Sunday, September 30, 2007

Is Customer the king in India,Yet?

This is a question which I have raised in this blog quite a few times and whenever I have written about my experiences or rather bad experiences as a customer i have had quite a few people commenting on it.Which essentially reinforces the fact that most of as consumers have faced similar situations and thus are able to relate to it. Any of us who has stayed for a reasonably long time in US has more discomfort with the way we are treated here. Our experiences in banks, both nationalized as well as private is equally bad though one would expect the experiences in the private banks to be better. Dealing with service-guarantee on products is still a painful process, and so is dealing with salespeople in various shops . The list seems to be endless...............

Maybe one can console himself by saying that things would change and we are wrong in comparing ourself with economies which have been customer-oriented for a much longer time than what we have been, one could say that we have become consumer-oriented since the liberalization of the our economy in the 1990's, so as such we are a very young customer-focused country. This is an important point because putting the customer first and making him the king or queen will not happen automatically , once you put it in the mission statement of the company. Because this care and focus on the needs of the consumers would come only through the behavior and attitude of not just the marketing department and but also the other departments which have an active interface with the consumer. The term used for this effort is "Internal Marketing", which essentially means you need to start the marketing process within the company starting from the Marketing Department itself and then covering other departments. How many times have we interacted with either the lady at the reception of a company or a sales person in a multi-brand outlet and carried a bad impression about the company itself?????

Internal Marketing would require companies to hire right kind of people and train them well enough, and ensure that you communicate your philosophy through the company right from the top management to the distributor sales person.

Things would start to change when the employees of a company get treated well when they themselves go out as customers ... and start to accept the fact that they have to treat customers well, and this is a long term process and hopefully we are moving towards it......

Wednesday, September 26, 2007

More TV Channels more choice more confusion...

We are witnessing a world of which is getting increasingly fragmented. We have moved from an era of mass marketing where Henry Ford could sell as many black Model Ts as he wanted, to an era where mass customization and micro-segmentation where every marketer wants to be able to address needs of individual customers. Though not many have been able to reach the magic formula of being able to serve the individual customer profitably. If we were to look at one area where there has been a tremendous fragmentation, it is the traditional mass media, specially TV channels. Close to a decade back we just had one channel Doordarshan, and as a marketer if you wanted to reach the consumers across the country and you had put your ad in Chitrahaar then your job is done, you would have reached your target customers and media planning was a very nice and an easy job.

But quote from a recent news item "An astounding 200 channels have hit the air since 2000, taking the total number to 326. (There were only six in 1991, when the satellite TV had entered India’s orbit, and 48 till 1996.)" This proliferation of channels has added an estimated 48,000 minutes of new advertising time every day converting this into 10-second spots, that’s 288,000 new spots a day. Now lets imagine the life of a media planner in this situation, with each of these channels attracting a smaller and smaller group of consumers, making reaching them more complex and costly. Though if one were able to get the exact data on the viewer ship maybe we could manage to reach them more effectively. Some time back I had read that Google wanted to integrate its google maps, Wi-fi and ads. It wanted to target individual consumers who were browsing the net in a given area, to be targeted with specific ads for that locality and link it to their search. For example if one were browsing the internet sitting in a CCD in MG Road in Bangalore then through google would be able to target ads of the nearest shopping mall or announce the special price menu in a nearby restaurant or announce the happy hours of the nearest pub....

Tuesday, September 25, 2007

The Impact of the world cup win...........

I am one of those who has stopped watching cricket especially after the performance of the team in the last world cup. But i made an expectation yesterday and went on to watch the last half of the match, and was pleasantly rewarded by the rare Indian victory. It was not only me who was benefited yesterday , the sponsors of the Reliance Communications, Nokia, Pepsi and the sports broadcaster ESPN-Star Sport had a windfall gain . In the 50-over version of the game when the Indian team exited in the first round many of the advertisers and sponsors wanted to renegotiate the ad-rates. There was a lot of debate of the merits of having a more flexible arrangement depending on the performance of the team. But with yesterday's win in the twenty20 World Cup tournament the Indian team and players are back in the reckoning, in the next few weeks we will find new brand endorsement deals being struck. But the bottom line is that for marketers who want to bet on cricket to make their brands a success in the market place it will remain a gamble, unless the team starts to perform more consistently.

But just to give an idea of the gains that ESPN Star Sports made in the Twenty20 tournament, an estimated Rs 200 crore, out of which 110-115 crore came from ad sales alone. The ad spots for the final was sold for an all time high of Rs 7.5-10 Lakhs per ten seconds, and the TRPs are expected to be in the range of 15-20. Some food for thought indeed..........

Monday, September 24, 2007

Retail Options - India

The retail scenario in the country is changing rapidly in the last few years. A decade back the only retail option one had was the ubiquitous grocery shops which dotted the whole country. Today we have almost the full range of retail options which are available in any developed country, though their presence is not uniform through-out. But India would be perhaps one of the few countries where one would find all these portions together. For a real long time manufacturers in the country had a upper hand in the distribution network, but this is changing very fast. One assumption people make when they see the large format stores and Malls is that the grocery stores would disappear. As of today the share of organized retail is estimated to be anywhere between 2-6% and is expected to grow up to 15% in the next 10-15 years, thus the mom-n-pop store is going to remain an important player in the times to come.

With the variety of outlets one feels that there is a need to develop a classification . I have felt two clear criteria on which one can classify the retail shops in the country could be size and service. Within size we could have many combinations, but broadly we could have three sizes , the large format shops like the big bazaars and hyper marts would be the larger ones, medium size shops would be primarily be the super bazaar formats, both in the pop-n-mom as well as organized a category like Subhiska and last one would be the general grocery stores. In the terms of service the classification could be self-service versus full-service. In the case of the large format stores they would be primarily be self-service format and the grocery shops it would largely be serviced by the shop keeper. In between would be the superstores wherein at times either partial service would be provided or it would follow the service format of the small grocery shop.

Another way in which the retail options could be looked at could on the criteria of convenience , variety and experiential store types......

Saturday, September 22, 2007

Train Travel and Indian Railways

Most of us have pleasant memories of train travel. We associate train travel with vacations and holidaying. My earliest memories of train travel use to the three day- two night journey from one corner of the country to the other for our summer holidays and thus so far in my life i continue to love train journey and longer the better. The last week from UP to Gujarat , just over a thousand kilometer distance and had booked my tickets through eticketing services provided by the railways.

My onward journey was booked in AC 3 tier and the train was late only by 4 hours and managed get into my berth, only to find that there was one more person claiming my berth. The train was late and I was feeling sleepy, but still managed to hold on till the TT came and sorted out the issue. The problem seems to be with more one person, so I started wondering if there has been a major goof up in the railway reservation system itself. But we were in for a pleasant surprise, the TT came and informed us that I had been upgraded to AC 2 tier and the person claiming my berth had been upgraded from Sleeper. Same had been done for quite a few people. Most of the travelers in the 2 AC were people who had been upgraded and i could hear them speak to their friends on mobile.

The benefit to Railways would be that they would have managed to clear up some of the wait listed travelers into sleeper and made some more money. But over and above it is the positive word of mouth which would have spread among people. Through this they have managed to create a positive image for railways which they might encash it at some point later in time.

Well the story doesn't end here, I had booked my return ticket back on the same train a few days later and I was expecting another upgrade. I was not being greedy , but this being the off- season the AC 2 is usually empty, but I was disappointed to find that it had not happened. Out of curiosity I went around the AC 2 tier compartment to find it almost empty. So what had actually happened with on my onward journey was possible on the return journey but obviously some initiative had to be taken from some ones end to do the up gradation... so it make me wounder about the problem with execution of good schemes and being more customer responsive

Thursday, September 13, 2007

Marketing Books Old & New

I thought I will compile a list of Marketing books which every marketer should read

1. Tipping Point by Michael Gladwell

2. Blink by Michael Gladwell

3. Why We buy by Paco Underhill
4. Call of the Mall by Paco Underhill

5. Selling the Dream By Guy Kawasaki

6. The Wisdom of Crowds by James Surowiecki
7. Made to Stick by Chip Heath and Dan Heath
8. The Anatomy of buzz by Emanel Rosen
9. Origin of Brands by Al Ries and Laura Ries

10. Marketing as Strategy by Nirmalaya Kumar

This my list, readers can add their own favorites

Monday, September 10, 2007

Differentiation Continuum - the paradox of branding

The influence of branding is moving on from the sphere of differentiable products to the seemingly commodity like shimla apples which have started arriving in truck loads in the Local market. A casual visit to the neighborhood hyper mart one can easily spot apples from other parts of the world, which also have some identification stickers put on them. The local fruit vendor has apples which have some tags on them on it, on enquiring what it meant, he gives his own explanation of branding and the premium he wants for those apples. In the context I am reminded of the demands of fenny manufactures who wanted the drink to be panted. Thus we are moving on the path of branding commodities...

I see three kinds of players in the branding business on the differentiation continuum; one-end signified by commodities and the other by the brands which represent a category. One would find very few companies at the brand-representing-category end of the spectrum, companies like Xerox, which have achieved that over the years of relentless branding being the exception. It is considered to be an ultimate achievement for a marketer if his brand starts representing the category, a view supported by the branding Guru Al Ries. But most of the companies would fall in the middle of the spectrum with products being differentiated but not sufficiently enough, and that is where most of the action in branding lies. But what strikes me as odd is that at one end we try our best to convert commodities into brands and at the other we consider it be out ultimate goal to make the brand again into a commodity which would represent the category. Maybe this is the paradox of branding, but luckily very few of the brands have been able to make the journey through the differentiation continuum.....

Saturday, September 8, 2007

Apple iPhone and the Price drop

Every consumer feels let down and disappointed when he finds that the prices of a product which purchased a couple of weeks back has dropped down. Could be the end of season sale or technology change as Steve Jobs would like to put it but it leads to a lot of heart burn and dissonance among the early adopters. Two months after the launch a reduction of 33% in the price of the product cannot be justified in terms of change in technology alone, but as the bits blog puts the reduction has been done keeping in mind the upcoming Christmas season. But i think apple should accept the fact that it read the market wrong in terms of the volumes it would be able to generate at the initial price. The $100 rebate to older consumers would add to the conviction of the consumers that they had been charged higher earlier...

More Reaction on the Blogsphere on the apple Price Reduction.....
Four mistakes Apple made with the iphone price reduction
Six Guesses why apple cut the iphone price

Friday, September 7, 2007

Festivals and Promotions.... Will this festival Season be different??

For most of us festival season is a season of promotions, other day one my friend who found that I still hadn't bought a TV said " Diwali Season will have many promotions and discounts you can get a good deal, you can get a DVD player free with the TV". For most companies, in the durables, the season starts from September and extends till January. The season is marked by the starting of Onam, Ganesha festival, dusheraa and peaks with Diwali , continuing till Christmas and New year. In a typical household in India festivals are considered to be an auspicious time to make new purchases and this sentiment has been over the years captured by marketers by providing free-bees and offers.

There are many companies and branch managers who save funds from their normal promotional expenses and use the money during the festival season. This rush to capitalize on the season in the past has lead to promotional warfare in the market place, with each company trying to out-do the other with a better scheme or promotion. At the dealer end they have made best use of increased competition and the hurry to achieve sales targets by squeezing more out of companies. The sales peaks which occur during the festival season has had its own impact on the supply chain and the manufacturing.

But this festive season promises to be different, if one were to go by the news items with heading saying 'White goods firms look for festival without freebies', and other reports which talk pessimistically about the chances of auto sales improving in the festive season. The consumer durables companies are claiming that they would move away from discounts and promotions and instead provide customers with more models and upgrades to increase sales. The negative effects of sales promotion is known to many but when everyone in the industry is into the game no can say no .... most of the companies have claimed that would not get into the major promotions this year but the season has just begun and it is to be seen how long can the companies resist from going in for discounts to get short term sales...

Update: The general consensus in the industry is that the festival season sales are not as they used to be, articles like festival season has lost its sales appeal with marketers give good insights. Festival season: Sales boom is passe now,

Festival Shift

Wednesday, September 5, 2007

Minute Maid Trial ...4 Ps

After being put-off by the Hypermart people today I could try out Minute Maid 'Pulpy Orange' at a local small retailer. It has taken close to six month for the brand to reach the Hindi Heartland after the its launch in three southern states in February. First the plus points of the product, It tastes good, and the tag like 'Puply Orange' stands up to the expectations both while drinking and visibility of the pulp . The tag line and product experince match...The distribution and the POPs for the launch is also good, as should be with a major launch by coke. Thus out of the four Ps one can say that three Ps- product, promotion, and place have been taken care off, but the Price which is at times the most critical of the four Ps in impulse purchase categories like soft drinks is the one which needs to be investigated more.

The pricing is 25/- for 400 ml and Rs 60/- for the one liter bottles, which I feel is a little high for the Indian market. Working backwards from the price for 1 liter bottle, they would have had to charge 18/- rounded off to 20/- for a 300 ml bottle. And consumers would have felt it is almost double the price of a normal soft drink. Though the company would like to dispute the fact that it is a soft drink, it would claim it is a fruit drink, but for a consumer it is competing against the normal soft drinks, whatever the company feels. Looking at these issues I think the company thought 400 ml and 25/- would be better price point. But the problem with the 400 ml volume is that it does not exist in the Indian market we are used to either the 200ml or 300 ml volume so the consumer has to be told that it is a 400 ml bottle and it doesn't help that bottle looks like a normal 300ml one.. and from the consumers point of view most of us would find 400ml too much for an individual to drink and too less to share....

Sunday, September 2, 2007

5 Minutes at a Check-out Counter- Lessons for Marketers

Today I went to one of the hypermarts in the city and was impressed by the variety and display of products. After spending close to an hour, I picked up a few essentials and came down to the check-out counter. There were more than a dozen of them and I searched the one which had the smallest queue, infact had only person ahead of me and waited my turn. The person in front of me had a few items that he had purchased, and one of which was a Minute Maid Juice, newly introduced by coca cola in India. The girl at the check out counter told the person this is a new item, just come so you will have to go to another counter where they were making manual bills and get it billed. Hearing this I quietly dropped the Minute Maid which I though I would try. This was for all the display and posters that company had put up in the shop and all the hoarding in the city, the company people would feel great that they had put up a good display and dumped the shop with stocks but.....

Well the story doesn’t end here, I had only two items and after billing I gave my card and I was shown a sign according to which I hadn’t billed enough to be eligible for a card swipe, I tried complaining that the other shop where I purchase accepts cards irrespective of the amount but .... in the meanwhile the minute maid customer came back after checking his bill and told the girl that she had billed a 20/- item which was supposed to be given free. The girl started arguing that the people on the floor run schemes which are not told and this is not there in the system and so on . As a solution she told him to pick up some thing else for 20/-. The customer was not impressed he said he wanted the money back and the girl called her supervisor, who again didn’t have any idea. Knowing that all this wouldn’t be ending soon I thought it best to pay cash and move on. Even after another ten minutes I could see that they were not bale to address the problems with the earlier customer

This experience brings into focus a few essential things, first is the training of personnel who deal with customers, which is these rapidly expanding stores should look into and second in a hypermart a consumer is supposed to purchase huge quantities, now if he is worried about what schemes displayed on the shop floor is he actually getting in peak hours would mean long queue and more frustration for people following behind...

And last point back to Minuet Maid it is not enough for a marketer to ensure that the product is available, the POPs and danglers are in place, the ads are running he has also got to ensure that the products get entered into the systems of various stores to ensure customer convenience at the purchase point...


Free Web Hit Counter Coupon Code