Saturday, March 08, 2008


The Promiscuous Indian Consumer

Of Bellies and bladders

Q: What are the major changes that you have seen in the rural markets in the last decade in terms of size of market?

-Pobbathi Rajshekar, Hyderabad

A: Dear Raj, the rural market has always been a big one for India. Three-fourths of all consumption lies here in sheer population terms. Only less than a quarter of the population lives in urban areas.

The population numbers occupying rural spaces have however shrunk over the last several decades. This is what I call “Creeping urbanization” affecting rural masses in a state of market and habit transition. The rural population, over the decades, has shown a trend wanting to move into a state of gradual urbanization in terms of exposure, habits, life-styles and lastly consumption patterns of goods and services.

In rural areas, we have key issues with the populations that live on and off the land. As the generations go by, land holdings are splintering, with successive generations getting less and less land to farm upon and live off. This is causing for a gradual urge for better life-styles, as seen happening in urban centers. This movement and aspiration is further accentuated by mass media, which today penetrates 98.9% of all areas Urban and rural. This media is not segregated media for urban and rural. This media’s dominant visual, tone and tenor is the urban lifestyle. This is actually making for a salivating generation in rural India that wants to migrate physically, emotionally and aspirationally for sure to the urban mode of living.

Back to the size of the market then. The market size has always been large. The largest numbers of bellies and bladders and indeed every organ part that requires marketing satiation lies in rural India. The size of this market is well over 700 million! All these individuals have needs, wants, desires and aspirations that anyone in Urban India has. The fulfillment of these needs hitherto was on an un-branded commodity format thus far. Today however, there is a rampant craving for the brand offering for a host of needs. This craving is suddenly giving the market a boost as brands find takers in markets that hitherto frowned on the branded produce that lacked value differentiation in their minds.

The size of the market for branded goods and services therefore looks suddenly big.

In sheer comparative terms, the rural market size is exciting by a factor of 1:3 for sure. For every color television set that is demanded in Urban India, three will be demanded in rural India.

The market is a very involved market as well. Not as cynical a market as most modern urban economies where brands are suddenly being seen as entities that do not necessarily pack value. Brands in these urban markets are seen to pack premium, and not necessarily value. Not so in the nascent emerging rural markets of India. Therefore the market size is large, involved and has the potential of packing great marketer premiums for a while to come.

Q: in the recent past, there have been a lot of logo changes. Why do companies change their logos?

-Rajeev Sikka, New Delhi

Rajeev, many, many reasons really. Here are five for a start.

1) One is certainly the need felt to re-define corporate culture within and
without the organization. In such a case, companies suddenly find their
existing logo to be a burden it is carrying. A part of the old heritage of
organization. Something that was thrust on it by a very old founding
management that believed in a different credo altogether.

In such cases, the company believes it must change tack and move away from
the definitions of organizational purpose and reinvent itself. As it
reinvents, it wants to shed the old logo and adopt a new one.

2) Yet another reason is when a company finds a logo too frivolous for the
intent of organization. We must realize that when most old logos were
created (ones that have been around for more than 50 years), the fonts
available were basic and so were the colors. Half tones were not
encouraged, leave alone quarter tones. In the bargain most logos did not
look solid enough and some even had a basic frivolity around them. Companies
therefore want change.

3) And then there are companies which want logos changed when there is a
split of business. This happens mostly in family run businesses. Take
Reliance for instance. The Anil Dhirubhai Ambani Group versus the Mukesh
Dhirubhai Ambani Group. Both need different logos. One inherits it, and
another creates it anew.

4) Companies further want to look contemporary. The Wolf Olins re-creation
for the Tata group was one such effort.

5) Name changes of companies necessitate logo changes as well. A company
that goes for a drastic name change, where it moves away from a generic
sounding name, might call for a logo change as well. Take for instance the
rather hot InfoTech Enterprises based out of Hyderabad. Despite its very
varied and prosperous lines of business, it remains in generic name space
and hence gets reasonably lost in recognition space. If it changes its name
in the near future, it will undergo a logo change as well.

Q: Would you agree that the Indian consumer is more
promiscuous today than ever before?

-JS Manian, Chennai

A: Manian, I think the Indian consumer is certainly more promiscuous than ever before.

In any society promiscuity is essentially polarized between the two
ends. The higher income group at one end, which can afford the best of
brands, and at the other end to the lower income group, which quite doesn't
care as much about brands. The middle income group (the large middle class)
is the most loyal of the lot.

The reason for this promiscuity is the fact that the Indian at large is more
and more exposed to media of every kind that offers the best of range and
variety. The Indian is getting very range-conscious and is getting rather
impatient with brands. The brand experience one wants to secure from brands
is also getting broad-spectrum in appeal. Brands that offer narrow solutions
are getting the raw end of the consumer action that results in dumping of
the said brand.

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

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Friday, March 07, 2008


Vicarious Corporate Social Responsibility Activity

Vicarious CSR Activity?

By Harish Bijoor

Q: Corporate Social Responsibility activity seems to be emerging as the new marketing tool. What’s with it?

-Rohit Balakumar, Delhi

A: Rohit, CSR is a strategic marketing tool for sure.

Let’s take the highly visible soft-drink category as an example. It works this way. In the early days of marketing, the USP is essentially physical. It is all about the taste, the color, the clarity of the liquid, the refreshing ability, the fizz and such other sundry product features.

In mid-marketing years, the functional USPs are over-done. Every marketer in the space has used some or all of it, at different points of time. The consumer at large has tired of it all as well. There is a degree of consumer cynicism that sets in on these functional USPs. The USP has got commoditized.

Therefore in comes the emotional USP. Here, the Marketing USP of the product is all about focusing on the arena of product benefit. What the consumption of the product leads to. These benefits could again be functional or emotional. For instance in a tooth-paste, it could be whiter teeth and in a Cola it could be the ability to quench thirst. Further still, the emotional USP could be about the tooth-paste getting people in Close-up situations and in the Cola category the ability of the brand to actually help people make friends. "Food, friends and Thums Up" for instance!

The emotional USPs can climb from the sublime to the ridiculous. In such situations brands advertise crazy situations even! Quite like the toothpaste with Oxygen in it attempted!

When consumers tire of the emotional USP as well, we enter the later marketing era. Here, the consumer is rather cynical of the functional and emotional USPs altogether. The marketer notices this. In a bid to capture mind-share for his brand, he does some degree of self-criticism of the category and its advertising on the whole as well. Quite like what Sprite did with its "Baaki sab Bakwas, sirf Sprite bujhaye pyaas” campaign with shots of bathing in soft-drink even at play as the dominant visual.

In the later marketing years, in comes the role of the CSR USP. Here, consumers of the category have climbed Maslowe's hierarchy of needs and are cynical about basic product and emotional USPs of every kind. Even tired of the device of ridicule as USP.

In comes CSR as USP. CSR appeals to consumers sitting atop Maslowe's hierarchy of needs. These are the self-actualizing consumers who like to think that the product they drink is politically correct and that their contributions to the brand actually help contribute at large to the society they live in. This is vicarious Individual Social Responsibility (what I call ISR activity).

Indirect social responsibility activity even! This is quite like indirect taxation. When you buy a product you actually fork out a sales tax which is a form of indirect tax. This is in addition to the direct taxes you pay.

This is indirect CSR. Makes you feel happy, provided you are at that state of self-actualization. Vicarious CSR.

A good tool to use in tired market categories such as Cola and Tea. Therefore you see a Pepsi with its campaign and Coke with its "Little drops of joy" and Tata Tea with "Jaago re" versus plain old "Utho"!

Q: College youth festivals seem to be attracting mega-bucks. Why? What is the rationale here?

-Monica P Tiwari, New Delhi

A: Monica, college cultural and sports festivals are seen to be low-cost marketing options by some sets of Corporate houses. Festivals are occasions of on-campus frenzy. Further still, apart from the actual students attending the festival, there is some degree of media coverage that helps brands in the overall context.

Brands are willing to invest money for one other reason. Youngsters on campus are at a reasonably impressionable age. Catch them young is certainly the buzz slogan here.

One other reason as well: The alma mater influence.

Most moneys that come in as sponsorship come in from senior managers and CEOs within brand organizations who are alumni as well. There is a benign contribution angle here as well.

Festivals are on the whole positive occasions when a lot of positive consumer sentiment can be harvested to the benefit of the brand. Irrationality rules high during festivals, and the marketer loves to harvest irrationality.

A lot of money moves into festival marketing of the Ganesh Utsav and Puja kind in the country. Dandiya as well attracts a sizeable amount of money. The college festival is another such festive avenue.

Q: Do the logos of Private sector banks stand out more than those of Private sector banks? If so why?

-Pavithra Ramana, Chennai

A: Pavithra, not always true.

This is true largely in the bigger cities of India. In the smaller towns, and we have plenty of these in our country, the traditional old logos of Public sector banks still hold water. Public sector banks are still respected in the bulk of the country. The keyhole of an SBI, and the Icon of Vijaya Bank, and the memory of the Pigmy collector of Syndicate Bank are still fresh in the minds of people who stay in what I call "Real India". Virtual India lives in the bigger cities. This part of India is more besotted with the big names like a Citi and a Stanchart.

And even in the big cities, there are a host of people who read the fine print of the banking sector carefully and still appreciate the Value-for-money services afforded by the Public sector banks in the country.

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


Thursday, March 06, 2008


Brand and Product Chess

Edgy-buzzy Gender Stuff

By Harish Bijoor

Q: What is this trend of segmenting products for women and men differently? I am referring to the recent launch of Women’s Horlicks by GSK.

-Mrs. PK Ganapathy, Mumbai

A: Mrs. G, this is just the beginning of a trend. Segmenting products and services by gender is a new trend in the Indian market for now. It is however a trend that signifies that India as a discerning consumer market is just about happening.

The demographics of the Indian market is a supportive fact to this.

Slightly less than half the population is female. Look into the data churned out from the bigger metros of India. The share of working populace between the sexes in the big metros has shifted dramatically over the years. Today, as much as 19 per cent of the women in the big cities work out of home. Of these, 11 per cent find themselves in blue collar jobs.

The out of home culture is hot among women in the big cities in particular. This helps products such as these skewed to the woman on the move.

In many ways these products are a wee bit before their time. Those pushing these early-state products are doing it to appear at the cutting edge of consumer understanding. The ones who do it first will be remembered the most.

At least for a while.

Volumes are absolutely niche. Nevertheless, the image shares these brands enjoy is good. This is differentiation at play. This is edgy buzzy stuff. And women love it! Never mind they may not buy it. They love the fact that some companies are out to pamper them. GSK is one such with its Horlicks offering, as is Kellog’s with its own variant of breakfast cereal.

The marketing idea of gender segmentation of products is all about the differential and differentiated needs of nourishment for different body types as embodied by the two sexes. Women fulfill many roles that men do not. So, create a new solution! Horlicks for women is one such. There will many more that will follow.

Q: If you were to point at one big opportunity area for the marketer of the future, what would it be?

-S K Tripathi, Jaipur

A: Tripathi-ji, when I look at potential categories of relevance for the future, the first thing I pick is the lowest common denominator category of food and beverage. My rationale here is the universal truth that people have bodies. These bodies need sustenance in terms of food and beverage. These are what I call "staple sustenance" categories. They will never go out of fashion.

Further still, when you look at India, we boast of the second largest numbers of bellies and bladders in the world, after China. Our 1.039 Billion population number is a number that craves for these "staple sustenance" categories.

There are opportunities in the realm of food and beverage both at the product and service end. I do believe the opportunity is bigger in the food and beverage service end though.

What’s the key insight here?

Insight: while food is important, the consumption habit of food itself comes a full-circle.

In the beginning, the best food is good old home food. People either tire of eating home food, or alternately find it cumbersome to make. Then, in a progressive society people start eating out. For instance, in Bangkok, the average person eats out 47 times a month versus the 7 times a Mumbaikar eats out a month! This means that the home-kitchen is out of fashion in Bangkok altogether.

And then, when the aspect of health concerns emerge, people tend to want to eat healthier options, such as home food. The ability to procure home food however is the issue here. There are two routes. One is a dabbawalla who will bring your food to work, or the other is a Tiffin service coming to your workplace or even bachelor home from someone else's home. This is the potential of the two streams of the dabbawalla as a service and the Tiffin provider as another service altogether.

The category of the Tiffin provider and the dabba-service is ripe for such a brand play tomorrow. In such a market play, the value of the food is but notional, as it is made at home. The value of the service is a tangible, and a value that can be captured big by the small entrepreneur in this space as well as the corporate valet service which might want to get into this space.

I do believe our society is going to morph faster than Western societies onto the bandwagon of health. The craving for home-food will be big. There will therefore be opportunities in this space. There will be further opportunities to segment the Tiffin offering on the scale of Organic Tiffin’s, Vegetarian Tiffin’s, Eggetarian ones, Hindu Tiffin’s (non-beef), Health Tiffin’s (non sugar and non oil heavy), and a host of such options.

This is going to be big business opportunity for sure.

Q: As more and more foreign origin brands enter the Indian market, what’s the one big reality that Indian brands need to face and battle?

-Josy Paul, Trivandrum

A: Josy, the big reality to face is the game of product chess.

The threat of the MNC product line up in every vertical that your ‘desi’ brand has is a reality today. . This is a game of product chess. Every one of your product has a match out there. You are a black Bishop and his is a White Bishop!

You need to play better chess than he does.

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


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