Horlicks and Palak Paneer/ Exemplar Comparison

Brand funda : Elasticity of Brand

Article Review : What Makes Brands Elastic? The Influence of Brand Concept and Styles of Thinking on Brand Extension Evaluation Journal of Marketing Vol. 74 (May 2010), 80–92 ( Link)

 In this very deeply research article the authors examine why some brands are more elastic than others. Here the authors describe elasticity as the ability of the brand to extend to other categories

• Research suggest that brand extension success depend very much on the extension fit.That is whether the extensions fit the perception of consumers about the parent brand.
• The more elastic the brand is when the brand is able to extend itself to distant categories.
• Early research suggest that the brand's elasticity is dependent on the parent brand's characteristics.If the brand is positioned on prestige, then it is more elastic and can be extended to multiple categories.
• Functionally positioned brands are less elastic 

This article tries to expand the existing research by saying that while brand's characteristics are important in determining its elasticity, the consumer's style of thinking is also very important determinant in the brand's elasticity. Consumer's thinking styles are classified into Holistic thinking style and Analytical thinking style.

Analytical thinkers focus more on attributes and categories to draw inferences and judgements while holistic thinkers focus on broader connections ( contexts, relationships) between objects. According to the study, brands which have a positioning based on prestige usually have a abstract message which can be transported to multiple categories. Functional brands are at a disadvantage since the functional attributes cannot be moved effectively to distant categories.

The response by the analytical and holistic thinkers to the extension are also significant. Holistic thinkers are able to connect between parent brand and extensions while analytical thinkers will find it difficult to relate parent brand and extensions if they are functionally different.

The study finds that the brand's elasticity is jointly determined by the parent brand's positioning ( prestige vs funtional )  and consumer's style of thinking ( holistic vs analytical)

For prestige brands, analytical and holistic thinkers has similar  response to brand extensions while for functional brands, holistic thinkers had a favorable response towards extensions. The probable reasons can be that when evaluating extensions of functional brands, analytical thinkers focused on functional attributed and their similarities and often found dissimilarities.Another important finding is that prestige brands encouraged holistic thinking in both type of consumers. 

The study also suggest that brand can encourage holistic thinking in consumers through brand architecture. Sub-brands can be used to increase elasticity of functional brands for analytical thinkers.Brands can also bridge the gap for analytical thinkers by elaborate communication about the extension. Marketers has to match the message to the consumer's style of thinking which can make distant extensions receive favorable responses from analytical thinkers.

The article has lot of significance to marketing practice. While conventional marketing wisdom suggest the brands should not extend too far from parent brand, in practice, this may not be possible.The article gives direction for marketers endeavoring such extensions.It is important that marketers understand the consumer characteristics and its impact on the responses to extensions. Prestige brands are difficult to create but it has its advantages when it comes to brand extensions.

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Marketing Strategy : Toothpaste majors fights challengers effectively

A recent article in ET mentions that the challengers in the Rs 7000 crore toothpaste market like Anchor,Ajanta Babool and Vicco were wiped out by the major brands like Colgate, HUL etc. A few years ago the major toothpaste brands like Colgate and Pepsodent were shocked by the huge challenge from brands like Anchor ,Babool etc . The challenger brand used price as the major USP and gained more than 15% share in the market.

Its interesting to understand how the majors fought these challengers. The following are the strategies used by the major brands to fight the price competition -

• React aggressively : The assault from the challenger brand was faced by the major brands aggressively. Brands like Colgate, Pepsodent etc reacted sharply to the competitor first by reducing the price to arrest the severe market share loss.
• Flanker brands : The major part of the success of market leader was the use of flanker brands to ward off price competition. Colgate effectively used Cibaca as the flanker brand to fight the price competition thus preserving the price premium of the market leading brands.
• Use smart SKUs : The toothpaste market leaders also used less prices SKUs to neutralize the price competition. The availability of big brands in affordable packs in a way prevented the consumers from switching to a less priced local brand.
• Advantage in differentiation : The age old concept of Positioning and Differentiation helped the leading brands to effectively fight the price competition. The low priced brands failed to counter the brand-equity with price alone. 
• Deep pockets : The deep pockets of the likes of Colgate and HUL enabled a large aggressive and sustained offensive against the challengers. Regional brands didn't had a chance fighting the deep pockets.

The lesson for the challenger brand is not to fight the big players without credible differentiation. 

Best Marketing Practice : Uncle John's iDrive

It feels good when a brand innovates on an idea that benefits not only the brand but also the community. One such innovation is the children's park which was created by Cochin ( Kerala) based ice-cream brand Uncle John. Uncle John is a famous local brand of ice-creams marketed by M/S Jojo Frozen Foods Pvt Ltd. The brand name is coined from the name of its founder MC John.

Uncle John's I-Drive is a small children's park located near the NH Byepass at Cochin. Cochin which is the business capital of Kerala only has two well maintained parks for the residents. Both these parks are located in the heart of the city which makes it difficult to reach thanks to the heavy traffic. The launch of this small park which is away from the traffic of the city has proved to be a big boon to Cochinites. The park is modeled as a traffic park for kids with cycles, battery operated cars etc and other standard outdoor plays like slides, see-saw etc.

Pic Courtesy : The Hindu

What is interesting is that the whole concept of the park is ideated and executed by the brand. According to reports, the park is the idea of Mr.Joseph Simon who is a Director at the company which owns the brand. Another interesting fact is that the park charges Rs 25 as the entry fee ( per person) and the users can purchase ice-creams for that amount. The park already is a big hit among the residents of Cochin.

This park  is a classic case of smart marketing practice where the brand takes an initiative to offer something that is useful for the community ( also the target market) at the same time benefiting itself in the process. The investment of the park is huge but it is going to benefit the brand in the long-term. The brand through this idea is able to attract the TG and also makes them experience the products and at the same time provides enjoyment to them. This is a classic case of experiential marketing. 

However, the brand despite being innovative in the concept somehow was not aggressive in promoting its itself  in the park. Except for a hoarding there is not much OOH media inside the park that enhances the brand's visibility. In a typical Sunday, around 700 families visit the park and that is an audience a brand will die for.  There is lot of scope for innovation for the brand inside the park.Hope that the brand is able to sustain the park and gain its true return in terms of brand equity. The brand could have done lot of things inside the park that will enhance the brand's awareness and equity like

• Events
• Memorabilia
• Merchandise
• Contests

In the long term factors like safety, new games/rides, courteous staff, parking facilities, support of the corporation authorities will play a critical role in the success of this unique idea.

Marketing Funda : Determinants of Brand Extension Success

Professor Franziska Volckener and Professor Henrik Sattler of Institute of Marketing and Retailing, University of Hamburg, published a very insightful article  titled Drivers of Brand Extension Success in Journal of Marketing in 2006 which spoke about critical success factors that drive brand extension success. The authors through extensive empirical research distilled five factors that determine whether a brand extension will succeed in the market place. 

The study which was conducted in German FMCG industry gives valuable insights for marketing managers across the world.

The five factors that determine the success of brand extensions are as follows

1. Fit between parent brand and brand extension : Whether the extension is in line with the parent brand's positioning and consumer perception

2. Parent-brand conviction : The brand equity of parent brand , the trust of consumers on the parent brand's quality are critical factor that help extension success.

3. Parent-brand experience : The previous experience of the consumer towards the parent brand will affect the consumer's response to the extension

4. Retailer acceptance of brand extension : Retailers play an important role in the brand extension's success.

5. Marketing support : The investment in brand promotion also has a strong role to play in the success of the brand extension.

My Two Cents : The above cited research throws important light into the critical determinants of brand extension acceptance by consumers. Marketers should view these factors holistically because all these factors collectively contribute to the success of extensions. These factors like parent-brand experience and parent-brand conviction take time to develop. Hence haste in extending a brand without these factors can be risky.

 While I am personally critical of brand extensions, market pressures and opportunities make brand extensions a vital element in the marketing strategy . The research of Professors Volkener and Sattler is very relevant in this context.

Marketing Strategy : Flexible or Focused ?

While discussing the components of an effective marketing strategy, marketers often is in two minds about the overall direction of their strategy. Should the marketing strategy be flexible or focused?- this is the critical question that marketers should address while preparing their strategic plan. 

Flexibility in marketing strategy refers to the ability of the firm to adapt their marketing response to the changing environment. Marketing strategy should address the critical issues of (a) response to competitor’s actions (b) response to changing consumer trends (c) response to changing market environment (d) response to changes in technology (e) decisions regarding the entry and exit. Businesses operate in a dynamic environment which is witnessing changes every day. More than ever before, marketers are witnessing disruptive innovations which are changing the consumer behaviour frequently.

Focus in marketing strategy refers to the firm’s ability to consistently explore the depth of the various elements of the strategy. It involves a continuous and in-depth focus on (a) consumer and their behaviour (b) core strength of the firm (c) market in which the firm operates (d) enhancing the depth of marketing mix elements (e) investment in product development (f) investment in product promotion  etc. Marketers now are faced with global competition. Geographical boundaries are now irrelevant as far as marketing is concerned. Indian products are now faced with competition from across the world. Hence is important for marketers to focus on their products and markets.   

When firms become too focused on their products and markets but not flexible, they risk the chance of getting into a state of immobility. This situation may lead to marketing myopia where the marketer becomes too focused on the product but failed to see the market moving in another direction. Focussed marketing strategy is ideal for mature markets where the chances of disruptions are limited.

When firms become too flexible in their marketing strategy, it may lead to a state of disorder and confusion. The firm sees many opportunities and will enter various markets without realizing their competence. This can lead to unnecessary wastage of vital resources and may lead to a financial crunch. Marketing strategies should be highly flexible in those markets which are emerging. In such a market, it will be difficult for marketers to focus because the directions are not visible yet. In such situations, marketing should be flexible enough to embrace any viable opportunities.

When firm’s marketing strategy lack focus and flexibility, it fails in what ever it does. The company thus will not be able to make an impact in any market it enters (because of lack of focus) and also will not be able to respond to changing market dynamics (due to lack of flexibility).

The ideal situation is where firm is able to have both focus and flexibility in their marketing strategies. This may sound impractical but it is not. While focusing on consumers and markets, it is possible for firms to be flexible in their response to changing market environment and competitive actions.

Professor Thomas Kosnik in the book Marketing Management : Text & Cases (Richard D Irwin,Homewood IL,1990) uses the term “Perennial Renaissance “for a flexible and focused marketing strategy. When a firm adopts a flexible yet focused marketing strategy, it is able to fight the competition and at the same time maintain a steady focus on what it is currently doing.

Take the example of Google. While Google tries to make its search engine better, it is constantly innovating and flexible in grabbing new opportunities and challenges as an when it emerges. Gillette is another example of a company that constantly innovates at the same time is very much focused on its current markets.

It is not easy to make a flexible -focused marketing strategy framework. The first task for the marketers is to build this concept into the culture. Flexibility and focus has to be built into the organisational culture. For example, it is very difficult for a bureaucratic organization to practice flexibility in their marketing practices.  Firms need to empower their managers to decide and act fast if they want to practice flexibility. At the same time, managers should establish discipline and process orientation if they want to embrace focus into their marketing strategies.

Another factor which managers should consider is to shift their attention from Products to Consumers. Companies can practice flexibility by focusing on consumers rather than getting stuck with their products. Consumers constantly look for new ways of satisfying their wants. By keeping a close tab on the consumers will enable firms to respond to changing trends faster.

It is also vital for organisations to plan for the long-term. When brands are managed for quarterly results, focus and flexibility gives way to short – term spike in sales. Managers should keep the long term objectives in mind (Focus) but keep their plans tuned according to consumer needs and wants (Flexibility).

Companies also should invest in innovations. Firms cannot aspire to be flexible if they did not innovate. Continuous innovations in terms of product and marketing strategies will raise the stature of the organisation in the market.

Originally published in adclubbombay.com

Marketing Strategy : Branding Basics for Small Business

In most of the marketing literature, branding strategies are usually skewed towards large businesses. The nature of these strategies also demands heavy and sustained investment in brand promotion and brand equity development. Often such high decibel brand promotion strategies create an impression that branding is a game for large players.

One of the fundamental question before any marketer is whether to brand or not brand. Although marketing literature suggests that there is an option for no-branding, for all practical purposes a firm cannot escape branding. No-Branding decision is where the firm chose to sell its offerings as generic products or commodities. But even in such a scenario, the firms which are marketing such generic products are distinguished by their company name which should be considered as a brand.

For example if you are a salt manufacturer supplying to retail outlets, although you are not selling branded salt, your company name will act as a brand for your customer ( retailer). Even though such firms are not into selling branded products, they have a corporate brand. Through their sales personnel and transactions, these firms are already building their corporate brand.

One of the most important advantages of branding is that brands help to identify and distinguish the seller. Even when selling commodities, the buyer needs to identify the seller and developing a corporate brand helps in getting repeat business from the customer.

Commit to Branding

The first step in creating an effective brand is a conscious decision to invest in branding the business. Whether it is a corporate name or an individual brand name, the decision to invest in branding will bring in a big difference. Branding is much more than putting a label in the cover of the product. Branding is a long term strategy which involves development of a brand vision and creation of brand personality.

Branding need not be expensive

Investing in branding is not about the money set aside for brand promotion but the level of involvement of marketers in developing the brand consciously. Small and medium enterprises have the constraint of limited marketing budget which forces them to overlook the importance of branding their products/business. But when we look at the long term perspective, taking baby steps now will go a long way in establishing a powerful brand in the future.

Big brands are built over a period of time. It is possible for small enterprises to build powerful brand through a consistent investment in smart branding practices. It is advisable to set aside a small percentage of revenue for the purpose of brand development alone. Consider this budget as a Systematic Brand Investment Plan rather than an expense.

Develop and protect the brand elements

Once a decision is made to build a brand, the next step is to develop powerful brand elements.

Brand elements include name, logo, symbols, mascots, color schemes, taglines etc. These brand elements should be prominently displayed in every communication that goes out from the firm be it visiting cards, gifts, brochures etc.

The next logical step is to protect the vital brand elements like Brand Name, Logo, etc. This is very important to prevent plagiarism and to challenge the rip-offs and copy cats.

Explore promotional opportunities

The fragmentation of media is in fact a big blessing for small brands. The proliferation of media has given lot of low cost promotional opportunities for small brands. The competition among the media has kept the advertising rates low especially for second –rung media. Small brands can make use of regional media options in a much more effective way than large brands operating in a national scale. Local newspapers, radio stations, cable TV channels offer excellent cost-effective vehicles for small brand promotions.

Brand promotions through these low cost media may not give a substantial ROI or a significant impact in sales in the short-term. In the long term, such small media exposure will increase the visibility of the brand and benefits will start accruing.

Corporate brands which operate in a business to business environment should explore their brand promotions in a different manner. For business brands, sales professionals are the biggest promoters of the brand. It is important for small businesses to ensure that the sales force is communicating the right kind of message to the customer. Business brands should try to communicate their brand message through every possible contact opportunities.

Every business has some communication materials like brochures, pamphlets etc and these materials offer some amount of information about the company and products. When endeavoring to brand development, these materials are of immense value. These materials should communicate the core Brand Manthra to the consumers. It is commonly observed that these communication materials are only used as a product catalogue rather than a branding tool.

It is a myth that brand building is expensive. Brands are built over time and through consistent systematic investment. The new highly connected environment has opened up many cost effective promotional platforms which can be used by small business to build their brands.

Originally Published in Adclubbombay.com

Marketing Strategy : Basics of Customer Service

Last day, my colleague got simultaneous service calls from 3 branches of a reputed car service firm. The call was made three days after he had given his car for service in one of the firms. Customer services failures like this is rampant in almost all sectors, which often make us wonder whether firms have forgot to understand the basics of customer service. While selling products or handling complaints, it is surprising to see a lack of basic customer service skills like empathy, responsiveness or responsibility.

Customer service is no rocket science. It does not take loads of customer data or complex CRM algorithms to provide exceptional customer service. What a firm need is the ability to understand customer’s needs and develop a human process to assist the customers in realizing their needs through the firm’s offering.

One of the fundamental requisite of customer service excellence is to treat customer service as an important strategic marketing tool. When a firm considers customer service as a marketing mix element; investment, involvement and control will be more focused. The task of ‘putting customers first’ will be considered a priority at the highest level.

In 1940s, Johnson & Johnson framed its famous credo, under the leadership of Chairman Robert Wood Johnson. The Credo made a very bold statement that “We believe that our first responsibility is towards doctors, nurses and patients, to mothers and fathers and all others who use our products and services”. The credo made the company imbibe a customer oriented culture which is now considered as a core competence. When the importance of customer service is impressed upon by the highest level of management, it becomes a culture rather than a peripheral activity of a division.

Customers always look for a single unified contact point at the company for all their requirements. Often it is the sales/marketing department that acts as the unified contact point. Although the unified contact point is supposed to facilitate two-way communication, in practice the contact is more skewed towards selling products rather than providing customer service. The management has to be careful that the contact point is given sufficient authority to fulfil the customer requirements.

The quality of customer service will come to test when customers have real issues or complaints. How well a firm approaches the complaints is the true determinant of the effectiveness of the customer service initiative. More often, consumers get stuck with their complaints because the contact point may not have the authority to initiate any corrective actions or solutions.

Customers may also have limited access to the higher levels of management. It is in this situation that firms should develop a system of escalation with regard to complaint redress. The process should have definite timelines which automatically triggers escalation of unresolved complaints to the next level of management. For example, if a complaint is unresolved (for whatever reasons) for more than 30 days, it will automatically get moved to the next level of the management hierarchy. The advantage of such a system is that over a period of time, the firm will be able to have virtually no unresolved complaints.

Another basic requirement for exceptional customer service is the human factor. Having highly motivated employees give a special meaning to the word – customer service. An example of extra-ordinary customer service was displayed in the Taj Hotel during the terrorist attack of 26/11. The entire world was thoroughly moved by the dedication of the Taj hotel staff who risked their lives to keep the guests safe from terrorists. These kinds of extra-ordinary actions can result only from a highly motivated and committed team.

While customer service needs to have a human touch, it is important for firms to back the human factor with robust processes. Processes help the firms to have a consistent level of customer service by taking care of the variability factor. Firms must build some amount of flexibility in the processes because one cannot anticipate all kinds of customer requirements and problems.

Companies should also be taking an effort to practice permission marketing while attempting to cross-sell to the customers. Permission marketing is a term coined by the marketing guru Seth Godin to denote the practice of getting prior permission of customers before attempting to sell.

Companies taking customer service seriously should understand that it cannot offer everything to every customer. It takes lot of courage and effort to identify the customer segment that the firm opt to serve. Once that profitable segment is identified, firms should not shy away from providing the best possible customer service to them.

Originally Published in Adclubbombay.com

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

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

Marketing Strategy : Harnessing the Power of Brand Elements

American Marketing Association defines brand as a name, term, sign, symbol or design or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition. According to Professor Kevin Lane Keller, Brand Elements are trademark-able devices that serve to identify and differentiate the brand. The most common brand elements are brand names, logos, symbols, characters, spokespeople, slogan, jingle, imagery, packages, colour, imagery, signage etc.

It is important for marketers to realize the potential of using all the brand elements while endeavouring to build a brand. Most marketers tend to concentrate their resources only on brand names and logos and thus losing an opportunity to create and develop other brand elements which can act as a powerful differentiator. Successful brands take advantage of all their brand elements there by creating various points of impact in the mind of the consumer.

Take the case of Absolut Vodka. This is a brand which used its simple trademarked Vodka bottle as a powerful brand element. Through consistent campaigns, the Absolut Vodka bottle was developed as a powerful differentiator for the brand. The trademarked bottle has become the most remembered and visible brand element for Absolut creating a distinct identity for the brand. The brand created lot of awareness, loyalty and consumer interest through the clever use of the vodka bottle in all of their campaigns.

Marketers should be able to identify unique brand elements that can break the clutter and create an impression. While most of the brands chose to invest in common obvious brand elements like the name, logo etc, it would be wise to look for something different. A classic example of that can be seen in the branding of Vanish – which is the stain removing detergent brand of Reckitt & Benckiser. The brand used colour Pink as the main brand element. Vanish uses the tagline “Trust Pink, Forget Stains “to promote the brand element. Vanish product is not pink in colour but the brand comes in a pink pack. The use of the “Pink” colour as the brand element acted as a powerful differentiator for Vanish. The association with Pink also increased the brand awareness and brand recognition in a highly cluttered detergent market

Another important criterion for effective use of brand element is that it should be easy to memorize. The brand elements should be easy to remember and recall. The consumer should be able to remember the brand element and the element should aid in the recall of the brand during the time of purchase.

Intel’s famous tagline “Intel Inside” is one such brand element which is easy to memorize and recall. The brand used this tagline and its logo very effectively in their promotions. ‘Intel Inside ‘tagline together the logo became a powerful brand element that created lot of brand recall and identity. Intel is also one brand that used its jingle (melody) as a powerful element. The five note melody has now become an indispensable part of the Intel branding. Intel carefully developed these brand elements through a 3 second animated jingle ( known as a signature Id, audio visual logo) which consisted displaying the logo and the five- note melody after every Intel ads ( Source – Intel Website). Over a period of time, these brand elements became so powerful that consumers will recall the brand once this melody is played.

The brand elements thus created should be protected by the brand owners. Trademarked brand elements become powerful differentiators over time. Since these brand elements are protected, there need not be any fear about competitors copying those elements.

Marketers should try to identify all possible opportunities to create brand elements. And while communicating the brand’s message, all these brand elements should be present in the communication. For example, Idea Cellular uses a wide range of brand elements in its communication. The brand uses its signature Yellow Colour, Taglines and slogans, brand ambassador and its signature melody in all their multimedia campaigns. All these brand elements have become popular over these years that consumers are now recognizing Idea Cellular when they see or hear any of these brand elements.

Having a basket of strong brand elements also helps in tapping in the various promotional mixes more effectively. For example a popular character or a mascot can open up opportunities of promotion through merchandising. A popular jingle or a melody can help to promote the brand through radio, TV or even mobiles. So it is the job of the marketer to constantly look for creating new brand elements and thus giving new promotional opportunities for the brand.

Brand elements have lot of strategic importance in branding. Marketers should take responsibility in identifying, creating and developing unique brand elements. Once created, these elements provide the brand with a powerful identity at a time when features and attributes are increasingly becoming commoditized.

Originally published here at adclubbombay.com

Marketing Strategy : Where is Marketing in Your Strategy ?

It is interesting to see how many companies realize the importance of marketing in their corporate strategy framework. Most firms have realized the importance of marketing as an important function in their organizational framework, but marketing has not yet being considered as an important part of the corporate strategy.

Marketing concept evolved through various stages. The first stage was where the firms believed that consumers want inexpensive products that satisfied their needs and wants. The emphasis during this stage was on mass production and focus was on efficiency and low cost. ((kotler, p. (2008). Marketing management. delhi: prentice hall.)

The next stage of the evolution was when firms realized that consumers are not just looking for low cost solutions to their needs but are also attracted to product features and new product innovations. During this stage, firms competed with each other in developing new product features and solutions.

Soon firms realized that mere product innovations and features are not going to lure consumers into purchase. Consumers needed to be persuaded to buy products. During this stage, firms focused on increasing their ability to sell the products in the market. This stage saw lot of investment in building sales departments and channel management functions.

Despite the success of the concept based on the emphasis on selling, firms found a gap in the consumer needs and the product being sold. Increased competition created a need in the firms to look at consumers for fresh ideas. Firms realized that they should be more consumer focused rather than focused on selling products. Firms also realized that it has the ability to shape consumer behaviour and create new wants. Rather than focusing on selling and producing, companies began to listen to consumers and adopt strategies that shaped new consumer behaviour and trends. Products became only a tool to realize firm’s objective. Consumer became the focal point of all activities. It was the beginning of the marketing.

From a function focused on moving the product from the warehouses to consumer, marketing has come a long way. It now occupies a significant position in a firms’ organizational structure. But it is time to reinvent marketing.

Although leaders of businesses emphasis on the importance of marketing in their organizations, the concept of marketing is constrained by the functional status bestowed upon it. Marketing is still considered as a function rather than a strategy. And by giving a functional status, the scope of marketing is severely blocked from realizing its full potential. It is time for firms to realize that business in marketing.

Marketing is not a function but a strategy. This is a matter that has to be dealt with at the board level. While financial performance and analysis is given huge importance in the annual report of publically listed firms, it is interesting to see how little information and analysis is given on the marketing side. I would like to suggest that firm’s should show courage to put their marketing strategy to scrutiny at the highest level.

The advantages of taking marketing strategy at the board level will have lot of advantages. For example take the case of a brand extension. Should this decision be taken at the board level or should it be dealt at the functional level. Is brand extension a corporate strategy or a functional strategy? In most of the firms, these decisions are taken at the functional level and seldom discussed threadbare at the board level unless it require huge capital expenditure. And it is often found that brands lose because of meaningless extensions resulting in a direct impact on its financial performance.

Take the example of positioning. Is positioning of a brand discussed at the board level or decided at the functional level. Should the decision of positioning /repositioning discussed at the board? If business is marketing, then the decision on positioning should be discussed at the highest governing body because the success of the product largely hinges on the effectiveness of positioning. When positioning strategy is discussed at the highest level, it becomes business strategy and not just another element of the functional strategy.

When a firm takes such a serious view of marketing, then branding becomes focused. Positioning becomes consistent, Managers think twice before venturing into meaningless extensions. Brand strategy will not be outsourced to advertising agencies. Consumers will be handled with care. Complaints will be seriously dealt with and monitored at the highest level of management hierarchy.

In highly successful companies, marketing is handled by CEOs. Brands like Apple, Microsoft, Harley Davidson thrive because they are looked after by the CEOs. When CEOs become marketing evangelists, marketing will achieve its true potential.

Originally published here in adclubbombay.com

Marketing Strategy : How to Create a Category

When Tata Motors launched its sub 1tonne commercial goods carrier- Tata Ace in 2005, it created a huge change in the small commercial vehicle segment in India. After five years, Ace is ruling the new category of mini trucks in the Indian market.

India is witnessing a huge surge in the creation of new categories. As the market grows, marketers find new ways of identifying and satisfying needs and wants. With increased competition, marketers often look for creation of new categories where they can avail better share of revenue and profits.

The recent high profile launch of iPad by Apple Inc has put a spotlight on the strategy of creating and owning new categories. Burdened with competition from across the globe, category creation is the magic pill that marketers now look forward to for survival.

Need Gap and Price Gap

When attempting to create a category, marketers broadly look at two approaches – need based and price based. In the need based category creation, marketers look for unmet needs and wants. Sugar Free is the brand of artificial sweeteners which pioneered this category in India. The brand identified the need for such artificial sweeteners in the emerging health conscious Indian market and tapped it quite successfully.

Another broad approach is to look for price gaps in the existing category and carve out a new category based on the price factor. Tata Nano is expected to carve a new sub-category on its own at the bottom of the pyramid with its 1 lakh price tag.

Bundling Multiple Uses

Marketers also try to create new category by bundling multiple uses. While lot of debates are going on about the future of the Ipad, it is interesting to see the attempt to create a new category by Apple through this product. Apple Inc is trying to create a new category by combining multiple uses together in a single product. iPad can act as a eBook reader, play music, surf the internet, play games and perform office related tasks. Marketers can think about creating a new category of products that performs multiple tasks thus solving multiple needs of the consumers.

Emulating successful brands

Mahindra recently launched a new commercial minitruck- Gio which emulates the success of Tata Ace. Gio is a sub 0.5 Tonne goods carrier aimed at creating a new category of compact mini truck in the Indian market. Mahindra Gio is expected to carve a significant customer base out of the existing commercial three wheeler segments. Gio shows that marketers can create new categories by emulating successful marketing practices from other categories.

Break- Away Positioning

Marketers can also look for new category ideas from existing categories. When Swatch was launched in Switzerland in 1983, the watch market was categorized on the basis of price. Watches were perceived to be a functional product and were segmented as premium, mid-range, and low price range. Swatch created a new category within the industry by positioning itself as a lifestyle product rather than a functional product. Swatch adopted the strategy of break-away positioning where the new category is created by breaking away from an existing category Swatch was positioned as a fashion accessory by careful design of marketing mix elements which created an iconic status for the brand.

Think Beyond Products

In order to create a new category, marketers should be able to think beyond products. The focus should be on ideas rather than the physical products. The ideas will later transform itself to products. But to get the right kind of ideas, marketers should be able to understand the life of a consumer. Consumers may not always be in a position to give new product ideas to a marketer. But an observation into the life of a consumer will throw a million insights which can later be transformed to practical product ideas.

Look at the consumers

Consumers are always looking for ways to improve their lives. Some of their needs are hidden or even latent. By closely interacting and observing the consumer , marketers will be in a position to create newer product categories and thereby becoming more relevant in the life of the consumers. For example, Indian computer market is witnessing a shift towards laptops and netbooks. This shift has created a need for a mobile internet service which can enable the consumer to surf the net on the move. This need has enabled companies like Reliance Mobile and Tata Indicom to come out with a new sub-category of internet broadband datacards. The increased health consciousness of Indian consumers has created a huge new category of functional foods and healthy snacks. These new categories are being created only through careful observation of consumer needs and trends.

Consumers are constantly looking for ways to make their life better. There are immense opportunities for new categories that can make the life of consumers a lot easier. Marketers should be willing to experiment new products and categories inorder to cash in the abundant opportunities before them.

Originally Published here at adclubbombay.com

Marketing Strategy : Celebrating the WoW Moments

Seldom does brands hit upon wonderful ideas that capture the attention of the consumers. During the last IPL season, Vodafone hit upon such a wonderful advertising idea – The ZooZoo. Those white cute characters quickly captured the imagination of India. ZooZoos were all around the media with rave reviews, blogs and viral videos. The entire marketing community was watching how the brand will handle the unprecedented success of the ZooZoos.

Vodafone themselves was surprised at the success of ZooZoo and it took a while for the company to wake up to the idea of capitalizing the success of ZooZoo by launching merchandises, games, contests and social media engagement. To take the popularity to ZooZoo to the next level, the brand also launched a campaign asking the public to contribute to the advertising campaigns by suggesting ideas.

It is important for the brands to capitalize every such wow factors to the maximum. The big ideas can come in the form of a tagline, a celebrity, a brand mascot, a product feature or an advertising idea. Once that big idea becomes highly accepted by the consumers, it is important for the brand to take it to the next level of engagement.

Take the example of the MRF‘s association with Sachin Tendulkar and cricket. The association started off as a brand endorsement. MRF’s logo on Sachin’s bat got the brand so much visibility that cricket fans began to ask for MRF bats at sports shops. MRF later launched its cricket kits to cash on the popularity. To celebrate the brand’s association with cricket, MRF also ventured into launching MRF pace foundation which has become a vital talent school for pace bowlers. All these engagements involved investments that could not be recovered on a short-term. MRF also involved seriously into racing sports which had a direct connection with the brand’s offering. MRF began to celebrate its involvement in rallies thereby reinforcing the brand’s credibility as a modern, tough tire brand. In all these activities, the brand involved 100% and the investments was not blinded by a quest for short-term sales spurts.

It was a wow- moment for Nike when it chose the tagline “Just Do It”. Customers loved the tagline and Nike did not waste a moment in celebrating the tagline. The tagline became an integral factor in the success of Nike brand. In the Indian context, Idea Cellular Ltd hit upon a hit tagline “ An Idea can Change Your Life ”. The brand also signed up Abhishek Bachchan as the brand ambassador. The brand celebrated these two big ideas together with huge success.

Marketers should look for signs of success of their big and small ideas. There is a huge potential for celebration when consumers start talking about those WoW moments. When consumer starts talking about the brand, marketers should take the cue and take the engagement to the next level.

Have a plan to celebrate.

In this highly competitive world, time is a precious resource. The brand should celebrate its ideas before the euphoria dies down. More time the marketer spent contemplating on the planning phase, the less effective the engagement. There has to be a plan to systematically enhance the engagement with the consumers in the event of such a wow-moment.

Celebrating the brand’s wow moments can have lot of positive rub-offs. It can create an engagement with the consumers. Take the case of ZooZoo. These characters created lot of engagement with the brand and the public (consumers and non-consumers of Vodafone). The ZooZoo fan page in Facebook has more than 3.30 lakh fans. Through these, the brand is able to connect with a larger base of existing and potential consumers who hold a positive frame of mind towards the brand or its campaigns.

Use all the marketing opportunities.

We are living in a highly networked world that offers many opportunities to engage with the consumers. Indian marketers are slow in adapting to newer ways of connecting to the consumers. Once Vodafone figured out the celebrating ZooZoo, it went on an overdrive using all the media opportunities. Vodafone is now using social media like Facebook, Orkut etc to create more engagement with the consumers. It also sells ZooZoo merchandise through select outlets. There are also contests and games which consumers can play in the social media that created lot of consumer engagement.

Celebration is an investment.

In an era of spreadsheets,ROIs and quarterly reports it is difficult for marketers to quickly quantify the returns for such a celebration. Hence it would be prudent for marketers should consider such marketing activities as a long-term investment. Although there may not be an immediate spike in the sales, one should be able to see the long-term equity that such a celebration can deliver to the brand.

Link the celebration to the brand.

While there are a lot of advantages in celebrating the wow- moments, marketers should have clarity in linking the celebration to the brand’s big picture. Brand needs to benefit from the celebration either in terms of better visibility, market share, loyalty or engagement with the consumers. Periodic reviews and assessment will help marketers to justify further investments in celebrating brand’s small and big successes.

Originally Published here in Adclubbombay.com

Marketing Strategy : The World of Experiential Marketing

Marketers are now faced with intense competition at one hand and a media clutter on the other hand. These issues are going to aggravate in the years to come. Differentiation will become difficult and if at all brands can create differentiation, communicating the uniqueness will become even more difficult.

It is in this scenario that experiential marketing becomes relevant. According to Professor Kevin Lane Keller, Experiential marketing promotes product by not only communicating a product’s features and benefits but also connecting it with unique and interesting experiences.

Traditionally, experiential marketing was appealing to those products and services that have high experience attributes. Experience attributes are those attributes which cannot be evaluated by consumers before purchase. Consumers have to experience those attributes inorder to evaluate or form opinion about it. For example, resorts, holiday packages, Spas etc are products that have high experience attributes. Marketers have to market those products/services by taking the customer through the product experience. Communicating experience attributes is one of the most difficult tasks in marketing communication.

As the consumers are moving towards an experience eco-system, marketers of all kinds of products and services should be willing to embrace the concept of experiential marketing. There are many forces that are driving this experience economy. Consumers are now exposed to a wide range of products and services. This exposure has enabled them to see beyond the marketing communication originated from the brand.

Another factor that is driving the trend towards experience is the clutter. When the product features remains the same, consumers tend to bias their purchase decisions towards those products that offer them a better experience.

Experience can happen at different levels. According to Bernd Schmitt of Columbia University, how the brands sense, feel, think, act and relate have a strong impact on the way the brands are perceived by the consumers (Journal of Marketing Management, 1999). Marketers can think about engaging with the consumers only if they are able to connect with the consumers across these five critical experience points.

In order to create an effective customer experience, marketers need to think beyond product categories. Categories are increasingly becoming irrelevant as far as consumers are concerned. Technological innovations are enabling firms to create products that transcends beyond boundaries. The focus is on the consumer’s needs and wants rather than creating a new product within a specified category.

Most of the product marketers are confused about building an experience around the physical product. How is it possible to create an experience when the consumers purchase products from retail outlets and consumes it at their own convenience?

In such a scenario, one method is to create a consumption experience in the mind of the consumer that will compliment the real consumption experience. For example, Cadbury Dairy Milk is a brand which successfully created a consumption experience in the mind of the consumer. From the product – chocolate, the brand has moved from the physical characteristics of taste and quality to a joyful experience of consuming chocolate. The recent campaign for Cadbury Dairy Milk Silk is a classic case of creating experience in the mind of the consumer.

Another method is the engage the consumers in different platforms. HUL which is India’s largest FMCG Company recently launched a website called Be Beautiful (bebeautiful.in) as a platform to communicate with its consumers. “Be Beautiful”, unlike other brand website , is a platform for all of HUL’s personal care brands like Pond’s, Lakme, Sunsilk, Vaseline and Dove to connect with the consumer. While the consumer experiences the actual products at her home, these brands try to engage consumers and shape their experience with the brand through the website. The website offers a platform for the brand to interact directly with the consumers thus create an opportunity for experiential marketing.

While marketers think too much about using the social media for advertising and promoting their products, they miss out the opportunity to engage with the consumers and create an experience in them about the brand.

Events are also a smart way of creating brand experience and to relate to the customer. Brands like Colgate uses events like “Dental Check Up Camps” to relate to the consumer. These events not only reinforce the positioning but also give a sense of relatedness to the consumers.

The cornerstone of experiential marketing is that the entire organization should be integrated to deliver the desired experience of the consumer. Philip Kotler defines Holistic Marketing as that which is based on the development design and implementation of marketing programs, processes and activities that recognizes their breadth and interdependencies. When endeavouring into experiential marketing, the entire organization should be thinking alike, be it the operations, sales, finance or HR. Brand websites which are seldom updated, complaints not attended to properly, rude sales people, unethical corporate practices can severely undermine the experiential marketing endeavour.

Originally published here in Adclubbombay.com

Marketing Strategy : Making Brand Portfolio Decisions

Brand portfolio decisions are strategic in nature. These decisions have very powerful impact on the entire brand architecture and marketing strategy of the firm. According to marketing theory, there are two basic brand portfolio models –House of Brands and Branded House.

Recently Rajiv Bajaj, CEO of Bajaj Auto announced a decision that the company will not be using the corporate brand Bajaj for any of the motorcycles produced by the company. Instead, the bikes will sport individual brand names and Bajaj Auto will be a garage of independent brands like Unilever and P&G. According to newspaper reports, the company will focus on four brands – Pulsar, Boxer, Discover and KTM and will not use the parent brand to endorse these individual brands. Bajaj Auto has made the decision to move from a Branded House portfolio model to House of Brands portfolio model.

House of Brands

House of Brands model refers to a brand portfolio where firms will choose different brand names for various products across categories. These brands will have own identity and personality. Different products in the same category will also have individual brand names. FMCG giants like Hindustan Unilever, P&G l follow the model of House of Brands. For example HUL has soap brands like Lux, Rexona, Hamam, Lifebuoy, Dove etc.

House of Brands portfolio model have many advantages. One of the biggest advantages is the focus that managers can give to individual brands. Since each brand will have separate identity, brand managers can devise focused strategies with regard to segmentation, positioning etc. Individual brands also give tremendous amount of freedom as far as strategies are concerned. Brand managers are not constrained in devising their strategies since the brand is not linked to any other brands in the portfolio.

Since the brands in the portfolio are independent, the failure of any one brand is not going to have an impact on other brands. Controversies affecting one brand will have minimal impact on other brands from the same company and brand managers can distance other brands from the brand which is facing the issue.

House of Brands model also have its fair share of disadvantages. Since the firm intent to have different brand names for various products, the cost of promotion of these multiple brands will be more compared to Branded House model.

In the case of House of Brands, the promotional budget has to be shared which will create internal competition among various brands for a larger share. While internal competition can be beneficial, there is also a chance of internal conflicts within the brand management teams.

Another potential disadvantage is the chances of brand cannibalization within a category. For example soap brands Rexona and Hamam from HUL compete with each other in some southern markets. Thums Up and Coca Cola compete with each other in markets where they co-exist.

If not done carefully, different brands in the portfolio can also create confusion in terms of positioning and segmentation. Overlaps in segments, cannibalization, same positioning, and clutter etc can occur if the firm is not careful about the individual brand strategy. At one point of time HLL (now HUL) found its brand portfolio with too many brands that overlapped with each other. The company had to undertake a brand rationalization exercise which reduced the number of brands from 110 to 30 power brands.

Branded House

Branded House portfolio model is where the firm chooses to have one brand name for all the products that is marketed by the company. Many firms use the corporate brand name for all the products that they sell in the market. Dell is often cited as a classic example of a Branded House.

The biggest advantage of Branded House is the economies of scale in terms of brand promotion activities. Since there is only one brand to promote, the firm can channel the entire resources more effectively.

Another advantage of Branded House is that the promotional cost of introducing new products into the market will be significantly lower compared to House of Brands. Since the new product will carry the common brand name, there is an increased chance of consumer acceptance because of the existing brand equity of the parent brand. The firm is thus spared of the task of building brand awareness from the scratch.

A major disadvantage of Branded House model is the possibility of brand dilution arising out of different products from the same brand. Unless carefully monitored, product proliferation within the brand portfolio can dilute the core positioning of the parent brand. It may not be possible for all products to have the same positioning theme and any deviation from parent brand’s positioning will dilute the core positioning them of the Branded House.

Firms strictly adhering to Branded House portfolio model may have to forego many market opportunities if those categories do not fit into the parent brand’s positioning. For example a Branded House marketing luxury product may have to forego the mass market opportunities because of the positioning constraints. That constraint is not applicable for House of Brands because the positioning of one brand may not affect another.

Another disadvantage of Branded House portfolio is the impact of product failures/controversies on entire portfolio. Since all products carry the same brand name, failure of one product can have a negative impact on the parent brand. Any controversy involving a single product can have devastating influence on the entire product range.

Although theoretically these two portfolio models exist, in practice firms tend to use various elements of both models together while devising their brand portfolio strategy.

(Reference: Tybout, A., & Calkins, T. (2006). Brand Portfolio Strategy. In Kellogg on Branding (pp. 104-129). Wiley India.)

Originally Published here at Adclubbombay.com