MARKEZINE ISSUE XIV • OCTOBER’12
WORD OF MOUTH
October 2012
MARKEZINE
From The Editors’ Desk Club MarkUp believes that the lessons learnt from history are invaluable. They provide a backdrop for future learning. Capturing this essence, a traditional approach to word of mouth marketing and its evolution in the current aspect would be an interesting dimension to explore. Today when an endorsement of a brand can be harvested in a way unlike any other with a simple ‘like’ option, it becomes quite interesting to observe the power of the almighty Word of Mouth. It is this sentiment of influence and virality that finds a clear resonance in falling dominoes. A gentle push growing in impact and effect, truly represents in essence the concept of Word of Mouth. We expected a plethora of perspectives would be shared; the variety was indeed exciting. For this, we at Club MarkUp are grateful. We urge fresh participants to contribute in making Markezine a truly vibrant, diverse magazine. Moreover, October 2012 marks the onset of Marketing World Cup ‘12. The epic battle begins yet again, to test your skill and acumen. Get your battle axes out Marketers it’s time to prove your mettle. Glory is yours to attain; will this be just another missed opportunity or are you ready to take what is rightfully yours!
Ankit Gupta
We would also take this opportunity to reach out to our readers for feedback to further this endeavour.
IMT, Ghaziabad
Thanks and regards, Ankit Gupta Credits Co-editor: Raunak Sancheti, Divyanshu Sethi Design Team: Raunak Narang, Dhruv Chopra Content: Aadish Kohli, Ramya Vasudevan, Shubham Gupta Write to us at markup.imt@gmail.com Follow us on :
2nd year, PGDM (Marketing)
Contents From the Editors’ Desk ....................................................................................... 1 Word of Mouth 2.0 ............................................................................................. 3 Word of Mouth: Boon or Bane ............................................................................ 4 Influencer Marketing .......................................................................................... 6 Word of Mouth publicity for Movies ................................................................... 8 Word of Mouth and its Future........................................................................... 10 The ‘Word of Mouth’ effect............................................................................... 12 Mark-e-feed: Risque Marketing ........................................................................ 14 Mark-e-feed: Loyalty Program– All glitter and no gold? .................................... 16 Mark-e-feed: Sensory Marketing....................................................................... 18 Mark-e-feed: Catching the eye of the public...................................................... 20 Mark-e-feed: VESPA– A new beginning ............................................................. 22 Mark-toon ........................................................................................................ 23 Ad-O-Holic 7.0 .................................................................................................. 24 WOW- Words On Wall....................................................................................... 25
MARKEZINE
October 2012
Word of Mouth 2.0:
On
October 21st, Mr. Anand Rai from Delhi
posted a photo on Facebook, about an old man seeking dignified labour to support his family. Till this photograph came along, all his posts had received on an average 5 likes and no shares. In just 3 days it spread like wildfire and was shared over 40,000 times from his account and elsewhere. This was Word of Mouth 2.0, the new communication marketers are focusing on. WOM 2.0 is all about taking social networking to a level where the traditional WOM turns viral and your content gets shared faster than you envisioned it. The recent Gangnam Style is another example of WOM 2.0; everyone agrees the video is quirky and fun but no one can pinpoint exactly what they love about the video. It’s a fire which caught on, right from the West Indies team to the interest of Trollers on Facebook; everything was done the Gangnam style! Today’s generation thrives on unique content; they want to be inspired, awed, ecstatic or even disgusted through it. Facebook has understood this need and created its product around this need of its users to be heard and to be seen. Marketers are already working on their Social media strategies but WOM 2.0 is not just about effective Social media networking. It works effectively when your audience trusts the source the information is coming from, when the information seems like a personal account rather than a paid advertisement. As Dr. Kotler says, “Word of mouth will either make you or break you”. Marketers have always engaged in WOM marketing through – Identifying influential individuals and getting them to endorse the product Offering free services or product trials to build a buzz about product attributes Developing regular PR channels to spread information about products In WOM 2.0, marketers have access to customers 24x7. This has changed the way WOM works; it’s
Shilpa Kulkarni MBA, TAPMI, Manipal Has work experience in the travel industry and is interested in branding
no longer just about the right people, it’s about the right message. If your information is compelling enough it will go viral on its own without the need for an intensive marketing budget to boost the buzz! Marketers could work on the below parameters to build a buzz about their brand. Content – ‘Content is the king’ - if it doesn’t excite you, it doesn’t work for you. It is about the associations your audience makes between your brand and your content. Innocent Drinks is a beverage company providing healthy beverage options, with a fan following running into 2 lakhs on Facebook. Their posts are highly popular even though they are rarely about their drinks.The posts are fun, relate to current news and happenings. The customers associate the brand today with the same values. Channel and Measurement– Since WOM 2.0 has moved on to the Social Media, marketers have a gamut of options available to them. Facebook, Twitter, Pinterest are great channels for viral marketing and excellent for measuring their effectiveness. If it isn’t working, you move on to more crowded pastures! Involvement – Once you take your product/brand out there and the word gets out, ensure you stick around to control it lest it gets out of your hand. Word of Mouth has evolved from a few spokespersons to viral marketing; it’s not going away anytime soon and marketers should make the most of it! 3 5
MARKEZINE
October 2012
Word of Mouth– Boon or Bane
Marketing
and Public Relations are two proc-
esses which go hand in hand. PR strategies include a variety of methods to strengthen a business' good will, credibility and its brand image. The art of influencing public opinion, including seminars, promotional activities, special activities, product launches, advertisements, sponsorships and media releases is a process which requires astute thinking and strategizing. The underlying objective behind all the PR activities is to publicize businesses and their products, services and its purposes. Word of mouth is one of the most inexpensive and effective methods for promoting business. Advantages of Word-of-Mouth Publicity The first and foremost tool used by Public Relations professionals is publicity. Until the last decade, however, the scope of word of mouth (WOM) publicity was largely unexplored and ob-
fuscated by PR professionals. WOM happens to be one of the most inexpensive and effective techniques to promote any business. A common man will tend to have more trust on WOM publicity than the publicity by common means of advertising. WOM marketing is more than the mere creation of verbal propaganda; it 46
Aditya Sharma PGDIM NITIE, Mumbai
also makes public relations and marketing easier. WOM publicity incites people to share details, experiences, and information about their personal lives, which a shrewd public relations professional can exploit in order to reach target audiences more effectively. Pros and Cons of WOM WOM attracts public attention and involvement, be it through blogs, instant messaging, or media coverage. WOM publicity, however, can have both positive and negative effects. While good WOM represents the opinions of satisfied customers, WOM can also be used as a weapon by dissatisfied customers (or competitors) eager to destroy a brand’s image. WOM can work in both ways for a company depending upon the satisfaction level of customers. So, the company cannot negotiate on quality and has to make sure that it has satisfied customers so as to ensure positive word of mouth publicity. It is therefore prudent to monitor WOM closely to prevent injury to a company’s brand name. PR professionals use publicity to shape internal and external opinions of organizations. They also work to garner support from important members of the public whose WOM has the potential to create more hype than an advertisement.
MARKEZINE
October 2012
This is the reason why some businesses like restaurant business endorse their business by roping in important people who have a wide acceptance in the public.
the Apple iPad or the services offered by Bank of America. In the publicity campaigns for these products and services, ads have taken a backseat to the work of WOM strategies.
Potential of WOM
Tips for Creating WOM
In order to ensure that WOM publicity efforts properly achieve the intended results and reach their targets, WOM should be tactically aligned with business goals. WOM and publicity are mutually beneficial. While WOM increases public awareness of a company, media publicity speeds up the spread and flow of WOM. WOM is propagated at a much higher rate in public if PR works in collation with them. People value integrity and trustworthiness. The right WOM can help a company:
The advertising and PR professionals can kickstart their own WOM rather than waiting for the public to do it for them. All they need is a powerful strategy for building widespread enthusiasm. A WOM publicity campaign has to be a well thought of plan and has to be implemented at multiple levels in the market. It cannot be made as a single source campaign but a multiple source multiple effect campaign. An effective WOM campaign begins with the following:
1. Exponentially improve trustworthiness 2. Garner trust 3. Enhance sales figures of the company 4. Develop attitude towards the product in the customer’s mindset 5. Refine customer service WOM vs. Advertisements WOM publicity has the potential to influence public opinion and buying patterns. It can convince consumers to make decisions about a particular product or service which may or may not fall in their circle of buying capacity. Media coverage provides publicity through third-party endorsements. If these endorsements are combined with the hype created through WOM, the product or service will likely score high in the credibility ratings. Surveys have again and again discovered that most people make purchases based on the opinions of others. Take, for example, products like
Focus Groups and experts willing to give their insights about the product
Testimonials and endorsements from satisfied customers
Creative Thinking and implementation
A small team of people acting as generators of the WOM publicity
Compelling and provocative story telling strategies.
A plan for enhancing relationships with existing customers 5 7
MARKEZINE
October 2012
Influencer Marketing Subhankar Kar Chowdhury
As a potential customer makes purchase decision, he is influenced by different circles of people through conversations with them, asking for advice and imitating their habits. Such personalities are called influencers. Consumer’s involvement with a product determines the way the process in which he searches information from external sources. For an enduring involvement product, the consumer will do an on-going search, for a situational involvement product, the consumer will perform a purchase-specific search, while for a low involvement product he will acquire information passively. There are various reasons for which a consumer goes for information search. Besides the case involving high involvement products, consumers search for information if 1. The perceived risks related to the purchase are high 2. It is a high priced product 3. Information search is cost effective 4. Less time pressure 5. The consumer is clear about the features s/he is looking for in a product 6. The brands have a lot of differentiation between them 7. There are mainly 3 types of reference group influences on consumers.
Informational influence exerted by ones having Expert power like an SME, a knowledgeable friend or an expert celebrity
6 8
PGDM
Marketing
and Systems, IIM Lucknow. 5 years of work ex perien ce
at
Wipro. Interned at Headstrong in consulting
Comparative influence exerted by referent power holders like a typical customer or a symbolic aspirational celebrity
Normative influence that depicts the rewards or punishments associated with the usage of a product/service
Earlier, in the awareness phase, consumers were influenced by celebrity endorsers, typical customers or SMEs (like doctors), through television advertisements, newspapers ads and other conventional sources of advertising. In the action phase, consumers were influenced by family and friends. But with the advent of social media the concept has changed a bit. Social influencers who exert their influence in the awareness and consideration phases are the typical consumers who write about their experiences in social platforms. They operate through their different forums, twitter accounts, blogs and Facebook. Consumers can relate to them and they influence not only the purchasing decision but also the brand affinity of the consumer.
MARKEZINE
Key influencers, who are experts in any designated field, exert influence through their blogs, Twitter or expert comments on different consumer feedback sites. They influence not only the purchasing decision but also the brand affinity of the consumer. Peer influencers who are typically family members or friends influence both the consideration for a brand and the purchasing decision of the consumer. As consumers are spending a lot of time on social media and since it is the only platform where a conversation can take place, social media and influencer marketing have become integral part of each other. Nowadays with many information sources and advent of technology, it is getting difficult for brands to push messages easily. In such an environment, actions by a brand speak louder than advertising. It is ‘do vs. push’ strategy where in rather than conveying product benefits repeatedly, brands encourage ‘doers’ to act in a manner which would influence peers. ‘Doers’ are the knowledgeable and influential personalities in a particular field. For example, for an individual wanting to buy a motorcycle or engine oil, a member of a biking community would be a ‘doer’ and a bike manufacturer or an engine oil com-
October 2012
pany would try to promote such a personality to go on biking trips or adventurous ride. This would propagate a message that the particular brand encourages bikers, and with the help of influencers this helps in creating an emotional connect with its target group. So, with the advent of social media marketing, influencer marketing is becoming an important tool, which today’s marketers cannot neglect.
References: 1)
Henry Assel, Consumer Behavior and Marketing, Cengage Learning
2)
Prahalad, C.K.; Ramaswamy, Venkat (2004) The Future of Competition. Harvard Business School Press. ISBN 1-57851-9535.
3)
http://www.whatsnextblog.com/2008/10/ fiskateers_how_a_social_community_becam e_a_veritable_sales_force/
4)
http://www.customerthink.com/blog/ my_personal_definition_of_business_with _customer_value_co_creation
5)
http://www.tremor.com/
6)
http://www.socialbakers.com/
7 9
MARKEZINE
October 2012
Word of Mouth publicity for Movies
I am a big movie buff! But with so many disastrous experiences in the past I decided not to watch all the movies and go for only the selected ones. The selected ones were which my close friends and family members recommended, took reviews from blogs etc. This review taking approach made me realise, I am actually watching movies only after I like the review unlike before. Pick up any film from the Paan Singh Tomar to English Vinglish, the verdict is out – ‘A good film has found its way amongst the audience, even if a little late’. Its business may have ranged from coverage to super hit but the makers don’t have any reason to complain. This also means that if a film has been left ignored and given a cold shoulder by the audience, it has been done deservedly so. A film was all there to be grabbed, if the audience didn’t catch it then that was for a reason. The indications were pretty much there, though on a much lesser scale, when Riteish DeshmukhGenelia D’Souza starrer Tere Naal Love Ho Gaya hung on reasonably well to find an average status for it at the very start of the year. It has to be noted that as a solo lead, Riteish had scored for years and after a tepid beginning, his musical romcom managed to find an audience in the long run. Ditto for Paan Singh Tomar which is the classic case of even those not being ultra-confident
8 10
Aditi Nayak MBA, Wellinkar Institute of Management Interested in Marketing
who had invested in it. Irrfan Khan and Tigmanshu Dhulia took it upon them to keep the flag flying high which means there was yet another success added to Bollywood report card. The epitome of word of mouth resulting in an exceptional affair was Kahaani which was a heroless, song-less film with pregnant leading lady and a director, with two flops behind him. The Vidya Balan starrer didn’t take a start but audience were left mighty impressed. The film turned out to be a super hit while enjoying the best word of mouth of the year so far. Close on its heels was Vicky Donor which didn’t do that much promotion. Well, just imagine trying to sell a film about sperm donation, featuring a newcomer and directed by a filmmaker who wasn’t following Bollywood diktat!
MARKEZINE
October 2012
Similarly who would have ever thought that a film starring Paresh Rawal as the central lead would comfortably march towards the 50 crore mark and that too with a director (Umesh Shukla) with whom the earlier pairing (Maharathi) was a resounding flop? Well, Akshay Kumar thought so and though he must not have been too pleased by the film’s opening day collections, thumbs up by audience soon after, was good enough to make the team smile again. Today, I am sure that Gauri Shinde, Sridevi and Balki are going through similar emotions, with their English Vinglish, finding good patronage from the target audience which wasn’t as forthcoming on the opening day and was perhaps waiting for their peers to announce the verdict. Well, now that the verdict is out and the film is finding huge growth in word of mouth, it has only added on the beautiful trend that has started developing this year. In the times when bets are being placed on blockbusters material films crossing 100 crores in 4, 5 or 6 days, it is always heartening when deserving films (made at 25% of the budget that biggies
carry) make half of that in 4, 5 or 6 weeks. It only means that even in the times of multiplexes and quick bucks, if a film is good enough, audience won’t let it disappear in a jiffy. In a way this word of mouth publicity is back in trend as it was in the 1912s, when the first Indian movie was released. At that time there were no advertisements, no promotions. But only the word of mouth publicity! References: http:// articles.timesofindia.indiatimes.com/201210-17/box-office/34524447_1_englishvinglish-gauri-shinde-sridevi http://www.marketing-madesimple.com/articles/word-of-mouthadvertising.htm#.UH1tTlGQROI
11
11 9
MARKEZINE
October 2012
Word of Mouth and its Future
Word of mouth involves direct interaction with speech as the medium of communication and trust as the basis of marketing. Those who have used the product, experienced the service, witnessed the event, visited the place, met the person etc…share their experiences. It takes a considerable amount of time and capital investment to develop a “brand image” and takes even longer to sustain that image. Word of mouth on the other hand puts the credibility of the endorser at stake. It takes time for the good word to spread from one mouth to another. Various laws have been formulated to elicit the impact of word of mouth: Sarnoff’s law: (Radio Listeners) A network with 100 people is 10 times as valuable in terms of reach as a network with only 10. Metcalfe’s Law: (Ethernet) The network value grows as the square of the number of users. 100 users communicating amongst themselves. Reed’s Law: (The Law of the pack) A network of 100 people can talk not only with each other (as stated under Metcalfe) but also within groups of 2^90. As per the above laws it’s obvious that the future of word of mouth lies in social media. Today our accounts on Facebook, Twitter, Tumbler, LinkedInn, Blogosphere etc… have become the face of the consumer. Word of mouth is a response to some kind of stimulus. The stimulus could be some kind of experience, special service, privilege, discount, rebate etc. received by the customer. An innovative approach could be an online 10 12
Himanshu Varandani MBA, Great Lakes Institute of Management, Chennai
website where only the official brands will register themselves; for example Indigo, Spicejet, Kingfisher, Jet etc… Now, in the airlines segment a user can register only under one of these airline brands. The users can then show their loyalty by making comments about their brand or about the competitor’s brand. Every company can provide their followers with the necessary arsenal needed for the battle. The basis of this suggestion is the football banter prominent among the youth all over. Brands can also organize various events and invite this army of loyal customers to participate in it. This will give the customer a sense of belonging and will guarantee the word-of-mouth promotion. Trust and credibility are the most important tools which are the essence of word-ofmouth promotion.
MARKEZINE
Trust can be generated by encouraging customers to express their views about the brand on various social platforms. These views need not always speak highly about the product. Credibility about a brand can be generated when great stalwarts express their views about a brand eg: ShashiTharoortweeting his experience of travelling in JetAirways gives credibility to the product among his followers.
October 2012
Special treatment: Companies can provide special treatment to highly active and influential customers to encourage them to go viral all over the internet. An airline company can offer free cookies to customers who have been tweeting on a regular basis about the company. They can even offer these customers a special chance of visiting the cockpit and taking pictures with the pilot. Thereby making the customers feel obliged to promote the brand. Innovative and Intelligent campaigns: Customers admire the brands which create smart and different campaigns that “make them think”. Funny and humorous campaigns create a buzz
As long as people continue to ask the “Have you….?”type questions among their peers and relatives the wordof-mouth campaign is successful. For instance: Have you tried this? Have you seen this? Have been there? Have you done this? And so on… Curiosity: Curiosity is a key element of keeping people engaged with the brand. People keep asking what’s next and this becomes the topic of their conversation. Surprise: The most important element is giving a memorable experience to a customer. The “taken aback” customer is the focal point of word-ofmouth promotion campaign. A free gift, a discount, a rebate, an online mention on the official page etc. does the trick.
among the customers. Provide forums, scripts, secrets, information, giveaways or something of value to the customers to enable them to blog about the brand and talk about it. References: Social Media Marketing by Dave Evans
13
13 11
MARKEZINE
October 2012
The ‘Word of Mouth’ effect
Imagine a situation wherein there was no TV, no radio, no press, no advertising on the back of taxis or bus-stops, no email spam (!!!), no enewsletters, blogs, social networking sites, no banner advertisements and no telemarketing, how would people share views and form opinion. Well the answer is, "By talking to each other"… Yes through Word of Mouth!!! Word of mouth is essentially about customers sharing their own experiences or reporting the experiences of others. There are hundreds of ways to get people talking, but you need one to change your business forever. Something silly, Something special that is worth talking about. Why does word of mouth marketing work? What would hold more importance while choosing a fine-dine restaurant, a doctor, a gymnasium or a new mobile phone—an online review or the suggestion by a close friend. Even with the increase in the number of review applications and sites, research results have confirmed that Word of Mouth recommendations for products or services made by friends, co-workers, or neighbours that an individual knows or trusts is still the most effective way to win new customers. One has to admit, that WOMM works, it generates curiosity and makes one want to know more about the product. If the companies can get the individuals who are not associated directly with the company, to generate buzz by praising the virtues of their product or service publicly, the results could be highly profitable. Word of Mouth is useful not only for those cus12 14
Nidhish Gupta PGDM, IMT Ghaziabad
tomers who are seeking reviews about a particular product/service but can also drum up new interest. An endorsement by the right person, someone with known credibility in a particular industry or in the public eye could trigger off a tidal wave of profit. Some Examples of Word Of Mouth Marketing Particularly in India, people rarely find their way around a city using maps or written directions. The usual practice is to leave home with a vague idea of destination (street numbers, Locality, approximate distance etc). Along the way, Indians would ask strangers – mainly auto rickshaw drivers, who know the city well, about their destination Perfetti Van Melle to maintain the word-ofmouth for its Big Babol amongst Indian children, had to keep on introducing something new and exciting for children every few months like Picture Stories, Comic book, Magic candles etc
MARKEZINE
Sony TV in order to promote itsnew serial, `Jassi,’ planned `flash mobs’, wherein groups of 15-30 people went into high-traffic areas such as Big Bazaar and Apna Bazaar and called out for `Jassi’. They also promoted it through groups of women on the train who struck up seemingly impromptu conversations about `Jassi’. The serial and particularly the character “Jassi” aroused a lot of curiosity amongst people even before the 1st episode was aired and this led to a definite increase in the viewership. Star Network established itself in India through the serials ‘Kahani ghar ghar ki’ and ‘Kyunki Saas bhi Kabhi bahu thi’. These serials generated a huge word-of-mouth because they led Indian women to identify themselves with the characters in the serials. These serials became regular talking points in the Indian households, women
October 2012
gatherings etc. to the extent of mad craze and helped Star Network to climb to the number one position from being a distant third. Other commonly adopted techniques for Influencing Word of Mouth a rediscussion of the product on internet blogs, through product placement in movies or at social and sporting events, discussion of the product on LinkedIn, Facebook and internet chat rooms etc. While a positive word of Mouth can help a company significantly in terms of promotion, sales etc. similarly, a negative word of mouth can do much more damage than can ever be imagined. With customer’s increasing indifference to traditional advertising, Marketers can no more afford to convey the information about their product to the customers as was done earlier.
15
15 13
MARKEZINE
October 2012
Mark-e-feed: RisquĂŠ Marketing: A risky proposition in India
Almost all the advertising in the world involves creating the drama or an over the board story around the product which reflects the exaggerated benefits associated with the usage of that product. There is nothing wrong in creating theatrical effects if that confines within the limits of humour, levity and creativity but a creative work lands in troubled waters when it decides to play with and disturb the strongly held beliefs, norms and standards. India is a country where many countries and many centuries co-exist at any given point of time.A collage of over hundred sensibilities India was never a single nation but a continent in its own right. It is impossible to communicate, leave alone attract, the entire population of the country with one single message. Indian subcontinent has always been a land mine territory as far as experimentation with the morality is concerned and a brand has to tread very carefully in order to connect with the consumer. Indians believe in power of tacit words and hence explicit content may not register any place in the Indian mind.
14
Meenakshi Arya PGDM, IMT Ghaziabad A food technologist from CFTRI with work experience at a microingredients called Specialty
company
International Products,
Mumbai.
There are a few ads which are outright obscene and deplorable according to Indian standards. The most infamous ads in this arena come from a men’s deodorant brand called Axe which keeps on reinforcing the idea that the usage of its product invariably helps alluring the females towards the user and the ads have evolved over the years around this basic message only. Along with the objection to the sexually explicit visuals of the ads, the most important aspect which drew attention or rather protest was the unabashed execution which successfully brings the males to believe that such an effect can be replicated in real life to a certain extent. This very fact even brought the brand to litigation when the brand promise was not even remotely delivered. And for that matter, it becomes imperative for the ad agencies to carefully design the concept keeping in mind the criterions set by Advertising Standards Council of India (ASCI) which is a selfregulatory voluntary organization of the advertising industry in India. The council’s objective is to maintain and enhance the public's confidence in advertising. Their mandate is that all advertising material must be truthful, legal and honest, decent and not objectify women, safe for consumers - especially children and last but not the least, fair to their competitors.
MARKEZINE
Most Ad agencies believe that an original idea cannot be straight jacketed into the boundaries of morality and principles of any particular society. It should be free flowing as well as used for the progression of the human race which otherwise will get stuck with age old norms and standards. Like how ad world has moved on from showing women doing household chores in earlier part of twentieth century to both the sexes enjoying all the aspects of life there is a need to accept that nothing is standard and standards are bound to get changed once someone somewhere thinks beyond them. Also, there is that fine line between being hilarious and obscene and when it is crossed depends not upon what is being shown but what is being perceived and understood.
October 2012
kind of advertising ensure that? Well, for low involvement product it does because the focus is not on the product features but on the brand image. For example, mountain dew ads are always associated with over the top audacity and creates unique image for its users. The scene is completely different for high value products which require quite a good amount of research. RisquĂŠ marketing may not work for them beyond brand recall because of prominent role of attributes and linked benefits in buying process. All said and done, the last word should ultimately come from the consumer who has to go through all kinds of communication being hurled at them and then screen it carefully to absorb the right kind and leave the rest as frivolous visuals.
At the end of day, the purpose of advertising is to induce an intention to purchase but does this
15
MARKEZINE
October 2012
Mark-e-feed: Loyalty Programs – All glitter and no gold?? “Customers are issuing a very clear warning to marketers. Give me relevant communications that reflect my history and connections to you, or we will go elsewhere with our business”. These are the bold words of Sandra Zoratti, VP of Global Solutions Marketing, InfoPrint Solutions Co., a joint venture of Ricoh & IBM. A recent survey shows that most marketers are doubtful about the effectiveness of customer-loyalty programs, while they believe that they are still as important as any other ace marketing instrument up their sleeve. Or are they? In a competitive market, rarely would one find an organization that says it’s completely satisfied with its current customer base and profitability, especially when the competitor is lurking just behind you, waiting for you to make a mistake and pounce on to your “loyal customer base”. Customer loyalty programs have thus become one of the biggest market acquisition and CRM assets in business, cutting across major sectors like Airline, Retail, Hospitality and Gaming. The consumer enthusiasm to embrace these loyalty programs has grown steadily over the recent years. According to a survey by USA Visa research services, almost half of general purpose credit cards offer a reward program. This pervasiveness of loyalty programs has caused marketers to believe that such programs may be a necessary cost of doing business in certain industries. However, with a large number of loyalty programs doled out so frequently by competing companies, are firms merely giving away their profits in a desperate struggle for market growth, like the airline price war in the early 1990s? A Loyalty program is a program run by the mar16
S Vignesh PGDM, IMT Ghaziabad
keter that allows consumers to accumulate free rewards as incentives for making repeat purchases with a firm. Such a program is not beneficial to the consumer for a single purchase. Research shows that these programs do significantly impact the repeat purchase behaviour. A reward program, added to excellent service with easy and quick earned rewards, takes the consumers’ minds off the price. Hence, consumers do not hesitate in purchase even at the cost of spending more. The more the customer gets engaged in the loyalty program, the higher his switching costs tend to become, further boosting repeat purchase from the same brand. Research by ‘Bain & Company’ claims that loyal customers are more profitable for an organization. Apart from price sensitivity, profitability is believed to be generated by reduced servicing costs, increased spending, and the favorable recommendations are passed on to other potential customers by these loyal buyers. While the generalist notions of customer loyalty and increased repeat purchase tend to make it apparent for companies to follow aggressive loyalty marketing, it is however important to first take into consideration the effectiveness of these programs with respect to the alternate competitive programs before doing so.
MARKEZINE
Most studies examine a single program in isolation, when in reality multiple loyalty programs are often offered by competing firms. Consumers holding loyalty program cards from competing chains reduce the share of wallet and customer lifetime for the focal chain. Thus as a competitive firm resource, a loyalty program needs other complementary resources to realize its value fully and to create competitive advantage. Loyalty programs do not always lead to beneficial outcomes for the offering firm and it is only high-share firms that experience sales lifts from their loyalty programs. Another factor that needs to be observed is the market saturation of loyalty programs. Crowding the marketplace with loyalty programs can diminish the return of an individual program , as customer tend to redistribute frequently from one loyalty program to another depending on competitive reward schemes offered. It therefore becomes imperative for each organization to first analyse the cost of program per individual versus the return per individual projected. While these numerous researches repeatedly aim to gauge the effectiveness of customer loyalty programs, the exact conclusion is still unclear. The impact of loyalty programs tend to vary across different customer segments, and tends to
October 2012
show significance performance variance in response to the competitors loyalty programs, which eventually with time, tend to erode the differential gains. The future of these loyalty programs, however, seems to be still heading in the positive direction, with ever evolving programs like Amazon Prime (which tripled its subscriber base within a year) and Shoppers Stop First Citizen Loyalty Program ( which achieved a path breaking 25 Lakh customers in 2012 ) paving the way.
17
MARKEZINE
October 2012
Mark-e-feed: Sensory Branding: A case in point
Sensory
branding is an emerging discipline for the marketers. The idea is to engage the customers through one or more senses and going beyond the conventional marketing media of sight (sometimes Sound) thus developing strong brands with memorable connections. Consumers show different behaviors with different brands because of their like/dislike towards the same. Developing an emotional connect with them is therefore necessary for a healthy and long lasting relationship with the brand. With the plethora of information available, many conventional branding messages are no longer effective. A “times-square effect” – an overload of visual messages- challenges marketers to make their messages to be heard above the din. Add to that the dynamism, limited time and a thin line of difference between virtual and real world — sensorial appeal will play a vital role in engaging consumers towards brands. The key to involve them is to create a buzz around your brand and provoke conversations about it. In order to achieve it, marketers need to bring the branding a level up from the traditional media of sight (or sound). Colors have a direct influence on consumer behavior. For e.g., Color red, increases the pulse and the heart rate, it raises the blood pressure and stimulates appetite. So restaurants prefer red color environs vis-à-vis any other colors. Likes of Pizza Hut and few others follow the same. Starbucks does it in a unique way in order to create repeat purchases. Customers’ personal interaction at Starbucks’ coffee shop where the brand is associated with a sensory experience stimulating a strong, positive, and distinctive impression across all five senses. In this case multiple sensory cues are tapped; lighting, furniture, interior furnishings, music, coffee and aroma, which all con-
18
Rakshit Suri PGDM, IIM-K 5 years of work experience with Wipro Technologies
and has
worked on consulting projects
during
his
internship with Headstrong.
tribute and complement each other as if a sensory orchestration. When the sensory experience is maximized, the store atmosphere creates a compelling experience that consumers will want to repeat through repeated visits. The success of movie “Avatar” is not because of its great direction and technology used but because the stimulation and the sense of being in the thick of action in a fictional story is what the achieved thereby allowing the audience to touch and feel - literally. (There have been instances when great technology and innovation hasn’t been able to mesmerize the audience). Touch can be manipulated through texture, softness, materials (in case of clothes), weight, comfort etc. Kellogg’s Rice Krispies, with its signature “Snap, Crackle, and Pop,” By introducing a distinctive sound to its breakfast cereal, the company integrated four senses into its product: taste, touch, sight and sound. Schweppes, which, in its long-running “Sch you know who” campaign, linked the “Sch” in its name to the tell-tale rush of gas emitted by a soda bottle that is being opened. Parle’s attempt at sensory branding was Krackjack.
MARKEZINE
The biscuit with the dual taste of sweet and salt in one is probably one of the earliest examples of sensory branding in the Indian context (which was followed by 50:50 from Britannia). Anything that tastes sweet and salt at the same time, people recall 50:50 instantaneously. Visual images are more distinctive when matched with a sound/smell. Brylcream’s “A little dab’ll do ya” radio jingle, “Intel-inside” campaign and their four tone melody helped creating a positive image in the consumer’s mind and more than that it created more brand recalls. Our very own Britannia with its “ting ting tee ding” , titan created the magic with the violin, Pillsburry doughboy’s giggle, MGMs lion roar, windows start up music, Cadbury’s sweet music in the recent campaigns all raise the level of engagement a tad higher resulting in greater involvement and sense of ownership of these brands.
October 2012
of all the emotions are triggered by smell. Pass the entrance of a Lush store and you are hit by a rush of fragrance. They don’t believe in packaging, so the soaps lie down like big blocks on the table so that customers can touch and feel the products. This way they engage their customers at a level higher than the existing ones. Our emotional and cognitive responses are affected by our feelings from seeing, hearing, tasting, touching, and smelling. This becomes even more effective for the products (remember ABC Model) where the cognition precedes the affect. Marketers can change the sequence by making
Lush, the handmade cosmetics company epitomizes sensory stimulation. Smell increases the customer’s connection with a brand. It creates an instant connection and it is known that 75% the consumers feel (affect) first through sensorial experiences and then let the emotional responses dominate their rational thinking. All brands try to gain the top of mind and alter the decision making process of its buyers, and sensory marketing just reinforce their cause. So, the main idea is that each sense ignored is an avenue of communication not utilized.
19
MARKEZINE
October 2012
Mark-e-feed: Catching the eye of the public : Live Advertising
Live advertising is the concept of using people participation and props to create an ad that happens live and in a public area. There are very few records of live advertisements as it is still relatively unexplored. Honda created a live Ad in South America with the theme “Difficult is worth doing” when they got an elite team of sky divers to create the name Honda in sky diving formation In the Summer Olympics of 2006, Adidas created an outdoor ad by enlisting climbers to race up 33 story buildings in a vertical climb for a Winner’s Prize of $10,000. The latest advertisement to catch people’s attention has been that of Coke in collaboration with ‘Skyfall’, the latest James Bond movie slotted for release on 26th October 2012 in the UK. The advertisement has people undertaking an adventure to win their free ticket for Skyfall. It starts when a passerby goes to a vending machine at a railway station in the UK to get a bottle of Coke Zero. Out comes the bottle along with instructions asking him to reach Platform 6 in 70 seconds. This is the James Bond adventure offered to the consumer to spice up his life. It transports him from his mundane daily life into a more exciting one for 70 seconds. “Unlock the 007 in you” seems to be quite an apt tagline for the ad.
20
Mary John Thalody PGDIM, NITIE, Mumbai A mechanical engineer with experience in operations and teaching.
Naresh Jawni PGDIM, NITIE, Mumbai An Electronics engineer with 3 years work experience in the IT industry.
What are the advantages that live advertising offer? Live Attention: Nothing grabs more attention than an ordinary guy doing/getting something extraordinary in public. Live ads attract attention through the newness of the process and the surprise element. Every viewer is a new viewer: Unlike television advertisements, live advertisements are viewed by people who pass through when the event is happening. Hence, there are very few chances of the event being viewed by the same group of people.
MARKEZINE
October 2012
More cost efficient than traditional print or TV advertisements: Booking slots on prime time, creating a repeatable ad, buying print space all take money. All this is eliminated when the ad is performed willing by the consumer or by locally hired actors/stunt people.
Chances of going viral on the social media space: With YouTube causing videos to go viral, the imaginative concept of a live Ad has all the chances of marketing itself on virtual space. The Coke Zero ad is an example garnering 1,375,397 views in two days since Oct 18, 2012 when it was published on YouTube. Some issues that dissuade companies from trying live advertising:
mall in Mumbai. Some visitors’ cars had unexpected Pujas performed on them by a hired priest, some cars got decorated with flower garlands and ribbons, others had pretty young ladies walk around the car admiring it to the open mouthed wonder of its passengers.
Unpredictability of external surroundings: The advertisement is far too dependent on the weather, the mood of the subject, the success/ failure of the stunt and so on. Failure has the potential to backfire on the brand.
It is yet to be seen whether this new medium of advertising will take off in India. Whether it does or not, these visitors will definitely recall the name Ambi ur for a very long time. And so will anyone who sees that Ad.
Permissions: Government laws and permissions of different countries vary. This might pose a problem to different stunts.
Live advertising gives a brand the chance to endear itself to the customer. The average man on the street goes home smiling thanks to a brand that’s made his day. What better way to make a loyal customer? After all that is what marketing is all about.
The response of the consumer: If the advertisement involves performing a surprise on the consumer without prior notice, there is chance that he/she may respond unfavorably. This may lead to bad media and bad publicity. Live advertising has been initiated in India too. The Ambi Pur “Freshness Surprise” ad had the brand playing pranks on unsuspecting visitors to a
References 1. Collins,Oisin (This Coke Zero advert is easily the coolest 'Skyfall' related thing we've seen yet)
21
MARKEZINE
Mark-e-feed: VESPA - A new beginning “If you are not prepared to be wrong, you’ll never come up with anything original” -Sir Ken Robinson
October 2012
Apurv Mehta PGDM IMT, Ghaziabad Member - Literature club.
The
nostalgia of the 60’s is back, flamboyance
and chic are in play, it’s the time for VESPA. Remembered as the flagship scooter of the tie up between LML and Piaggio during the 90’s,it was the second largest player with a 28% market share. Come 2012 and scooters segment is ever growing, the average middle class of the country prefers scooters as a secondary vehicle along with a four-wheeler especially for the women in the family. Looking at the above scenario and the upcoming festival season, Piaggio has played their hand perfectly in launching Vespa TVC. Creating vintage romance in retro style they have created a very charming campaign putting their point across with a colorful zest. It’s simple yet elegant; it’s the old Vespa reminding you of the paved streets of Rome, or the lip smacking hot pizza. A perfectly well made advert for the urban youth correlating to the premium pricing of the Vespa. Also this price of the scooter drives it into a niche segment and not a mass product, but more of a lifestyle brand. The effect of this TVC might not cause ripples for low cost rivals like Honda Activa, Suzuki Access, TVS Scooty Pep+ and Mahindra Duro. Piaggio has promised to come out with a mass market offering late next year. Even if the sales might be low, this has built tremendous brand equity for Vespa and a positive step towards long run sustainability of the brand. People have started talking about it, a definite win for this new entrant. The company produces the scooters at its facility in Baramati, Maharashtra, which can produce 22
An
engineer
ex-
tremely interested in new
innovations
in
technologies.
150,000 units a year. Plans are afoot to double capacity in a year’s time. Piaggio has invested €35 million (around Rs 243 crore) in the facility and plans to put in an additional €20 million to augment capacity. With the on-road price going to upwards of Rs. 66,000 it is definitely not a sustainable strategy, while the market is very competitive, only certainty in the scooter market is growth. Where could have Vespa done better, they hit the nail with the appeal but I feel, the growth for this segment lies in the young women who should have been the target. The colors offered would also appeal to girls, it is definitely considered a feminine product in the Indian market. The biggest boom for scooters was the Priyanka Chopra TVC ‘Why should boys have all the fun ‘, targeting the correct segment and racking up sales for Hero Honda. We need to wait and watch, the future of this brand. But Piaggio has made a wonderful start to their Indian journey.
MARKEZINE
October 2012
Mark-toon
Brands Glare, But Word of Mouth is all you care!!! “
23
MARKEZINE
October 2012
Ad-O-Holic 7.0
Ad-o-holic 7.0, the annual Ad-fest organized by Club MarkUp was held on September 1st, this year. Ad-o-holic is a platform where budding advertisers are given an opportunity to compete against students from the top B-Schools in the Delhi/NCR region. This year’s theme, ‘What’s your B(r)and Equity?’ saw the teams put in their hearts and souls to take their bands to the top of the music charts. In the first round, an online round, the teams were judged based on their creative skills and in the second round, selected teams were invited to IMT Ghaziabad campus to present their Advertising strategies. It did not take long for the judges to recognize the creativity and analytic skills of the teams. Innovation, imagination and ingenuity
2426
of the teams were duly recognized and the team from FMS, Octavia, consisting of Swati Saini, Shubhashish Mandal and Abhijeet Singh bagged the first place. The team from IMT Ghaziabad, Urban Raga, consisting of Ankit Bansal, Priya Poddar and Kasturba K.V was adjudged the runner up. Club MarkUp takes this opportunity to congratulate the winners and thank all the participants for their overwhelming responses. We also want to express our special gratitude to judges Jyoti Kainth and Tripti Ghosh for their valuable support and guidance. It was definitely a day well-spent for us, the proud MarkUp-ites, and a day of great learning for all the participants.
MARKEZINE
October 2012