Wednesday, June 30, 2010
Oxemberg : Body Music
Saturday, June 26, 2010
Marketing Strategy : How to Market The Intangible
Marketing the Intangible
Originally Published in Adclubbombay.com
Services contribute about 5o% of India’s GDP and have become an important growth engine for our economy. The growth in the service sector has opened up immense opportunities for new products and also newer markets. The huge service economy of India has attracted many players into the market. The market is now flooded with new players and new products.
Marketing of services is a challenging task primarily because services are largely intangible in nature. Because of this intangible nature, consumers find it difficult to visualize the service or evaluate the quality of service before purchase. For established services this problem is less because customers already have formed their opinions because of their past interactions. For a new service firm, getting the customers to try out the service is a very difficult task. This calls for a strong branding effort on the part of the service marketer to lure the customers into their offerings.
Creating a service brand is not the task of the marketer alone. The entire organization is responsible for crafting that brand experience. This is because of the fact that service cannot be separated from the service provider. When the brand promises a consumer of a definite experience, the entire organization should be working as a single unit to provide that expected experience. People who are a part of the organization form an important element of the consumer’s perception about the service brand. For example, the behaviour of the cabin crew in an airline service is a critical factor that defines the perception of the consumers regarding that brand. Hence managing a service brand is more of a strategic function rather than a mere functional task.
For a consumer, evaluating a service before purchase is a difficult task. There is a strong element of risk which is perceived by the consumer before availing the service for the first time. Marketers’ task is to reduce the risk perception and encourage trust so that consumers try out the services. Many companies use branding as a tool to build trust and thus create a long lasting relationship with the customers.
Professor Leonard Berry in his article “Cultivating Service Brand Equity “in Journal of the Academy of Marketing Science” talks about four ways to build service brand equity. According to him, the service brand should be (a) Different (b) Determine your own fame (c) Make an emotional connection and (d) Internalize the brand. Strong service brands create powerful differentiators to convince the customers that they are different from the rest of the crowd. Service brands should also be very clear about their core strengths which will inturn makes customers to come back to their service offering. The brand should then build emotional connection with the consumers. Another important requisite is that the employees of the service organization should internalize the brand values and then only they will be able to provide outstanding customer service.
While communicating the service brand’s message, firms should be able to project its credibility, expertise and trustworthiness to the customers. Brands use characters, logo,symbols,colors etc to reinforce its service promise. ICICI Bank successfully used celebrities to build its image as a trustworthy new generation bank. Global consultancy firm Accenture firm uses Tiger Woods to convey its core brand value of “Performance”. These brands have used brand elements like slogans to reinforce the brand promise. Brands like Bajaj Allianz use characters to convey its message. Bajaj Allianz uses the animated “Super Agent “character to convey the message of reliable customer service. These brand elements help the customers to visualize the services even in the pre-purchase stage thus reducing the perceived risk of service failure.
Marketing a service require a holistic approach where the entire organization is focused at fulfilling the brand promise. It becomes the responsibility of every employee in the service organization to take part in creating the experience promised by the brand.
Tuesday, June 22, 2010
Sure : No Sweat
Saturday, June 19, 2010
Brand Update : Vivel Extending to Fairness Cream
Thursday, June 17, 2010
Marketing Strategy : Customer Service Starts From The Top
Zappos.com is an online retailer of fashion accessories predominantly shoes. The retailer is famous for its focus on customers. The key factor behind the stupendous success of Zappos.com is their customer service culture. The company is passionate about their customers and the culture of putting customer first runs through the entire company. The entire business model of this company is centred on customers and the CEO is the driving force behind this customer oriented culture. The company has a warehouse that is open 24X7 so a customer who orders at 11 PM gets a next day delivery. The company also has a 365 day return policy where a customer, if he is not satisfied, can return the product with in 365 days of purchase and get a refund.
Top Management Involvement
The quality of customer service is directly proportional to the involvement of senior leaders of the company. Although the actual execution of service is done at the lower levels of management strata, unless the senior leaders are held responsible for customer satisfaction, the process will not excel. But for that, customer service should be given its legitimate position in the management functions. In service firms it is natural that customer service is given its due importance. But in other companies there is no reference to customer service as a function.
When senior managers become involved in managing customer service and satisfaction, the function gets recognized in the organization. Priorities change and service does not become an irritant but a priority. Firms like Zappos.com,Ritz Carlton, Mitchells and Marriott thrive because of the intense involvement of top leadership in monitoring customer service. In firms like Zappos and Marriott, the CEOs take personal interest in customer service initiatives.
Employee Motivation
Although it may seem very basic to state that employee motivation is critical to any customer service initiative, many firms fail to practice this obvious dictum. Since the frontline employees are the implementers of customer service, it is absolutely essential that they are given the necessary authority and responsibility to handle any request from the customers. This perhaps will the main reason why consumers do not appreciate being serviced by call centre executives. These outsourced firms usually do not have any authority to solve the issues of customers.
Randy and his sister approached the store and was surprised when the store staff replaced the shakers for free and even apologized for not packing it correctly. The author then mentions that his family later went on to give more than $100,000 worth of business to Disney Land. The salt and pepper shaker was not worth more than $10 but the small gesture by the Disney Staff created goodwill that is worth millions.
Such customer service excellence will not happen unless the employees are intrinsically motivated. The motivation comes from the responsibility and the freedom that comes with the job. It is in this context that organisational culture becomes critical. While processes can make customer service error free, spontaneity can come only from individuals. Organizations should strive to bring that spontaneity into the customer service.
Another story about customer service spontaneity -
Bill Marriott , the Chairman and CEO of Marriott International, in his blog once narrated a story about an Associate who gave his pants to one of the guests . The guest who came for a business meeting found that he accidently packed his wife’s slacks instead of his own. He realized this only minutes before the meeting began. The chances of going to a store to buy one and making it to the meeting on time were minimal. One of the Marriott Associates noticed that he happened to be of the same size as the guest and offered him the pair of pants he was wearing. The pants were of perfect fit and the guest went to the meeting on time. The Associate managed with his extra casual pants till the grateful guest returned.
(source : http://www.blogs.marriott.com/search/default.asp?item=2358646).
It is not that companies today are not aware of these basics but the fact is that in pursuit of high growth, often these fundas take the backseat.
Sunday, June 13, 2010
Brand Update : Sugar Free Natura - Expanding Brand Usage
Tuesday, June 08, 2010
Brand Update : Vanish Gets a Brand Ambassador
Sunday, June 06, 2010
Marketing Strategy : Four Pillars Of Customer Focus
The Four Pillars of Customer Focus
Originally Published Here at Adclubbombay.com
Customer focus is one of the most used jargons in the marketing lexicon. Despite being accepted as an important strategy, many firms have not yet been capable of delivering exceptional customer service and focus in their operations.
Customer focus is a choice and the choice has to be made at the highest management level. Being customer focused is an expensive proposition. It is resource intensive and needs hands-on management from senior leadership of the company. More than money, customer focused strategy depend on human resource. The investment needed for maintaining customer focus is the time and dedication of all management levels towards the goal of service excellence. Most of the firms which aspire to be customer focused fail because of the lack of involvement of top management in customer-related activities.
Most companies invest their resources in creating processes and automating customer touch points. After this investment, the management leaves the customer management to these insensitive machines and algorithms. The entire process will be a waste unless there is a human element in it.
For any organisation who aspire to be customer-centric should start by building a strong foundation .Without a strong foundation, customer centric activities will lack in their effectiveness.
Customer knowledge, Culture, Human Resources and Conflict resolution are the four pillars of a customer focused organisational strategy.
Customer Knowledge
Customer profiling is the first step towards building customer focus. This is one of the most difficult phases in the quest towards customer focus. The depth of customer focus in a company is directly proportional to the depth of the customer information collected. The effectiveness of all customer-related promotions will depend on the extent to which the collected information is being used at the customer touch points.
For example in a business to business environment, firms are sitting on a huge pile of customer information. The information from the past interactions with the customer, the information from the past sales data are all available with the company. How well this information is available to the sales force will determine the effectiveness of any customer related campaign run by the company. While most firms collect customer information, this information are seldom updated or distributed to the concerned personnel.
Another important task for the managers is to identify the customer group that the organisation should focus on. It is near impossible for organisations to satisfy every customer. Some customers may be unprofitable for the company to serve. The management should be able to take informed decision on the customer groups which it will have to focus on. Once these groups are identified, firms must orient its organisation to deliver exceptional service to these customers.
Customer-Centric Organisational Culture
The second most important pillar of customer focused organisational strategy is the culture. Customer-centric organisational culture is where the entire organization is tuned to deliver exceptional service to the customer. Customers become the centre around which the organization is built.
The Chief Executive becomes the Chief Customer Officer. Every process and actions of the firm is prepared with customer in mind. Although this proposition may sound theoretical, companies like Marriott, P&G and FedEx have built their business around a customer focused strategy.
Human Resource
People form the third pillar of a customer focused organisation. The employees are the vital interface between the customer and the company. Customer focused organisations invest huge resources in developing a team of highly trained customer- care executives.
It is critical for organisation to understand the importance of front-line employees who deal directly with the customers. These employees represent the face of the organisation. There has to be clear role clarity for employees who interact with the customers. Customers always prefer a single contact point with the selling organisations. Customer focused organisations thrive because their entire organisation is created to optimize customer touch points. The customer –care executives are given enough authority and responsibilities to deal with customer requirements. Cases which are beyond their authority are escalated to higher levels.
Conflict Resolution.
Handling customer conflicts is the litmus test of the effectiveness of any customer-centric organisation. When there are no conflicts or complaints, customer management is not a daunting task.
The real depth of customer focus is revealed when there is a complaint or a conflict. As customers, we all have faced situations where our complaints go unresolved. A recent survey conducted on mobile phone users revealed that unresolved complaint was one of the major reasons for customer churning in Post-paid customer segment.
Customer focused organisations have a robust complaint handling mechanism backed by strong process and also sufficient budgets. These organisations have a system where complaints or conflicts are addressed within a stipulated time frame. The unresolved complaints are escalated to higher levels of management and necessary actions are taken at each levels of management for proper remedial actions.
Thursday, June 03, 2010
Titan Zoop : Be Cool
In 1998-99, Titan tried to tap the market with a brand Dash. But the brand failed to catch the fancy of the market at that point of time. Analysts says that Dash was too early for the Indian consumers. During that time, parents were not that interested in spending on kid's accessories like Watches.
Watch the ad here : Zoop
Zoop faces competition from the host of unorganized players in the market along with cheap Chinese imports. For Zoop, budget competition will also be something to be concerned about. Budget competition is the competition for the money . Budget competition for Zoop will be those kid's products across various categories that falls in the price band of Rs 350- Rs 1000. That include toys, clothes, video games, etc. If you look at the launch campaign of Zoop , the brand subtly addresses that competition by pointing at the ' need ' for a watch.
Zoop has rightly positioned itself on the style factor and I am sure many young customers will fall for it.
Monday, May 31, 2010
Marketing Strategy : How to Engage Customers to Create Brand Equity
Engage Customers to Create Brand Equity
Originally Published here at adclubbombay.com
Engagement means creating involvement. Customer engagement means the effort taken by the brand to develop an involvement between customers and the brand beyond regular purchase and use.
Traditional marketing practices seldom encourage active involvement of customers. The marketers often are satisfied with the regular purchase of the product by the customers and the level of engagement with the customers is limited to handling queries, handling complaints and loyalty programs.
The new economy has necessitated marketers to think beyond the typical purchase/sales orientation to a more pro-active customer engagement orientation. The web 2.0 and the rising popularity of social media have created a new cost effective platform for marketers to build and maintain customer engagement programs.
Take the example of ZooZoo- the characters created by Vodafone to promote its Value Added Services. With in a short span of time, ZooZoo was all over the social media and the Facebook fan count reached 2, 75000 at the time this article is being written. Using ZooZoo, Vodafone has created a new way of connecting and engaging with the target audience.
Create a culture of engagement.
It is not easy to create effective customer engagement. The first and foremost requirement for effective customer engagement is to orient the company culture towards a customer orientation. Customers can be demanding and more so when the company takes an initiative to reach out. Hence marketers should venture into creating active engagement only after the entire firm develops an orientation towards customers.
Make it easier for customers to connect.
An important requisite for active customer engagement is to make the process easier for consumers to reach the company. Active consumer engagement cannot work effectively in an outsourced environment. Hence the marketing department should be able to create and sustain a robust mechanism to respond to the consumers.
The web has made it easier for marketers to keep tab on consumers’ demands. But in a country like India, one should account for millions of consumers who cannot access such a channel. While creating such engagement channels, the brand has to create a robust process to ensure that it responds to the consumer immediately. An unanswered query or a complaint can create negativity and can be detrimental to the brand’s equity.
Have a vision
Brand managers should have a clear vision about the outcome and purpose of customer engagement. The critical question is “what is the expected outcome of this engagement?”
The outcomes of a customer engagement program need not be based on purchase or sales. There can be qualitative objectives also for such an engagement. How ever brands will reap the benefits of loyalty and repeat purchases from the consumers who are actively engaged with it.
When the consumers are actively engaged with the brand, one need not search too far for new product ideas. Highly involved consumers will be a vital information source for obtaining feedback and product improvement ideas.
Move to a higher ladder.
Once the platform is identified and target audience chosen, the brand should have something to say to the consumer. The brand can engage the customer in many ways. Typically during engagement, brands will assume the role of an expert offering advice to consumers on problems. The task for the marketer is to find the areas in which the brand should engage with its consumers. For example, through Gang of Girls website, Sunsilk is providing tips and advice on hair care which is the subject where the brand is an expert. The advantage of such an engagement is that the brand has more control over the conversation.
While identifying the area of engagement, the brand should be able to ladder up to a more abstract need rather than restricting itself into a category need. This will appeal to a larger audience and thus take the brand’s reach farther. Tata Tea created a highly successful engagement based on the theme “ Jagore “ inspiring many youths to register themselves as voters in the recent general elections. But the challenge for the brand is to take this engagement further since the elections are over.
Another way of engagement is where the brand provides a platform through which the consumers engage with each other. The brand acts as a facilitator rather than the expert. Consumer driven brand communities are the results of such an engagement. These engagements are more powerful than the brand driven engagements because the underlying cause for such engagements arises out of passion rather than profit.
It is all about action
Successful engagement arises out of action. Brands venturing into creating customer engagement must devise ways to create and maintain a higher energy level among the consumers. The engagement plan should have activities, contests, debates, meet ups, webinars, sharing, exchanges, tweets etc to keep up the energy level. This means that there is going to be a substantial investment on the part of the brand to keep the momentum going. The investment is more on the human side rather than monetary investment. Technology has enabled companies to keep these engagement costs minimal. But there has to be a dedicated team who will keep the activity levels high so that there is never a dull moment.
Saturday, May 29, 2010
Brand Update : Gems Does a Kinder Joy
Gems Surprise is inspired ( copy ?) by the Kinder Surprise . Kinder Surprise has met with success in the Indian market. I do not have the figures but as a consumer, I have been a regular buyer of this product so are my friends.
The consumer acceptance of the Kinder Joy may have been the reason for the launch of Gems Surprise.
Kinder Surprise was never a competition for Gems. Kinder Surprise has created different niche where Cadbury does not have a presence. Cadbury does not want any product to rule any part of the chocolate market that easily. Through Gems Surprise, Cadbury is addressing the industry competition.
There is no product in Cadbury's brand portfolio that is similar to Kinder Surprise. Gems was chosen because it is a unique brand with lot of equity among the consumers. The form factor of Gems also made the brand worthy of being a competitor for Kinder Surprise.
Gems Surprise is going to create holes in the Parent's pockets. Gems was always affordable and right product to buy for the Kids. Gems Surprise priced at Rs 30 is an upward stretch for the brand.
The question is whether the consumer will buy Gems for Rs 30 because there is a gift free with it ? For all those customers who has been buying SKUs of Gems for Rs 5 and Rs 10 may find it difficult to justify the purchase of Gem's Surprise at Rs 30.
What I understand is that the product ( chocolate ) will be the same in Gems Surprise. What you pay more is for the toy.In the case of Kinder Surprise, consumers did not have a benchmark about the price so Rs 30 for Kinder Joy was accepted by the consumer.
Gems will definitely get lot of consumer trials and purchases .Whether the purchases will be sustainable will depend a lot on the variety of the gifts that is inside the pack. Kinder Surprise is the master in this game. Will Gems beat the master will be a fun ( expensive though) to watch.
Related Brand
Kinder Surprise
Wednesday, May 26, 2010
Market Statistics : FMCG Market Shares
Monday, May 24, 2010
Tata Tion : Why Let Go
Company : Tata Tea
Brand Analysis Count # 454
Tion is a fruit based drink which has extracts of tea, ginseng and fruit. The brand is a challenger in the Rs 2500 crore non-carbonated beverage market in India.
Tion is positioned as an energy drink . The brand although fruit flavored is positioned as a tea-based cool drink. The major differentiators for Tion are its ingredients. The brand has tea extracts and Ginseng which makes the brand stand out from the rest. The presence of these ingredient also makes this brand look more healthy compared to other drinks.
Tion has the tagline : Why Let Go. The launch campaign is does not have much to talk about.The brand is essentially giving a message that it has so much in it that you cannot let it go.
Consumers have different take on the taste of Tion. The taste may not be universally appealing and that can restrict this brand to a niche. Tion will appeal to those consumers who are looking for a healthy cool drink and something different from the fruit juices. Compared to the existing fruit drinks, Tion gives certain kind of refreshment thanks to its ingredients.
Tion was initially launched in 400 ml packs priced at Rs 22. But now the brand is available at 200 ml packs priced at Rs 13. The packing is novel and can generate lot of trials.
But the 200ml drink seems to be too little to quench thirst and can create a perception of too little for that price. That was the typical reaction of a consumer after having the drink on a hot day.
Tion is a different product from the rest and along with the endorsement of Tata, the brand can get lot of trials. In the city where I live, Tatas have managed to make the brand available at key locations. The proposed JV with Pepsi will also help the brand get into more store shelves.
The challenge for Tion is to convince the customers to regularly consume the brand. The brand is banking on its ingredients to convince the consumers to patronize it. I feel rather than the ingredients, the brand will hold the key. With the kind of communication strategy, Tion may not be able to build a strong equity. It may need a heavy dose of celebrities especially those in the athletics/sports which can reinforce the message of a healthy energy drink. With global brands like Gatorade, Burn etc upping their ante, Tion should invest more on the brand rather than banking on its ingredients.
Thursday, May 20, 2010
Marketing Strategy :Do You Know Your Customers ?
What Marketers Should Know About Customers
Originally published here in Adclubbombay.com
The dictum “Understand your consumers “has often become a cliché. It is not a new idea but it is the most forgotten idea. When sales are growing at tremendous pace and when the production is struggling to meet the demand from the market, consumer is pushed to the backyard. During periods of economic boom companies focus is on expansion, diversification, new offices, mergers and acquisitions. But then suddenly out of the blue, everything comes to a grinding halt. Growth stopped, inventory piled up and consumers stopped crowding the stores. Now is the time to bring back the consumer to the centre of your business strategy.
It is said that the seeds of disaster is sowed during the time of growth and optimism. Take the case of realty sector. This is the sector which was most affected by the current slowdown. When the industry was growing at a scorching pace, every one forgot the consumer. Prices were skyrocketing not because of real consumer demand but because of speculation. Many players cared little to understand whether the consumer is actually buying or is it a mere speculation that is driving the price. When the realisation came that real consumers are not buying, everything came to a standstill.
This current slowdown in the economy is a lesson for all marketers to go back to common sense. The common sense that consumer is the centre of business. The purpose of business is to create consumers. And to do that one should know the consumers.
Who is your customer?
Although this question sounds too basic and simplistic, it is surprising to know that many businesses do not have a basic definition of their customers. The era of mass marketing where the marketer treats the entire market as a homogeneous group is over. The market has moved drastically into different segments.
Consumer’s knowledge about offerings has also changed. This new set of empowered knowledgeable consumer has warranted that companies be more empathetic to the needs and wants of the consumers.
Marketers should have a thorough understanding about the consumer. The first step is to clearly define the consumer. The definition of consumer should be exhaustive and not be limited to a mere demographic picture. The mental, physical, emotional and social dimension of the consumer should be clearly stated by the marketer.
What does the consumer need?
Once the customer definition is clear, the next task is to map the needs of the consumer. This is not a static process because consumer needs and priorities keep changing. Hence there has to be a continuous mechanism through which these changes are absorbed into the learning systems of the company. In an advertising agency perspective, increasingly companies are cutting their media expenses. That does not mean that the need for promotions has died. When advertisers look for new cheaper methods for promotions, agencies should be in a position to help them. This can happen only if the agencies have a better understanding of the consumer’s changing needs.
Understand Customer’s customer
In the remarkable book “What the customer wants you to know “, management guru Ram Charan says “The most important thing to understand about your customer is her customers”.
The customer’s customer principle has wide application in business marketing. For an advertising agency, the customer’s customer is the consumer. For a business firm, it will be the customer of the client. If a marketer wants to clearly understand the customer needs, he has to first identify the customer’s customer and customer’s competitor. While many consumer firms clearly map their customers and competitors, business markets fail to understand the significance of this understanding. Because if the customer’s customer stops buying products, then your customer will stop buying from you.
From market driven to market-driving
Consumers will not be able to tell you exactly what they want. But a deep understanding about their life and their behaviour will give valuable inputs about new product ideas. Market –driving strategy is the strategy where the company shapes the consumer needs and wants through break through products and technologies. Hence it is important for marketers to go beyond what the consumer is saying.
Market Driven strategies are the conventional reactive strategies. Companies react to the changing marketing conditions using various marketing mix elements. The focus is on satisfying the obvious stated needs of the consumers. Market Driving strategies are aimed at creating original products and shaping consumer needs. The needs may be hidden and marketers should have the guts to tap those hidden needs.
Steve Jobs is quoted to have said that he does not believe in market research. He famously said that “We just want to make great products “. Here the focus is more on shaping the consumer needs and wants rather than reacting to existing needs. In a market driving strategy, the focus is to create new customers rather than satisfying existing customers. But for that one has to understand the hidden and latent needs of the consumers.
Constant consumer conversation and engagement will help marketers to understand those needs and find means to satisfy those needs profitably.