Monday, June 30, 2008

 

Of Butter and Underwear..........

Why Ban Amul?

By Harish Bijoor

Q: Lux Cozy and Amul Macho ads. Have been banned by the I&B Ministry. What does this mean for the freedom of expression? And what does it mean to the creative man at large? Why all this hullabaloo?

-Jayesh Mehta, Mumbai

A: 'Jayesh-bhai', Lux, once upon a time was a cake of soap and Amul a butter I layered my toast with. Today, they seem something else altogether.

First of all these brands of inner-wear have benefited immensely from being raised in parliament. The best of brands promoted with the best of creative input and the best of media exposure seldom enter into the hallowed portals of the parliament of India. These two have.

In the bargain, Lux Cozy and Amul Macho have hogged the lime-light of editorial coverage in both print and television mediums for sure. They have got a bigger bang for their advertising buck than what any media-planner can afford to get and give. In the years gone by, MR Coffee got the same time of attention with Arbaaz Khan and more importantly Malaika Arora coming to the fore on the brand with a piping hot set of sequences of sex, stimulus, steam and coffee of course, as an incidental.

Having said all of this, I personally do believe these pieces of creatives are not fit for being telecast on a mass medium at large. Don’t get me wrong. I am as liberal as you and everyone else in the big cities of India largely is. I am just a little more sensitive on this issue. Sensitive to the fact that India does not live in its metros. India is much more. Three fourths of this country lives in its villages. Another three-fifths of the balance 25% of the urban population lives in the Tier 2 towns of this country. Let’s get sensitive to social needs, wants, desires, aspirations and mores of these viewers and consumers who live in Real India.

Why the hullabaloo? Just for this one reason. Real India hates the sexual innuendo thrown at them and their children from the popular and mass mediums of the day. There is an innocent child-audience out there asking questions out there. There is a bigger child-audience as well out there which is not asking questions of their parents, but is nevertheless getting their answers.

I do believe these brands have understood the market wrong, and have gotten carried away by “creative excellence” as a route to the heart and soul of the consumer. The creatives are exciting, and maybe even excellent. But they lack insight.

The key insight to bother about is this. Most of India is not too excited about the Dada Kondke genre of double entendre advertising. The women of Real India are particularly not excited about this, as they have to deal with the ruffians on the roads who get a bit too carried away by advertising and its exciting creatives.

One more insight to care about. In intimate apparel and under-garment advertising/marketing, it is important to ensure that product endorsement is handled by the same-sex entity. A panty must be endorsed by a woman and a man’s jock by a man. The moment the product is endorsed by the opposite sex entity, as in the case of Amul Macho, one treads into the realm of controversy. Crass appeal is a matter of worry then.

Q: What is the biggest change in the Indian consumer at large? Is it overt consumptiveness? And how is the marketer approaching this change?

-Roopa Mehrotra, Kolkata

A: Roopa, the Indian consumer has changed dramatically. She has become very out-door oriented for a start. In addition to this, she has become spend-oriented from the old savings-oriented Indian. Eating out and the market for narcissism is big. Spending on brands has perked up from the spending on commodity. The skew of spends between brands and commodity is shifting with the scales tilting in favor of brand-spends. Overt consumptiveness is surely here, but only across a small segment of the haves.


Brand marketers have largely geared themselves to this new consumer and everything is targeted accordingly. Some more trends then. The increasing number of double income no kids (Dinks) households is adding to the eating-out mania in the country. This is significant considering that this eating-out pattern is not led only by gastronomic-greed or gastronomic-variety-seeking behavior. Instead, it is all about eating out because one has to. It is eating out by compulsion.

As this spreads, the market for RTE foods and RTD beverages is bound to increase. The RTE market is directly related to the fatigue of eating out.


The process is cyclical. In the beginning you eat good old home food. Then you move on to outside food that is wholesome. And then on to junk food. Tired of it all, one wants to then try RTE foods which can be either heated in a microwave or cooled in a cooler. RTE is the last development in the cycle. Therefore this happens when society is highly evolved in its eating out pattern. Evolved to a point of fatigue.

Statistics available in the eating-out market indicate that we are just about climbing this hierarchy. In Delhi a person eats out 6.2 times and in Mumbai the number stands at 7 times a month. This number is still small. If you take numbers pertaining to the young and single population however, it is much more robust. The eating out habit in the age-group of the 21-30 year old groups in Mumbai stands at 23 and in Bangalore at 27, as per a recent study of ours titled "Retail Eatouts Probe 2007"

Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.

Email: harishbijoor@hotmail.com


Thursday, June 26, 2008

 

The Internet Divide

The North South Internet Divide

By Harish Bijoor

Q: Where does India stand in terms of utilization of Outdoor mediums of publicity in relation to other countries? Are brands using this medium adequately?

-Chanda Pathak Mumbai

A: Chanda, very simply put, we are an under-developed Outdoor economy. We are the “Third”, if not the “Fourth world” in Outdoor usage as of now.

Australia makes good use of Outdoor. In Australia you even have human bodies
moving about as an Outdoor cluster. Walking Posters, if you may! Hungary is good at Outdoor use as is all of Europe. So is Japan.

Utilization efficacy of the medium goes n step with the lifestyle of the people of the country. More ‘Outdoorsy’ our life, the more Outdoor evolves. As we wander
out of doors more, the more is the eye-balls in this business. India is just about entering that phase with more and more people of the house spending more and more time out of home and on-the-go.


Today however, the medium is yet to mature. The medium is at best left as an adjunct and co-incidental medium which gobbles up a wee bit of expenditure of what’s left over from the mainline mediums of television and print. Brands are yet to wake up to the true-blue potential of Outdoor.




Q: Why is Internet advertising in India still so sluggish? So is the mobile phone advertising market. I have been promoting this medium for 8 years now, and yet there are not enough takers?

-Name with-held on request

A: Dear ‘Be-naam’, Internet advertising is still a pretty nascent thought. As you wallow in frustration, please note that other evangelists of mediums such as Point-of-purchase, Outdoor, Mobile advertising, and sundry such mediums have waited more than three decades to see light at the end of the advertising tunnel.

What is required is patience for the moment. The fifth ‘P’ of Marketing is really a very big ‘P’. Patience!


The reaction to the Internet is tardy at the moment. There is a dichotomy here.
India is at the nerve centre of the technological changes hitting the electronic world. At the same time, there is a North-South divide of sorts in Internet space.

We in the South are the producers. The consumers essentially sit in the
North. Our response to the internet and mobile industries is still nascent.

In the arena of telecom, we are adding on 6 million connections every month.
We are indeed one of the fastest growing markets in the world. Our internet
base is however small as yet, with 23 million surfers from India (we have grown at 33 per cent over last year). However, the depth of surfing time is weak as yet; despite India boasting one of the world's lowest broad-band connect rates!


Mobile entertainment delivery is yet to take off as an arena of work here.
We seem to be developing base platforms for the US and Europe, but we are
not too focused on India as yet here.

Bide your time. Your time shall surely come.

Q: Advertising agencies seem to be opening media schools. From the brand perspective, does this make sense? If so, what?

-Jacintha Pereira, Pune

Jacintha, there sure is a method in this madness. A full-play communications agency operating a media school offers several advantages to brand.

For one, it affords a seamless back-ward integration for the agency in terms
of academic input, and a ready school of people who are definitely
positively-coated by the magic of the mother brand.

And in terms of image, it offers the mother brand the positive cues that accrue from being involved not only in commerce, but in education and academics as well
Add one more positive to that. An ad-agency that is deep into education is
certainly not a fly-by-night operator. The image that accrues out of
academic involvement is benign. More benign than all effort at CSR activity
as well.

Remember, in India we worship two primary Goddesses. One is Saraswati and the
other is Lakshmi, among others. Saraswati comes first and then Lakshmi. We
have always revered education ahead of wealth creation.

An agency that makes Lakshmi and takes care of Saraswati as well, is indeed
a benign one.

And there is plenty of method in this madness for sure.


It offers the group a feel that is macro and more involved than another
agency involved just in commerce would have. Overtly it is this, and
covertly, it is creating for itself evangelists as alumni. Never mind
where they will work in the future, they will always remember their alma
mater with pride.

This positive equity is pretty immeasurable.

Q: Can you tell me one good example of a Tourism brand in India? And what are the challenges in building such a brand?

-Gopi Santhanam, Chennai

-I take Kerala Tourism as a classic inbound travel program and Singapore
Tourism Promotion Board and its efforts in India for outbound travel.

If you view the entire brand promotion kit of Kerala Tourism, you will see
all the fine details that are contextually correct for the inbound audience.
Not only has this been done, but efforts have been made to educate every cog
in the tourism game, from taxi-driver at airport to restaurant waiter and
bell boy. The effort has been a seamless one, and does not depend on
advertising alone.

And this is the mistake most tourism brands make. They make lovely pieces of
advertising that promise the sky and deliver the boondocks. No effort is
made to correct the ground level realities of infrastructure, soft issues of
tourist handling, courtesy and convenience and a host of 47 issues that need
to be looked into to provide a seamless brand offering.

Tourism is tough business, as there are a host of deliverables that need to
go right. Satisfaction in this space is a cascade of positive experiences.
This cascade of experiences needs to be seamlessly right. One wrong
experience is likely to nullify the effort of all else.

God is therefore in the details of the delivery. Therefore, Kerala needs to
be not only God's own country in its advertising promise, but in its
physical delivery terms as well. Consistently.

The challenges are many for sure.

Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.

Email: harishbijoor@hotmail.com


Wednesday, June 25, 2008

 

The animal link in Consumers

Did you smell your Nalli saree right?

By Harish Bijoor

Q: How evolved is the Indian consumer? And are all consumers in India equally evolved?

-Pritham Bhasin, New Delhi

A: Pritham, there are two views on this. From a pure Darwinian perspective, all consumers who call themselves human beings are reasonably evolved. Yet again, if you peek into consumer lives keenly, you will see chinks in this process of evolution altogether. Let me focus on one to give you a peek at the answer to your question.

I will dip into a recent study we under-took for a specific client, whose name I will not mention. The question: Is the consumer an evolved animal? And if so, how evolved? Here it is. The results at a glance.

What we find in the gut of the Indian market is very interesting. We find consumers in India as animalistic as consumers in Bali and most certainly as those living in the markets of the Dak Lak province of Vietnam. We are therefore very connected to the world at large. All consumers in a sense, across the globe, are similar.

The consumer ethos is similar in these markets. The consumer is essentially a human being. And all human beings are animals. Social animals if you please!

All animals behave similarly. Some animals do it openly. Others do it closeted. But all do it.

Do what? Many things. Pritham, think of yourself and place your hand on your heart and see a bit of yourself in some of these diagnostics. Answer one question first.

Do you smell some body part or the other at some point of time of day or night?

You actually do. You might do it in the confines of privacy of your making, but you do. Now list out the body part you smell.

Some do the innocent stuff. The fingers after biting off a piece of nail? 82 per cent do.

The arm pit? 91.2 per cent do.

I have a list of seven body spaces that you indulge in, but let me not go that path, lest I embarrass you and your sensibility. Not to speak of the sensibility of the rest of the readers of this column.

Worse still, do you like eating some bit of a body part or the other on some days of the month?

You do. Do you remember biting your nails off and chewing on the skin around? And let me not traverse this direction more, lest I paint you as a mini-cannibal of your own making.

Is the consumer an animal? I think she is. He is.

We have evidence from markets in India where consumers pick up and smell the saree before buying it. Consumers pick up denim jeans and smell it before buying.

Smelling coffee powder before buying it is a normal aromatic chore. Is smelling a pair of jeans similar? It is.

Man is essentially very sensorial in his purchase behavior. When you buy something you like to see it. You like to touch it. The consumer is a tactile entity. You like to smell it. At times openly, and at times without anyone seeing what you are doing. You like to taste it, if that’s possible.

We are all animals.

Q: Some of us run smaller companies than others do. The number of small companies must surely outnumber larger companies in India. Is there a difference between branding and advertising? And if there is, what is it?

-RC Chari, Hyderabad

A: Chari-gaaru, branding is the core strategy and the core component. Advertising is the execution. There is a misplaced sense of importance that ignorant clients place on advertising. There is equally some confusion that the two are the same. While both complement one another, they are just not the same. One leads to the other. One is more visible than the other as well. Both are equally important to the purpose of marketing at large.

It is important to realize that in today’s context, the ad agency brings in the creative and executional excellence of a thought. The thought itself, which is the key part of branding, comes out of a different process altogether. This process is branding-centric. And this is what differs from advertising.

Branding is consumer-insight centric, and is the foundation on which all of advertising is and will be built.

Q: We see a lot of In-movie advertising today? Does this work?

-KS Sampath, Chennai

A: Sampath, ‘In-movie’ branding can be overt at one end and covert at another. Overt in-movie branding is all about the huge Videocon glow-sign that keeps popping up at every dance sequence and the rather larger than life cut-outs of a Bournvita peeking out now and then.

Covert in-film branding is all about using the brand within the script in a rather non-intrusive manner. In a manner where it seems accidental even.

I do believe covert branding works better in films than overt. When brands are woven into scripts subliminally, and when the script itself speaks the language of the brand, efficiency is at its highest.

Cinema is a popular medium of the masses. Mass brands can utilize cinema with efficiency to promote their line, tone and tenor.

Q: Some studies indicate that rural women make decisions in rural markets and men buy. How do you target men and women differently in your advertising and marketing?

-Jayashree Ruparel, Mumbai

A: Jayashree, this is true.

For this, there is need for two kinds of media inputs. For the women, you need in-home inputs. Television and 1:1 contact is an ideal way. Television is easier, but there is clutter. 1:1 is difficult and expensive, but is very efficient.

For the men we need inputs at the shop level. I therefore plug heavily for rural POP (point of purchase) material heavily, to create that impulse reminder.

Use this mix to advantage, and you are home! In the rural home!

Q: How does the common farmer insulate himself in the wake of organized retail stepping into the fruit and vegetable markets as well? I grow tomatoes for the export market.

-JS Gill, Hoshiarpur

A: Gill-ji, the farmer has two options. Either go direct or become in a pawn-supplier in the big game of organized retail that is hitting Indian shores.

Imagine a situation where the farmer is a pawn-supplier. Imagine Reliance Retail. Reliance Retail will need to source fresh fruits and vegetables. It will tie up a farmer for this effort. The farmer gets a fixed price right through the year. This is one way to do things.

I do believe this is the way supply-chain monopoly will emerge in the farming sector in India in the future. You can’t beat them, join them. Ouch!

Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.

Email: harishbijoor@hotmail.com


Sunday, June 22, 2008

 

Clustmaps

Locations of visitors to this page

Thursday, June 19, 2008

 

Colors and Brands

Organized Retail’s Organized Challenge

By Harish Bijoor

Q: How important is colour in the game of branding? Can brands really own colours in the minds of consumers?

-Rohit Hemmady, Bangalore

A: Rohit, first of all we are talking of a very serious game. Branding, if a game at all, is a very, very serious one. One which can actually make and break fortunes. No wonder then that there is so much of corporate investment in the process of branding at large.

Having cleared that sensitive semantic hurdle, let’s come to the issue of colour and its importance.

Colour is essentially a basic differentiator. And brands by themselves are differentiators that occupy higher hierarchical status in the differentiation stakes. Colour is one of the first things that helps set brands apart. Therefore, if you are a Cola and a red has been usurped by a Coke and a Blue by a Pepsi, go for a green or a yellow. Never mind that they would look corny on a brand of Cola for the moment. People will get used to it. But for heaven’s sake, don’t make the mistake of being another red or a blue. Or worse still being a mix of both. You would die on the count of differentiation ability.

Colours can be owned by brands. In fact these colours for specific brands are owned in consumer minds. A prominent brand cannot play about too much in this colour-coded consumer’s mind most of the time.

Colour can be used strategically too. Take the case of organized fruit and vegetable retail in India today. The sector is essentially one dominated by the small vegetable seller with his cart and the small vegetable shop alike. Organized retail in this segment till now meant the Co-operative society, the Horticultural department with its stores and the like.

Today is however different. In comes a Reliance Retail with an all-India format of fruit and vegetable retail. The colour chosen is a dominant red and bright green. Red is for the fruit and green is for the vegetable, I presume.

Look around at everyone else in this space. Heritage Foods is the same. Subhiksha is the same. Most new-comers will follow the same colour logic. This is the strategic use of colour. Maybe accidental in this case. The moment you think fruit and vegetable retail, you will think these two colours.

For the brands that swim in this segment of the market, things pan out differently. For a Reliance juggernaut, their colour use is not unique and will therefore become part of the commodity space of organized fruit and vegetable retail. At least in colour terms.

For the smaller players in this space, this is good. Reliance will do all the advertising for the category with the colour and all its appeal. In-store branding experience eiwll add to this. The spillover effect of colour sharing will surely come along the way of a Subhiksha and a Heritage. This is surely the positive fall out for the smaller brand, where sharing the same colour as the market leader can only give it more and more advantage as a point of consumer choice, and indeed consumer confusion even.

Q: What do you see to be organized retail’s biggest challenge in India today?

-Yogendra Pathak, Bhubaneswar

A: Dear Yogi, the biggest challenge being faced by organized retail in the country is that of people.

While largely, most players have bought the best of systems, the best of bench-marked practices, the best of real estate and indeed the best of everything else, the biggest challenge is retaining the best of people to work for them. While all other items inanimate can be managed with ease of consistence and surety, people are the biggest variable in this business.

If you are in this business, every quarter is a challenge in terms of people. If the best of your people have stayed on with you in the last quarter, stay happy. Celebrate.

The people challenge is across all levels. The most critical levels are right at the top and right at the bottom. The CXO of every description and the front-ended store hand who interacts with consumers are the two most valuable resources that face the crunch.

Everyone in retail wants the high-on-performance and high-on- image CEO. And equally everyone in modern retail wants the true-blue performers who manage consumers at the front end in their stores. These are the true-blue store warriors who ensure repeat custom at the store of choice.

Managing people is therefore today a science that demands multiple variables to interact with one another and multiple disciplines to interact to make it a model of success.

There is research evidence that 76% of people in retail, ITES and the media and entertainment industry in India leave their jobs because of one big reason. Their immediate boss. Rectifying this immediate-boss situation is the one to seize in hand now and create a positive cascade that helps keep people back.

Sadly Indian retail is a long, long way away from being automated. Till such a time then, people will rule. People will therefore continue to pose the biggest challenge for most retailers.

Q: Why is advertising getting more and more stupid? The advertiser is scraping the bottom of the drum as he brings appeals that don’t exist into the market.

-Sushma Selvaraj, Chennai

A: Sushma, Shhhhhhhhh! That’s called creative excellence. The advertiser’s goal is simple. Get the eye-balls to happen in a clutter-dominated market. If your piece of advertising can stand out of the clutter, never mind how, so be it. Awareness scores are important. One way of getting it is the inane appeal and the stupid appeal even!

More importantly, do remember, a society gets the advertising it deserves. Touche!

Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.

Email: harishbijoor@hotmail.com


Saturday, June 14, 2008

 

The Pricing dilemma on brands

Price. Exciting Price!

Q: Pricing has always boggled me. How do marketers price their products? What’s the logic at play?

-Jayanth Reddy, Hyderabad

A: Jayanth, pricing decisions are largely as personal as the product or service is. There is really no one formula most marketers use, but it is useful to look at some ways that most dabble with.

The typical and traditional brand will toy around first with the Cost-based pricing system of yore. This simply means price your brand of tooth-pick based on what it costs to make it. If your tooth-pick is a simple balsa-sliced output, work out the stable-state cost of Balsa wood in the market, work out all input costs that would include processing, curing, slicing and sharpening of wedge. Add packaging costs. Add the cost of selling and distribution and most certainly the cost of advertising. The cost of capital to finance the entire operation as well. Add labour. Add transportation cost to that. Add the cost of wastage as well. Add literally every cost there is to think of.

This would then be the cost-based method. Add a margin to it, and the price of your end pack of branded tooth-pick is ready.

And then there are market price-based systems which most marketers use. You are just about to launch this exciting range of lingerie. You look around in the market excitingly, peek at the competition and check out the prevailing prices marketers are realizing. You then bench-mark your product quality somewhere out there on the scale of availability of competing products. You arrive at a price. You hold the price.

What-the-market-can-bear systems abound as well. These add premiums. The cost of the product may be all of twenty two rupees, and competing market offerings may be at the level of fifty five rupees. You decide to price your brand of packaged, branded Neem sticks (for daily morning dental hygiene use) at all of a hundred rupees.

There is no cost-based rationale here at work. No market-price based logic as well. The product is unique, has no competitors in the same category, is looking for an up-grade from the category of plain old and boring tooth-paste to Neem twigs, and the category is a buzz-category of the future, where it will be politically and fashionably correct to be seen brushing teeth with Neem sticks. You then price at a peg that you wish to. You price at a level of what the market can bear.

You could be an exciting predator as well. Predatory pricing would mean you pricing your brand of Gingley Oil 10 per cent below the cost price. In terms of prevailing market-price of competitors, it could as well be all of 40 per cent cheaper.

A predator will price his product below the cost of production even. This is a short term measure though. The predator will aspire to vanquish competition swiftly with his better product at a cheaper price formula. He will go on for all of 18 months, by which time the prevailing competitor has collapsed. He will then slowly raise the bar of his prices, till he reaches not only a break-even, but a whopping profit as well.

Watch out though! Most countries have very stringent predatory pricing laws.

Scarcity pricing. Out here, you will price based on degree of scarcity of the product. Your branded Onion will become more and more expensive as the commodity gets scarce. Milk powder brands will become more expensive when there is scarcity of liquid milk in a market and cheaper when there is plenty of availability.

Input based pricing. This is an exciting one. The theory is simple. Base the price of your product basis the quantum of inputs that went into its making.

Take coffee beans for instance. Calculate keenly how much of water went into its making. Calculate similarly how much of water goes into the growing of sugar-cane. Calculate the same for tomatoes, potatoes and Yam. If tough old yam takes the least bit of water and sugarcane takes the most, the price of sugarcane per comparable unit, will be the highest and Yam will be the cheapest.

This in many ways is the best way of pricing anything. Remember, water is a scarce resource. How was that resource managed to achieve the end output of potato or coffee or Yam? This in many ways is a very socially-equitable method of pricing as well. Remember, water is but one input you consider. You will need to take every other input there is as well.

Jayanth, there are twenty-nine other methods of contemporary pricing, but we will leave that for another day. This column can take only so much.

Q: Who, what or which is the most important change agent in Indian markets today?

-Shobha Rajaratnam, Mumbai

A: Shobha, you are either a lawyer, teacher or counter-intelligence agent. Your question-language tells it all!

Very simply put, the most important entity in Indian marketing today is the consumer. Nothing and nobody is more important in markets than consumers. Everything else is predictable. The consumer is not.


Q:
Do mascots play a crucial role in the existence of the brand? In today's
context, was it sensible to pare off Gattu's association with Asian Paints or
does Air India need a Maharaja to address new millennium India?

Joby Matthew, Kottayam

A: Joby, I believe a mascot can be forever. There is just no need to phase out a
mascot provided you have nurtured the mascot over the years, keeping up with
the requirements of the Joneses of the years in question.

Only when you don't do this assiduously do you suddenly realize that your
mascot is outdated and might just have to be killed and buried.

In reality, brand mascots can live as long as a brand can and does. Care in the management of the mascot is the key issue at hand. Mascot management is a science and art in itself.

Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.

Email: harishbijoor@hotmail.com


Thursday, June 12, 2008

 

Regional Brands and Rural Profits

Is the Cafe Culture for real?

By Harish Bijoor

Q: Is the much-hyped Café culture for real? How do you see it moving over the years?

-Raksha Gupte, Mumbai

A: Raksha, this one is close to my heart. In many ways coffee remains my first love. Let me trace some of this Café culture for you.


The first Cafe in organized space happened in 1996 with Cafe Coffee Day opening its first outlet on Brigade Road in Bangalore. The seeds of the revolution in Cafe space in a manner of speaking was sowed by this early development.

In a generic fashion however, the Cafe in a different avatar as we know it, has been around for a hundred years and more. This is the Udipi restaurant of the sit-down variety and the stand-up avatars of Darshinis as we call it in South India. The country has all of 63,850 such outlets offering great coffee to all those who desire it.

The future is all about a rapid expansion for the first stage. I typify three stages in this revolution. The "early phase" of establishing the plain-vanilla concept of the Cafe. This started in 1996 and is all of 11 years old as of now. This has resulted in all of 831 Cafes dotting this country.

The "mid phase" is the one we are just about entering. This is the phase where Indian entrepreneurs like VG Siddartha of CCD and Amit Judge of Turner Morrison (who started up Barista) have done the start-up work. The category has been developed by the early entrepreneurs. The category has developed and has attracted the attention of the biggies in this space across the world. In will come the biggies now, either on their own, or through a process of mergers and acquisitions. Or through special purpose vehicles specially create. A Starbucks entry is the classic example. But there will be more.

In this mid-phase development, the numbers will boom. This is the time when the traditional players like CCD and Barista will expand on their own numbers to keep pace and even out-pace competition such as from Starbucks. There will be a complete sprucing up of offerings across the existing chains. New competition will spur on better quality offerings in terms of hygiene, array, service and delight. The consumer is the gainer.

The lowest-common denominator Cafe will morph as well in this phase. The Café will offer more and more of both variation in form and variety on offer in terms of food, beverage and ambience.

The third phase is one we will enter some three years from now. Cafe 2010 lets call it! This is the phase when the numbers would have touched all of 2000 plus Cafes in the country. Now the Cafes will become reasonably 'parri passu' in their offerings and the lowest common denominator Café will morph further. Cafes will splinter in their positioning stances. Some will be plain vanilla; some will be for teeny boppers. Some for the thirties. Some for the oldies. And then there will be Rock Cafes just as there will be
Cafes for those who enjoy Trance. Cafes for same-sex couples, Cafes for politics, and Cafes for culture. The options are many.

The Cafe culture is bound to survive and thrive. What is important is that Cafe chains need to have their fingers on the pulse of their customers. This will help them morph in the right direction to profits.



Q: Rural markets are difficult to access due to the issue of profitability. Am I right? How are the trends here as of now?

-RB Joshipura, Pune

A: Joshipura-ji, with the growth of average bill share from rural outlets, servicing of these markets direct is today a possibility. Rural marketing, which hitherto was a long-term market seeding operation in the past, is today a break-even possibility as well in most markets, a profitable proposition in a small percentage, and of course remains a profit-nightmare in many markets as well.

The rural market is suddenly not such a slow-burn process anymore. Marketers are seeing light at the end of the tunnel. In some villages the tunnel is longer than the other. In some villages, there is no tunnel at all, to the delight of the modern marketer on his rural marketing hunt.

Newer distribution channels that depend not only on what I derogatorily call the Alimentary canal system of distribution we have known for 80 years plus in India (viz. the one dominant distribution system that moves stock from the factory of the producer to the C&F agent, to the Distributor, to the wholesaler and then to the retailer, to whom consumers come to) seem to help in this profit search as well.

Hindustan Lever’s experiment with rural entrepreneurs who do something similar to a peer-to-peer selling exercise is one such. ITC’s e-chaupal is another model as well. These examples are becoming old now, with newer and niftier models from across a spectrum of durables, household-products and services have emerged successful. Small entrepreneurs in this space have the biggest success stories to tell. Listen to them.

Q: Do you see a future for small regional brands that have survived in niche markets over the decades? Or do you see them being trampled over by the big MNC players? How does one approach the future here?

-Sanjay Agarwal, New Delhi


A: Sanjay, in a world that is getting increasingly clonal in its offerings, regional brands offer differentiation abilities that have a USP of their own.

Look at it this way. The whole world of brands is becoming a ration shop of sorts. The global brand dream is clear. Everyone in the world must one day use a Lux to wash their bodies and a Surf to do their clothes. Your teeth must touch a Colgate. As this dream becomes more and more of a reality, smaller regional brands will emerge to be clutter-breakers in categories that have largely got clonalised.

I do believe people will get tired of brands that look too factory made, too synthetic, too organized and too big. Look at a cake of soap. Most of them have lowest common denominator perfumes. Over a period of time, the marketer understands that most consumers like a particular smell. Therefore "the plain vanilla scent", as I call it, emerges. Regional brands will aim to break this clutter.

People at large are becoming tired of the big brand message. Big brands are seen to be premium offerings that skim the consumer purse as well. Small brands that do not advertise as much are considered to be offering more value.

Further still, it is important to understand that the region is more homogenous in its needs, wants, aspirations and desires than the nation at large. A person in Andhra Pradesh thinks and emotes in a more homogenous manner than a person in India as an averaged out cluster market. National brands offer brands for the averaged out cluster while regional brand offer specific offerings to the localized and more homogenous mass.


I therefore do believe that regional brands have a good future. As national brands find it difficult to penetrate some clusters where these regional brands are strong, and as they scent the opportunity of these local brands, acquisitions will become a norm.

Regional brand players can have one of two business revenue models. The
first could be to build, operate and continue to operate regional brands for the distant future, or the second wherein they could act like "brand planters" who will build brands with the pure purpose of a sale to a bigger entity. Once the old brand is sold off, get back to the activity of creating more. Brand harvesting was never as good as this before!

Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.

Email: harishbijoor@hotmail.com


Tuesday, June 10, 2008

 

Colas and CSR

CSR By Force?

By Harish Bijoor

Q: When is a brand a brand?

-Revathi Reddy, Hyderabad

A: Revathi, this is a philosophical question at large. Let me answer it with as little philosophy in the answer as possible.

I believe a brand is a brand when it is perennially in your dominant psyche. It need not be a purchase, but it very definitely needs to be a dominant thought. This will irritate the sales guy in the forefront of the marketplace. And so also your top-line sales seeking CEO. But this is true. Branding in reality, has very little to do with sales. Very little to do with buying and selling. The day you as a brand manager understand this, despite the bullying influence of your CEO from above and the sales team from below, you have arrived.

The brand is a pure form. A form that does not need the sanctification of a purchase to endorse whether the brand is a brand.

I believe a brand is a brand in the real sense of the term when you buy it without a thought even. Without even a thought to linger and say that there is a competing product to buy even. A thought that cannot be shaken or stirred, come what may.

The brand is a convenience. People like you and I are always on the run. We are forever living lives that demand decisions of every kind, every now and then. You need to decide what shirt to wear in the morning and what trouser to match. You need to decide which movie to see and which to avoid. Which friend to meet and which to run away from.

In your choice of brands as well, as a consumer, you are forever deciding. I believe a brand is a brand when you stop deciding which brand to buy altogether. When the decision comes by rote, it is indeed a brand.

In many senses then, in a category where there are no choices at all, there is a brand! When Milkmaid was all alone as a condensed milk, there was just no decision to take. When in came 'Mithai Mate', you had a choice. If you continued to ignore 'Mithai Mate' despite the allure of the company Amul, despite good quality cues, despite the allure of its advertising, and most importantly despite the allure of its price even, then Milkmaid is indeed a brand.

A brand is a brand therefore when you stop deciding. A brand is a pre-made decision. An unquestionable one. Unchallenged.

Look around our lives. How many of these exist in your brand psyche? Two? Three? Out of 800 plus that are dominant in our everyday lives? None?

Q: How come the Cola companies in India are out on a spree of looking nice and sounding right? Why all this CSR advertising?

-John A Challadurai, Trichy

A: John, I do believe the Cola category in India is going to fast become what I call the "socially ostracized” category. These are categories of non-healthy foods and beverages. Sugar, Oils, Pan and Gutkha.

Liquor and cigarettes are the prime occupants of this category. The Cola is about to join this category.

This is therefore preemptive action. Good and sound.

Sadly, companies today seem to adopt CSR stances only when pushed against the wall. On very few occasions out of their own volition

Q: What’s the role of CSR in modern marketing society? What’s the theory behind it all?

-RN Singh, Delhi

A: Singh-‘saab’, there are simply three marketing formats to follow in a society as it morphs. In the early stage, society is all about “I, me, myself”! At this stage in consumer societal evolution, the marketer gets away using the language of hedonism and pleasure. The “I, me, myself” kind of product and service works well. The ‘Axe’ effect works here!

And then there is the stage when the consumer has gone beyond that basic stage. He is now concerned about the people around him. His loved ones. His family of four. His extended family of four more, mother, father, father-in-law and mother-in-law, last to be included!

This kind of man likes brands to be inclusive in their language, tone and tenor. This kind of man wants products that are good for the entire family! Never mind the rest of society, just as long his close-knitted family is taken care of, he is fine! The 'Annapurna' atta story works here!

And then there is man who is more conscious of more people around him. This is the kind of guy who is bothered about the good of his immediate neighborhood and society! He wants his entire neighborhood to be happy! The ‘Lifebuoy’ “clean the neighborhood” story works here!

There is macro-man then. This is the kind of person who wants the good of his immediate society and his entire planet. This is the kind of guy who wants to use bio-based detergents that don’t hurt the eco-system! The ‘Surf Excel’ “Do bucket paani bachana hai” theme works here!

And finally there is Cosmos man! Concerned about the cosmos, much of which he does not know even! We are yet to get there!

CSR works at every level. CSR is an inclusive process! A process that embraces the good of society in a very inclusive manner. This inclusiveness could start at the level of the immediate family and morph on to embrace the entire Cosmos.

CSR plays a vital role in taking commercial brands out into the commercial marketplace with a theme that is appealing to the sense and sensibility of the modern consumer. CSR is therefore a valuable tool that marketers can use to market their brand of soap, detergent, sugar and tea with equal panache and commercial effectiveness.

CSR is not at all about running public hospitals and schools alone. CSR is not about sending Tsunami relief material to the trouble spots of the world. That is old hat! It is much more! The modern consumer understands CSR that much more intimately when you touch his life, with a wee bit of CSR in your soap. A wee bit in your shampoo! In your kids diapers and feminine hygiene products as well!

The future of marketing is full of CSR! Of a different kind!

Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.

Email: harishbijoor@hotmail.com


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