Saturday, June 14, 2014


A Cockroach Promotion and More!

Q: Everybody give a tumbler on a packet of tea and a comb on a packet of sugar. Is there any one promotion you have found more exciting than all this inane stuff?
-Joel R Shenvi, Mumbai

A: Joel, I am as tired of these inane promotions as you are. Promotions are meant to create  a positive blip for sale volume. Here is one from the mother market of them all, the United States of America.
The American consumer is a typical 5th generation marketed-to consumer. Totally tired of marketing. Totally tired of advertising. And totally tired of every consumer promotion there is.

Milwaukee saw an exciting re-invention of the consumer promotion. A company that manufactures an insect repellant and insect-killer in spray form had a marketing problem. Sales were down. The times were tough.

The promotion the company thought of was an exciting one. Five healthy American cockroaches were caught and stunned. Their bellies were bar-coded. When these healthy American cockroaches regained their presence, they were let loose into the drainage system of Milwaukee.

The next morning saw an ad in the paper announcing a USD 50,000 reward for anyone who brought in one of the bar-coded cockroaches dead or alive. The next day saw a run on the shops. Everyone wanted an insect killer spray. Stocks of every company selling one was liquidated off the shelves.

Milwaukee saw a kind of the Great American Gold Rush. Kids went about with canisters to kill. Office-goers carried a spray in their jackets and went hunting for USD 50,000 in their office loos.

A killer promotion for sure.

Q: How has luxury retail been evolving in India? Is there a fair bit of traction in this space?
-R L Sinha, Kolkata.

A: Sinha-Da, luxury-retail space in the country was initially spurred into action by the space offered by 5-star properties in India. This meant that luxury brands could afford a presence in some 6-10 luxury hotel lobbies and shopping galleries in some 6 big cities. This restricted presence. Anyone with a desire to partake of the offering of these brand labels made a beeline to these properties. Therefore, you had consumers from as far as Hoshiarpur and Bhatinda going all the way to Delhi  to buy their Swarovski crystals.

At best, the most popular luxury brands had access to some 20 plus stores in India. Not anymore. And that’s evolution for sure.

Today, this paradigm is broken. The emergence of the Mall has led the way.  Brands have even ventured out to the High Streets, braving very un-differentiated segments of shoppers, many of them who walk by in by the awe of the brand, and many who walk in and get frightened by the price tags altogether.

Today, a luxury brand has a wider presence across channels. Across the trade channel of the 5 star hotel property, the Premium Mall, the Popular Mall, the High Street and the On-line store. The niche is widening its marketing wedge. There is plenty of traction in this space as India affords more and more, luxury retail grows.

Q: I am on the verge of bringing out a range of ready-to-eat foods for the Indian market. Can I depend solely on the power of organized retail to make it big, or do I need to venture out deeper?
-Rohit Kapashi, New Delhi

A: Rohit, depends totally on the ambition of your venture.   If your ambition is to dominate the market you enter, then the use of organised retail is just not enough. Organised retail is very small in the country. Of the total value of Indian retail, only 7.1 per cent comes from organised retail.

Brands have to rely on the large, dissipated and very vibrant kirana category for their real vibrant sales. In terms of distribution mix, urban markets need a skew of organised and un-organised. In rural markets, the choice is largely through un-organised retail, village shandies and mandis, and the local ration shops, just as there is the trend of the emerging discount chain in rural.

Q: Modern retailers are launching their own brands that compete with other older brands in the market. Is this fair? And how does it hurt established brands.
-Rohini Sampathkumar, Bangalore.

A: Rohini, first things first. There is nothing that is really unfair in the market process of an organized retailer offering his/her own brands on sale. Most of the time, what is offered is great quality stuff at 30 per cent cheaper prices even. The only missing element is  the big brand label. This is certainly a threat to the organised old brand in the market. But then, everyone must compete. At the end of this long game of competition, the consumer will hopefully be the ultimate winner.
These are DOBs(dealers own brands) or Private labels. They are small in number as of now. Most sell private label brands within their organised retail store formats. Some will venture out to sell through the mass chain ultimately. This is a tough task though. The core competence of such private labels is largely show-cased within the private space of the store that spawns it. FMCG distribution and management is a different core competence altogether. Transgressing and owning this competence is a tough task.

Q: Whether the market is on the up-turn or down-tick, there is always a value-consumer out there. Am I right? And how does she operate?
-Anand Abirami, Chennai.

A: Anand, you are right. Every market has its own proportion of value-seekers. As consumers age in terms of being consumers itself, the value dimension does get blunted and brand imagery takes over.
 This value consumer is the one who spends the most time in your super-markets. He/she is down-grading on brands. At times this is a brand to brand down-grade and at times it is a pack-to-pack down-grade within the same brand. From larger packs to smaller.

In addition to this, consumer demand is getting stretched out over lower-cost variants. For example, in the automotive category we have consumers who have had 2-box cars  for all of 8 years and are looking to change. When they re-enter the market to change, typically they would come in with aspiration to upgrade to a 3-box version(sedans). However, during the last  slow-down in India, we have had customers actually going in yet again for a 2-box car replacement. This means they want to fork out less as an outlay in tough times.

What this does is that it does not only kill the sale of a 3-box car which would have otherwise happened in the short-term, but in the medium to long-term, it postpones this family from being in the 3-box car market for a cycle time which might be as short as 6-years in India or right up to 10-years in a strong value-delivery seeking family. This is a hit not for one quarter but for successive streams of quarters.

The consumer is still brand-conscious, but this brand-consciousness operates within a price-format that is value-defining.

In terms of consumption behavior, the consumer is much more careful in terms of usage. There is no surplus usage. There is less squandering and more real usage. The toothpaste is used with care and the tube is squeezed out till the last bit is out with a 'chimta'(tong) in the bathroom, just as the cake of soap is used till its last bits are squeezed. Hotel soaps and shampoos picked up on travels by the man or woman of the house  are being used as well to optimal levels.

For this type of consumer, value is in. Wastage is out.


Q: Do brands over-estimate the consumer's spending capacities? Are there examples of fault-lines across categories?
-Devika lahiri, New Delhi

A:Devika, the fault-lines run long and deep. Apparel is a classic case. The gung-ho nature of the economy, the fact that the demographics of this nation are young-skewed, and the Outdoor nature of the young led apparel marketers to go a bit too gung-ho in their attitude as well recently.

This has seen inventory pile-ups, styles laid out in the market and in pricing decisions as well. Every business plan of many an apparel maker is in the doldrums due to this.

FMCGs did wrong as well. Many focused on larger volume and value packs. The small packs were ignored. Low unit and low value packs literally vacated many markets. This was an undoing for the brands in tough times when consumers want to move to smaller packs. Companies like Britannia however re-invented the wheel in time. The small-pack focus of the company is poised to reap rich dividends.

One read the market, the economy and its peoples wrong in a cautionary recession.

Q: Everything is out to be tried. A new kind of try-marketing is out here where everyone is bending backwards in offering trails. Is this is a new marketing ploy?
-Revathi P Mudra, Bhubaneswar.

A: Revathi, this is a all about brands wanting to get tactile with their consumers. The idea is a simple one. The best way to sell anything to anyone is to show them the brand. The next thing the consumer wants to do is touch the brand. The third thing would be to use the brand and check it out for its delivery claims.

In many cases of products, the price of the product is prohibitive to allow a trial without purchase, therefore, low trials mean low buys. Marketers circumvent this by offering the free trail.

What is important to understand is the number of days of  trail or occasions of trial that is necessary for the product or service to be just right for adoption by the consumer. Once that is understood, the cost viability of the activity can be worked out.

For instance, for a  coffee brand to be adopted in a home, a total of a minimum 3 months of trail daily is necessary. This means that a competing brand should be able to work this right only if it is able to provide that deep a placement of its free stock. A simple one-time Rs.5 sachet free does not work. At best it is a very expensive waste.

The ability of the consumer to see, touch, feel and experience the product or service in all its brand and product sensorial aspects is the biggest advantage.

During a recession, this type of trail-offers spring up fast and strong. When there is not enough money to use on mass media advertising, ‘tryvertising’ becomes a very focused way of reaching consumers 1:1.

In recent months the US and Europe have seen a surge in tryvertising.

There are tryvertising websites that get you to register onto them with your database. Freebies are then sent to those registered and feedback is solicited. If you register on a couple of these websites and if you are sincere in your feedback giving mechanism, regularity and correctness, you can run an entire home on literally just this.

Q: I do believe agri-product branding is the biggest opportunity India has. Do you agree?
-Usha RR, Hyderabad
A: Usha, a whole-hearted yes. Agri-produce branding is pretty nascent in our country. The branding of sugar is a classic example. It has gone nowhere. The opportunity surely does lie here, in terrains such as these where we have had little success.

In the case of milk, each of the dairy co-operatives has done a yeoman task. Amul is one, but there are forty others in India who have done similar good work. The non-co-operative enterprises such as Heritage Foods have added to this effort.

The staples sector is far away from this movement. However, with the emergence of organized retail in India, a lot of action can be seen in this space.

Chains such as Reliance, the Aditya Birla Group, and others in this space will offer Private label brand sin staples. This will be the first big step into the branding of staples.

The agri product needs to fulfill the basic parameters of good quality and consistency on offer to be branded. Additionally, on procurement price, these products need to hold the line to be accepted as brands that are static price rather than brands that fluctuate their prices basis availability.

Q: What are the most important skills one needs to have in advertising professional?
-Josh KR, Tiruvalla.
A: Josh, many many things really.
The ability to emote with the needs of a brand is a very important trait. The ability to feel the robustness of a brand in the market-place is another. It is important for advertising professionals to step into the market and smell the sweat of the alien consumer. Most advertising men and women find this difficult.

Advertising people need to start living the life of  the ordinary man and woman on the street. Most don’t. It is important to travel in the same buses that common people travel in. It is important to watch the same tele-serials that common people watch. There is a big disconnect here. The common man on the street watches “Comedy Nights with Kapil” and the advertising man is hooked to HBO.

Living like the consumer and breathing the same air the consumer of the brand you advertise for, is an imperative to success. It is an imperative to build emotional connect, strategic content and ultimate long-standing creatives of creative and strategic merit.

Q: With the large number of mobile handsets in the country, where is the media opportunity on mobiles going?

-R K Jena, New Delhi.

A: Jena-ji, as of speaking now, we have a total of 914 million mobile phones in this country. We are still growing at 11 million phones plus per month. Most of the  new connections are coming from our small towns and villages. I do believe this is a big revolution that has occurred in India. Homes in rural areas which do not have a Television set even, today have mobile phones. In many ways every telco is seeding a medium within every Indian home. A medium that is personal, involved and involving.

The mobile phone is an excellent medium to use. Creativity in its use is yet to arrive. As newer ideas emerge, this will become a big medium to capitalize upon.

The mobile phone is closer to you than anyone else. It is on 24 X 7, is kept closest to your heart in your shirt pocket, is compelling in its demands as you rush to read every message that beeps on it. It is demanding even more when the call rings. You leave everything else and rush to pick it up. It is a media that packs a lot of expectation. Every call that rings can bring a promise to you that enhances your value, your life and your economic well being. The mobile phone is a promise.

The mobile is better than your spouse as well. It demands nothing. It does not fight. It listens to you all the time. It is only as intrusive as you want and allow it to be. And you can shut it off when you want to. A great medium for sure.

The mobile phone is a promising media. A media whose promise is yet to be exploited. There is an ideas-drought here. If you carry that brilliant idea and patent, now is the time to attack the medium in India.

 Q: Brands are jumping onto social media marketing in too much of a hurry. Is this not a double-edged sword of a medium?
-Devaki M, Ludhiana

A: Devaki, a double-edged sword for sure. Totally. But this is good. Brands must ride the good with the bad. Social media is hopefully run by real consumers more than planted and paid consumers. If that is true, true democracy will prevail in marketing as social mediums tell brands what they must hear, but were hitherto too distant to hear.

 I do not believe negative WOM can carry too far if there is no fire to stoke this negativity at all. Social networks are good because they are reasonably fair. They are democratic. In that manner a spade will be called a spade and not a sickle or a gun.

The problem with Marketing and marketers today is that all of us want only the positive. We shun the negative.

It is important to understand that the consumer is a positive and a negative person packaged into one body , mind and soul altogether. The Yin and Yang will be at play forever.

No brand can expect its image and experience to be positive forever. Further still, no brand can expect its image to be ten on ten positive. There will come times when consumers will want to articulate the negative as well. In such times, your brand will be 9 points positive and 1 point negative. This is good for the brand.

Brands must learn that they must ape the lives of their consumers. No consumer is perfect. The perfect being is a myth. Similarly, the perfect brand is and should be engineered to be a myth. If your brand is too perfect, sit down and re-engineer the brand. The brand must be equally fallible and real and alive as is the consumer. Consumers forgive small faults. I go the extent to say that brands that have perfect offerings must engineer small faults that will come by time and again. Brands must get as real as their consumers are.

Negative impact of WOM is a reality that brands must be prepared for. In a world that is democratic you cannot have brands that are autocratic in their orientations. Brands need to step off the pedestals they live upon. Social media is a great step-down ladder for brands.

Q: I have a big problem with shop-lifters.  Mine is a small self-serve outlet for gifts, but my losses on this count are big. Of the 200 customers I get every day, a minimum 20 must be robbing me.  Is there gyan here?
-Rohit Ram, Delhi.

A: Rohit, that’s a large number of shop-lifters in your gift shop. There is something surely very wrong. Ideally, your shop-lifers must not be more than 4 on 200. Even that is a big number.  Sadly those who shop-lift pick the more expensive items, and therefore the value of shop-lift goes up. You must be closing shop soon.

A shop-lifter is normally a very young person. At times children in their teens. College students and young people at large. Look at them keenly through those close-circuit cameras keenly. They are shifty-eyed, are spotted wandering aimlessly, visit the same shop many times, but buy very little. Spot them in groups as well. Groups that have wandered off a college or school even.

       Add to this the solo performer. The bored young and old person alike who meanders and hangs around a bit too long in a shop. Profiling your customer carefully and keeping a keen watch, and catching a few and making great examples of those catches is a way to go. Name and shame publicly for one.

Apart from CC TV, investing in shop-wardens in plainclothes who hang around the store without looking like a part of the store, is a good thing to invest in. Further, shop-lifting time-slots can be identified by the trend of catching people on the job. Intensify the vigil in these time-slots.

       Apart from Sensomats and other such pieces of technology, nothing like the sharp human eye to assess and catch the culprit.

       Take care on aspects of store-design and layout of merchandise as well. Positioning of those items that are really small and liftable very close to the cash-counters is what many outlets attempt. This however spoils the store at large and affects the spontaneity of store design and layout. However, worth a try.

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

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