Marketing Strategy : The Basics of Internal Marketing

According to Berry and Parasuraman (Marketing Services: Competing through quality), Internal marketing is attracting , developing, motivating, and retaining qualified employees through job-products that satisfy their needs. It is the philosophy of treating employees as customers.

Although the concept of internal marketing seems like another version of human resource management, there is much more than just attracting and retaining good employees. According to Professor Philip Kotler, marketing activities within the company is equally important as marketing activities outside the company.

According to Kotler, there are two perspectives to internal marketing. One perspective is the coordination within the marketing department. The various marketing functions like sales , advertising, product development etc should act as a single unit focusing on delivering the best to the customer. The second perspective is the interaction between the various functions like Production, Finance , HR etc. Internal marketing’s role is to ensure that the entire organization is able to come together for a common business objective.

While many literature focus on the usefulness of internal marketing on the marketing function, internal marketing have a strong strategic importance which is often overlooked.

Advantages

There are many advantages of internal marketing. These advantages vary with the nature of the business that firms are in. Internal marketing has a strong impact on the customer satisfaction in service industries. In most of the service businesses, the consumption of the service product happens at the service factory. Research has proved that the way in which the employees are treated have a direct impact on the way customers are treated.

There are businesses which are human resource oriented like software firms which will find internal marketing a very powerful tool for marketing as well as strategy. Such marketing programs targeting the employees will have strong effect on the overall efficiency of the employees.

The internal marketing initiatives will also have a ripple effect on the ability of the organization to attract and retain the employees. In this highly networked world, internal marketing can generate very high positive word of mouth publicity about the working environment in the company which can attract new talents to the organization.

Firms venturing into Internal Marketing have to look at the concept at different levels. There has to be emphasis on key focal points like branding, communication, training, motivation and transparency.

Internal Branding

With regard to branding, Internal Marketing is closely linked to corporate branding. Corporate brand has more relevance in internally than a product brand. Employees should be thrilled by the corporate brand rather than the product brand. Hence marketing communication targeting employees should be aimed at building corporate brand equity rather than product brand equity. Brands like Infosys, TCS, Unilever etc not only attract prospective clients but also new talents to the company. Working for a reputed corporate brand is a powerful non-monetary reward for the employees.

Internal Communication

Firms venturing into internal marketing should create a robust internal communication infrastructure which is a vital pre-requisite to any such program. Free flow of relevant information within the organization is very vital in this context. The success of the internal marketing program lies in the employees being able to internalize the brand promise, company values and develop customer orientation.

For example, the employee in the finance department should understand the implication of fast payment/bill processing on the overall business of the firm. Materials department should understand the importance of efficient procurement on the overall business strategy of the firm. The understanding of cross linkage of various departments and its impact on the customer will be the biggest takeaway of a successful internal marketing program.

Organizational Culture

Another important prerequisite of a successful internal marketing program is the internalizing of organizational culture among the employees. Firms like Marriott, Apple, Microsoft, Infosys, TCS, GE thrive because the employees are torch bearers of the organizational culture. Such internalization will happen only through a robust internal marketing program. For example, in Infosys, founders like Narayana Murthy , Nandan Nilekeni had the wisdom to understand the importance of developing a highly ethical , performance oriented culture. These organizations have a strong internal structure that is responsible for teaching this culture to the employees.

Top Management Responsibility

In most of the organizations, the task of internal marketing is not clearly defined. Most often this function is handled by the Human Resource Department. The thinking is that HR department is best suited for dealing with employees in matters regarding motivation, training and development etc. Like product marketing, internal marketing is also a very important function to be left to any functional department. In my personal opinion, top management is responsible for internal marketing. Firms like GE, Zappos, Google ,3M has CEOs taking the full responsibility of internal marketing.

In this highly competitive environment, internal marketing is a tool that can differentiate an organization from its peers. It is time for organization to understand its importance and start investing in it.

Originally Published in Adclubbombay.com

Crocodile : Will It Realize Its Potential ?

Brand : Crocodile

Company : SP Garments ( Crocodile International Pvt Ltd)

Brand Analysis Count : 468

Crocodile is a brand from Singapore based Crocodile International Pvt Ltd ( CIPL) . The brand came to Indian in 1998 as a JV between Shivram Associates and CIPL. Within a span of three years, the brand gained much attention in the Indian market.

Crocodile as a global brand had its origin in 1949 in Singapore . The brand later became very popular across Asia as an affordable fashionwear for men. The brand is also famous for the controversy and long legal battles for the logo with the iconic French brand Lacoste.

Crocodile's brand logo has much resemblance with the logo of the French casual wear brand Lacoste. Both the brands has crocodile as the logo. Although there is some difference in the logo, for a consumer both the logo looks the same. In Lacoste logo, the crocodile is right facing while in Crocodile brand - it is left facing. Both the crocs are in green color and is strikingly similar for a casual observer.This has caused a very long legal battle in markets like Hongkong and China.

Later in 2003, both the brands went for an out of court settlement where Crocodile agreed to make some changes with regard to the logo.

The new Crocodile logo has the tail more vertical, the color of the croc is grey and the croc has scales and bigger eyes.

Controversies apart, the brand had a good initial run in the Indian market. The brand was priced at a premium but the international image , the resemblance with Lacoste and some heavy media campaigns took the brand to a level of high popularity. It is interesting to note that the brand owners had registered for Crocodile trademark as early as 1950s but the brand actually entered the market only in 1998.

The brand initially launched its range of innerwears and I still remember the TVC where girls at a pool party ogles the hunk wearing Crocodile inners and the TVC ends with girls saying " There is a crocodile in your pants ". The brand later added its entire range of casual wears in its promotions.

Another striking branding strategy of Crocodile was its merchandising . The brand had lot of Single Brand Outlet in upmarket malls which increased brand visibility to a large extent. Although the price was at a premium, it was affordable.

Despite these positives, the brand struggled to make profit. In 2006, the brand changed owners and Coimbatore based SP Garments bought the stake of Shivram Associates . Ever since SP Garmets took over, the brand has been on a restructuring exercise. According to news reports, many unviable stores has been closed and the new owners are looking at Company Owned Outlets to promote the brand.

The brand was initially targeting men of the age 30 +. The current strategy is to target much younger consumers from age 20 +. The brand will be positioned as a young fashionwear which is affordable and has an international legacy.

The brand is yet to launch a media campaign and hence cannot comment much on the positioning strategy.

Crocodile brand has lot of positives on its side. The brand has a good recall in the market. The brand name Crocodile has a charm factor in it.The logo similarity with Lacoste is a definite advantage and there is still a gap for an affordable casual wear brand in the Indian market. But one of the mistakes that the International brands do in the Indian market is to price themselves out of the game. Crocodile has a huge potential if it plays the afford-ability game rather than try to cash in on its faded international image.

Crocodile will be an interesting brand to watch for.

Marketing Strategy : Unleash Your Innovation Engine

Indian companies are not well known for innovation. In comparison with the global counterparts, Indian firms have so far shied away from investing in innovation. That is the reason why India cannot boast of an iPod or a Google. It is not because India is lacking in brilliant minds. Indians are an inevitable part of the R&D initiatives of most of the global firms. Infact most of the global firms have their R&D centres in India to take advantage of the human potential available.

Despite having brilliant minds, it is highly disheartening to see Indian firms lagging behind product innovations. One of the primary reasons is the reluctance of Indian corporate heads to invest in creating an innovation culture. When Indian firms begin to invest in creating an innovation culture, markets witness the launch of products like Nano, Tata Ace or a Mahindra Scorpio.

One of the primary requisite of creating an innovation culture in an organisation is the top management involvement. Any breakthrough innovation can happen only if there is a strong commitment from the senior leadership of the company. Senior managers should be able to instil a sense of ownership in the mind of the employees if they want to create an innovation culture. The leadership should take care to erase the fear of failure which is most detrimental to the creation of a culture that promotes open innovation.

Managers must also remove the myth that innovation is always expensive. We are living in an era where most of the brilliant dollar ideas are created by people working with very limited financial resources. When organizations embrace an innovation culture, the cost of creating innovations begins to reduce drastically.

There are three critical investments that companies need to make in their quest for creating an innovation engine. The first investment is in the culture, second investment is people and the third investment is in the time.

Creating an innovation culture is the primary requisite for all firms aiming to build their business on innovation. This is perhaps the most difficult investment to make. Once the innovation becomes a part of the culture, it can be further strengthened using processes. For example in 3M, 25% -30% of the revenue should come from new products introduced within five years. To facilitate this process, technical employees are allowed to spend 15% of their time on projects of their choice.

Another vital investment is on the people. Management must understand that it is people who drive innovation. How ever robust be the process, without highly motivated people, process may achieve little. Firms focusing on innovation undoubtedly take care in selecting and retaining highly motivated employees. The new kids on the block like Twitter, Facebook is attracting bright talents because of their unique approach to work. Google has become one of the most preferred places to work because of their penchant for creating a unique work environment.

Another vital investment that firms have to make is with respect to time. Creating an innovation culture cannot happen overnight. This is a long process and each firm should discover their own DNA of innovation. Time is the investment that the leadership has to make if they want to build the innovation culture into their organizations. Innovation cannot be initially managed over quarters. The management should first establish an innovation budget and encourage the employees to invest that budget into product development or improvement. It will be easy if these budgets are initially spent on product improvements rather than breakthrough products or new products. Once the entire team begin to understand the seriousness of the innovation drive, more and more serious innovations will follow.

It is important for the senior management to tolerate failure. It is impossible to innovate without tolerating failure. And the fear of financial loss is the greatest inhibition for firms venturing into creating an innovation based business model. An open communication channel between the innovation leaders and the senior management is a necessity to avoid such financial loses. Managers should be encouraged to speak their mind about the viability of a particular idea or a project.

Originally Published in Adclubbombay.com

Brand Update : Alpenliebe is no longer a candy its also an Eclair

Alpenliebe, the flagship candy brand from Perfetti VanMelle (PVM) recently launched Alpenliebe Eclairs.The brand which pioneered candy ( more specifically deposited candy) segment in India is no longer a candy brand.

PVM has been experimenting with Alpenliebe for a while now. Ever since the launch in 1995, the brand saw may product-line extensions and campaigns.

The brand over these years launched lollipops, different flavors of Alpenliebe and also extensions like Creamfills and Mangofillz Alpenliebe. Consumers willingly accepted these variants making Alpenliebe market leader in the segment.

Along with the extensions, PVM extended the equity of the brand to other confectionery segments through secondary associations. The brand launched Chocoliebe in the eclair category drawing equity from Alpenliebe.

The brand also saw some clutter -breaking campaigns in its life so far. The brand was launched with the positioning - Simply Irresistible. The brand used the messages like " Jee Lal Chahe ,Raha na Jaye " and finally to " Lalach Aha Laplap".

The brand then introduced Kajol as the brand ambassador and along with the animated alligator - Mr Munch began promoting Alpenliebe aggressively. In 2010, the brand launched another clutter-breaking campaign which saw Kajol doing a role reversal of sorts. The ad featured a theme where the role of human and monkey were reversed . Kajol took the role of a monkey and Madaari ( master) was a monkey ( detailed plot here)

Watch the campaign here : Role reversal

The latest move of Alpenliebe to launch eclairs was a complete surprise. First thing is that the launch of Alpenliebe eclairs completely changed the character of the brand. The brand now is no longer a candy. In a branding perspective, this is significant. It is just like Horlicks launching noodles. Horlicks no longer is an energy drink. So Alpenliebe has become a brand that endorses many confectionery products including eclairs, sugar filled candy, cream filled candy and lollipops.

Secondly, the brand now competes with Chocoliebe which is the eclair brand from the same company. So higher chance of cannibalization happening for PVM.

Although the core Alpenliebe brand has been consistent with the positioning of " Irresistible Taste", the product-line extensions were having different positioning. For example -

Lollipop has the tagline " Lagay Raho"

Creamfills has the tagline " Kuch Alagh"

Mangofills has the tagline " Mango ka Tinku".

This shows that Alpenliebe is not maintaining a consistency in the core positioning. For an umbrella brand, consistency of core brand message " Simply Irresistible " is vital and this message should run through all the campaigns of the extensions.

Eclairs however has maintained the irresistible taste as the positioning. But the launch campaign is horrible.

Watch it here : Alpenliebe Eclairs

I feel that the ad agency was told to create a funny commercial and they tried and failed miserably. Alpenliebe Eclairs has the tagline " Chocolatey Laila " which I think is a tagline that may not have much life in it.

Having said that, there is a business logic behind the launch of eclairs. Confectionery marketers are faced with the issue of consumer price- fixation. The market is highly price conscious. Candies are now priced at 50 paise and all efforts of marketers to make consumers pay more has failed. Alpenliebe Eclairs is an attempt by PVM to trade-up the pricing ladder. The Rs 1 eclair will add more profitability to Alpenliebe portfolio and eclair is a high growth category in this industry.

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Brand Update : Sunfeast enters noodles segment with Yippee

Sunfeast is on its way to become a megabrand. This challenger biscuit brand launched in 2003, within a span of 7 years, has presence in categories like biscuits,pasta and now in noodles. Sunfeast made its first brand extension in 2005 when it launched Sunfeast Pasta Treat and created the pasta category in the Indian market.

In September 2010 , the brand launched its noodles brand extension- Sunfeast Yippee. Indian noodles segment has now become a huge market worth Rs 1200 crore . Maggi is the market leader with a whopping 70% market share ( Business Standard). A huge market with one major market leader is definitely an attractive one. That is one of the reason why so many players have recently launched their brand in this segment.

Sunfeast ( ITC) is a worthy player to take on the might of Maggi. ITC is a company that is not averse to taking risk and have a huge cash reserve to fight a marketing war with Nestle.

The Sunfeast brand already has built up sufficient equity in the biscuit business with its high profile campaigns featuring Shah Rukh Khan . The brand also occupied good shelf space in most of the large retail formats . Another aspect of the brand was its penchant for launching a series of new products and flavors which helped gain lot of consumer liking in the biscuit business.

Looking at the strategy behind extending the biscuit brand into noodles, there are pros and cons that has to be noted. The major advantage for ITC in extending the Sunfeast brand is that it may have saved lot of money through this extension. Building a brand in a sensitive category like food will take lot of investment and time. Since Sunfeast is already in food business, it makes economic sense to launch noodles under this brand.

The disadvantage is the dilution of the equity of the brand in its core business- biscuits. Sunfeast is not now a biscuit brand but an umbrella brand endorsing many food items. Hence the personality of the brand has changed . This change has happened from 2005 itself when the brand launched the Pasta Treat.

In the branding of noodles, Sunfeast has adopted an endorsing structure where Sunfeast brand will endorse the Noodle brand "Yippee " . The look of the brand says that it is going to be positioned as a happy, vibrant, fun loving brand. I am yet to see any campaigns for this brand in any of the channels. Retail shops are displaying the brand with some POP promotions but not much on the message side.

Picture courtesy and an interesting take on the brand by Karthik - here

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Marketing Strategy : 10 Questions About Your Brand

Marketers are faced with a highly challenging task of balancing short-term and long-term strategies for the brand. In a highly competitive market, marketers often get deluged in activities which are tactical in nature. In doing so, brands may lose focus on pursuing its vision.

There are many reasons behind the manic run behind short-term gains for the brand. The major culprit is in trying to manage the brand from quarter to quarter. Pressured to show positive growth in every quarter, managers are seldom given time to analyze the long term implications of their marketing activities.

At some point in time marketers need to pause and take stock of the brand’s path to future. Great brands are never built in 3 months. It takes years of focused work and investments. Although marketers are willing to invest now, they expect a positive ROI within a short span of time.

Whether the brand is new or old, marketers need to periodically assess and evaluate the path towards the future. The following questions will help the brand managers to check whether the brand is treading in the right direction.

1. What is your brand vision?

It is critical for brands to have a long term game plan. The plan will help serve as a guideline that will help future managers to devise action plans and continue in the right direction.

2. What needs of customers that your brands satisfy?

Marketers must be able to clearly articulate the customer needs and wants that the brands aim to satisfy. These needs and wants may change over time; hence marketers need to periodically review whether the brand is currently relevant in the customer’s life. The brand should also be able to appeal to the new demands of the consumers. Regular evaluation of this parameter will keep the brand in tune with the changing consumer mindset.

3. What is your brand’s core strength?

Brands needs to have a “ WoW” factor if it is aiming for long run profitability. Marketers needs to constantly search for the “WoW “factor and keep inventing more and more of these “ WoW” factors.

4. What values does the brand represent?

Brand values represent the core foundation upon which brand strategies are made. According to Professor Kevin Lane Keller, Brand Values are those set of abstract associations that characterize the 5 to 10 most important aspects or dimensions of a brand. Brand values serve as the basis for brand positioning. Marketers have to identify and internalize these core values and periodically check whether the brand is aligned to these values.

5. Will the customers relate to those brand values?

Not only that the marketers should identify brand values, they need to check whether those brand values are relevant to consumer’s life. Sometimes consumers may not relate to the brand’s core mantra. It is in this situation where the brand may feel disconnected with its target audiences. Periodical review of the brand’s connection with the target market is critical to long-term survival.

6. Is the brand relevant to a customer’s life?

Successful brands stay relevant in the consumer’s life. Marketers should be able gauge whether the brand is relevant to the customer. Managers should constantly keep in touch with the customers to understand how the brand is helping them in their life.

7. Is the brand’s promise sustainable over time?

Markets are dynamic and consumer taste and preferences change drastically over time. Hence while developing the brand’s core mantra or promise, managers should also devise a process to determine whether the brand’s promise is sustainable over time. The brand also needs to evaluate its promise in comparison with its competitors.

8. Is your brand flexible?

There will be situations where the brand may have to reinvent itself. New opportunities may force the brand to venture into related as well as unrelated categories. Marketers should build some amount of flexibility in the brand architecture so that it is possible for the brand to venture into other categories.

9. Does the brand create excitement in the market?

Iconic brands are exciting. These iconic brands not only excite the customers but also the employees. A crucial question in the brand’s quest for excellence is whether the brand is able to create a sustainable level of excitement in the market. Creating excitement in the market is not easy and it cannot be done overnight. Marketers need to invest a lot if they want to create a high level of excitement in the market.

10. Is your brand engaging the customers?

The final question for the managers is about customer engagement. We are living in the experience economy. Consumers pay for experiences rather than for products. To understand the customer’s expectations and deliver those experiences, brands needs to constantly engage the consumers. Technology has enabled marketers to directly interact with the customers in multiple platforms. Managers should check regularly whether the brand is engaging with the customers through the various available platforms.

Originally Published in Adclubbombay.com