actually established bajaj scooters as a household name by creating the desired pull effect. Same holds true for HUL’s lux campaign with stars like Hema Malini and Madhuri Dixit when celebrity endorsements had not picked up in a big way.
Cut to present time and we find a plethora of brands with glitzy and whacky advertisements on television and in newspaper dailies making use of each and every spot available. Same holds true for billboards and hoardings at posh locations. Now the issue is how much impact do such campaigns have on the minds of target consumers, especially when we take into account the fact that in a small span of time, let us say during 3-4 min commercial break on television he is supposed to watch numerous ads, remember them and recall them while making purchasing decision. It is also a herculean task to measure the impact of these ads in quantitative terms. Also one big issue in this regard is that many a time when these ads are aired in the midst of any popular show they act as irritants from the point of view of consumers and more often than not they nullify any eye catching effect that was built into them to attract viewers. To counter this many advertisers thought of using more and more celebrities so we had Aamir Khan endorsing Coca Cola and Shahrukh Khan endorsing Pepsi, HUL roped in former Miss India and model Mehr Jessia Rampal for ponds cosmetic products in response to another former Miss India and Universe Sushmita Sen’s endorsement of P&G’s Olay cosmetics products. This excessive use of celebrities by almost all the brands has again robbed this tactic of any novelty that it promised in the beginning.
So what should be the way forward? Marketers and brand owners themselves seem to have come up with an alternative which can be termed as the concept of marketing at source. This is fast becoming a trend on the marketing and advertising landscape and is being increasingly used by advertisers and marketing managers.
What is this concept all about?
This concept entails intercepting the target consumers at the right location and the right time in a more direct manner than what traditional forms of advertising allow. This enables greater impact of marketing and advertising on consumers while ensuring that they are engaged in an entertaining way. To illustrate this there are two examples that really stand out.
HUL’s THE BAJE KI KNORR LOCAL CAMPAIGN
Under this campaign which was launched in September 2010 the women commuters in local trains in suburban Mumbai were served delicacies prepared with Knorr ready to cook spice mixes. This idea of serving hot and fresh delicacies to women commuters on their way back home after a day of hard work clicked with the consumers.
Over here what HUL was trying to do is to influence the influencers and break the clutter. In India the decision regarding the purchase of kitchen items is taken primarily by the women of the house, so by actually providing them with a memorable experience of Knorr ready to cook food items, they hoped to create a strong recall and ensure repeated purchase. It also broke the clutter in processed food category which has players like Nestle, Britannia, ITC, Frito Lay etc. Instead of going ahead with any run off the mill television commercial or print ad, it made direct contact with the source of its market and revenue i.e. middle class women commuters and it did so not by pestering them but by making the encounter a unique and entertaining one and this created a favourable image of the product.
NESTLE’s RURAL CAMPAIGN
In its bid to promote Maggi noodles in the rural markets, nestle organised a programme wherein the representatives from Nestle travelled to rural areas of UP and Bihar and showcased to inhabitants the process of preparing Maggi and then they were served piping hot noodles. The entire idea was to educate the rural consumers about the product and create a powerful impact by making them taste hot and delicious noodles. Again over here Nestle chose to give traditional forms of advertising and marketing a miss which could have been making use of hoardings, distributing pamphlets, or advertising on radio. Rather it sought to educate consumers about a never before used product in a more direct and engaging way.
In both of the examples the idea worked because consumers were directly impacted by the campaign and were made to feel special, so next time around when they go to retail outlets the memory of this experience would in all its likelihood make them buy the product and use it and hopefully trigger repeated purchases.
Prerequisites of a successful marketing at source
There are certain things that marketers need to keep in mind while implementing this idea-
A large number of dedicated sales forces would be required to make direct contact with the source i.e. end consumers. For example in case of HUL’s campaign, they needed a large number of sales personnel to serve delicacies to commuters in different local trains and on different routes.
Good distribution network and product visibility- to cash in on initial strong recall after the campaign, visibility and availability of the product in the retail outlets via strong distribution network is needed because if consumers ask for the product and do not find it there is a likelihood that they may switch to some other product.
Complementary use of traditional forms of advertising- to say that the traditional forms of advertising are passé would be naïve. Once the initial recall is created through marketing at source, at this point traditional advertising would kick in, in the form of television commercial and print advertising to reinforce the positive memories of the product and convert it into a purchase decision.
Innovative and out of the box thinking is required to make direct engagement with the consumers an exciting and memorable experience for them because this task is quite unlike sales promotion where either free samples are doled out or hefty discounts are given which trigger short term sales. Over here the idea is to build long term association with the consumer by starting the relationship on a memorable note which can be used to build upon a strong relationship.
DEbasmita panja | IIMB
Digging into the reality of Reality Shows: A Booming Marketing Platform
Culture Reality shows have become a catchphrase in the Indian Television industry. Indian viewers’ mind set seems to have undergone a dramatic change. A significant fraction of the audience base have become bored of the never ending saga of family dramas and soaps and are switching over to reality shows. The Indian reality television, though in the nascent stage of its development, is growing at a phenomenal rate.
The international history of reality shows dates back to 1948 with the telecast of the first TV reality show Candid Camera by Allen Funt. The Granada Television Series Seven Up in 1964 was among the pioneers of reality shows that were broadcast in the United Kingdom. The industry earned global popularity with the revolutionary success of shows like Big Brother, Survivor and American Idol. Similar journey commenced in India in the 1990s with the advent of music reality shows like Meri Awaz Suno. The show became highly popular but at that point of time in the industry, there were not many players in this segment.
The scenario changed tremendously with the huge success of Kaun Banega Crorepati. The enigmatic presence of Mr. Amitabh Bachchan alongside the differentiated concept of KBC in terms of Indian viewers’ tastes and perceptions proved to be a successful venture and opened up opportunities for such reality shows in future. The rising popularity has given a new dimension to the business of television channels in India. It has broken the monotony with interesting scripts and innovative formats of reality shows. Perhaps one of the prime reasons for reality shows dominating the industry is the ability of audience to be a part of the shows and easily relate themselves to the characters. However competition in this segment of the industry is becoming intense due to its continued success in increasing TRP ratings. Channel executives have become keen in outdoing others with almost every channel broadcasting two to three reality shows in the same season.
In such a high growing, competitive industry, what strategies are being adopted by the various television channels to position their shows in the most favorable manner? How are the production houses trying to set themselves apart to pull the crowd? What marketing weapons are these players using? Primarily, the production houses are negotiating deals with television channels and launching various categories of reality shows like game shows, celeb-reality, prank-reality, talent hunts, adventure based shows etc. Such a varied offering keeps the audience hooked to their television screens without a feel of monotony. Production firms like Endemol International BV, BBC Worldwide Productions India and FreeMantle India Television Productions Pvt. Ltd. are frequently coming up with innovative concepts ranging from shows on cooking to biggest comedian hunt which are entertaining and are being widely accepted by Indian audience. The formats and ideas of the shows are being used by the companies as a differentiating factor. Endemol, for example, has signed a joint venture with a sports management firm for bringing in reality shows on boxing and cricket while others are conceptualizing reality shows on business for testing entrepreneurial aptitudes.
Though these reality shows seem to be entirely Indian products, they are often a result of deals with foreign networks. For example, the local station Network 18 and the media corporation Viacom collaborated to produce Big Boss. India is a comparatively new entrant in the reality show business. So such cooperation with highly experienced foreign companies adds to the competence of the programs. The production firms are also bringing in international formats for adaptation in India. At the same time, they are focusing on localized contents to tap the local audience. Deepak Dhar, managing director, Endemol India says, “We are planning to get a format called The Million Pound Drop for the Hindi audience and then extend it to south India and the Bengali-speaking market.”
Internet is also playing an important role in its growth. It has been used as a cost-effective and interactive tool for promotion of reality shows by several television channels. These companies have partnered with popular websites like facebook, YouTube, Orkut, rediff etc. for advertising their shows. Star Plus, for instance, has made use of social networking sites for initiating conversations on its show Master Chef. These channels have released web premiers for their shows and are popularizing them through online media posts. The channels are using blogs, launching their own sites and placing promos of their shows across video sites. A lot of popular reality television shows have profiles on well-accepted social networking sites. They are also creating websites for getting regular feedbacks about their shows, thereby creating awareness and excitement in the minds of the viewers. In addition to internet, channels are also using editorials in print publications for promoting the shows.
An evolving trend of cross-promotion of shows and promoting movies through reality shows have become quite successful. The television channels are working towards introducing a synergetic relation between film promotion and reality shows. This is setting up a win-win situation for all players in the business. Reality shows provide an efficient platform for movie promotion with minimum cost being entailed by the film producer. The appearance of celebrity actors in the shows captivates more people thereby registering more TRPs. The viewers are also entertained by the show and the celebrities.
Among the other tools that are being employed by the television channels are celebrity hosts and judges and this has been established as a very effective approach as the Indian viewers always have had a special connection with Bollywood. Anupam Vasudev, EVP marketing, Star Plus, said, "Celebrity-based reality shows attract new viewers. So, more people are sampling your channel when such shows come on. A number of them stay with the channel even after the reality show ends."
The increasing popularity of the reality shows is making it easier for the producers to attract higher sponsorship. Also most of the revenues are generated from text messaging and mobile interactions by the audience for voting purposes. There is effective utilization of content in a reality show shoot as almost nothing goes waste. “Even auditions and behind-the-screen happenings are shot, and broadcast before the actual show goes on air...controversies and fights between participants create frenzy and the show becomes a talking point in the press or on social media,” says a production team member of a show.
However what remains to be seen is whether this dynamic success of the reality television industry is sustainable or not. A lot depends on the ability of the industry to come up with further interesting concepts. Gavin Wood, director of production, India Freemantle Media says, "India has a great potential to produce its own formats. We may discover some formats that existed earlier and got sidelined or forgotten. We can work on them as well. Indian formats have the potential to go global as the passion and creativity in India grows in the years to come. This will drive the growth of the television industry in India."
Aravind BM | NITIE
Adapting to Cultures – Marketing in Global Environment
Globalization has not only brought people, communities, places closer to each other but has also turned many cities, regions in the world to cosmopolitan. We should not be surprised to find that our neighbour or our colleague or a friend in Facebook comes from a land thousands of miles away and follows an entirely different lifestyle and culture from ours. The never before proximity of people of varying background in both digital and physical world has enabled us to know about a variety of cultures which seemed arcane a few years ago. This ever-widening knowledge about different cultures owing to growing number of touch points to experience various cultures has helped marketers to understand the culture and use their understanding to develop new marketing strategies based on culture.
Culture can be understood as an integrated pattern of human knowledge, beliefs and behaviour. Culture exerts a considerable influence on day to day activities of life thereby forming an integral and important part of anyone’s life. People pay attention when you identify and acknowledge them and they identify themselves with their culture. People of any given cultural group feel more connected to the products/ services when they are advertised keeping the cultural aspect of that particular group in mind.
As they say “One man’s thrash is another man’s treasure”, a promotional strategy which is very successful in one culture might be an utter failure in another culture. One of the classic examples is the ever famous “Bite the wax tadpole” translation of coca cola in Chinese. Coca Cola had to change its name in Mandarin to comply with the “language” which forms an integral part of any culture.
Ogilvy and Mather, the ad wizards of the world have started “Ogilvy Noor” the ad agency of the Muslim world. Ogilvy Noor is the world’s first bespoke Islamic Branding practice, offering expert practical advice on how to build brands that appeal to Muslim consumers, globally. Muslims Consumers occupy a significant part of world consumer base, both in terms of individual purchasing power and number of consumers. Ogilvy and Mather recognized both the uniqueness and importance of this market and by creating Ogilvy Noor it makes ads and offers market insights for companies targeting the Muslim market.
Back home in India, similar efforts are in progress to woo consumers on “culture factor”. India is a motley of cultures with each state boasting of multiple cultures. We have been seeing different Television ads for a single product, each ad targeting consumers of a specific culture /language, some others stressing on the cultural heritage of various regions of India (e.g “The taste of India” campaign of AMUL). This is just the tip of the iceberg, a lot of By virtue of a rich cultural heritage; India offers huge opportunities as well as challenges in the field of cultural marketing.
Culture is not only just a way of life for people; it is also a potential demand generator and a market creator. For example the traditional Indian wedding which is celebrated with pomp and gaiety and which is an integral part of the culture of people is a billion dollar market. It is the biggest market for various goods (e.g. Textiles, Gifts, jewellery) and services (Catering, event management). Similarly the innumerable festivals in India also provide a good opportunity for “cultural marketing”. Crackers and sweets attract very high demand during the festival of Diwali; Greeting cards and other goodies during Christmas, New year time are classic examples of demand stimulated by culture.
Thus we see that Culture has become one of the most important aspects of marketing in today’s world, offering new avenues for marketing products and even encouraging development of culture specific offerings and creation of new markets.