Marketing Myopia : ICICI bank charging fee for rewards redemption

Last day when I got my ICICI credit card bill, an interesting notice was enclosed along with the bill. The notice stated that from June 12, the redemption of my reward points which was accumulated  because of the " Loyalty Program" of ICICI bank will attract a charge of Rs 99 + tax. 

Oh really .... What the hell !!

This comes from one of the largest marketing machine in the Indian banking industry and I am totally confused about the logic of this move. Then I happen to read an article in Business Standard and was happy to know that even the journos doesn't have a clue as to what is happening. 

First things first. 

ICICI bank in a way pioneered the concept of rewarding the consumers for their banking transactions. Where reward points existed for credit cards, ICICI introduced reward points for savings bank too and for that they partnered with Payback which facilitate the reward management. 

In my understanding, reward programs are considered an effective way to increase brand loyalty. It is a common method used by marketers to reward loyal and regular customers. There are two sides to rewards. 

Firstly it rewards the existing customers to use more of the service or product and also it acts as an incentive for new customers to be loyal to the product. The thumb-rule is that the rewards must be enticing enough to encourage the customer to see value in being loyal.

Here the smart brains of ICICI bank loyalty program has decided to charge the customers who wants to redeem the loyalty points earned. 

Does it make any sense ???  

First the bank says that you will be rewarded with Payback points if you use the credit card and uses reward points as an incentive to become a loyal customer and then charge the customer when it comes to actual redemption.  It is short-termism at its best. 

You are going to charge the customers for being loyal ?? Common dear marketer , you must be living in the seller's market which is dead a decade ago. 

Another factor is the reward itself. If the reward one gets from the Payback was superb, then 99 INR may be justified but what you get for 1000 reward points is a silicon egg beater or a Prestige LPG hose  ( what a wonderful reward)  for which I need to pay additional  Rs 99 + tax. 

Although I have a Payback card , I have never bothered to look at the points because the so called rewards are no-rewards. So am I bothered about the Rs 99 charge, no because I don't intend to redeem it .  

But as a marketer, what ICICI bank is right now doing is defying all theories. 

Brand Update : Pond's extends to male category

Pond's has been traditionally viewed as a feminine brand. More so because of the products that the brand endorses. Starting with the cold cream, the brand has moved to various skincare segments. In a recent move , HUL has decided to launch Pond's skincare products aimed at men. 

The first product to be launched was the men's face wash. The variant or rather the brand-extension was launched with the upcoming actor Varun Dhawan as the brand ambassador.
Watch the ad here : Pond's men's facewash 

The ad is predictable and compares the brand to a battery charger for the face. Pond's men's facewash has the tagline " Face ka charger" and touts coffee bean's extract as the USP.

According to AC Nielsen, the male grooming market is estimated to be Rs 4000 crore and skincare is the biggest growing category with around Rs 443 crores ( Source). Hence the launch from HUL make sense.

Whats puzzling is why HUL decides to launch a predominantly feminine brand like Pond's for this opportunity.

Ideally (IMHO) HUL should have launched a brand exclusively for men's category instead of extending a Rs 1000 crore brand from a feminine category . Ofcourse Nivea is doing the same thing but doesn't mean that HUL which has the capacity to launch new brands should not launch a new brand. 

My argument is that Pond's will not be able to bring in lot of masculinity into Pond's without hurting the parent brand's persona and will always be constrained by the parent brand's perception. Since the market in question is so huge, HUL has wasted an opportunity to launch a powerful brand exclusively for men. It already have brands like Denim, Aramusk etc which could have been used for this opportunity. Why Ponds ?

Brand Update : Colgate rules the toothpaste market with 57% share

Today's Business Standard has an interesting report on Colgate which despite facing tough competition from major brands was able to hold on to the market share. Infact the brand was able to improve upon the market share. ( read the report)

According to the report, the Indian toothpaste market is around Rs 5000 crore and Colgate has around 57% volume share. Even in the Rs 2000 crore toothbrush market, Colgate commands over 42% share. This is despite the fact that there is an increased competition in the market and the competitors are the likes of HUL, P&G etc.

Some of the lessons of marketing is outlined in this report.

• Consumer Awareness
• Innovation in plugging product gaps
• Rural penetration through distribution augmentation

I feel that the brand's consistency in communicating and its aggressive media communication has helped the brand in good stead . The brand was quick to respond to competition although in the case of Sensodyne, the brand was outsmarted.The launch of Active Salt , Visible White also helped the brand to keep itself in the top of the mind of consumer.

Brand Update : Axe in deep trouble

The Times of India ( 23/05/2014) has a disturbing news for all Axe ( brand) fans. According to the report, the brand which had an iconic status and which was a market leader in the Rs 2100 crore Indian deo market has slipped into 3rd position. ( Source)

According the newsreport, Fogg is the leader in the deo market with a share of 17% and the second player is Park Avenue with a market share of 8%. Axe has been relegated to third position with a share of only 6%.

The reason is very simple. Axe failed to differentiate !

How ironic isn't it ? The brand which virtually built the deo market in India and ruled for many years but then fail at marketing ! 

To top it , the brand comes from one of the best marketing companies in the world - HUL .

The brand should have seen the writings on the wall . There were a plethora of brands copying the " seduction" theme . But the brand put up a brave face and refused to react . Soon Axe lost its mojo . 

I am not saying that Axe should have changed the basic proposition but it should have drove the agency guys to come up with break-through campaigns ( I know its easy to say) But rather than reacting strongly at the competition , the brand steadily imported its global advertising to the Indian market and watched its share go down the drain. 

Usually when I criticize the HUL, I get nasty comments about being an armchair critic . But let me stick out my neck and say that Axe failed in marketing and that is sad !

Philips Aquatouch : Shaver for the modern man

Brand : Aquatouch
Company : Philips

Brand Analysis Count : # 542

Philips has been recently pushing its electric grooming products aggressively in the Indian market. The company has been seriously building its product portfolio in the Indian market with focus more on small appliances, LED , audio devices and personal grooming products.

The big push came in 2012-13 when the company launched ad with the celebrity John Abraham for the Philips Men grooming range. Watch the ad here 

The company estimates that the men's grooming range would be around Rs 1500 crore and the market especially the young consumers are moving towards the more convenient electric devices. 

The company cites several market research studies which show that youth views these shavers to be convenient and consumers are worried about the cuts and nicks which they get by using traditional shaving products.

Although Philips' electric shavers are in the market for the last ten years, the bigger marketing push has come during this season. 

The company is now pushing the wet shavers branded Aquatouch primarily because Indian consumers are habituated using the shaving cream + water combination. The brand is running as series of ads featuring the benefits of the Aquatouch.

Watch the ad here

The brand is rightfully positioned itself as the " Shaver for the Modern Man " and the product directly attacks the traditional shaving razors. This is indeed a warning signal for Gillette. 

What is interesting about the product is not the strategy of Philips but the silence of the competitor - Gillette .

The pioneer and innovative powerhouse of the grooming market is surprisingly silent about electric shavers and trimmers.

Let me pen down my take on the Philips' thrust on the electric shavers. 

My prediction is that there is a high possibility of electric shavers and trimmers becoming a large category. The combo products which enables men to trim and shave will be a very profitable category and will dominate the higher end of the market. This is going to have serious problems for Gillette brands like Mach range and the Fusion range. 

The reason is the increasingly the consumers are now experimenting with their facial hair. Especially the younger market. They have now all types of mustache and beard and the conventional shaving razors are not flexible enough to cater their needs. 

Now many dabble with a trimmer and the good old razor. But soon time will come when these convenient electric shaver + trimmer will capture the upper end of the market. This can drive the expensive Mach and Fusion brand to be irrelevant to the Indian consumer. Looking at the economics , electric shaver is more economical than the expensive cartridges of Gillette . 

Wondering why Gillette which practiced " Planned Obsolescence " to the core by cannibalizing the existing products with innovative new ranges silent on the direct attack by Philips ? Are they practicing Marketing Myopia ??

Marketing Insight : What drives brand trust ?

Last day, I went to buy a small appliance as a gift, there were two brands- one was an instore brand and another a very well known brand. The in-store brand product looked very good with more features than the national branded product. At the similar price point , the instore brand looked a very good buy.  

When my wife asked my  " expert" opinion, I urged her to go for the national brand despite the fact that I knew that the private label brand would have been a better choice. 

On introspection, I found that what I was doing by choosing the national brand was risk-reduction. That is what branding is all about isn't it ? The national brand offered a much less featured product so on a value calculation, the private label offered more value. But as a consumer, the national brand offered less perceived risk.

So why did I as a consumer felt that the national brand offered less risk compared to the private label ? 

Firstly, the brand was reputed ( familiar) and its legacy gave me comfort that it would not fail me in terms of performance. Secondly, as a consumer, I had a positive experience with the brand which made me trust the brand more than the private label. Thirdly since the product was an electrical appliance, the perceived risk is more compared to another product category. 

So for marketers, creating trust for a new brand is not easy especially in product categories have high perceived risk ( common sense !) . And brand's role is that of risk-reduction. And as a consumer, I can say that for me a brand would be trusted if it is familiar and has perceived product expertise. 

What do you think are the drivers for brand trust as a consumer ?