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Showing posts from February, 2008

Consumer research & Newspaper readership

I am glad Vinod Mehta has said it. His refusal to toe the line as advocated by 'Brand Managers' is laudable. Though I need to add that such brand managers are better doing everything else other than managing brands, if they did advocate to Vinod Mehta to give the reader 'what he wants'.Vinod states in his piece, 'If journalism is a consumption item like butter chicken, then why not give the customer the flavour and taste he desires? That, after all, is the first rule of free market capitalism.'If that were the first rule of free market capitalism, why are the most enduring brands (remember the Sony Walkman) a result of not ever having asked consumers if they needed that particular product. As they say, 'Sony's market research was legendary: they didn't do it!' In fact my guess is, if the consumer was asked about the Walkman, he would have said, no. Why? Simple. Most consumers do not know what they want. Now, there is a distinction to be noted. I…

Indian Passenger Car market

The Indian car market has continued its impressive growth. After registering a 20.7 per cent growth in domestic sales last year, the market is expected to grow 12-15 per cent this year. That will translate to a sales volume of over 1.5 million passenger cars. The bulk of this volume will be dominated by small cars. There is even a possibility that India becomes the global small car hub.
Read the complete Business Today story on the Indian passenger car market, its problems and opportunities here.

Why Reckitt Benckiser is the star of a 'staid' industry

'Cos it knows how to come up with innovative products by keenly watching consumer habits.

The Economist states that the firm's success has been attributed to its innovative and entrepreneurial culture. Up to 40% of Reckitt's sales come from products that are less than three years old. Innovation is not driven by high expenditure on research and development, but by the company's insights into consumer habits. Controversy is encouraged. The company's multinational staff come from very different backgrounds which helps 'create tension in the system'. A 'tension' that drives innovation. Reckitt has good brands and good market exposure, but other firms do too—so it is set apart by its lack of bureaucracy and ability to reward performance.

Fans or Sport consumers; what's the difference?

'Tell me, is there some society that doesn't run on greed......the world runs on individuals pursuing their self interest...'
So said the legendary Milton Friedman (watch the video here).With that in mind, its not easy to get carried away by Sandeep Goyal's exhortation in his article, 'League talk: Creating fans or fanning consumers?', where he exhorts 'IPL and its franchisees need to keenly focus on creating, nurturing and growing fans, real fans, not just consumers for their sports brand.'His cause is noble. Yet the question that needs to be asked is, what's the difference between the 'real fan' and the 'consumer of a sports brand'? After all who is the purist out there who 'consumes' without a speck of selfishness; the fan who watches with a stake that is truly unblemished by his own needs and desires, as they say 'for the love of it all'? Its good to remember that our actions are in most cases dictated by the overw…

Stealth Marketing in Movies

The Oscars, as much a reminder of how talented certain people are, also points to storytelling that is biased ( listen to this talk by Evan Sayet), and in many cases rejected by the average cine goer.
But in certain ways, movies are useful to Marketers. Take the case of novelist Bill Fitzhugh, who became one of the first known authors to incorporate a product placement into a work of fiction. He'd sold the film rights to his 2000 book Cross Dressing to Universal Studios, which at the time was owned by distilling giant Seagrams. He struck a deal to replace generic references to liquor in a bar scene with flattering references to seagrams spirits, and says he was rewarded with an ample supply of liquor. But here's the twist : Fitzhugh wasn't really interested in helping Seagrams sell liquor. He struck the deal because he knew that when his book came out, he could market its product-placement deal as unique, if lamentable, literary landmark. In other words, by generating hand-…

Outside in vs. Inside out

As Mitali says, 'one harrowing experience with an outlet does irreparable damage to their image & customer loyalty' !

Now that's the 'outside in' approach. Create the image and then try and deliver. The problem with it is the same, as mentioned by Mitali. When the experience turns contrary to the image, loyalty vanishes (that is, if it did exist in the first place).

The 'inside out' approach is when the brand lets the experience dictate the image. Sure it may take some to time for the image to get built. But if it does get built because consumers speak about their wonderful experiences with a brand, the 'solidification' of the image is ensured and will sustain longer.

The 80-20 reaction on the part of Brands, as mentioned by Manasa, sure is prevalent but flawed because it looks at customer relationships form a transactional perspective and not a relationship one. The difference would be that brands would not just take into consideration present ear…

The 'Hygiene-Motivation' factors of Retailing

Jagannath's take on what he encountered at Big Bazaar prompts a serious consideration of Herzberg's 2 factor theory on Human Motivation. Herzbergs' first component in his approach to motivation involves what are known as the hygiene factors and includes the work and organizational environment. These factors do not lead to higher levels of motivation but without them there is dissatisfaction.The second component in Herzbergs' motivation theory involves what people actually do on the job and should be engineered into the jobs employees do in order to develop intrinsic motivation with the workforce. These factors result from internal instincts in employees, yielding motivation rather than movement.Retailers too have a lot to learn from the 2 factor theory. They must be able to distinguish between those factors of retailing which, if delivered on, do not necessarily result in store loyalty but do go a long way in ensuring that the customer doesn't abandon his patronage…

I admit....Apple's quite the cult brand

I guess I stand corrected.

Apple's iPhone has actually delivered on a superior customer experience. A mobile phone customer survey conducted by ChangeWave Research in late 2007 showed that the iPhone led the pack in terms of customer satisfaction among its US customer base. An unprecedented 82 per cent of iPhone owners reported being 'Very Satisfied' with their purchase, which was by far the highest rating of any mobile manufacturer.
A user friend of mine based in the US swears and stands by her experience with the iPhone. Sandy too bats for the iPhone. I admit, the feeling's pretty strong among the 'Apple legion'. And it couldn't have been for no reason. There are even people like Chuck Neistat who protest Apple's failings by making a movie, 'cos (surprise, surprise) they are so much in love with the brand.
As the Businessweek article, 'Cult Brands', points out, Cult brand loyalty 'flies in the face of conventional marketing wisdom. Consu…

Shampoos score as soaps stumble

With a penetration level of just around 38% for shampoos in India, can increase in volume and value be attributed to, as the HUL GM & category head (haircare) N Rajaram put it, 'portfolios being developed and deployed for various consumer needs and price segments and marketeers being able to leverage their firm's global brands and technologies while tailoring them for Indian consumers' ?

Or is it just that a significant number of Indian consumers have stopped washing their hair with their bath soaps?

Whatever the reasons, shampoos are lathering over. ET reports that while soap volumes hit a record low last quarter, down by as much as 5%, shampoos made a strong comeback in 2007 riding on 'innovation' and fuelled by growth at both, the premium and entry levels. According to A C Nielsen, volume of regular shampoo more than doubled, growing 13.8% in 2007 compared to 6.7% in the previous year. Category leader Hindustan Unilever was at the forefront of the growth story…

How 'green' are consumers?

Why would consumers go green? 'Cos they care about the environment? Why would they care? 'Cos they can afford to?Or maybe it has nothing to do with how financially comfortable the consumer is. Take the US for example. A 2006 survey ( maybe things have changed since then), shows that that fifty-eight percent of the general USA population surveyed considers itself “Not Green Interested.” These self-proclaimed “non-green” individuals do not care about environmentally friendly practices, including recycling, corporate social responsibility, or natural and/or organic ingredients. The study also reveals that while 2 out of 3 consumers cannot name a brand they consider to be Green, there are differences between perception and reality on what companies are Green. To consumers, a Green brand uses technology that is environmentally friendly and uses natural and organic ingredients in its products. Brands placing emphasis on supporting environmentally responsible organisations or donatin…

Landfill Prize Winners - Products you can live without

'Winning' Products - The £179 toothbrush (The Philips Sonicare Flexcare brush)The ijoyride (i Joy Ride exercise machine: The makers call it a unique way to exercise and they are right. What other exercise machines look like a toilet on skis?; See Pic above)The Ambi Pur 3volutionGillette's six-bladed, battery powered, wet razorThe 'slingbox'Hammacher Schlemmer infant-care timerBraun Tassimo coffee makerThe pocket sundialPYRAMAT Computer gaming chairThe e-on PowerDownPic : http://business.timesonline.co.uk

Will the real slim shady please stand up

Note the contrasts!

A 2006 study by ad agency Leo Burnett Worldwide found that 'men admire toughness, authority, responsibility and what Ernest Hemingway described as ‘grace under pressure’. They aspire to power, money and status. Silky smooth skin doesn’t come into it.'
A 2008 HT-Cfore survey conducted to map the male mindset in India found that '46 per cent men felt that women are "asking for trouble" by going to a pub with friends, then another 46 per cent (again, almost half the respondents), said that if a woman swore at them, they’d be tempted to get physical or aggressive: they would feel like hitting or slapping the woman. The ‘ideal woman’, said three out of five men (almost 60 per cent) should be homely and not go partying; only 24 per cent respondents said that their ideal woman should be "independent, yet a good homemaker". Two out of three men (64 per cent) felt that if they made friends with a woman "in a bar", they would think of …

Are subscriptions a measure of Customer Loyalty?

Sandy's got a point about Customer Loyalty. Is having 3 million subscribers to a 'loyalty card' a measure of real loyalty? Does it actually transalate into a repeat purchase? After a harrowing shopping experience that saw me huff and puff my way through a Big Bazaar store that had stocked up on rotten vegetables among other things, I reach the 'priority' counter where I was told, there's no priority for a fellow like me just because I have a Big Bazaar-ICICI card. Slinking away to join the mile long cash counter crowd, I winced at the decision to come to a Big Bazaar store on the weekend.In fact, tell you what, to hell with my Big Bazaar card, I need to shop elsewhere. Coming back to Sandy's point, my Big Bazaar card has turned me bitter. Now that's far away from 'loyal'.What say you?

Brand Image -Sustenance is the difficult part

Creating a brand image is far easier than sustaining that very same image. Slip ups are only to be expected.

Take poor Mammotty's case. A video that shows him rudely slapping away a fan while perched on a vehicle is now being flashed by the tabloidical news channel, Headlines Today. It was funny to hear Mammotty grovel on TV, trying to defend what he did, in fact not even owning up to the act, which is out there for all to see. Now, my sympathies are with Mammotty, who is truly a great actor, having delivered performances that have gotten him cult status in Kerala. Also remember, the public isn't always made up of polite people. There are the perverts and jerks in every crowd. Mammotty must have lost his temper cause of one of them. But in trying to defend, deny what he did, Mammotty is trying to sustain his image. One that has naturally followed him from his films. After all his bread and butter depends on it. The larger public sometimes forgets that these stars are ultimately…

High Performance Learning Institutions

'On the other hand, high performing colleges exhibit a dynamic, proactive, integrated set of perception determinants no matter their size, context, culture, or location. Here are the perception lenses that distinguish high performing colleges from mediocre institutions: opportunity actors rather than crisis reactors; change creators rather than stability protectors; emphasis on interactive relationships rather than individual turfs; feedback learning systems rather than hierarchical protectorates; use education centered technology rather than high tech gimmicks; strategic positioners based on imagination rather than strategic planners mired in memory; sophisticatedly interdependent rather than dogmatically independent; measurement performers rather than rhetorical cheerleaders; market sensitive rather than economically indifferent; and, finally, emphasize student needs rather than faculty convenience.'

- Ronald J Stupak; 'Perception Managment : An active strategy for market…

Why are brand fanatics, fanatic?

Though the 'complex' explanation seems to carry greater weight, the real answer is always, almost is as simple as the... .

Take Manish and Raghu's explanation of 'what makes a Harley Davidson or Apple user develop the kind of intense quasi-mystical belief in his brand that makes Queen Alexandra’s devotion to Rasputin seem like a schoolgirl crush in comparison?'

Their answer almost borders on complex gibberish. They state, 'It probably comes from the philosophy of the creators of the brand who—somewhere deep down—want their customers to be, not just “satisfied” but, as successful and as self-realized as they themselves are.'

My 'complex' take?

Actually its simple. Consumers buy cause they fulfill an unfulfilled need. At times they are aware of this unfulfilled need. At times they are not. When the 'dude' buys a Harley, he fulfills his desire to project or preserve an image of being 'macho'. Thats exactly why he sports the tattoo, dons th…

Non still beverages fizz ahead

ET reports that Sprite, Coca-Cola's lime-lemon beverage, has emerged as India's fastest-growing fizzy beverage, ahead of colas, non-cola carbs and juices.

According to beverage industry figures, Sprite grew at a record 20% last year, even as the total cola category sales averaged growth of 4%. The year saw Sprite grab market share in excess of 10% of the entire sparkling beverage industry — estimated at about Rs 7,000 crore. Non-cola carbs, on the other hand, grew 8.2% during the year. Coca-Cola's lime-based beverages Sprite and Limca and orange drink Fanta, and rival PepsiCo's lime drinks 7-Up, Mountain Dew and Mirinda fall in this category. Juices, meanwhile, grew 5.7%.

Love sells

This is the best time of the year for most marketeers. Especially those that sell products and services that can be sold, wrapped in the 'garb of love'.
Consumers are at their irrational best. The ones in love. Marketeers not just make a killing with greater quantum of sales, but also garner greater value per purchase. Take Lifestyle retailers in India for example. To cash in on the 'love demand', watch makers Titan, Timex, Christian Dior and Tommy Hilfiger have unveiled exclusive Valentine's Day collections. Titan has introduced the 'Spell collection' for women and 'Octane' for men. Similarly Timex has introduced its 'Torque' collection for men and women, available in 21 styles. Spending on gift items including cards, flowers, jewellery, chocolates, mobile phones, MP3 players and wrist watches is likely to touch Rs. 3000 crores this Valentine season as against 1400 crores a year ago. On an average, the spend on V-Day gifts is between Rs. 100…

Marketing the Army

'But as any marketing professional will concede, a product can be packaged and advertised through skilful and innovative marketing only up to a point. If the product is inherently inadequate, mere marketing acumen will not suffice. The country faces a major and complex challenge by way of its national security matrix. The spectrum of military challenges from the macro (nuclear weapons, missiles and satellites) to contested territoriality to the micro–low intensity conflict, internal security and terrorism–will become more demanding. The brunt of the operational load is carried by the ubiquitous ‘young officer’ – whether in Kargil or internal security and counter-terrorism.'- C Uday Bhaskar, Defence Analyst; 'Attracting Talent: Indian Army has a marketing problem'

Do unkempt stores offer better prices?

When Andrew Levermore, CEO at Hypercitytalks about the 'myth' of consumers thinking a store offers better prices if it is dirty or unkempt, its not too difficult to guess who he is talking about.

But if the the 'unkempt' store is actually about great space utilisation that leads to greater effeciencies of operation, then its the consumer who stands to benefit. Prices in the store would be lower than its competitors due to the lowered cost structure at which it operates. At the moment, in India, consumers seem to value lower prices over ease of shopping within the store. The concept of 'organised chaos' that Big Bazaar swears by, for the moment, is working.

Also when the CEO at Hypercity dismisses the concept of a 'sale', I'm not too sure if he is on the right track. The Mass Retail consumer is on the hunt for a bargain. 'Sales' drive perceptions of 'better bargains'. Its also builds an image of 'lowest prices'. Big Bazaar has c…

Depression & spending

The depressed it seems tend to spend more.

Why?

One idea is that feeling blue causes people to have a devalued sense of self, so spending more money on a new object — which people may identify, in a way, as an extension of themselves — starts to undo that deflation. That same emotional hunger may help to explain other costly behaviors, like aggressively playing the stock market or prowling for a new romance.

But there might be another way, too. It was also revealed that there seems to be a process mediating the link between sadness and spending. That process is self-focus. Being sad and focusing one's thoughts inwardly usually go hand in hand. But when the two were pried apart it was found that people who are sad, but not self-focused don't spend as much. To break the link, therefore, intentionally try to avoid self-focusing when one is sad simply by thinking of other people.

Read the complete article here.

Always, discount the fuss

I wonder if all the fuss the media makes is a pointer to why the product must not be taken too seriously?

The much feted Hyundai i10 seems almost normal to me. On the other hand, the never mentioned Chevrolet Spark impressed me.
Is it just me or is there more to this?
Cartoon : http://school.discoveryeducation.com

Technology diffusion in emerging economies

'The question is how much this unevenness matters. It is tempting to say, not much. What really counts, say techno-optimists, is that technology should get a toehold. Once it does, its grip will strengthen. So although only 6% of India's rural poor have phones, urban folk were at the same stage in 1998—and look what happened. Optimism about diffusion seems all the more plausible because of leapfrogging. Technologies such as mobile phones can be dropped into developing countries without the slog of building expensive infrastructure (such as land lines) and can circumvent the failings of old 19th- and 20th-technology. Poor countries will leapfrog into the next generation.'

Read the complete Economist article here.

Drop prices to stimulate demand

Rising prices, for whatever reasons, always affect cost-benefit analysis adversely. More so if the buyer's always looking for a bargain. The only way to get sales back on track is to lower prices. Leaner operations are called for, in such scenarios.

The airline industry in India is now faced with dropping demand due to rise in fare prices. ET reports that after two years of growing at possibly the fastest rate in the world, the number of domestic air travellers in India has fallen significantly in the past two months of December and January. Average growth in the past eight months had been above 30%, but December recorded a 14.8% growth in year-on-year terms.

Airlines, whose load factors have started falling as a result of the slowdown, are beginning to see the writing on the wall. Falling load factors have forced them to offer cheaper fares by opening their lowest fare-categories. Airfares are bunched in various fare-classes, and airlines typically try to sell at the higher classes…

What consumers value; Discounts or shopping experience?

Manu joins the chorus of buyers who find Big Bazaar disorganised and slow. Yet for the moment the chain powers on.

Why?

Obviously buyers at Big Bazaar seem to think that the cost savings they effect at the store is worth the trouble. Its always a cost-benefit analysis. The costs of having to trudge through a shabbily merchandised store versus the cost savings due to discounted prices. The balance at the moment seems to be tipped in the favour of 'discounted prices'. Remember this is more relevant to consumers who 'value' these cost savings, as they fall into an income category where every paise saved is worth it, never mind the 'shopping nightmare'.

Now Big Bazaar needs to be careful. The day competing chains match Big Bazaar's prices with a better shopping ambience, buyers in droves are gonna move into competing stores. The cost effeciencies with which Big Bazaar operates needs to be bettered, if not consistently maintained over rival chains' cost structu…

Retail Loyalty

HT Mint reports that Reliance Retail's customer loyalty programme, 'Reliance One' has touched a membership base of three million customers.

The average of one loyal customer per square foot of retail space is probably the highest and fastest loyalty programme amongst all the retail companies in India, according to unnamed industry sources.

Racism & Monkey Business

'However, we now have a judicial pronouncement -- based on no-doubt reliable evidence provided by some of the greatest cricketers in the world -- that what Harbhajan said was not, in fact, 'monkey' but the evidently less ambiguous "teri maa ki..." -- referring to the intimate anatomy of Symonds' mother. Those who saw excerpts of Judge Hansen's judgement broadcast on television will appreciate the extraordinary, if unintended, humour of the situation, as the judge ponderously analysed, in pronounced Australian accent, the nuances and implications of "terrymayky" (the transliteration does little justice to the actual comedy). Ironically, Harbhajan's mother is reported to have greeted the news that her son had merely denigrated Symonds mother, and had not, in fact, (The horror! The horror!) called him a monkey, with great relief, observing solemnly that this was a "triumph of truth".'

- KPS Gill, 'A Boor, Not A Monkey'
Carto…

Ashes to Ashes, Dust to Dust

Nothing could be starker in contrast. The mortal body of the guru behind 'transcedental meditation', with a fan following of the who's who in Hollywood and elsewhere, is to be taken in a procession in Allahabad and then to be cremated.

In contrast Baba Amte wished that he be buried so that that every part of his body be utilised rather than add to pollution. Baba's desire for a burial was so that micro-organisms in the soil feed on his body and every bit of it gets utilized rather than the ash polluting water sources.

Wonder who's the real guru?

Down, but not out!

Sandeep, Mitali (hey, thanks for the 'fav' bit), Geetika, Naveen, Manu....all the others...

Thanks for dropping by. Will respond soon.

Am down with a bout of fever...lessons am learning?
At the risk of sounding cliched..., enjoy good health. Its the best thing you have and be thankful.
Dont pride in your body (sense is so much better), its just a lowly micro organism that can waste you.
When you get sick, stay away. What's worse than you being sick is having a home full of sick people 'cause of you.
While sick keep your grey cells ticking. Read.
Pray.Down, but not out. Will be back soon.Cheers.

The 'Validity' & 'Invalidity' of theory

Sandeep wonder's'if all the theory on marketing, consumer behaviour, advertising etc. taught in classrooms really makes any sense in the real world?'

My take?

It will (make sense) if their applications are effected appropriately. The trick here is to know when to apply (theory) and when to reject and go with your 'instinct'. Let me illustrate. The Maslowian hierarchy helps any manager identify the right tools of motivation depending on which level on the hierarcy the 'subject' exists. If the manager were to know that the subject in question seeks 'esteem', a better sounding job title with a few added responsibilities can effect an increased dose of motivation within the subject. Any manager blissfully ignorant of the theory may have tried 'money', which in turn may have been met with disdain.

Similar is the case with consumers issues too. Take the concept of 'perceptual threshold'. The threshold is the point at which a subject can pick …