Consumer Insight : Customer Loyalty

This post is inspired by the article by Mr Prasad Sangemeshwaran in Brand Equity ( 09/09/09) titled "Goodbye Mr Loyalty". (Read it Here). I feel that the basic premise of the article is wrong.

The article starts with a very bold statement - " The Customer is Infidel" ( which is a nice attention grabbing technique). The author then went on to argue that the concept of customer loyalty is now a thing of past.

I feel that the author made an assumption that all marketers believe in customer loyalty. Customer Loyalty is a concept- an ideal state where the consumers keep coming back for your offering. Marketers know fully well that consumers will keep coming back for the offerings only if it satisfies the need continuously. Marketers are also aware that consumers are looking for new ways of fulfilling their desires.

The moment you think that consumers are permanently loyal to your brand, you are in a state of marketing myopia. Marketing myopia is a condition where marketers become too narrowly focused on the product rather than the consumer & his need. Why Nokia is highly successful in India is its constant endeavour to bring in new products in tune with the changing consumer needs. Even in the case of Nokia, it missed out the " touchscreen" mania and even the " smartphone" trend. Marketers today are more aware about the impact of disruptive innovations which can create havoc in the market. Successful brands today are focusing not only in meeting consumer needs but also in shaping those needs.

It is also wrong to say that in the past consumers were more loyal to brands. The choice before consumers in yesteryear's were very less forcing them to stick to certain brands. That is not an indication of loyal behavior.

Having said that, there are brands which are able to create not only brand loyals but also raving fans. Brands like Harley, Apple,Google,McDonalds, Disney etc are considered iconic because of its ability to create communities and fans. But even these brands needs to keep running very hard to keep those consumers from switching.

If Customer is the King, how can you expect him to be loyal ?

Brand Update : Pears

It has been a long time since I wrote anything about Pears. The fact was that there was no big development about the brand for the past two years. The brand is regularly and consistently promoted across various media.

The brand extended itself to kid's category with the launch of Pears Junior and also into personal care segment with products like face wash. Pears also launched variants like Mint, Aloe Vera,Oil control etc during this period. Although the brand launched these variants, the core positioning of the brand remained the same for the original soap.

Recently I saw the new commercial of Pears

Watch it here : Pears

The brand is very consistent about the positioning strategy. Pears is built on the wonderful relationship between the Mother and

Child. All Pears ads captured this emotion quite perfectly. The brand focused on its " Transparency " and is positioned as a " Pure and Gentle " Soap.

This time too, the brand follows the same theme. The significant addition is that now Pears has a tagline - Masoom.

Masoom translates to Innocence . So Pears now celebrates a new brand value - Innocence.

The new campaign is nice but as a Southie I did not quite understood the dialogue. But the cute child and the theme always work the magic.

I am assuming that Pears brand is serious about the Masoom Tagline. Masoom concept works very well for Pears. The concept of innocence fits with the " transparency " and Pure & Gentle positioning.

Pears was one of those brands which did not have a tagline. With out the help of the tagline , the brand was able to communicate its core positioning. The core brand values of Pears was communicated through visual cues .

The tagline of Masoom seems to gel with the brand. Whether and how the brand is going to use this tagline in future is something to watch for.

Related Post

Pears

Marketing Funda : Line Filling

Marketing Practice Reader Balaji asks a very pertinent question about the series of brand launches by Maruti Suzuki in the hatchback segment. He asks :

"

I want to know about New product development in automobile industry especially in Maruti.They are launching different small cars.Is it really makes a profit for them.Can you give the explantion with example.Introducing new car in the small car segment(Maruti) makes confusion among the customers that which car to buy /which is best?.Is really they are benefiting or just in order to compete with other company they are introducing the new product ? "

Maruti Suzuki is following the product line strategy of Line Filling. Line Filling is a strategy where the company introduces new products within the same( existing) price range.

Maruti Suzuki recently launched a series of brands in the hatchback segment. A look at the price ranges of hatchback brands of Maruti will give you a clear picture of Line Filling.

Maruti 800 - Rs 2,00,000 - Rs 2,12000

Maruti Alto - Rs 2,22,000 - Rs 2,70,000

Maruti Estilo - Rs 3,17,000 - Rs 3,98,000

Maruti Wagon R - Rs 3,18,000 - Rs 4,32,000

Maruti A Star - Rs 3,40,000 - Rs 4,12,000

Maruti Ritz - Rs 3,89,000 - Rs 5,10,000

Maruti Swift - Rs 4,06,000 - Rs 5,20,000

( All prices are Ex-Showroom Cochin)

Source : Marutisuzuki.com)

The overlap is diagrammatically represented below.

From the price ranges, it is evident that there is a significant overlap among various brands.The question is why Maruti chose to bring out products with similar price ranges. Another question is whether this overlap will create cannibalization among these brands.

There are several reasons for such a line filling strategy. According to Prof. Philip Kotler, firms adopt this strategy for

a. Incremental Profits

b.Satisfy Dealers who complain about lost sales because of missing items in the line

c.Utilize existing capacity

d.Try to become a full-line company

e.Try to plug holes to keep the competitors away. ( Source Marketing Management ,11 edition)

In the case of Maruti, more than one reasons prompt it to fill the line. Maruti Suzuki has tremendous brand equity in the Indian market. Hence having a full line catering to all segments of consumers offers tremendous advantage to the company.

There are customers (like me) who would like to buy a car from Maruti. Having various offerings at various price points keeps that customers happy and make them stick to the company. If I want to upgrade to a bigger car, I have a choice or a A star or a Wagon R or a Ritz or a Swift. In such a scenario, I may not go in to a competitor's product.

Another reason for Maruti's line filling is to keep out the competitors. The company is facing lot of competition in the hatchback segment. At the lower end Nano may give Alto and 800 a run for its money. Santro, i10 and Spark is giving tough competition for mid-range hatchbacks and products like Fabia, Palio,Punto,i20 are giving competition at the higher segment of the hatchback market. Hence to keep the market share intact , Maruti is keeping a full line of brands covering various price points.

When there are brands which has similar price points, it is natural that some sort of cannibalization will happen. When Ritz was launched, it definitely took away some customers of Swift. But Maruti can be happy that the customer has bought its product rather than that of its competitor.

Regarding the profits, Maruti is one of the lowest cost producer in the automobile industry. This low cost base enable the firm to make a profit irrespective of cannibalization.

One of the critical factor that a firm should consider while line filling is the Differentiation. There has to be a just-noticable difference between the offerings other wise consumers will get confused . In the case of Maruti brands, there is a clear differentiation either interms of design or performance between these brands.

Line Filling is the strategy adopted by Maruti Suzuki to retain its grip in the Indian market. But in the Indian Automobile industry , may be only Maruti can do it.

Brand Update : Onida

According to a report in Economic Times, Onida has decided to send its iconic mascot- The Devil to Hell. According to the report, the brand feels that Devil is no longer attractive to the consumers and hence the decision to remove it. The report further says that the brand is working on a new mascot.

The report gave me a sense of Deja_vu. This is not the first time that Mirc Electronics ( brand owners) has scrapped the Devil.

In1998, Onida withdrew the mascot citing the same reasons that they have given now. The explanation given in 1998 was that Indian consumers no longer find Devil, who symbolizes Envy, relevant. So they scrapped the famous tagline " Neighbour's Envy, Owner's Pride " together with the Devil. But ever since it changed the tagline and mascot, Onida never found a powerful positioning .

After six years of drifting around, Onida brought back the Devil with much fanfare in 2004. Media and brand enthusiasts welcomed the move and eagerly awaited the Devil in a changed modern avataar. But the comeback was damp squib. The brand suffered heavily due to ownership issues within the company. There was no brand promotion or new product launches worth talking about since 2004. If at all there were launches, promotions were not sufficient enough.

Now in 2009, Onida is redoing its old strategy.

Onida is facing a marketing problem and not a branding problem. Everything is fine with the brand. People recognize the brand, love its mascot. The issue is on a larger perspective. It needs to concentrate on its entire marketing mix not just the brand elements. Changing the devil and bringing in a new mascot is not going to do any good to Onida.

The Economic Times report suggest that Onida is changing its brand elements because of competition from Korean brands like LG and Samsung. These Korean majors has built its position in Indian market riding on Product strategy rather than on heavy duty brand promotions. Their products were good, reasonably priced and well promoted. In the case of LG and Samsung, nobody really cares about the tagline. For them , the product speaks for itself.

Onida failed because its products failed. I was a die hard Onida fan . I loved my Onida KY Thunder Television. But after that there was nothing remarkable about Onida. No high technology products came from this brand.Onida became successful because the Devil was backed by products that really created envy in others. Now there is nothing to envy about Onida. Last year, I bought an Onida DVD player which boasts about playing scratched DVDs but the product failed miserably.

Now in the consumer durable space, brands are coming out with new advanced products on a monthly basis. Technology keeps changing and most brands are moving with break-neck speed to catch up with consumer expectations. In the case of Television, flat is now old and brands are talking about plasma, LCD etc. What is Onida doing in this space ?

Onida is now in one of the most difficult times. The brand needs to come out with a product that will change the game. Changing the mascot is secondary at this point of time.

Related Post

Onida Brand Update

Onida

Gatsby : Inspired by a Movie

Brand : Gatsby

Company : Mandom Corporation ( Japan)

Brand Analysis Count : 416

I used to notice Gatsby brand of hair gels in beauty salons.I have seldom seen any advertisements of Gatsby but the popularity of this brand among salons often surprised me. This has prompted this small post about this shy brand.

I was really surprised to know that Gatsby is an international brand with its origin in Japan. The brand is owned by Mandom Corporation. Gatsby is a leading men's beauty care brand in Japan.

Gatsby brand was born in July 1978. The most interesting fact about this brand is about the brand name.The brand name was inspired by the movie " The Great Gatsby " starring Robert Redford. ( Read the History here). I think Gatsby is one of the rare brands which derived its brand name from a movie.From a hair gel brand, Gatsby then morphed into a complete beauty care brand for men with wide range of products in Japan.

No information is available about when Gatsby was first launched in India. How ever, the brand have significant popularity among hair stylists . It has to be noted that Gatsby also has a strong retail presence also.Recently Gatsby launched its range of deos in the Indian market.

What is puzzling is the lack of any sort of brand promotion for Gatsby. Internationally this brand is famous for its hair care products. The brand's latest launch of " Moving Rubber " Series of hair gel was a hit across various markets. But this brand has so far being very silent in the Indian market. The competing Indian brands like Brylcream and Parachute After Shower are very aggressive interms of share of voice.

The recent launch of deo range is an indication that Gatsby is getting interested in the Indian market. The men's grooming market in India is witnessing lot of action and the pie is getting larger. We may see some action from this brand also in future.

Brand Update : Kelvinator

Marketing Practice reader Ms Simran asks an interesting question about Kelvinator. She wanted to know about the prospects of rejuvenation of Kelvinator brand.

In my earlier post on Kelvinator, I had predicted (assumed) that the brand will be killed after being acquired by Electrolux. To a certain exte

nt, it was true also because Kelvinator was sidelined for Electrolux brand. There was no brand promotion and the product was also not visible in stores.

Electrolux too had difficulty in surviving the highly competitive Indian consumer durable market. In 2005-06, Electrolux Kelvinator Ltd was acquired by the Videocon group ( source). The acquisition gave Videocon , the rights to use Electrolux brand for five years and Kelvinator brand for unlimited period. ( Source).

My prediction of Kelvinator's death was proved wrong. Videocon had other plans for this brand. The brand was rejuvenated in 2008-2009. Recently I saw the commercial of Kelvinator in one of the local Kerala channel. ( Watch the TVC here : Kelvinator)

The brand retains the famous classic positioning of " The Coolest One".

I think that Videocon is using Kelvinator as a flanker brand . Kelvinator will be the price warrior for the Videocon. Even after all these years, Kelvinator still have lot of brand recall. Vidoecon will just have to create some noise in the media to rejuvenate the brand . I am sure Kelvinator still have lot of potential to succeed in the Indian market.

It is good to see the good old Kelvinator back into the branding world. It is also wonderful to see the brand owners retaining the famous positioning and tagline which made Kelvinator famous.

Related Brand

Kelvinator