Marketing Strategy : The Difficult Task of Differentiation

The Difficult Task Of Differentiation

Originally Published here in Adclubbombay.com

Marketers are a worried lot. The market is flooded with similar products and offerings which has created a huge clutter of brands and products. The situation is worse in markets where the entry barriers are low. Added to this is the entry of private labels by retail giants to cash in on the consumption opportunity.

Take the case of the soft drinks market in India. The market is flooded with desi and foreign brands with similar flavours and product properties. This summer is witnessing fights over mango and lemon flavours. The brands are segmenting and micro-segmenting the market with every possible variable.

For a marketer, this situation has multiplied his marketing expenditure. The focus is on outsmarting the competition by grabbing more share of voice. To standout from the crowd, marketers are using every tricks of trade. Instead of one celebrity, now a team of celebrities are endorsing brands. Consumers, on the other hand, are overwhelmed by this plethora of brands. Instead of simplifying the purchasing process, brands are now confusing consumers by choices.

For brands, the abundance of choices creates a huge problem of differentiation. Differentiation based on product features has become a difficult task with competitors taking no time in copying /adopting that feature. Differentiations based on incremental product improvements /features have become difficult to develop and sustain in the market.

In an era where companies expect brands to be successful with in three months (quarter) and brand managers being evaluated on their quarterly performance, creating sustainable long-term differentiation strategies are not in vogue.

The current economic situation has now forced many marketers to rationalize their portfolio and cut the flab. It is time for Indian marketers to go back to the basics of creating sustainable differentiation strategies for their brands.

Invest in R&D

India is a R&D and product development hub for most of the MNCs but seldom Indian marketers were able to create breakthrough products for the Indian market. Tata Nano has shown the world what Indian minds can do when inspired. A project which was labelled ‘ Impossible’ by many analyst is now a reality. Nano is a lesson to all marketers. This product was created from a need and backed by conviction and support from the top management.

It is not easy and the Nano example shows the myriad of issues one can face when venturing into creating something original. But the effort is well worth the results. The market is moving in a direction where only those brands will succeed who can innovate.

Protect the Differentiation

An important determinant of a successful differentiation is the brand’s ability to protect the differentiation. Patented features are powerful differentiators. But it is very expensive and time consuming process to patent features. In the case of FMCG products like soaps , such kind of patents are not a viable proposition.

Smart brands use ingredient branding to protect their key differentiators. Ingredient branding is where a particular product feature or an ingredient is branded by the company. There are two kinds of ingredient brands.

One type is where the ingredient is owned by another company. Intel is a pioneer in ingredient branding. Intel has built ingredient brands like Pentium, Celeron, Atom etc .These are not standalone products but ingredient of computers. By creating powerful ingredient brands, Intel has successfully created a space for itself in the consumer’s mind.

Another type of ingredient branding is where the feature/ingredient is owned by the company itself.Bajaj has a powerful ingredient brand DTSI ( which is also a patented technology) which it now uses for all of its two wheeler brands.

The ingredient branding strategy helps firms protect their critical innovations or even benefits. These ingredient brands can be copyrighted which will prevent competitors from copying these innovations.

Connect to a Relevant Need

Creating a sustainable differentiation is possible only when brands become customer focused. Most differentiations that we see in the market are product oriented. When products become standardised, it is important for marketers to create differentiation focusing on consumer needs.

Brand laddering is a strategy that can be used by marketers to create differentiation on a need rather than on a product feature. Raymonds is a brand that has created a space for itself by effectively laddering up to a customer need ( Complete Man). The benefit of such a strategy is that competitors will find it difficult to copy the differentiation since it is based on an intangible attribute. The brand has created a unique powerful image which is sustainable over time.

It is also important for the differentiation to be relevant to the consumers. When connecting to a need, marketers should ensure that the need is highly relevant and will fill in a very important gap in his life.

Long Term Vision through Brand Charter

Brands will take time to establish and marketers should be able to give some breathing space for the brand to discover itself and connect to the consumer. It is important for marketers to create a brand charter which will spell out the long term vision for the brands, its differentiation and positioning platforms, guidelines and strategies.

Such a brand charter will guide the future brand managers to create tactics which are in line with the overall brand vision. If a brand chose to create intangible differentiation opportunities, there has to be a consistency in the brand’s positioning and differentiation strategies. Brand Charter will help bring consistency which will inturn facilitate create a sustainable differentiation.

K Series Engines : Leaner Meaner Fitter

Brand : K Series
Company : Maruti Suzuki

Brand Analysis Count #450

Marketing Practice Blog has reached another milestone of 450 brand analysis. Let me take this opportunity to thank my readers whose constant feedback was a source of inspiration for me. The next obvious target is 500.

I am happy to mark this achievement with a very interesting brand - K Series Engines from Maruti Suzuki.

K Series is a classic example of Ingredient Branding. Professor Kevin Lane Keller defines Ingredient Branding as a special case of Co-Branding which involves creating brand equity for materials, components or parts that are necessarily contained within other branded products.

Although Professor Keller defines Ingredient Brands as a brand from one company which is an ingredient/component in a host brand from another company.But recent marketing practices has shown that ingredient branding can be done by the host company itself .
So ingredient brands can originate from the same company or from different companies. For example HP computers powered by Pentium Microprocessors is where ingredient brand Pentium is owned by a different company ( Intel) . Hence it is a case of co-branding.

In this case of K series, the ingredient brand is owned by the company itself. So theoretically it cannot be termed as a case of Co-branding.

K Series was launched in 2008 . The launch was to counter the much touted Kappa engine to be launched by Hyundai. K series engines also conformed to the tougher emission norms that came into force from April 2010.

Branding engines is not new in the Indian market. Bajaj Auto was a pioneer in branding its DTSI technology and reaped tremendous benefits in terms of differentiation. Maruti is trying to replicate Bajaj's success in the four wheeler market.

K series has been a success and the company has produced more than 3 lakh units in 18 months time. K Series engine is fitted in the new generation models like Swift, Swift Dzire, Ritz ,A star and new Wagon R. The first model to come out with this engine was A Star.

K Series engine is claiming to be more fuel efficient offering better control and ride quality. Maruti has invested some amount of money for the promotion of this ingredient brand. This is rather unique marketing practice seen in India because most of the other car makers having ingredient brands does not resort to exclusive ingredient brand promotion. There will be mention of the engine in the product ad but no campaigns exclusively for the engine.

The brand was launched with the ad featuring the marathon runner. Watch the ad here : K Series ad.

The ads could have been much better and more creatively done. The campaign lacks the " Aha " factor and only helps to create a brand awareness .How ever the company needs to be applauded for this type of branding. K series has adopted the tagline " Leaner, Meaner, Fitter" which sums up the brand promise.

The reason for Maruti going for ingredient branding is simple. Engines are now largely becoming commoditised. Now we see same engine in different car brands from different makers. For example, some models of Tata Motors, Fiat, Swift carry the same engine. When engines become a commodity, marketers have to look for other powerful differentiators. Hence ingredient branding comes to help. Ingredient brands are protected by the firm and creates its own identity in the mind of the customers. So K Series engines provide the much needed sustainable differentiation for Maruti.

According to reports, Maruti is planning to have K series engines for all its models. When the competition in the market has increased substantially for Maruti, such smart moves will help retain its leadership position in the Indian market.

Marketing Strategy : The Art of Story Telling

The Art of Story Telling

Originally published here at Adclubbombay.com

Branding is the art of story telling. Successful brands are those who tell stories that catch the imagination of the consumers. More compelling the story is- the more customers will love the brand.

Lux for the past 75 years has been telling the story of Bollywood beauties. Dettol has been telling stories of fighting germs and Johnson & Johnson continue telling stories about the love between mother and child.

Story telling is a difficult task and that explain the reason why many brands fail to succeed in the market. Story telling is different from advertising. Advertising helps communicate the stories to the audience but brands have to first build a compelling story.

Take the case of Santoor. This is one of the first brands to tell a story of a beautiful mother mistakenly identified as a young girl because of her younger looking skin. The theme has been consistently reinforced by the brand through various advertisements. The story was compelling, realistic and easy to understand.

Brand stories are not a standalone complete story. The brand story does not have an ending. It is evolving and continuing.

Theme

Stories should have a compelling theme. In order for the story to be compelling, then the theme should be powerful and relevant to the consumers. In the case of Santoor, the story theme was based on the consumer insight that beauty is often associated with younger looking skin. The entire brand story was based on this premise. Axe deo brand has been telling stories of how women chase men who are using Axe. Men like the theme of getting chased by women. Axe was told a compelling story of how ordinary men got chased by beautiful women.

Relevant

Stories should be relevant to the audience (consumers). Marketing Guru Seth Godin in his book “All Marketers are Liars “, talks about the importance of understanding consumer’s world view. He argues that only those stories will be successful which are relevant to the consumers’ world view.

Brands must know their audience before telling stories. They have to understand the audience’s world view in order to create a relevant theme. It is one reason behind the huge success of “slice of life “commercials. Consumers are able to instantly link to the theme because it is something that they can relate to.

Consistent

Brand stories are continuous. Hence the stories need to be consistent with the same set of characters reinforcing the basic theme. Brand stories can be imagined as a large collection of highly related stories woven with a common thread. Hence it is important for the story teller to have the bigger picture while telling their stories. When the stories deviate from the common thread, consumers get disconnected.

Onida was telling a compelling story of envy with the central character of devil. The story was liked by the consumer and a brand was built. But later the brand deviated from the theme, characters were changed, devil was taken off and soon consumers felt disconnected with the stories.

Often we see brand stories change for no reason. When advertising agencies change, brand stories also change. Once the common thread is lost, consumers tend to forget the story.

It is also important to be fresh while consistent. Adults are easy bored by repetition. So brand managers should ensure that there is freshness in the stories that is being told. These stories should evolve from the big picture. Airtel is a classic case where the brand is able to create freshness with consistency. The brand’s core theme of Expressing Oneself is being reinforced through ads which are fresh and attractive.

Connect with the consumers

Successful stories are those which become close to the consumers. The audience should involve with the stories and should own up the theme. Successful movies are those where the audience become a part of the story. They cry and laugh with the characters and are a part of them during the movies. Successful brands are those where the consumers become the part of the story. The more involvement the consumers are, the more iconic the brand becomes. Apple and Harley Davidson are brands which told compelling stories. These brands became iconic because consumers became the part of the story theme.

Brands are trying to tell stories through different media and platforms. The powerful stories are usually told by consumers to consumers. It is very difficult to make a consumer tell a brand story to another. The story should be simple, uncomplicated and personal.

It is a True Story

Brand stories are true stories and it is not fictional. Consumers understand brand stories through experience. He uses all the sense to understand the stories told by the brand. Marketers often think that consumers will buy the story told through advertisements. Hence the focus was more on building a fantasy which is far from reality. What is often forgotten is that the consumers tend to validate the story through experience. If there is a mismatch between the story and the experience, the brand will not be trusted again.

Brand Update : Accenture

After the high profile Tiger Woods controversy, Accenture was quick to distance itself from the celebrity who was the virtual face of the brand. Accenture as a brand was in a tough spot because it was strongly associated itself with Tiger Woods and suddenly the brand was put in a position to disown its own brand image.

I could imagine the plight of the agency and the brand manager to come out with a new set of campaign without undoing all the equity and brand position that has been built over these years. Since their consulting business is not depended on advertising , they could breathe easy. If it was a consumer business , Accenture would have been in a soup.

The brand has started a new series of campaigns with a new set of brand ambassadors - the animals. Seems that Accenture has decided to depend on animals since there is no risk of them getting into any controversy. The brand is running a TVC featuring an elephant while the magazine ad features a type of Chameleon.

The ads were far far below the standard of the erstwhile ads featuring Tiger Woods. I feel that the brand could have continued using human beings ( models) as the protagonists rather than switching suddenly to animals. Since Accenture's core strength is People, ads featuring animals may not do well to reinforce the core positioning of the brand. The brand could also take the risk of taking multiple celebrities for the campaigns rather than shying away altogether from celebrities.

The Accenture brand saga throws in some important lessons. The importance of De-Risking the brand's associations. Accenture as a brand has put in lot of investment in Tiger Woods without de-risking. Ideally it would have either used more than one celebrity or could have run parallel campaigns with the same positioning but using a different creative platform. I had raised the same issue of risk in my analysis of Katrina endorsing Slice. Brands cannot escape from secondary associations. These associations can be on features,celebrities, countries etc. It is important for brand managers to have a clear understanding on these associations and how it is affecting consumer perceptions. It also pays to de-risk the brand from certain strong associations so that the brand may not land up in trouble.

Brand Update
Accenture

Danone Choco + Milk : Chocolate Smoothie

Brand : Choco + Milk
Company : Danone
Ad Agency : Rediffusion Y&R

Brand Analysis Count :449

Danone is a world leader in dairy products. This Paris based $16 bn giant was present in India as a stakeholder in Britannia Industries Ltd since 1993. By 2006, problems surfaced between Danone and the Wadia group which later culminated in Danone exiting Britannia.

This year saw Danone venturing on its own into the lucrative Indian market. Danone has launched Choco + Milk brand in the Indian market .The company is currently testing this milk beverage brand in certain Indian markets before the national launch.

The milk based beverages market in India is still in a nascent stage and is pegged at around Rs 200 crore. Experts predicts a growth in this segment because of inherent qualities associated with milk products. The total dairy market in India is estimated to be Rs 2,30000 crore.

Choco plus milk is a flavored milk beverage which will be competing with brands like Amul Kool , Nestle Milkmaid Funshake and Horlicks Chill Doodh.
Chocoplus Milk is currently running its launch campaign in certain channels. Watch the ad here

Chocoplus is focused on the health + taste aspect of the product. The brand is calling itself a Chocolate Smoothie and not as a milk drink . The brand features a protagonist Raghu as the brand advocate.As the launch strategy , the brand is running an SMS campaign along with the brand website - Chocolatesmoothie.in. The brand has the tagline " Its not a drink, its chocolate smoothie". The brand is priced at Rs 15 for 200 ml.

The positioning of the brand is nothing much to talk about. Every brand now is talking about health and taste. The only difference that Chocoplus has done is to call itself a Chocolate Smoothie.
In such kind of products, taste has lot of importance . Kids needs to hook up to the brand and chocolate flavor rules the taste attribute. Another critical factor is the brand recall. Most of the existing milk beverages are not aggressive enough in this front. Kids needs to be constantly bombarded with brand messages . The usual strategy of retail visibility and dependence on spontaneous purchase may not be sustainable in the long term .Without building a strong brand pull, these products will be at the mercy of the retailers.

The value added milk beverages has a potential in the Indian market. Milk has lot of positive associations with health and nutrition. Mothers would like their children to take milk based beverages rather than soft drinks. But it is the pricing that is restricting the growth of this market to a certain extent. Rs 15 for a pack makes such beverages a luxury rather than a regular product purchase. These brands needs to make consumers stock these products at home. The brand needs to experiment with product packaging and SKUs to find the right mix.

On the promotion side also, milk based beverages are not aggressive enough. Since these brands target kids (except Amul Kool) sales promotions have lot of strategic importance. But seldom have I seen a good sales promotional campaign for such a product.

Danone is a global force to reckon with. The company has deep pockets and the capacity to shake up Indian market. It will be interesting to see how the company will build this brand in Indian market.

Brand Update : Knorr

Knorr recently launched another product line extension - Soupy Noodles. The brand is currently running the campaign featuring its brand ambassador Kajol. Soupy Noodles combines both the properties of soup and noodles. The brand is promoting this variant as a new category to be carved out of Noodles .

Knorr brand was doing well in the market after the company shed all the unwarranted product extensions and concentrated on soup category alone. Knorr retained its lost brand equity and is currently the market leader in the soup market in India.Knorr later extended itself into ready to cook range to expand the portfolio.

The launch of soupy noodles can be looked upon as just another interesting variant of soup product line or as a planned foray into Noodles segment. If the soupy noodles remain as a variant in the soup product line, the brand has done the right move in creating excitement in the market. Soupy Noodles will be attractive to the kids who has now the option of best of both worlds. Having said that Soupy noodles is not entirely an innovation since a similar version called Curry Noodles exists in the market.

The second scenario is where Soupy Noodles is a first step of Knorr into extending itself into noodles. If that is the case, then Knorr has not learned from its previous mistakes. Extension of Knorr brand to noodles will make the brand lose its generic status on the soup category. Of course the brand can point out the case of Maggi extending itself to various other categories. But Knorr had a bad history of extension failures and brand name confusion unlike Maggi.

I think soon Maggi will also launch its version of soupy noodles. If the taste is good, Indian market will see the emergence of a new category of soup + noodles.

Related Brand
Knorr
Maggi