Wednesday, May 30, 2007

"Cult Brands"

There is a good article on "Iconic Brands" and whether India can have "Cult brands" in this week's strategist. Questions on what is a "Cult Brand" and how one is built are detailed out. Most of the people interviewed for the article are of the opinion that it would be difficult for India to build iconic brands, apart from the LG chief and Prof Jha. The reasons given are that the country is so diverse that it would be very difficult to for a single brand to have a very loyal and emotional following, which they say is a prerequisite for cultivating a cult brand. Another reason quoted is the culture differences among the countries like US and Europe which have cult brands, versus India, according to Shripad Nadkarni, in India as a child we are encouraged to "Fit-in" rather than "stand-out". This has a bearing on 'Cult Brands" as they tend to have loyal following from consumers who prefer to go against the main stream. One point which I think has been missed out is that brand building and customer orientation in the country is just a decade and half old, before than in the regulated economy no one actually cared for the consumer. Building iconic or cult a brand is a long term work, as can be seen from the examples, Harley Davidson is a 101 year old brand, and Nike is also a very old brand. We also have much younger examples like that of iPod, but then the brand piggy-backed on the apple brand. In essence what I am saying is give more time for the marketing in India to mature and we also would be able to produce iconic or cult brands in the country.

Monday, May 28, 2007

Used Vehicles - Opportunity for Manufactures and Consumers

The pursuit of growth is forcing companies’ to capitalize on the value which lies hidden in the value chain of the business. Companies like Maruti were the first one to go into used car sales through their “True Value” chains, and now in many cities the true value dealership is as good as that of the new car dealership. Now Ashokleyland is entering into the used truck market. For the consumer it is win-win situation, because he can rely on the companies to provide warranty and assurance on the quality of the car or truck he or she is purchasing and the company gains by gaining an entry into hitherto unorganized market. The process of entering into the sales of used cars also helps push the resale value of the company’s vehicles. The objective is to squeeze out as much value as possible from the value chain and inturn also provide value to the customer. Companies like Porsche claim that 2/3 of the cars ever manufactured by the company are still on the road, maybe one of these days Maruti’s might also come up with such a claim.

Sunday, May 27, 2007

Biggest Hollywood Movie in India

Spider man 3 has become the biggest Hollywood movie released in India, exceeding the gross of Titanic. According to the latest figures the movie has grossed Rs 57 crores. One of the reasons is the large number of prints , 588, and the higher number of regional prints, which included 6 prints in Bhojpuri!!!! Most of the companies in India are know their success hinges on their capacity to adapt to the local tastes, as is evident from the quote of Keith Pardy, SVP, Nokia Strategic Marketing, "Nokia started out with making products that were designed to meet the unique needs of Indian consumers, and will continue that strategy" when he reacted to the rise of Nokia to the fourth position in the annual brand Brand Equity’s Survey of Most Trusted Brands.

Saturday, May 26, 2007

Bidi - Skull & Cross warning!!!!!!

How much would a pictorial representation of a warning have an impact on the consumption of a product? The pictorial representation I am talking about is the 'skull and crosses' symbol that is being proposed to be put on tobacco products in the country. The fear expressed by manufacturers is that the sales of tobacco products would drop leading to large-scale unemployment in the Bidi industry. The assertion is that it would lead to a drop in the sales of tobacco products. Though most of the tobacco products do have some sort of warning written on them as in the case of cigarettes and packed tobacco, the warning has not been put on Bidis. The legislation is a step in the right direction, as written warning may not be of much use as the fact is that Bidi is consumed by people who are illiterate ( may a gross generalization) . And when the symbolic picture is in place it would communicate that consumption of tobacco products is harmful. I am not sure about the impact that it would have on the old -seasoned tobacco consumers, but might have an impact on the new-user. The government has been deferring the implementation of the order under the pressure of powerful lobby of Bidi manufacturers in the country.

Tuesday, May 22, 2007

ITC Bingo - Too many variants????

ITC in March launched it's ready-to-eat snacks 'Bingo' to mark it's entry into the Rs 2,000 crore fast-moving branded snacks market. As usual the company has backed the launch by a well designed ad campaign and the taste and variants of the product are based on extensive research on tastes of consumers . The launch of Bingo represents ITC Foods' fifth major line of foods business after Staples, Biscuits, Ready-to-Eat and Confectionery businesses. The launch represents the attempt made by the company to reduce the dependence on tobacco in it's total turnover.

Though the success of otherwise of 'Bingo' would be decided in the market one thing which I have not been comfortable with is the number of variants that the product has been launched with. There are a total of sixteen variants. The intended strategy would be try and cater to the tasted of the as many consumers as possible, but total number of variants seem a little too high, especially for a new launch.

The impact of too many variants would be on three participants . First is the the channel, here the advantage of having more variants that it would enable the sales force to push more stocks into the channel during the launch. This initial push would give the sales force some thing to cheer about. The distributor would have to take minimum quantities of all the variants which would eventually force him to carry more stocks, with him having no idea of what would sell. The retailer normally would have a limited budget for the category and when confronted with this many variants he would either have to select a few or take smaller quantities of all, both of the strategies would be risky for a new launch.

The consumers would be the second set of people who would also be troubled by the number of variants. He has to try the new tastes one by one to decide which one would be best. Though the comapny would want to claim that the pricing at 5 and 10 rupees should make trials easy. And if he is not happy with the first variant he tries he might not go on to try the other variants in offer.

Lastly the production people would also behappy if lesser variants are introduced to start with, because they would not know what is moving off the shelfs and the consumer acceptance of the variety in the offerings.

So all in all though the impact of many variants would look good in the short run, it may not turn out to be the best strategy in the long run.......

Sunday, May 13, 2007

Changing Dynamics in Marketing

Marketing was easier twenty years back. Have one successful product in the portfolio and the company and the manager could sit back and relax. But the scenarios today is a lot different increased pressure from competition, more demanding consumers and impact of technology is forcing the marketers to be on his toes, they cannot afford to relax. It is like pedaling a cycle uphill if you stop pedaling you will go down. One classic case which comes to my mind is that of Sony Playstation, When PS-I came into the market it was an out and out success, responsible for a major part of Sony’s profits at that time. But the current third version PS-III is not doing as well as was anticipated. In a period of 12-14 years the situation for Sony has changed. Old competitors Ninentodo's Wii and newer ones like Microsoft’s XBox is doing better in the market.

The reasons attributed PSIII below par performance has been supply chain glitches and pricing issues. But the stark reality for a marketer is that he or she cannot be complacent and hope that the earlier successes would be enough to get him the sales day after day. The competition responds at a far greater speed than what used to be in the earlier days and consumers want newer features and versions every year and if you don't provide them the competitor would. Though it is truer in the case of technology-driven companies, it also applies to the old economy companies, but the rate of change is much slower....

Saturday, May 12, 2007

Rail Innovations - Nokia Trains

After Kurkure Express Now we have Nokia trains. The corporate world is trying innovative ways of reaching consumers and Railways is willing to partner with them. After the pilot run of summer special trains in South , now telecom major Nokia taking a train across the nation to promote its products. The idea is to use trains as concept stores where in the passengers can widow shop and try out various handsets of Nokia. Plans are also afoot to run a non-passenger train across the country which will stop at small stations across the country displaying Nokia products.

With a Tab of approximately Rs 35-45 lakh for a round trip, it looks like an attractive option. This is one more addition to the long list of unconventional methods of reaching out to the far flung consumers in the country , breaking through the media clutter and improve brand awareness . It is also to be noted that the initiative comes from a player which is clear market leader with close to 70% of market share the mobile handset market which shows that they are not looking at the current market share but invest in the future as the penetration would increase. and want to ensure that the brand retains its market share as the category grows.

Friday, May 11, 2007

Spiderman-3 in Bhojpuri and Indian Makeover of Archie's Comics

These two news items on Spiderman in Bhojpuri and the plan to Indianise Archie's comics stuck to me as the precursors to the change in the mindset of global companies and brands when they approach India. In the earlier days one found many of the MNCs foundering in Indian markets when they brought in products which had either been phased out or one which were a generation old as was in the case of Merc when they first came into India in the early 1990's with their old models which were being used as Taxis in Newyork. This marked change in the approach of the companies is also a sign of the recognition that India as a market has arrived. News item that Indians have overtaken Japaneses as the highest spending tourists in UK also emphasises the same point. Today to successfully cater to these growing mass of consumers companies and brands will have to localize their offering to the palate of the Indian consumer.

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