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Packaging Changes

Packaging is I think one of my favorite P, and have written on it earlier also, link

On how it can be a source of innovation, size related issues, the utility it can provide....

But I have also observed the number of changes which companies keep doing with their packaging. As a consumer we start associating the packing and color with the brand itself. So how good is to change the packing and color, .. of your brand..

There are many examples, but a few of the recent ones include, the packaging change of Cadbury's 5Star. These changes force the consumer to spend more time spent on buying the product (and that too in a category which is more of an impulse purchase purchase) as one has to ensure that he is not buying any new variant of 5Star, and thus increases the opportunity for a competitor to gain the attention of you customer...

The latest change which I saw was the packaging of "Britannia Cakes". Earlier we use to have a packaging which was half transparent. Now the latest one is fully opaque and it has visuals of cake on it.

I don't think it's packaging had changed quite a long time, but then making a cake packing non-transparent very little sense , one i have to read the favor, if it is chocolate or fruit or which ever, which earlier i could just see through...

And in things like cake I would like to see if they look fresh and are not broken, rather than relying on the picture on the pack....

Change in packaging and other brand symbols are needed when one is thinking about rejuvenating a brand, but then the basics should remain in place, especially the utility it can provide, visibility as in the case of Britannia Cakes...

Samsung Caputring the Moment and also.............

I saw this ad today morning in TOI(sports section), thought of sharing it , shows the importance of timing and knowing what is appropriate for your brand, and making yourself relevant to your consumers ......

Lost Skill of Listening to your Customers

When we talk about new product ideas , listening to your customer is said to be one of the best sources ....

I was sitting in a consumer durables shop discussing the pros and cons of buying a water purifier, when a customer came in and asked for a water cooler (the picture on the right). After a lot of discussion on various options and prices, he decided to buy a Voltas Cooler.

Then he asked if was there a option of having a purifier combined with a water cooler, I thought it be very logical, some company must have such a product. The dealer responded saying , the manufacturers of both these products are different companies, so what you can do is buy two of them separately and combine them.....

This conversation would have slipped out of mind had it not been for another customer who came in after ten minutes and asked the for the same combination, Purifier+Cooler?

I thought it could not be a coincidence that two people were asking for the same combination. I felt this was a new product idea combining two products purifier and a water cooler. But neither the cooler manufacturers nor the purifiers, have developed such a product yet.

Are we listening to the customer. I had heard in a few companies where the managers were forced to make one market atleast once a month so that they remained in touch with ground realities and also know the pulse of the customer....

Is the customer asking for a lot , I don't think, what he is asking for is "Pure Cold Water" , and we still believe to see the situation in a compartmentalized way..???

Customer Loyalty Schemes

Walk into any retailer and you would find them trying to sell loyalty cards, whether it is 'Club West' from Westside or the 'Green Card' of Pantaloons, or 'First Citizen' from Shoppers Stop or Landmark's Fellowship Card...... the list is a long one even without getting into the offers made by service industry, be it airlines, or clubs...

The idea behind these loyalty cards is that you are able to retain your customers and make them buy more and more from your shop and so on ............

But does this happen in reality...

I doubt, and most of us in India would agree based on our experiences especially with the new organized retailers,

I will relate my personal experince ........

I buy books at Landmark and last year was given a landmark fellowship card, and was promised many things.... so as a loyal customer kept clocking my loyalty points on the card and as I would buy many books, the people there also agreed to give a small additional discount over and above the points on the loyalty card....

Then suddenly one day I am told that the loyalty programme has changed or rather improved and there would be a new card issued to me. I asked whether the earlier schemes were still on, the answer at the desk was no no... they have been improved.

But then when I went to the counter with my books, the response was that if you take your regular discount (very small amount) you will not be able to get your points added to the loyalty card, and when asked why, he says orders from top.....

About details of the advantages of new schemes some lame explanation that additional points for a purchase of certain quantity and so on....

I felt that the company could have communicated to me in detail , they have my personal email id and they do send communication on certain events which happen but ....... the feeling that the company was designing new schemes to prevent a regular customer from getting any additional benefit..

Now some of you might feel that I am asking for more, but If I were to go to my regular book shop (old shop) and buy books from him , he would gladly give me three times the discount Landmark gives me, but then at times variety and new arrivals are better at landmark....

My point is that now when I walk into Landmark I am dissatisfied customer because of their botched up loyalty programme...waiting for Crosswords to come to town or start ordering books from the old book shop.....

Loyalty programmes can work as double edged sword for a marketer, if used wisely can result in customer retention, otherwise would make an otherwise loyal customer into a dissatisfied one...

iphone in the Indian Market

Apple's iPhone will be available in India from August 22nd onwards, through Airtel and Vodaphone, Link

That is making the market leader Nokia jittery, link

It would be interesting to observe how Indian Consumers would react to iphone....

Market Update 06.08.08

A update on what's happening the Indian market through coverage in various newspapers ,

Brand Equity had the following stories covered,

A good article on how the role of a salesman is getting transformed in the Indian market with the advent of technology, link

A very interesting write-up on how the traditional trade channels are partnering with companies to improve the experince that customers get when they interact with the retail outlets, link

Microsoft, yahoo and Google fight it out for the share of the online ad market, link

BS Strategist

how firms are relying more on direct marketing to push sales of their products and services, link

How the celebrity endorsement equation is changing and the new kids in the block are moving up the pecking order, link

The story on how UB is planning an entry into the wine business in the country, link

Audi and its strategy in India, link

How BMW plans to overtake Merc in India, link

Business Line Catalyst

FMCG Sales are on a upward movement despite of inflation and fuel price hike, details on this trend, link

Cashew Retail, link

Retail of home furnishing and accessories, link

ITC's paper business, link

The search for inflation-proof products is taking hitachi and many other companies to focus on their premium offerings, link

Retailer's push into finance, link

A detailed story on the discounter in Indian retail, Subhiksha, Link

Other interesting news bits,

Nano: Innovation & Creative Disruption, an article in sunday ET, which talks about how a host of companies are going in for creating break thru products at ultra low price like the 2500/- fridge , ..............inspired by Nano , link

In good company, The article on Arun Sarin on leaving Vadaphone, link

Article on how the upcoming festival season would be one without discounts and schemes, link

AGM speech of ITC, Link

Arvind Singhal in his regular column shares his insights into managing discount sales in Indian retail, Link

I had earlier written how many companies were reacting to inflation by giving more emphasis more on low-unit pack, but the latest data which is coming in indicates that this is not the case in the market, link

HUL is planning to provide backend support to it's distributors so that they focus more on customer interface rather than worrying about ensuring delivery and all, link

Demand for Low Frills Models

In the interview to Business Standard , Mr Shinzo Nakanishi MD of Maruti Suzuki shared interesting insights into the preference of car buyers in India. To quote from the interview

MARUTI ALTO

"Ten per cent of Alto sales come from the standard model, 30 per cent from the model with air-conditioning, and 60 per cent from the premium model, which, apart from the air-condition, also has power steering and is the most expensive".

MARUTI 800

" At one time 30 per cent of the sales came from air-conditioned models and the rest was from the non air-conditioned model. Now it is the opposite — 70 per cent of the sales come from the air-conditioned car. Of the 60,000 units we sell every month, only about 4,000 are non-air-conditioned".

This interview was with reference to the entry of tata nano into the market in the next quarter..

I was trying to think about the reasons of why this should happen, because if one were to take this information on face value it would mean that today we don't have a market for a no-frills model in India.

The logic that maruti is giving is that the consumers have moved up the value chain and are now looking for more frills in their cars, which is true to a certain extent. One more reason could be the easy availability of car loans which help the consumers to upgrade from the base no-frills model to the next model.

But in the context of nano the target segment is would be those people who have not thought of buying a car unless it is as cheap as what is being proposed by Tata. So these car buyers who are willing to upgrade are anyway not the target customers, they are looking at a segment which has not been accessed till now and for them a no-frills model would make a lot of sense.

But then nano will also try to upgrade and push its customers to the next model with more frills as they would be making more margins there than the base model......

To read the full interview, Link

Two Contrasting views on Service Levels in the Country

I read two editorials , one in the economic times and the other in business standard , both of them spoke about the service standards in the country. One spoke about how the levels had improved in the last few years and the other one spoke of how he felt that consumers today are switching back to the old PSUs for they are finding them better than private counter-parts in terms of service delivery. Another striking fact was that in both the articles the authors spoke about similar examples, It is for the readers to judge and which one matches with their experince....

Link to both the articles

The case for limiting the firm size, Link

A Quiet revolution in service delivery? Link

Kisan Seva Kendra : Rural Retail Initiative of IOC -II

Continuing with the earlier post, the idea behind KSK outlets by IOC was to provide a one stop shop for the villagers , where along with his fuel he could buy products of his daily needs too.

Tie-Ups

The combination of the pump and the retail outlet is what drives this model. IOC has gone ahead and tied-up with many FMCG and farm implements companies for an exclusive access to these rural outlets. One of the first FMCG companies to tie-up with KSK was Dabur, now they have recently tied-up with AIRTEL for mobile. The other tie-ups include National Seed Corporation and Indo Gulf Fertilizers. There many similar tie-ups in the pipeline and the company is working on the modalities of the deal.

Ground Realities

After listening about the initiative i decided to visit some of the KSK outlets in UP. The photos below are from one of the KSK outlets which I had visited recently...













At the ground level there are many operational difficulties with managing the retail outlet. The fuel sells on its own and the villagers are happy that they are able to buy diesel and petrol at their doorsteps. Earlier they had to travel atleast 10 kms to the nearest petrol pump to buy fuel.... But the dealers feel that they don't have the expertise of dealing with the wide range of products that they are expected to sell, ( from Fertilizer to note books) and because they don't have the whole range which a typical grocery shop would have they find it difficult to attract customers, and with the limited sales they are unwilling to put in a separate person for the retail shop , which is essential. Then there are issues related to credit and the market visits one has to make to keep maintain the stocks...

So one needs to keep a watch to see how the model evolves ...........