JUNE 2011
- Monthly Newsletter
INSIDE THE ISSUE Page 2
Revamp of the “THANDA”:- Coca-Cola in India Page 3
The Ifs & Buts of Celebrity Endorsements Page 5
Let them eat cake (Luxury Marketing) Page 6
Evolution of Marketing trends in Bollywood Page 7
Experiential Marketing--‐ Is this the future? Page 8
Pros & Cons of Celebrity Endorsement for a brand in the Indian Context
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Revamp of the “THANDA”:- Coca-Cola in India - Shashank Kumar Verma After a series of faulty steps during recent years, the beverages of the US$31 billion multinational are back on the shopping lists of Indian consumers, and Coca-Cola India is reaping the rewards. During the last financial year, its sales volume grew more than 30% and it turned a profit for the first time since it returned to the country in 1993 after a 16-year hiatus. Much of last year's growth for Coca-Cola -and its rival PepsiCo -came from urban and semi-urban markets, but experts note that Coca-Cola's rural push helped it consolidate its overall market leadership.
One reason why Coca-Cola's India foray faltered after it re-entered the country was that it did not pay enough attention to refrigeration. In India, consumers -- urban or rural -- want a "cold drink" and not just a "soft drink," says Jagdip Kapoor MD of Samsika Marketing Consultants, a brand marketingservices firm in Mumbai. "Initial 3-4 years it was grappling with whether it should focus on Thums-Up or Coke, and refrigeration took a back seat."
other foreign consumer-goods companies to sell their products in rural India. "People think Indian consumers want low-priced products," says Kapoor. "There cannot be a bigger myth. They want good-quality products at a reasonable price." It’s a common practice for rural consumers to pay one rupee more for packaged beverages to cover the cost of keeping them chilled. "How can anyone say they are highly pricesensitive consumers?" he asks.
The key to the turnaround, Singh says, is a greater focus on refrigeration. In electricity-deficient areas, such as some of the hinterland in Uttar Pradesh, Coca-Cola now provides shops with coolers that operate with brine solution so its products can stay chilled up to 12 hours without electricity. In other places, it has trade agreements with local ice makers. As for distribution, Coca-Cola India has moved from a centralized distribution model to a hub-and-spoke approach. Rather than transporting beverages directly from the bottling plants to retailers, its goods are now sent first to a "hub," and are then parcelled out to nearby "spoke" centres when orders need filling. Among the benefits, this approach reduces costs because fewer long-haul journeys in large, uneconomical vehicles are needed, while efficiency increases through more timely, tailored fulfilment.
Yet about seven years ago, Coca-Cola set out to woo rural consumers by halving the price of a 200-milliliter (seven-ounce) bottle to Rs. 5 (11 cents). Rs. 5 is a “psychological price point"; a price greater than Rs. 5 means the consumer has to "break a Rs. 10 note.". Now, Indian retailers found themselves arguing with customers, who wanted the drink for Rs. 5 and were unwilling to pay the extra rupee for refrigeration. Meanwhile, a price war erupted as rival PepsiCo matched the Rs. 5 price. Both
Cold Drinks, Very Hot Markets The reality is that the consumers that Coca Cola covers the most today are in hard-to-reach rural India. Coca-Cola realizes that its future will be determined in the countryside. Today's farmer could be tomorrow's city resident; better to capture that market quickly. But unlike others, India is a market that makes neither distribution nor inventory management easy, and is hugely diverse in terms of tastes and buying power. Indeed, even established consumer-goods companies in India have The High Cost of a Low Price covered only about a tenth of the The company also erred in adopting firms have since dropped the strategy. country's 600,000 villages. the low price-point strategy like many "The price barrier has definitely been a
Marketing Tidbits!! A new anti-wrinkle pill which is based on tomato extracted Lycopene, has been jointly produced by a food company and a cosmetic company. The companies are Nestle & L'Oreal
BY MERCUR—I
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problem in rural India," concedes a spokesperson for Coca-Cola India. "Soft drinks that come in a glass bottle have to be returned to bottling plants, and no mechanism can provide such drinks at a cheap cost due to freight charges. We are now looking at alternative packaging and how to organize distribution." Neglecting Thums Up There are thornier issues involving brand management that Coca-Cola India has had to confront like its failed
attempt to let the popular Thums-Up brand fade away in the mid-1990s so that its own Coke brand could gain more market share. "Coca-Cola bought Thums-Up when it ruled the market."Initially, Coke neglected the Thums-Up brand. Then it started paying attention, and ThumsUp is still number one in India, with Coke and Pepsi following." As Desai of Future Brands notes: "Thums-Up is a brand that refuses to die ... although Coca-Cola never in-
tended to let the brand live. There are huge pockets of enthusiasm for it across the country, and it tends to appeal to rural audiences more than other brands. Wherever it is strong, it has a good rural profile." Today, after the resolution of these problems, can we say that Coca-Cola now is ready to rule the coveted Indian market??? Only time will tell......
The Ifs & Buts of Celebrity Endorsements —Khalid Kamal Rumi Globally, ‘celebrity endorsement’ is a very powerful marketing tool, employed by firms to build their brand equity. In India, the Lux soap is known to have been endorsed way back in 1941 by the then famous film actress Leela chitnis. The introduction of celebrity endorsement in Indian TV advertising is marked by the commercials of 80’s featuring Kapil Dev, Sunil Gavaskar and Tabassum endorsing various consumer products. So, the potential of this concept has been well acknowledged, and tried and tested on the Indian soil for over 70 years now.
which is expected to help raise awareness of the brand, generate positive associations for it and build purchase intention among its prospective customers. Sometimes, it’s merely a reactionary
nessed a novel application of celebrity endorsements for crisis management, manifested brilliantly in the Cadbury case to weather the ‘worm’ storm. What are Frequently Endorsed? Among the industries that have generously employed this marketing tool, and have reaped healthy dividends are those representing FMCG, consumer durables, automobile, construction, healthcare and gems and jewellery among others.
Why Endorse? The compelling reasons for companies to yield a strategic position to celebrity endorsement in their marketing schemes vary. Very frequently celebrities are roped in during new brand introductions. The basic idea remains to cash on the popularity, credibility and mass appeal of the celebrities
step meant to nullify the impact of celebrity endorsement exercised by a competitor. The last decade also wit-
Who Endorses? Among the public figures, cinema and TV actors, artists and sportspersons
MARK - AVENUE are said to be the first choice for endorsements in India, followed by politicians, journalists, activists and some others who have been, or, promise to be very successful in their niche areas.
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tire aura and cult figure of the celebrity needs to be accentuated. In the minds of consumers, this kind of product is usually placed as an aspirational one and the focus is more on emotion-
ty is indicated by some popular indices like Q score (a function of favourite and familiarity) and Davie-Brown Index (DBI) (a function of appeal, influence and trust). In addition, a number of renowned publishing houses like TIME, Forbes and Businessweek also come up with their Power & Influence lists every year. In India, several publications like Filmfare and India Today release similar lists valuing celebrities on expertise, likability and trustworthiness factors. After valuation, most of the endorsement deals are carried out through celebrity agents and expert ad agencies. Endorsement Risks
It is also true that a number of ordinary faces also gained celebrity status with their appearance in some iconic ads, like Surf’s Lalitaji, the Complan boy and the Rasna girl to name a few. Choice of Celebrity The ‘consideration set’ of personalities for endorsement must be guided by the nature of customers a brand serves. Its target market or segment can be broadly identified on the following parameters: geographic, demographic and psychographic. A company needs to feel the pulse of its customer as the heart of a successful celebrity endorsement lies there. It decides the avatar a celebrity personifies, the message she communicates and the medium through which it is conveyed. The lingo, accent, dressing and props used in an ad that may appeal to urban customers may not be the most popular and effective ones in rural settings. Similar is the case with distinct genre of celebrities appealing to different members in the same family, say, children, teenagers, housewives and elderly. The role a celebrity plays in an ad depends on the kind of brand being endorsed. When it comes to lifestyle, fashion and luxury products, the en-
al appeal. But when there is a repeat purchase or low involvement product, the functional benefits tend to be highlighted more. Hence, to add to the believability factor, the celebs are usually made to resemble a common citizen representing shared points of pain and happiness. Rocketing Endorsement Fees Financially, celebrity endorsement is a
costly proposition for most companies. With contract fees crossing Rs 1 crore for top celebrities in India, due diligence needs to be carried out to closely estimate the expected returns on investment (ROI). It is thus better advised to take professional help before a company takes a call on celebrity endorsements.
How are Celebrities Valued? In the US, the brand value of a celebri-
Celebrities attract the maximum glare of today’s 24X7 media. Even a minor aberration on their part draws censure from all corners of the society. The fallout for the brand she endorses may be devastating in some cases if the person over a period of time has become a synonym for the brand. There is another risk for the brand getting permanently associated with the personality of the celebrity, popularly known as the ‘celebrity trap’. In the case of sports celebrities, betting entirely on the performance of the endorser may have a more severe
impact on the brand popularity than in the case of artists and actors endorsing the brand. Also, as a rule of thumb, viewing endorsements as a mere substitute for good products would only tantamount to a strategic blunder. In Celebrity’s Shoes From a celebrity’s point of view, the more offers for endorsement she gets, the more she becomes a household name. The subsequent offers only promise a better deal for her. But
BY MERCUR—I
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with every contract signed, she is restricted in her choice and the exercise of her free will is curtailed to some extent, at least in public appearances. It would also be interesting to study the impact on celebrities switching their endorsements for rival brands (most of them doing so in the wake of their being dumped by the previous brand owners). They are sometimes signaled in the media as no-more-good-
enough and when they switch loyalty they are berated for chasing only money. Its immediate consequence is a loss of face, which may hit the lesser mortals more critically than the very established ones. Celebrity Proliferation The onslaught of mass media is churning out celebrities every day from a plethora of domains. Leveraging web 2.0 platforms, they have been able to
garner, engage and entertain their bevy of fans and followers quite effectively. Many seem to be mere a flash in the pan, but their impact in influencing consumers is nevertheless felt. So, the relevance of celebrity endorsement is not the heart of the debate today, the crux is, who should we call a celebrity?
LET THEM EAT CAKE -Srinath Akula “Let them eat cake” – a famous
marketer should remember while
4Ps. From the product perspective as
phrase supposedly spoken by a great
dealing with luxury brands. The most
outlined in eight things, consumers
important of these is the consumer of
expect luxury performance from the
a luxury product desires to fulfill his
product and quality a cut above the
actualization needs of the Maslow’s
average. Pricing of luxury goods has
hierarchy. The article Eight Things
very little to do with the money; afflu-
That Every Marketer Needs to Know
ent luxury consumers can afford to
about the New Luxury Market by Pam
pay full price for just about anything
But a rational marketer would accept
Danziger, aptly summarizes the pur-
they choose to buy. From the distribu-
that marketing luxury products is not
pose of this article.
tion perspective, unlike the regular
French princess in 18th century, upon learning that the peasants had no bread. The cake was then a luxury for the peasants. Whatever the poor cannot have and the elite can, was identified as luxury. Is there any change in the definition of luxury since then? This old definition has lost significance and in the new age, luxury means different things to different people; it may be exclusivity of the product for some, high craftsmanship, precision and
quality
for
some, and premium some.
priced
for
But
one
thing is certain. Luxury is no longer the sole preserve of celebrities, aristocracy and the super-rich. New categories are created which are called accessible luxury or mass luxury.
playing the game in the same old turf. Hence we try to put forth few points a
No marketing analysis is complete without discussing the perspective of
goods, luxury goods are available in
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select stores or exclusive outlets. Pro-
is predominantly aspiration-
motion
al appeal focused and exclusivity focused. Celebrity endorsement is widely used to create Reference group appeal. As a last
The brand must be expansive
The brand must tell a story
The brand must be relevant to the consumers’ needs
The brand must align with consumers’ values
The brand must perform
set of words, to ensure success of a luxury brand, these are the basic foundations
Evolution of Marketing trends in Bollywood -Kumar Vaibhav Today bollywood is industry in itself
marketing was reduced to few ban-
related to
and growing big. Every year many
ners , hoardings and print advertise-
the movie
movies hit the Box office but things
ment but today these things have
like krrish
have changed from past where only
become simply the hygiene factors.
mask,
couple of movies used to release on Friday, Now every Friday the box office is bombarded with at least 4-5 movies so to create a buzz for a movie, the marketing team of film has to be very specific about how they want to go about publicizing the film.
outfit were made available at the reMarketing of movies in case of bad movies act like hedging of risk where risk is reduced because even a bad movie if marketed properly ends up doing some business rather than just going flat at box office. Due to marketing , the buzz which is created
They don’t just have to attract but
make people to come and watch the
also need to convince the audience to
movie and by the time people realize
visit theatres to watch the movie
that the movie is not good , the movie
which the audience might otherwise
recovers
end up watching on laptop.
cost .Similarly an average movie if
The film marketing holds a great significance today and very often the marketing strategies of new movies can be found, implementing the basic principles of marketing which is STP. An Aamir production Latest movie Delhi belly has clearly targeted India’s urban youth and positioned the movie exclusively for 18+ and old .There is a particular promo going air where
some
part
of
its
promoted properly can do wonders for the film makers like Ghajini. Very creative ideas are adopted to stand out of the other film promotions. This publicity is aimed at all the target audience in the country for creating a
tail stores, it created huge buzz in the kids, Kids were excited to own such stuffs. It started with that and today if the film makers really believe that they have a blockbuster, then they certainly put a lot more effort in marketing. Aamir Khan, known as Mr. Perfectionist ways came with innovative ways of marketing the film. Beginning with the butt chairs that have been set up at leading multiplex chains across the country, Aamir did a host of other activities to promote his film. He walked the ramp with costars Sharman and Madhavan for a ramp show where they unveiled their range of 3 Idiots T-shirts by Pantaloons.
“buzz” about the movie. Aamir khan in order to promote his film went on
Marketing of a movie can be thought
to give fans, the Ghajini haircut. Simi-
of as creating instant brand identity.
larly he also visited many schools for
As films have limited distribution win-
promoting Taare Zameen par.
dow and therefore a limited shelf life,
Aamir khan says that Delhi belly is not
the marketing has to happen at abso-
a movie for you if you are old. Today
Marketing has really taken off in last 4
the marketing of film is as importance
years and the benchmark was set by
as the story of the film, Earlier the
Krrish. The way the merchandisers
lutely the right time to get audiences into the cinemas.
BY MERCUR—I
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Experiential Marketing--‐ Is this the future? -Aditya Anand What is Experiential Marketing? Experiential Marketing is buzzword in marketing world these days. Marketing world always try to invent the wheel over and over again. Experiential marketing is not new in this world, yes the coy term “Experiential Marketing” is new. Western world always take clues from past and re---brand it into a new approach.
created using various things like M&M
According to one of studies a consum-
to sell there tractors created a simula-
er internationally and domestically are
tor which gave farmers feel how their
bombarded with more that 5000 mar-
new tractor can be used in fields. In
keting messages every day by various
Australia, Absolute vodka used the
means like TV, web, press etc. High-
same ploy to create a buzz about their
lighting the same problem, Herbert
new offering called “Cut”. They dis-
Simon says “…in an information---rich
tributed a bottle of “Cut” to everyone
world, the wealth of information
in two bars in Sydney and Melbourne
means a dearth of something else: a
and in turn consumers where given
scarcity of whatever it is that infor-
chance to contribute to exhibits of
mation consumes. What information
photos.
consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it” (Simon 1971, p. 40---41) So in this world of too many
brand,
marketers
need
something unique to get the attention. Is this the future? Not really. In my view experiential marketing is the oldest form of marketing that marketers have Experiential marketing is a form of
Why use experiential Marketing?
relationship marketing. Here marketer
been using. Think of world when TV, web, press was not in so much domi-
create emotional connection with a
Experiential Marketing is generally
nance. In those times only way to ad-
consumer and try create a customer
targeted toward very small number of
vertise was through showing the
experience using one or more senses
consumers. So why use experiential
product and word---of---mouth. When
like touch, taste, smell, sight or hear-
marketing!! When there are many con-
a marketer showcased the product
ing. The moot point is to create a
ventional methods available, when
he/she was actually creating an experi-
memorable, emotional and interactive
marketers can easily reach to masses
ence for customer, it use to create an
experience. This is also called as right
using web, TV or press media. The
impression. And marketer through
brain experience. This ploy exploits
reason is simple, today there is very
customer’s reaction use to know how
not only rational decision making abili-
large number of brands cluttering eve-
good
ties but also emotional aspects of de-
ry place possible, and consumer atten-
“Experiential Marketing” that we talk-
cision---making. This new experience is
tion is getting shorter and shorter.
ing about different from this? Not real-
was
their
product.
Is
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ly. Yes ways and means to do the
possible for all products and all social
soap, shampoo, flour etc.), software
same has changed. There are more
environments. Like Absolute Vodka
(although trial version is form of expe-
reasons why experiential marketing
“Cut” can’t be advertised in India in
riential marketing), electronic devices
can’t be “the” future.
similar fashion.
and list can be very long. Experiential
Firstly it is very short lived. A marketer
Thirdly experiential marketing is not
who is aiming to create a lasting
fit in all cases, like you can’t promote
brand can’t use it for very long time.
a well know product using experien-
Marketing is good for creating a buzz,
tial marketing as users know the prodSecondly it can’t be replicated very easily. Experiential Marketing needs special arrangements, which is not
uct. Similarly experiential marketing is
hype and catching attention of consumer for very short duration, it is definitely not the answer for future and its not new.
not proper for all kinds of product, like commodity FMCG products (read
Pros & Cons of Celebrity Endorsement for a brand in the Indian Context - P Vivek Krishnan Among the very first memories that I have of a celebrity endorsement is the Kapil Dev- Palmolive ad –remember “Palmolive da Jawaab nahin”.( Needless to mention that I had no clue then as to what the word ‘da’ meant and for the Kolkata boy in me, it always meant the short form of the word dada).
For the average Indian like me, cricket and movies were the stuff of dreams and all celebrities from those twin worlds back then were the last word in everything. Growing up, with rational thoughts replacing the foolishness of childhood, I realised how much sense celebrity endorsements made, in a country like ours’. Till about the 90’s, any celebrity could just turn up for an ad and get the product selling. All you had to do was to say “Bingo!”, if there was also a fit
or say “look XYZ is buying it, ergo I buy”. However as time changed and India too evolved to her modern avatar, consumers began looking at ads objectively. Hence an Amitabh Bachchan endorsing a brand like Parker Pens, ICICI home loans and the famous Cadbury ‘trust’ campaign, or a Rahul Dravid promoting Castrol went home well with the audience and contributed to the respective Brand Equities. However lazy advertising like using Steve Waugh for ANP Sanmar or Boris Becker for Siyaram got the boos from the audience. At times it is not exactly the celebrity who is the wrong choice, but the product /positioning itself that is the bad fit. Amitabh Bachchan and his son Abhishek were the brand ambassadors for Maruti Versa and despite that the brand tanked badly, it was only after repositioning itself as a ‘family car’-‘joy of travelling together’ that there was an upswing in sales. To look at the positive aspects of a celebrity endorsing, a feeling of credibility is often lent to the brand, for e.g. if we were to look at the CadburyAmitabh commercials after the worm fiasco and the subsequent regaining of market share. Another aspect is the attention grabbing one, which is the most common reason for a celebrity
endorsement, case in point being Nakshatra Jewellery and Aishwarya Rai. A celebrity using a brand creates an aspirational value to the product, like the Tag Heuer watch endorsement by Shahrukh Khan. The Psychographic connect is an aspect for which Lux is always famous
for –“The Beauty Soap of Film stars”. Of course who can dispute the demographic connect that these different stars have, when they are able to appeal differently to the different demographic segments. For example a Salman Khan can appeal to the masses, while a John Abraham can be for a particular segment. The other side of the coin is when celebrity advertisement can act as a negative impact on the brand. It may so
BY MERCUR—I
Page 9
happen that the celebrity sometimes completely overshadows the brand, a recent example is the Priyanka Chopra Nokia ad, where Nokia though a powerful brand in itself could not help being overshadowed by the celebrity.
Often the celebrity could, owing to his own actions, impact the brand negatively a.k.a Celebrity Credibility. The Salman Khan- Thums up Ads and the Fardeen Khan- Provogue botched endorsements are testimony. Sometimes when the market leader is a very strong brand in itself, and the competitor advertises using a well known
celebrity, it can misfire. For e.g. Amitabh Bachchan who endorsed Nerolac was wrongly associated with Asian Paints according to consumer surveys. Sometimes the celebrity becomes so
associated with the brand that all repeated advertisements somehow contrive to fit the product to the celebrity and when they finally decide to get rid of the star, it fails-Celebrity Trap. For example the Binani cement ads with Amitabh and how they finally got rid of the star albeit with a different pre-
text. The Pantene Pro-V Katrina ads, the Tiger Woods-Accenture experiences are good examples for it Whether or not celebrity endorsement has a positive impact, is a debate that can well stretch into the
next century too. However there is no denying the fact that celebrity endorsements do have a strong impact on consumer psyche and especially the Indian one. For as long as there are star gazers, there will be stars. Corporate Brands acknowledge the celebrity pull and hence are currently prepared to ride the celebrity endorsement bandwagon.
A Short Quiz : 1)
Whose Idea was twitter?
2)
Which similar social networking site sued Facebook for allegedly stealing source code?
3)
What is the word limit for a Google search term ?
4)
Which search engine was originally called 'BackRub'?
5)
How much did Facebook pay to get its current domain name?
6)
Recently against which company, Nokia approached Advertising Standards Council of India against a TV ad which plays on the Nokia brand name phonetically?
7) Generally what duration (in months/years) can be considered as long term Internet Marketing? 8)
How many friends does the average Facebook user have?
in
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Answers: 1.
Jack Dorsey
5. $200,000
6. Onida
2.ConnectU
3. 32
7. One Year
4.Google 8. 130