JUNE ’11
Vol. III
Issue I
Ed Speak When my fist clenches, crack it open
Team
Before I use it and lose my cool When I smile, tell me some bad news Before I laugh and act like a fool - The Who
Neelotpal Shukla
When we come to the end of one year of our ever so hyped MBA, there is that sudden surge of 'knowledge
Nishchai Nevrekar
acknowledgement' that our brain generates waves of. All of a sudden on the first day of the last year of
Gaurav Modi
MBA, we feel we have somehow managed to grasp and maneuver our way through those coils and coils
Rachita Behl
of matrices and curves and chains the fathers and grandfathers of Marketing have plotted years earlier.
Kushal Mehta
And if it does not happen on the aforementioned day, it definitely kicks in when we first see 'fresh' fruit.
Krishnakant Jonnalgadda Tushar Kumar
Somehow, it does happen. Somehow it should not. When we embarked on the expedition of starting work on this issue, before any of the above
Nandini Kapur
unfortunate (un)realizations occurred, we were glad to get a kick, though of a different kind. We realized
Pawas Soni
that the matrices and curves and all of those creeping things on paper mean just that much less,
Naresh Chandak
more so as each decade passes. So we thought it best to simply see what the future might just hold,
Neha Talwar
with a passing glance in the rear view mirror. Whether it be trying to untangle the millions (zillions you say?
Puneet Aggarwal
Maybe. The count never seems to end) of nerves in the head and figure out just what goes on there, or trying to figure out why would someone chop off toes to wear those Jimmy Choos, or how the fundamental definition of food is taking a blurred form, we tried to
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Contents Trendz The power of Co-Creation
4
MICA
Blurring Food Categories
8
NMiMS, Mumbai
Marketing to the High Net Worth Customer
12
NMiMS, Mumbai
Cover Story Its all in the Mind
18
Première Namaste StarBucks
22
GIM
Gyaan Social Marketing
26
IRMA
Crowd Sourcing
30
NM Dalmia
Feature Euphoria & NjM Week
34
unlock that whimsical romance of nerve and nerves, and just extend our period of learning, albeit beyond classes this time. We wish you just tag along. The year is just getting started !
The Eds Kushal Mehta Krishnakant Jonnalgadda Designed by Nishchai Nevrekar
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TRENDZ
The Power of Co-Creation
Author
Not long back, there was a time when there existed only a few brands in each product category, thus giving the consumer limited options to purchase from. In just a decade, a time has come when there exists innumerable brands in almost every product category, and the consumer is in absolute quandary
Sharad Gaur
regarding how to make the best selection from
Is a First year Post-Graduate Management student at Mudra Institute of Communications Ahmedabad (MICA), pursuing Post Graduate
Diploma
in
Communications Management. He belongs to Jaipur and has done his graduation from the Institute of Te c h n o l o g y, B a n a r a s H i n d u University. After working in the software industry for 2 years he joined MICA to specialize in branding. His interests include outdoor sports, photography and trying out new cuisines.
among an ocean of choices. Not just that, the world has seen a boom in the media industry in terms of its reach to the audience, giving the marketers a long awaited means of promotion that is cheap, effective and covers a majority of the target audience. Thus the industry saw a sharp rise in the advertising spends of majority of the organizations and the audience was bombarded with advertisements from all sides; be the through the television, the radio, the newspaper, magazines or out-of-home media. This has further confused the already confused audience. Thus, in order to break the clutter of advertisements, the marketing strategy of organizations has seen a complete metamorphosis in the past few years, and one of the most effective of them all is customer engagement via co-creation. Customer co-creation (a term coined by Venkat Ramaswamy and C.K. Prahalad) is a concept of customer engagement in which the brand and the customer work together for creation of value by the brand for the customer (Gouillart, The Power of Co-
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Creation). In co-creation, a brand asks its customers as to what they want from the brand, and then makes them
increased their brand recognition, customer loyalty and word of mouth publicity. Another classic example of co-
partners in creating the
creation is that of Starbucks
same. In most cases, co-
coffee. Starbucks launched a
creation is a win-win
forum called 'My Starbucks
situation for the brand and
Idea' which is an online
the customers because the
community of the Starbucks
customers help the brand know precisely what they want, and in this
customers. The reason of the launch of this platform is to enable
process the brand creates something they can
them to know their customers well and to
be sure about.
understand their psyche. The customers give
“In order to break the clutter of advertisements, the marketing strategy of organizations has seen a complete metamorphosis in the past few years, and one of the most effective of them all is customer engagement via Co-Creation� A classic example of customer engagement
their idea on a range of topics like - how the
through co-creation is that of Lays from Frito
waiters should be dressed?, should they wear
lay. Lays came out with an idea on
nameplates?, making ice cubes out
customer engagement called
of coffee, kind of food served,
'Give Us Your Dillicious Flavour'.
varieties of coffee served, the
In this case, Lays came out with
interior of the cafes, etc. Then
a contest in which consumers
these ideas are voted upon by
had to suggest new flavours for
other customers and the best
lays. Lays would then select four
ideas are rewarded. Not just this,
best flavours and launch them in the
these ideas are even implemented
Indian market. As one might predict, the
in the Starbucks cafes. This way the
campaign cum contest was a huge success. It
management comes to know for sure that what
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| Buzz - The Markazine | Jun 2011
TRENDZ kind of a change the customers want.
farmers could get the best deal for their produce,
!ITC e-choupal is perhaps the most
while ITC could get the best quality ram material
successful Indian examples of co-creation.
for further processing and sales. The concept of
'e-choupals' are internet kiosks in rural areas
e-choupals was so successful that today ITC has
within walking distance of many villages.
more than 6500 e-choupals and nearly 150
Each kiosk provided information in local
hubs, which serves almost 40,000 villages and
dialect on daily weather forecast, crop prices,
four million farmers across 10 Indian states
advice on farming methods; email service
(Gouillart, Building the Co-Creative Enterprise,
that let farmers interact with scientists at
2010).
agricultural universities, technical people at ITC, fellow farmers; access to land records,
From the above discussion, we see the power of
“Customer engagement and customer co-creation are the need of the hour in order to establish credibility and trust in the market as well as be profitable on a long run�
health and educational services and
co-creation if implemented properly. It becomes
i n fo r m a t i o n f ro m N G O s o n l a te s t
a very valuable proposition for the brand as well
developments in cattle breeding and crop
as the consumers. It saves a brand a lot of
seeds. Each kiosk was managed by a fellow
resources which the brand must have otherwise
head farmer called 'snachalak' who publicly
spent in finding out what the customer needs. At
swore allegiance to them. These kiosks were
the same time, it benefits the consumers as they
further connected by hubs called choupal
get the desired product from their cherished
saagars. Each choupal saagar connects
brand. Not just this, customer engagement
about 40-50 e-choupals. In contrast to
serves a bigger purpose.
mandis, they employ electronic weighing machines, conduct objective quality testing and pay farmers in full on the spot. Thus
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| Buzz - The Markazine | Jun 2011
A few of the benefits are mentioned below: !
Satisfied customers results in customer retention.
!
Word of mouth publicity for the brand.
!
Acquisition of more customers due to awareness and WOM publicity.
!
Better products in the market for the consumers.
!
More competition in the market, hence better service and product quality.
!
Check on any bad word of mouth.
!
Direct contact with the consumer for suggestions and grievance solutions.
Thus, we can say that customer engagement and customer co-creation are the need of the hour if marketers have to be successful in successfully delivering value for the customers in order to establish credibility and trust in the market as well as be profitable on a long run.
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| Buzz - The Markazine | Jun 2011
TRENDZ Author
Blurring Food Categories Multiple positioning across segments
Prasad Madhusudan Is a 1st Year MBA student at NMIMS, Mumbai. He has worked for Deloitte in the IT sector. His interests are music, singing & painting. He is planning to take up Marketing as his Majors.
Call it the two-in-one phenomenon; brands are blurring food category boundaries by positioning their products to be relevant in multiple categories. Companies are using innovations, packaging changes and cross-category placements to extend the same product to different categories. Brands are not trying to take on the well-entrenched category leaders directly but are instead broadening the domain within which their brand plays. Changing lifestyles and increased overseas travel has introduced new flavors and textures into the Indian palate. And brand extensions are catering to this need. Everyone is trying to solve the dichotomy of taste and health today.
Biscuit OR Chocolate ? NestlĂŠ and Lindt are among the top confectionery players who have blurred the distinction between chocolate and biscuits by launching biscuit products of their own. NestlĂŠ has recently sought to expand its Smarties brand and gave it a boost by launching Smarties cookies. Ferrero also launched its first nonchocolate-based snack under the Kinder brand in the
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| Buzz - The Markazine | Jun 2011
Europe, and fruit bars in the UK and the US. Even though snack bars are increasingly covered in sugar and chocolate in order to make them tastier, the inclusion of wheat flakes, nuts and other cereal ingredients contributes to their healthier image. Conversely, bar the specialist slimming or sports products, these bars are no Ferrero’s non chocolate based snack
longer viewed as too "saintly" to be enjoyed as a snack. Such cross-category marketing is largely
form of Kinder Happy Hippo long back in 2002. This is made up of a hippo-shaped wafer shell which is filled with hazelnut and
possible at modern retail outlets where consumers have direct access to the category bays.
“Brands are not trying to take on the wellentrenched category leaders directly but are instead broadening the domain within which their brand plays” milk cream. Snack Bar OR Chocolate? Snack bars typically compete with chocolate bars by positioning themselves as a tasty but healthy alternative. This is the case across all sectors including granola bars, which focus on health and naturalness; energy bars, which focus on functionality; and breakfast bars, which play on the link with breakfast cereals. This is also the case with other snack bars, including sesame seed bars in Eastern Britannia’s Choco Decker
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| Buzz - The Markazine | Jun 2011
TRENDZ Britannia The biscuit maker introduced Treat Choco Decker, a value-added biscuit that enrobes its Treat jam biscuit with a layer of chocolate, last year. Choco Decker now has a twin presence in the biscuit rack and the confectionery counter. This helps Britannia expand its consumer group. Britannia also has baked wheat snack in its
Knorr’s Soupy Noodles
portfolio which is focused on the youth. With
Knorr
packaging and placement similar to chips,
Consumer goods giant HUL too launched Knorr
“Britannia plays into the blur yet it is not keen on limiting itself by branding as chips. It wants to leverage its core competency of baking which is considered healthier” Britannia plays into the blur yet it is not keen
Soupy Noodles lin February 2010. Knorr's
on limiting itself by branding as chips. It
advertising has positioned the product as a
wants to leverage its core competency of
hybrid 7 pm snack combining both, the value of
baking which is considered healthier
Kelloggs Kellogg India too has leaped into the snack box from the breakfast bowl. From a category targeted largely at mothers earlier, Kellogg shrunk its pack sizes to tap into the evening snack opportunity for children by placing 10 packs alongside chips in supermarkets
10 | Buzz - The Markazine | Jun 2011
soup with a product loved by children. Its strategy
Chyawanprash cookies
is to leverage market leadership in soup to break
Take the case of Unibic, which wants you has
into the Nestle Maggi-dominated instant noodles
c o m b i n e d c o o k i e w i t h c hy ava np r a s h
category. HUL was intelligent enough to target
A new offering from the Indian arm of Australian
both the soup and noodle segment by just a
cookie maker Unibic will club the health benefits
minor innovation. In soupy noodles, Knorr soupy
of chyawanprash within the reassuring mould of
noodles is a combination of noodles with the
cookie dough. The brand wants to straddle both
soup masala. Thus without actually producing
categories. While Unibic still competes with
any new ingredient it has managed to target both
other cookie makers, the innovation could put it
the soup and noodles segment.
under the radar of chyawanprash makers such as Dabur and Emami.
Mc Donalds McDonalds' Deluxe Wrap is a snack as well as a meal. Snacking has been on the rise for the past decade or so and McDonald’s Wraps
“affordability” is one of the driving forces creating hyper
Appy Fizz This drink by ParleAgro consists carbonated
growth in the category. Affordability is not a new
apple juice. This was a sequel product of Appy
term, but it is a new factor that food retailers and
which was clean apple juice. The drink was the
foodservice operators are grappling with today.
subject of a successful campaign of advertising
A combination of snack food items are packaged
at cricket matches in 2007-08. With its
in a combination and presented as a meal.
champagne shaped bottle and smar t
United they are a meal and divided they are
advertising, Parle has succeeded in creating a
snacks.
Fizz in the segment, which is basically the Indian
Going by the current trends target in multiple
Youth. Appy Fizz plays both in the Carbonated
segments with the same product is going to be
drink as well as the fruit based nectar drink
come a norm but it is a plus point for the
segment. Actually it also competes with the
consumers since they would experience the
mocktails due to its champagne like packaging.
benefits of 2 products in one.
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TRENDZ Authors
Zehra Ladiwala
Marketing to the High Net Worth Customer: Trends and Future The High net-worth customer
Is currently pursuing her MBA at
She vacations twice a year in Europe, doesn't leave
NMiMS, Mumbai.A Computer
home without her precious LV, swears by her pair of
Science Engineer by profession and
Jimmy Choos, has countless designer outfits ranging
a shopoholic by choice. The world of
from the likes of Gucci to D&G and rides in a fancy
luxury brands has always fascinated
chauffeur driven BMW. Who is she? She is the young
her and this is what made writing this
hip Indian woman born to a life of luxury. She is a
article a very enjoyable experience
member of the crème de la crème sitting pretty at the
for her.
top end of the wealth spectrum where being filthy rich is beautiful. For her, luxury is an essential form of self indulgence. It is this customer that luxury brands like Cartier, Rolex, LV, DKNY, Chanel and many more are trying to woo.
Luxury goods Luxury goods are perceived as rewards for achievements and as a means to showcase these achievements to others. They are not governed by the
Shreyans Born, brought up and touched 6 ft, all in Mumbai! Electronics Engineer from Mumbai University. Worked at Infosys. Never managed anything higher than a ‘C’ in a Marketing, that’s what inspired him to write an article for BUZZ! ;)
12| Buzz - The Markazine | Jun 2011
utility they serve. It is the aura of exclusivity that they possess which is reflected in the persona of the owner and makes them extremely desirable. According to a study by American Express, 'Inside the Affluent Space', the mindset of the Indian luxury consumer is a desire to prove that “I've Made It”. These set of elite individuals are price insensitive and look for exclusivity above all else. They regard luxury
“The third annual Asia-Pacific Wealth Report published by Merrill Lynch Wealth Management and Capgemini had estimated that there were 123,000 millionaires (in dollars) in India at the end of 2007, up 22.7 per cent from a year ago.� products as social status symbols and there is
Management and Capgemini had estimated
a lot of pride associated with the ownership of
that there were 123,000 millionaires (in dollars)
the high end brands. Their purpose for luxury
in India at the end of 2007, up 22.7 per cent
goods is to lavish themselves in self-
from a year ago.
indulgence.
There was a time when one had to travel abroad to buy a Gucci or an Armani. However, the
India's lust for luxe
scenario has changed over the last decade with
Being one of the fastest growing economies in
a plethora of luxury brands flocking India to be a
the Asia-Pacific region, India is expected to be
part of 'The Great Indian Growth Story'.
the next hub of luxury goods consumption.
This occurrence can be explained as a
The third annual Asia-Pacific Wealth Report
combination of push and pull. On the one hand,
p ub lished by M e r r i l l Ly n c h We a l t h
luxury retailers are spreading their wings to
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TRENDZ India because their home markets are no
cent. The market is likely to touch $14.7 bn by
longer growing as fast; push has come to
2015.
shove. On the other hand, there is every reason to believe that India will take off. The
Trends
rise in disposable income, coupled with
Louis Vuitton was the first luxury brand to have
growing brand consciousness of the urban
entered the Indian Market in Delhi in 2003. Since
elite and increased global exposure has led
then there has been no looking back with brands
to a spurt in the demand for luxury goods.
like Boss, Bvlgari, Salvatore Ferragamo, Cavali,
The luxury goods market in India is currently
Bogetta Venetta making their presence felt in
sized at $4.76 bn and is growing at a
India. Luxury brands in India admit that they tend
compounded annual growth rate of 25 per
to bring in the more expensive items in their
“A major drawback in India is the absence of high streets which elsewhere provide symbiotic clusters of posh retailers like Oxford Street in London, Fifth Avenue in New York and Avenue Montaigne in Paris.�
Luxury Mall, New Delhi
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However, there is still some ground to be covered in retailing from luxury malls. In a bid to offset the exorbitant rates that mall developers charge for renting the retail space in a luxury mall they need to attract more consumers who visit the store with the intention of buying rather than Buggati Veron - World’s fastest car
inventory knowing the high net worth Indians' penchant for exclusivity. A major drawback in India is the absence of high streets which elsewhere provide symbiotic clusters of posh retailers like Oxford Street in London, Fifth Avenue in New York and Avenue Montaigne in Paris. Thus the Luxury Brand's initial foray into the Indian market was limited to five star hotels' shopping arcades due to lack of decent luxury retail infrastructure in the country. Today, the trend of luxury retailing has now shifted towards Luxury Malls like Emporio and the year old Palladium which have become the most preferred retail destinations for international players. A luxury retail outlet in a five star hotel is a part of the overall hotel experience, whereas a luxury
those who just visit to get a feel of the brand.
Challenges With most western markets nearing saturation, the world is looking to the East and India offers enormous potential for the luxury market along with countries like China. This opportunity comes with a pinch of salt as does everything in our country. Some of the major challenges faced by luxury brands include the scattered nature of target population (high cost of reach), lack of credible real estate options, and underdeveloped back end infrastructure like warehouses, FDI regulations and high import duties. The biggest challenge however, is to find a
proper foothold in the
Indian retail space, already saturated with modestly-priced, indigenous products, which
mall as an experience is specific to shopping. Physically, in the look and feel there is hardly much difference in the stores, however the overall ambience in a luxury mall is more shopping focused. These destinations attract the right kind of potential consumers which luxury brands need for the growth of their business. Emporio houses 74 International luxury brands while Palladium has 65 high-end brands.
A Jimmy Choo Boutigue
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TRENDZ
Palladium Mall, Mumbai
“In order to succeed in India, luxury brands need to localise their marketing strategies. This goes further than just putting an Indian print on a bag or collaborating with a local celebrity.� can prove to be a Herculean task for these
Marketing to the Global Desi
premium product companies.
In order to succeed in India, luxury brands need
Also, the customer segment being targeted
to localise their marketing strategies. This goes
by international luxury brands consists of
further than just putting an Indian print on a bag
frequent international travellers who
or collaborating with a local celebrity. India
overwhelmingly prefer the experience of
houses a variety of cultures, languages, festivals
purchasing Western luxury goods abroad,
and tastes. So, it is imperative to understand the
where brands offer them wider choice, better
difference between the flamboyant nature of a
service and more competitive pricing than
Punjabi customer and the more reserved nature
what's currently available inside India. So
of a Gujarati, and speaking to each of them in the
why should they buy a Cartier here, when
specific cultural register that they respond to.
they can get it for much less on their travels?
Those brands who are willing to better
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understand and connect with the local Indian consumer will be the ones who are most successful. For example, luxury brand Montblanc — which successfully operates nineteen retail points across first, second and third tier cities in India — has regionalised all their marketing material. Brands like Louis Vuitton and Rolls Royce have also localised their approaches, identifying important events and celebrations amongst potential clients and arriving with personalised gifts or a surprise car service for the occasion. Louis Vuitton had readied a worldwide Diwalithemed splash for their stores last year; Swiss watchmaker Audemars Piguet unveiled a Rs. 2.1crore ($472,000) gift idea during Diwali. Very recently, the world's most expensive car, the Bugatti Veyron 16.4 Grand Sport, with a price tag of over Rs16 crore has debuted in India in the Diwali run-up. What these players also need to understand is that a sale cannot be the final point of their lexicon. It should be the beginning of their relationship with the consumer just as the luxury brands' affair with India has also just begun. It is an established fact that every Indian now wants to own products that inspire awe and envy. But will India's luxury malls be able to match up to the luxury malls of the world making it a coveted luxury shopping destination? Only time will tell.
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COVER STORY
From NJM’s Cradle
Kushal Mehta Is currently pursuing his MBA at NMIMS, Mumbai, with a Majors in Marketing. He has completed his B . Te c h i n E l e c t r o n i c s & Communication Engineering from STCET, Kolkata. He is a music buff and ardent football fan, and takes keen interest in reading too.
Rachita Behl Is currently pursuing her MBA in HR from NMIMS, Mumbai. She did her Engineering from VNR VJIET, Hyderabad. Her passion rests in the world of literature and she is an avid reader.
IT’S ALL IN THE MIND Neuro-marketing Inception - the idea or phenomenon of getting into an individual's brain via his dreams, and compelling him to do your bidding. Infiltrate his dreams as he sleeps under the starry skies and by the time he realizes he's losing something, it's done, and he wakes up to nothingness! Know his deepest secrets or mould his thoughts so as to get around the hurdles of awakehood. But what if this very esoteric action was used by say, the sales manager of a soft drink MNC, or maybe a high-end shoe maker? What if they could penetrate our defenses, knowing the way someone's line of thought progresses in, and then manipulate all of that to make him buy their product. Illegal? Well, that's an issue which is too far off to discuss in the absurdity of the moment. But, thinking like a marketer, it's…WOW!!
Nandini Kapur Is currently pursuing MBA in
Let's bring the concept two notches down, and what we have is Neuro-marketing.
Marketing from NMiMS,Mumbai . She has done her B.Tech. in Electronics & Communications from Jaypee University of Information Technology, Solan, She enjoys making candles and is fascinated by the traditional Japanese art of paper folding - Origami..
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Wikipedia defines neuro-marketing as 'a new field of marketing that studies consumers' sensorimotor, cognitive, and affective response to marketing stimuli. Researchers use technologies such as functional magnetic resonance imaging (fMRI) to measure changes in activity in parts of the brain, electroencephalography (EEG) to measure activity in
specific regional spectra of the brain
You are not reading this sentence because of
response, and/or sensors to measure
the title or because you are interested in what is
changes in one's physiological state (heart
written on the next page, but maybe because
rate, respiratory rate, galvanic skin response)
there's something about this picture.
to learn why consumers make the decisions they do, and what part of the brain is telling
Why?
them to do it.'
Because the picture is eliciting some kind of emotional response in you, your eyes are being
The natural question though is-why neuro-
drawn to it, and you choose to read this story to
marketing? Because people rarely say what
find out what the heck it's all about.
they think when they are asked about what
And this is what this article is all about-Neuro-
they 'think' in response to a certain question.
marketing!
“What if they could penetrate our defenses, knowing the way someone's line of thought progresses in, and then manipulate all of that to make him buy their product. Illegal?� I can make you read this!
Many companies have already recognized the potential neuro-marketing offers and are using it to gain a competitive edge. A fine example of this is the American restaurant chain Five Guys. Let's discover what makes them tick and how!
Keep things simple-We help you choose Five Guys has a minimalist menu. It is totally focused on one entree, the hamburger, and one side dish, french fries. One alternate entree, a
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COVER STORY
Jerry Murrell, Five Guys Burgers and Fries
“Like everything else, it is the beginning and the ending that influence the entire experience.” hot dog, is also available. The principle of
Because others say so
neuro-marketing at work here is that
Walls screaming out loud “The burgers at Five
“customers presented with fewer choices in
Guys are awesome!” A third of their paper
a retail environment buy greater quantities of
takeout menus covered up with reviews. The
product.”
principle at work- Social Proof. A theory that
But how is the menu so simple? Lack of
suggests we base our response to a situation
variety? Nay. They give away all their toppings
based on how others react to it. By the time you
for FREE! This reduces the “paying pain” of
start munching on your food, your expectations
customers and strengthens their value
would already have been set. Even if you had
proposition.
doubts when you walked in through the door, all those burger lovers in other places cannot be wrong, right?
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Appeal to the senses
gain vs pain tradeoff are some of the ways to
These guys go beyond the taste buds. Rightly so.
achieve that.
Half of the beauty of food is in its smell. Look even
Like everything else, it is the beginning and the
beyond that. Five Guys appeals to the visual
ending that influence the entire experience.
senses too! To show that they use only fresh
However, being at its nascent stage, Neuro-
potatoes, they line up bags of the spuds where
marketing brings in quite a lot of apprehension.
the customers queue up to order. As they say a
After all, Inception is the idea or phenomenon of
picture is worth a thousand words! It drives the
getting into an individual's brain via his dreams,
point home far more effectively by going straight
and compelling him to do your bidding. So how
to our subconscious.
ethical is this entire process of reading the consumer's mind? Knowing what drives a
Whether Five Guys consulted any neuroscientist,
consumer and doing just that to make him
we can't say. But one thing's for sure. What we
choose your product over the others? We might
see here is a perfect union of marketing and
condone such an act if it is harmful. But who
neuroscience aka neuro-marketing! And clearly,
shalt be thy judge? Who shalt stop and tell thy
it works! So it would not be wrong to assume that
that thou dost wrong?
as time passes, and economic and financial pressure increases, more and more companies
We all know that the warning labels on cigarettes
will turn to neuro-marketing. Behavioral science
make smokers want to smoke more. So where is
will soon be a major part of market research.
the limit? Curiously, the seed is already sown.
After all how many times do you get a chance like this one to convert a consumer's “mmm-good” into “mmm-better”? Lessons for marketers? To strengthen your brand, appeal to the customers' reptilian or the old brain, which guides all buying decisions. It all comes down to who triggers the first reptilian action. So what does this brain respond to? Emotions that excite all the senses, and for a customer, the 4Ps are his 'senses'. Visual orientation, conveying tangible benefits, memorable beginnings and endings that influence the entire experience, minimizing the
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première Authors
Namaste Starbucks!!! Organised coffee retailing is a niche but growing segment in India which is now worth close to USD
Sarika Sinha a student of Goa institute of Management, Goa Ms. Sinha has done B.Tech in textile technology from UPTTI, Kanpur. Before joining GIM, she has worked in Supply Chain Management at Raymond ltd.She has worked as an editor of college annual journal “Fibre to Finish”.
441 million with around 1500 cafes is 150 cities. The coffee retail market is expected to grow at an annual rate of over 40%. At present, Indian sips coffee from players like Café Coffee Day, Barista, Costa Coffee, Gloria Jeans, Qwiky's, Café Nescafe and Coffee Bean.
Bang
alore based chain Café Coffee Day is currently the leader with 1,090 cafés and kiosks, and 15,000 vending machines. Barista, owned by Italy-based Lavazza, is second, followed by UK-based chain Costa Coffee. Starbucks, an international coffee
caf
é chain had recently signed a non-binding Memorandum of Understanding (MoU) with Tata Coffee Ltd for sourcing coffee and for retail business in India. Starbucks will set up its storesin luxurious 5
Chandramouli Muthiah
star hotels of Tata.
is currently pursuing MBA from Goa
In fact few more international coffee chains are
institute of Management, Goa
preparing to enter India. The UK's Coffee Republic,
Mr Muthiah has done his Bachelors
Malta's Cafe Jubilee and Australia's Coffee Club
in Arts and has worked in Marketing
Group are looking for franchise partners in India.
and Sales. He has an interest in
Dunkin donuts had already announced to open 500
cricket and has played for Karnataka
stores in the next 15 years. Recent survey says that
State cricket team.
doing business in India has become more congenial
22| Buzz - The Markazine | Jun 2011
years and penetrate tier II and tier III cities.
Exibit 1 : Coffee Consumption in India
Does the entrance of Starbucks means that the
Calendar year
Quantity in (MT)
existing players should wake up and smell the
2004 2005 2006 2007 2008
75,000 80,200 85,000 90,000 94,400
coffee?Competition is already intense among existing chains and they are trying hard to woo consumers but with the arrival of Starbucks the intensity of this competition will increase
now which is one of the major reasons that
further.
these companies can't ignore India now
Barista and CCD have a first mover's advantage
(Exhibit 3).
as they have already customized their menu for
By recognising the fast emerging “coffee and
the Indian palette.The existing coffee chains
hangout” culture in India Starbuckshad tried
have targeted the premium segment youth, as
“India is one of the most dynamic markets in the world with a diverse culture and tremendous potential” Howard Schultz, Chairman, Starbucks to enter Indian shores in the past by
they realized that it wasn't only coffee that their
collaboration with the Kishore Biyani's Future
target segment was looking for, but also for a
Group, Anil Ambani Group and Jubilant Foods
place to hang around comfortably, where they
Ltd. But none of these attempts fructified.So
could be themselves and do whatever they
Entrance of Starbucks in collaboration with
wanted, such as play games, read books, listen
Tata is not shocking news for anyone.
to music, enjoy arts, surf the Net or simply
According to industry estimates, there is
chilling out. Starbucks with its vast experience of
scope for another 5,400 outlets strategically
handling consumers from dif ferent
located close to offices, colleges and
geographical regions would certainly have a
shopping malls. Every player is already
competitive edge here. It has indicated that it is
planning to expand over the next two-three
going to position itself as an elite brand and
23| Buzz - The Markazine | Jun 2011
première intense competition it seems it would become more service-led than price-led differentiation in the future. To combat competition, “India is one of the most dynamic markets in the world with a diverseculture and tremendous potential. This MoU is the first step in our entry to India” said Howard Schultz, Exibit 2 : Age wise precentage coffee consumption
I n d i a n s fa s t g row i n g a p p et i te fo r
Chairman,Starbucks. “We welcome the entry of Starbucks into
India. It will certainly add to the excitement of the
“We welcome the entry of Starbucks into India. It will certainly add to the excitement of the culture of cafes here and we are looking forward to an expanded market going forward” Venu Madhav, COO, CCD. extravagance might work well for them.
culture of cafes here and we are looking forward
With the entry of Starbucks the existing
to an expanded market going forward,” said Venu
chains has to focus a lot on aggressive
Madhav, COO, CCD
expansion plans, innovative marketing
CCD is already looking to launch another 200
strategies and variety in products offered.
cafes to add to its presence on highways and
Coffee and conversations often lead to food
inside malls and corporate offices. Italso plans
so by offering variety of food (healthy snacks
to open no. of lounges in major citiesas well as
also)companies can dig deeper in consumer
Coffee Day Squares in major cities. These
p o c ke t . A l s o b y s e l l i n g d i f fe r e n t
lounges will target mainly young professionals
merchandises these companies gives
who grew up on CCD. Similarly, as a part of
consumer an opportunity to take home a part
differentiating its services, Barista is already
of his unforgettable experience. Due to
offering Italian food at its outlets and also
24| Buzz - The Markazine | Jun 2011
Exibit 3 : Pestel Analysis Political !
and in hotels. Indeed Starbucks entry will stimulate growth in
Stable govt has created better working
environment for industries !
High tolerance towards
to deliver the best to be the consumer's first foreign
countries and encourage foreign investments !
the coffee and hangout culture. Everyone will try
proposed changes in FDI structure in
choice. The price sensitive nature of the Indian market will be a challenge for Starbucks. Retaining performing employees for all chains
various sectors
will be another problem since the well versed
Economical
hands in this sector would love to join
!
india is no. 1 in consumer confidence
index 2010 !
Less affected by economic downturn
because of vast domestic consumption !
approx 59% population is above low
income line *
Sociocultural !
younger polulation with median age
25.9 yrs. !
Rising coffee culture and café
considered as place for socialising and hangout !
Improved living standards of people
!
Increased brand consciousness will
help Starbucks as coffee is considered as an elite beverage
Technological !
Improved quality of Indian coffee as
80% of coffee is exported !
international brands. Though none of the companies are willing to admit the tension with the entry of such a large player, all are keen to know what formats Starbucks will bring to India and what will be their strategies. Its success in the long run will however depend on how well it is able to adapt to Indian taste buds.Some coffee chains might decide to sell their stakes to Starbucks which will further strengthen its positioning in India. India is a country of equal opportunities and Indians are known for their warm welcome to MNC if company is willing to offer the products in “Indian” style.It's sure that Starbuckspresence in the country would improve the café culture in the country. Amidst all commotion coffee connoisseurs will certainly enjoy their fine cup of coffee.
Easy availability of Low cost of labour
entered into tie – ups with Planet M, Crossword and Ebony to set up Espresso Corners at these places. Also to expand its reach, the company has opened outlets in theatres, offices, airports
25| Buzz - The Markazine | Jun 2011
GYAAN Author
SOCIAL MARKETING Evolution Social marketing originated as a discipline in the 1970s, when Philip Kotler and Gerald Zaltman comprehended that the same marketing principles
Akhileshwar Kumar
which were used to sell products by different business organizations could be used to "sell" ideas,
Is currently pursuing his MBA at the Institute of Rural Management, Anand, class of 2012. He has completed his Engineering from
attitudes and behaviors. Kotler and Andreasen define social marketing as "differing from other areas of marketing only with respect to the objectives of the marketer and his or her organization�.
RGPV Bhopal. He has a keen interest in working in the development sector. Initially associated with a Bhopal based NGO, he worked on the field for two months in Samastipur district, Bihar, where he studied various themes like migration and remittance pattern in the village.
Need for change The view that marketing can be useful only for the organizations in the business domain and not for the ones that are in the areas of development is fast changing. The area of social marketing gets prominence and generates a lot of possibilities for social reformers and development agencies. Many development organizations and Ngo have adopted the best management practices of domains like finance
or
operation
or
human
resourcemanagement and have been highly successful after its implementation. But the marketing principals have not been majorly applied by these development agencies or the Ngo barring a few exceptions. The same concepts of marketing can be applied to the area of social issues. Social issues need the kind
26| Buzz - The Markazine | Jun 2011
of attention as any other product but this is
Cause related marketing and
still neglected. In the purview of the
Social Marketing
acceptance and establishment of the social
There is a remarkable difference between the
marketing the idea can be taken forward and
cause related marketing and social marketing.
used by many Non- government organizations
The Jago re campaign started by Tata tea was an
to promote their cause and the activities that
example of cause related marketing. Similar is
they are in. Social marketing when applied to
the Save Tiger campaign promoted by Aircel. The
Ngoand other such social organizations will
reason that I make these distinctions is that
help them reach out to a wider population and
these campaigns have had an impact on the
establish their credibility and also the cause
public but the motives were entirely different. If
that they are working on.
such campaigns can get the attention and have an impact there is a huge possibility that the
“Differing from other areas of marketing only with respect to the objectives of the marketer and his or her organization� Kotler and Andreasen on Social Marketing
27| Buzz - The Markazine | Jun 2011
GYAAN social campaigns can arouse the sentiments
people and cause the necessary change in the
of people and effect a behavioral change
society.
that is intended.
The development organizations and many NGO
Cause related marketing is often confused
work on shoe string budgets. The work that they
with a kind of social marketing. Though the
do never gets highlighted. Most cannot even
companies promote a social cause but the
name the biggest NGOs in the country. The lack
intention also is to gain brownie points for the
of marketing has caused the difference. With
brand from the campaign. I am not criticizing,
adopting marketing practices not only the cause
the kind of promotions just trying to highlight
that the NGO is working on will get highlighted but
the hidden interest which get neglected.
also the NGO will get better recognition. The recognition will help them generate funds and
“Cause related marketing is often confused with a
kind of social marketing. Though the companies promote a social cause but the intention also is to gain brownie points for the brand from the campaign� eventually help them in promoting the cause. Advantages
Thus marketing will go a long way in generating
Social marketing will provide the necessary
funds for such agencies working in the
tools for the organizations which intend to
development field.
bring a positive change in the society. Using
Various campaigns that have been promoted by
social marketing methods certain causes
the government agencies like polio eradication
can be better addressed. Marketing can
campaign have got adequate recognition. The
hugely influence the behavior of a person.
processes can also be implemented for many
Think about the influence it will have if issues
other causes. Using advertisements specially
like child marriage, literacy, health,
designed and other promotional methods to
infanticide and other such issues are heavily
reach the message to the people will help the
promoted. The marketing campaigns will go
cause find recognition. The recognition will effect
a long way in influencing the attitudes of
a behavioral change in the public.
28 | Buzz - The Markazine | Jun 2011
Example: Presented here is an example of how important a social marketing campaign can be in changing the society for the better. Product: Adoption Target population: Childless couples, single mothers, orphanage homes Promotion: Advertisements, educating about the process of adoption, campaigns Price: Societal benefits (earned) This kind of societal change has to be brought out in the open and need to be discussed with people who are unaware of it. The response that such issues will generate will be phenomenal. It's often argued that people act according to what they hear or see. So if a method like social marketing can help them hear and see the issues the actions will follow.
Conclusion Social marketing needs adequate attention from many agencies as the developmental organizations, donor agencies etc. It can be used as an active method to improve the visibility of the cause and also the organization which are struggling to find recognition and therefore sustainable growth. Promoting social causes by identifying the right target segment and reaching out to the people with various marketing
and
promotional tools will lead to a desired behavioral change.
29| Buzz - The Markazine | Jun 2011
GYAAN Author
CROWDSOURCING Divide and rule was the famous strategy used by Britishers to rule over Indians for decades. Today marketeers are quite inspired by the saying and are using it but with a twist divide the work and rule. Crowdsourcing: if we look at the word and break into two parts CROWD would be the general public and SOURCING would be giving out work or delegating work to others. In totality, crowdsourcing is the act of outsourcing
Nikita Agarwal
tasks, traditionally performed by an employee or contractor, to an undefined, large group of people or
Is currently pursuing her MBA from
community (a "crowd"), through an open call.
N.L.Dalmia Institute of Management
The answer to effective crowdsourcing may lie
Studies & Research. A Mumbaikar
somewhere in the middle of professional expertise
and a Commerce graduate from
and public opinion. Companies can interpret and
Sydenham College of Commerce &
create certain results and then ask the public to
Economics, she loves writing,
make a choice out of them.
blogging, dancing & listening to
SOME INTERESTING EXAMPLES AND THEIR
music.
VALUABLE INSIGHTS 路
Being a movie freak the first example that
crosses my mind is that of the youth favorite JAB WE MET. The makers of the movie crowdsourced the task of giving an enticing name to the flick and conducted popular voting. Three options were given: 1.
Ishq Via Bhatinda
2.
Jab We Met
3.
Punjab Mail
The three alternatives reduced the effort needed to enter the contest & the participants just had to send an SMS. The catchy and contemporary Hinglish (a mix of English and Hindi words) acted as an unshown
30| Buzz - The Markazine | Jun 2011
“Crowdsourcing is the act of outsourcing tasks, traditionally performed by an employee or contractor, to an undefined, large group of people or community (a "crowd"), through an open call.” trailer depicting the kind of movie Jab We Met
that are more compatible with local culture.
was: A mix of traditional and modern, witty and
Insight: The concept of crowdsourcing has an
young. This promotional crowdsourcing
inherent advantage that “what is created by
campaign created much needed buzz before
people would enjoy greater acceptability by
the release of the movie.
them.”
Insight: A flavor of the actual ice cream can be
·
given subtly through crowdsourcing.
marketing campaign in early 2007 which
·
The most “in” thing of today's times
allowed consumers to design the look of a Pepsi
Facebook has used crowdsourcing since
can. The winners would receive a $10,000 prize,
2008 to create different language versions of
and their artwork would be featured on 500
its site. The company claims this method
million Pepsi cans around the United States.
offers the advantage of providing site versions
Insight: Crowdsourcing brings about customer
The most loved cola, Pepsi, launched a
31| Buzz - The Markazine | Jun 2011
GYAAN involvement towards the brand which in turn
indicator of the kind of magic tricks that are in the
shoots up brand loyalty.
pocket of a marketeer through the tool of
Procter & Gamble :
crowdsourcing.
They used crowdsourcing with their research-
With growing competition marketeers need to
based product development, reaching out to
pilot new ideas for gaining the attention of the
s c i e n t i s t s o u t s i d e t h e i r ow n R & D
commoner. Crowdsourcing is one such tool which
departments.
eases the task of the crowdsourcing party and
Insight: Crowdsourcing can be useful not just
gives an invitation to the interested people to
with simple, repetitive tasks but also with
reflect their infatuation towards the brand,
complex research and development.
product, concept, idea etc through getting
The above mentioned few examples are just
involved.
“A very essential thing is to gauge beforehand what exactly could make the people targeted get up and get going to be a part of the Crowdsourcing�
32| Buzz - The Markazine | Jun 2011
Like every other thing, even a seemingly perfect tool called crowdsourcing has a tint of grey side to it. The company should undertake the act of crowdsourcing considering all the minute nuances of the activity. Sometimes the initiative could fall flat because of lack of interest creation in the minds of those targeted. Here, a very essential thing is to gauge beforehand what exactly could make the people targeted get up and get going to be a part of the crowdsourcing. As the monetary aspect is less attractive in this case, the people should be touched emotionally. Marketeers are, now, bringing up new ideas in relation to this concept to attract and engage customers. They get a firsthand insight of what exactly customers desire, which can help in taking strategic decisions. The people involved may feel a brand-building kinship with the crowdsourcing organization, which is the result of an earned sense of ownership through contribution and collaboration. When the work is outsourced to a particular group of employees the ideas generated may be confined to a few brains, whereas crowdsourcing leads to a pooling of ideas of people of varied demographics, thereby increasing the chances of a EUREKA!!!
33| Buzz - The Markazine | Jun 2011
FEATURE
N J M ‘ Broadway's dark tonight,
And where we create the 'BuZZ' around our
A little bit weaker than it used to be,
'Conquest's, grill the “Last Marketeer Standing'
See the young man sitting in the old man's bar,
till he wishes he wasn't 'the One', and celebrate
Waiting for his turn to die’
and honour the Kotlers' and Druckers' and Lewitts' existences for an entire week, for we
Broadway was indeed darker than it used to
believe no matter how high the bark grows and
be. With the usual dreary schedule following
how much the branches outgrow each other in
another and the old man's bar serving up the
their race for their time under the sun, the roots
same concoctions, the road back to glamour
always hold sway.
and supremacy was indeed a bit tougher than the usual uphill endeavors. That little enigma,
And in case you gain any misconception about
that little wave of the wand, that little jig that
the work we do, well the name should bring you
brings the entire panorama out of obscurity
back to harsh reality, because at Not-Just-
and flushes shades of symbolic fervor into
Marketing, the task just begins at the 'M' word.
hearts was missing. That's when we at NJM
What follows next is stretching the entire gamut
stood up and said…
to an extent where the scope overhauls the enlisted objectives and after hours and hours of
“Blahhhhh…let the Marketeers
rule
mayhem!!”
finalizing and executing and re-executing the 'final step's, we suddenly realize, we there is another that follows. And what's worse is that no
NJM, where ideas are created and chucked
matter what we do, the bloody bug to better
away with scarily equal dismissiveness, and
ourselves just doesn't die!
where we do not care, because we know the next one will be ruling the roster in half the
Well..that was us..and yeah..have to cut it short
time. Welcome to NJM, where we decide how
here. The damn bug bit again. Darn!
to change the aeons old marketing concepts and are hell bent on bending the bends to create new bends only to bend them the next time we have those just-off-the-work 'shots'.
34 | Buzz - The Markazine | Jun 2011
The junior committee rose to the occasion and made it a roaring success. For the first time, the Conquest Corporate Project was being offered to The world doesn't become a great place to live
the batch as the prize. With Bollywood being the
in because of preservers. It is the expanders
under-current as the theme, this intra college
who do not restrict themselves to the defined
event included some really fun activities like Flop
horizons and come up with something new. For
Movie Marketing, preparing wacky CV for actors for
them- to define is to limit. NJM, keeping up to its
the most amusing parts [Fancy Bobby darling
legacy, came up with the new addition to it's
playing the role of Shankar Nagre in Sarkar]. If just
already action packed calendar, in the form of
the sound of it is leaving you in splits, imagine the
NJM Week. For a debut event, it met with an
madness to witness it sitting right there. That's the
overwhelming response.
level of madness we are talking about.
tried to go hand in hand.
Guerrilla Warzone
us to choose the final cut of participants who
When everyone decided to have some fun, we
entered the zone of battle and aggression-
thought why not start a war? There was
Guerrilla Zone.
Guerrilla Warzone was an intra college event starting with the online round of STP which helped
intensity, aggression, powerhouse action, the
“Evil met the Alter Ego�- there was a flurry of
usual ingredient of wholesome entertainment
ambush. With subsequent round testing 6 different
and whopping prizes worth Rs 1 Lakh up for
facets of marketing of participants incorporated
grabs.
into a game and the final round being a Pricing
Sang Real was kept as an inter college online
Game
event where the participants revisited their
It's time to be part of the action and play the
marketing concepts There were the most
protagonist rather than being the audience. Cheers
unusual mishaps when speed and accuracy
to another exciting year ahead.
35| Buzz - The Markazine | Jun 2011
Opinion Wall
Co-creation is the practice of developing systems, products, or services through the collaborative execution of developers and stakeholders, companies and customers, or managers and employees. The “ivory tower� seems to have opened with Co-creation sparking innovation, cutting costs, increasing employee engagement, and generating value. Large organizations including Nike, Nokia and IBM are testimony to the same. In fact if experts are advising companies to move to the third stage of co-creation that seeks continuous and sustainable improvement across systems and processes. The verdict is thus loud and clear. Co-Create and move forward.
atwale H a y n Lava NMIMS The current scenario of cut throat competition to gain market share has put the Customer in the backseat. Co-creation is the order of the day and companies need to provide a 'platform' with the right knowledge, skills and resources on which customers can co-create value. This provides the customers with a superior experience that improves their satisfaction, loyalty and ultimately strengthening the bottom-line for the company.
Ashwin
P Anand NMIMS
36| Buzz - The Markazine | Jun 2011
Team
Contact Details : Neelotpal Shukla - 9619339510 Nishchai Nevrekar - 9004669367 Gaurav Modi - 9619193091 Rachita Behl - 9702467969 Kushal Mehta - 7738220886 Krishnakant Jonnalgadda - 9975043898 Tushar Kumar - 9768557929 Nandini Kapur - 9619484969 Pawas Soni - 9619594064 Naresh Chandak - 9619473047 Puneet Aggarwal - 7666947322 Neha Talwar - 9619270546
Contact: njm@nmims.org Follow us on :
37| Buzz - The Markazine | Jun 2011
Contact: njm@nmims.org Follow us on :