K J SOMAIYA INSTITUTE OF MANAGEMENT STUDIES & RESEARCH
VOL. IV | ISSUE V | OCT’ 13
SPECIAL STORY Capitalize on “Polarization”
COVER STORY >>13 FAUX PAS Pepsi Atom
>>16 HALLMARK CAMPAIGN ORPHEA 4D
>> 18 BRAND MARKive
The MARKSMAN wishes you
EDITOR’S NOTE Dear Readers We welcome you to the October edition of “The Marksman”, a month filled with the festivity of Dussehra, Eid and Diwali, a month that marks the peak season for most of the marketing brands. So we bring to you the insight of Innovative marketing. In this edition, we begin with “Surrogate Marketing”, a branding in disguise for banned products like cigarettes and alcohols. Basically surrogate marketing is when you promote one product or service in the hopes of selling another. There has been a very subjective argument for a long time whether it is ethical or not. With this article we take you through the role of surrogate marketing in India along with a plethora of examples. With our Brand Markive we've focussed on the fastest growing Indian e-commerce, Flipkart, a brand known for its innovative advertisements. The Marksman continues to provide you Tweets, Buzz, Bookworm, Ad-itude, SquAreheaD, Hallmark Campaign and Faux Pas, through which you can explore the marketing world. Your inputs have been valuable for making each edition a success through our Call for Articles Section. We take pride to congratulate Pradyut V. Hande, Kanika Tandon and Arvind Ratan, the winners of our article writing competition for providing insightful views through the article. As said by Ken Blanchard, “Feedback is the breakfast of champions”, we feel content and motivated when we get a good feedback from our readers. Do share your views for this edition on www.interfacesimsr.com/the-marksman and stay connected with us. Enjoy this journey of our October edition. Happy Reading! Team MARKSMAN The Interface-The Marketing Club of SIMSR @marksmansimsr.
IT’S ALL ABOUT AD-ITUDE
CAPITALIZE ON “POLARIZATION”
MARKETING FAUX PAS
TWEETS THE MANTASTIC MAN The men’s grooming brand, Old Spice, has added zing to its recent TVC by adapting its international viral ad to an Indian setting. The campaign is analogous to its international counterpart as it gives a satirical perspective on masculinity. Featuring Milind Soman, it is the first time that the brand has attempted to add an Indian flavor to its advertisements. Gradually, more creativity will be unveiled as they look into further aspects of being “Mantastic”.
THE MICROMAX MANHUGH JACKMAN For the first time a Hollywood star, Hugh Jackman has been roped in by Micromax, the Indian mobile phone maker. He will be endorsing the Canvas series, starting with Canvas Turbo which will be launched soon in India. The aspirational, reinventing and fearless personality of the star is said to be synonymous to that of the brand.
TWEETS BMW INNOVATES IN MAGAZINES The auto brand, BMW launched an innovative print campaign in luxury magazines. Promoting its Mini series of the hatchback segment, it aims to reach out to the young Indians. The ads appear in magazines such as Rolling Stone, GQ, Architecture Digest, Forbes, Fortune, Watch Time and others. Their idea was to break the advertising clichĂŠ of automobiles and allure the young crowd from affluent backgrounds by speaking their language.
VIDEO STREAMING APP BY DISH TV Dish TV, a direct to home television service operator has launched a video streaming application, DishOnline for Android and iOS. It has partnered with Ditto TV, Zeeâ€™s online streaming portal for this app. DishOnline is an over the top streaming application that provides a spread of live TV, movies and video library and TV shows. The starter pack costs Rs 49 and the Jumbo pack is priced at Rs 129.
TWEETS UNLOCK Bollywood actor, John Abraham is the face of National Geographic Channel’s new campaign, Unlock. On the basis of his love for wildlife and adventure, John Abraham is aggressively endorsing and promoting this campaign. It is an attempt to break through the stereotypes and explore the unconventional. The campaign aims to create a sense of enthusiasm by introducing a blast of energy into the channel content and its philosophy.
OPEN LETTER BY BLACKBERRY Blackberry pledges, ‘you can count on us’ in an emotional open letter that it has issued to calm its customers and partners. To reassure that the brand has a future, it has rolled out this letter in 30 newspapers across 9 countries. Despite the changes it’s undergoing and the challenges the brand is facing, it is trying to convince its customers that there exists a financial stability.
IT’S ALL ABOUT AD-ITUDE Television Ad Client: BMW Creative Agency: Liquid Campaign
With the heartbreaking news of the master’s retirement on everybody’s mind, it is hard to talk about anybody else. The latest advertisement campaign by the Liquid Campaign for BMW 1 series features Sachin Tendulkar and FIA GT1 driver, Armaan Ebrahim. The campaign was kicked off with Sachin handing over the keys to the first 100 customers of the new F30 3-series as a symbolic gesture to commemorate his achievement of scoring a hundred centuries. An excellent time to cash in on Brand Sachin. The ad features two BMWs racing against each other on a race track, one whose driver is later revealed to be Sachin Tendulkar. Although it lacks in cohesion and newness, it makes up for all of that by the presence of the master.
Print Ad Client: Google Creative Agency: Google Creative Labs This ad won $1 million worth of full-page print advertising in the newspaper by taking the top prize for its contest for the most creative original print ad. Ironically, it was made by and for a medium which is seen to be the main rival of the printed word. This full page ad for the Google Hangout by Google Creative Labs featured text stating that the Dalai Lama and Desmond Tutu had come together for a live broadcast hang out on Google+, the tech giant's social-network site. One page. Six lines. Advertising at its best.
BRAND MARKive Flipkart Up until the year 2007, the future of online shopping in India looked very bleak with the masses still skeptical about the whole process. Enter Flipkart. Founded by the Bansal brothers Sachin and Binny Bansal, Flipkart has revolutionized the way online retailing was conducted in India. The Bansal brothers, both graduates from the Indian Institute of Technology, Delhi, were working for Amazon previously. Where others saw risk, they saw an opportunity and cashed in on it. Thus began the incredible journey of Flipkart from an online bookstore to a fully fledged e-commerce retail outlet. Headquartered in Bangalore, Karnataka, Flipkart has presence in all tier 1 and tier 2 cities in India.
It was never going to be a bed of roses as India had not-so-sweet experiences with the e-commerce industry prior to the launch of Flipkart.
There are somethings you cant't buy online, for everything else there is Flipkart.
While Flipkart cannot be credited with being the first player in the ecommerce market, it was definitely one of the early movers and had a detailed plan that was set into motion as soon as it started. The reason Flipkart has enjoyed such a high degree of success is because it has focused on keeping its business purely customer centric.
Value added services like cash-ondelivery, swipe on delivery and product return if not found satisfactory have distinguished Flipkart from other players in the market. Flipkart also made use of strategic supply chain principles and invested heavily in logistics and inventory management to minimize costs thereby reducing costs of the products without compromising on the quality.
BRAND MARKIVE Flipkart employed word of mouth advertising in its nascent stages. This helped build trust and increase brand sentiment among the consumers. As it began to grow, it employed the services of Happy Creative Services which came up with the novel idea of using children posing as adults in the advertisements. On the lines of the catch phrase "Just Google it", Flipkart have come up with their own version "Just Flipkart it" used to attract anybody with a purchase intention.
60% of Flipkart's orders are Cash on Delivery.
Employs over 4500 people and is ranked among the top 20 Indian websites.
Flipkart is currently valued at $800 million and this year's figures are set to show a 400% increase over the past year.
4) Sells about 17,500 products daily and 6.5million annually.
The future of the e-commerce sector in India looks very bright with FDI in retail opening up new opportunities for international players. Flipkart has a gamut of products ranging from apparels to electronics, literature to personal care etc. In the future, Flipkart can look to incorporate eprocurement of services and expand into the B2B sector by adding more products to its portfolio. Flipkart will aim to be the one stop shop for all the consumers and business in the country.
COVER STORY SURROGATE MARKETING “Men will be men”, Imperial Blue CD’s. Do you really think they advertise for a soda or a CD? You guessed it right, the brands are not even close to music. “Khoob jamega rang jab baithenge teen yaar, aap, main aur bagpiper”, Bagpiperclub soda. When is the last time you had a soda alone? What do friends do when they sit together, drink soda? Some products which have been banned from advertising by the government like cigarettes and alcohol, market the products with the help of a surrogate item. This item is their channel to promote the brand and not to aim for profits. This is surrogate marketing. It is a fast picking up trend in today’s marketing arena.
What is Surrogate Marketing? The whole idea started in Britain, where housewives started protesting against liquor advertisements which provoked their husbands. The protest rose to a level where liquor advertising had to be banned. Brands decided to promote juices and soda under the brand name and the concept of Surrogate Advertisements emerged. Surrogate marketing can be considered a smart way of marketing products as the ad doesn’t name the product as such, but by just communicating the brand name, the original product is being marketed. They are actually more context-based. Surrogate marketing generally happens in two contexts: One, where the entire marketing function is contracted out to a company and the group then providing the marketing is referred to as the surrogate marketing unit. Two, where firms go for brandextensions into products which are legal and more acceptable to the society norms, while fitting well into the government regulations.
The impact of these advertisements is to promote the original product using other products. Effectiveness of surrogate advertisements Surrogate advertisements do impact a consumer's buying decision as well It also informs about the leading liquor brands thus promote sales. According to the inferences drawn from several surveys and interviews, 42 out of 50 people can understand the actual liquor or tobacco product being advertised. Indian Markets In India, ministry of health has banned the advertising of liquor and tobacco. But many liquor brands initiated other products like sodas in the same name which are then advertised. Extensive surveys resulted in findings which showed that liquor ads had direct influence on Consumers purchase behaviour, and no sooner the Cable Television Network (Regulation) Amendment Bill came into effect on 8 September 2000. Thus India gradually adopted surrogate advertisements. So companies usually either go for brand extension and promote the extended products or
promote certain products which might not be available in the market, for instance you might not necessarily find a Bacardi Blast music CD. The excessive pressure of the ban forced companies to focus more on brand building. Thus liquor companies started sponsoring and hosting glamorous events, like the Bacardi NH7 weekender, yet many others started distributing T-shirts, caps, key chains, drinking glasses with the brand name displayed on these products. Brands that opt for surrogate marketing SAB MILLER: Sab Miller has been promoting its brand Haywards 5000 has famous actors like Suniel Shetty and Sanjay Dutt endorsing the brand in the ad , “Yaaron ka Tashan”. However, they do not promote the beverage as such, but are endorsers for Haywards 5000 club soda. Soda promotion is wholly acceptable to the society. DIAGEO: The Diageo has associations with its brands. First, Smirnoff, that has cult associated with popular music events like the “War of the DJs”, “Nightlife Exchanges”, etc.
Johnny Walker is another famous brand of the company, who successful endorsers – Vijay Amritraj & Narayan Murthy have made the brand very popular. They have also made popular its ‘Striding man’ logo, which now also has a society in its name – the Striding Man society for Johnny Walker drinkers. Smirnoff advertises its party and club music VDs well on the TV as well, which are popular among the high-class people are socialites. BACARDI: Those catchiest ads of featuring famous Bacardi music. A good ambience where people are partying and having fun, does not promote the beverage brand, but the music CDs and the club soda. “Cool things start at Bacardi parties” UB Group: The UB group is one firm that has taken surrogate marketing to heights that are beyond thought. This is one brand with the most divergent sources of surrogate marketing – Kingfisher Airlines (which may soon be taken off the list), the Kingfisher calendar, the Kingfisher bird logo, which is a part of the logo of the television channel – NDTV Good Times, and a show on the same channel “Making of the calendar”.
And now the famous F1 race has their presence. Royal Challenge: The golf accessories they provide. Needless to say, one of the biggest & most expensive surrogate ones could ever get for a product – the Royal Challenger Bangalore pays testimony for this.
Bagpiper: Another club soda surrogate. Akshay Kumar has been saying for ages now, “Khub jamega rang jab mil baithenge teen yaar, aap, main aur bagpiper.” Sitting, chilling and enjoying the soda – with whiskey, rather the other way round. And this is easily perceived by the people and thus the promotion. Whyte & Mackay: Its silent marketing, with making a presence on the Royal Challengers Bangalore players’ jerseys. It is the presence that counts in the end.
COVER STORY White Mischief: Zaid Khan, Fardeen Khan promotes the White Mischief holidays, not to forget the cheerleaders in the IPL as well. Imperial Blue : It showcases a typical manâ€™s behaviour, forgetting the anniversary or attraction towards a lady. And the marketing is done through Music CD's. An apt tagline used in the commercial is. 'Men will be men' McDowells No.1 : It has used the Indian cricket team with the tagline 'The No.1 Spirit of Leadership' synchronous with the name of the brand. This style helps to take a diversion to go across the rules and regulations in particular regions. Thus evading rules set by the government or the societal norms. If it is liquor and tobacco in India, it could be some other things in some other countries. But companies donâ€™t stop making such products, neither are they banned altogether. Just the marketing is put under the scanner or regulated. Surrogate marketing proves to be a useful tool to take a flank and reach the target.
SPECIAL STORY Capitalize on “Polarization” During my routine social networking, I came across this exceptionally well written and astounding article in HBR. All this while, during my three months of stint with marketing and Kotler, I was under an impression that brand supporter was all that one needed to amass, in order to succeed. But here was an article that advocated quite the contrary. It spoke of having a group of consumers who hated your brand! It may sound uncanny at the first glance, but some companies have, in fact bolstered their sales following this tactic. For example, Kraft foods began broadcasting their Miracle Whip commercials that highlighted on both the extreme attitudes of consumers towards their dressing. There were some who were ardent fans of this dressing while there were others who simply abominated the flavor. Hence, their commercials capitalized on this very deep emotions and came out with an ad in 2011 starring love-‘em-or-hate-‘em celebrities, Paul D from Jersey Shore and the political Pundit James Carville. Some of the characters in the ad praised the yum factor while another said that he’d break up with his girlfriend if he learnt that she liked the dressing.
Miracle whip was a polarizing product. The ad strategy worked in their favor and there was a massive surge of 631% in social media postings and a 14% increase in sales. On similar lines, political campaign managers whilst strategizing, measure their candidate’s negative polling numbers too, since knowing what percentage of people will never be persuaded to vote is important to understand how to rope in the undecided voters. Brand managers must formulate their strategies on similar lines. A brand with high average supports might happen to be polarizing, with large number of supporters cancelling out the equally large haters. Identifying such instances is essential beforehand, since social media has given these haters a platform to vent out their opinion in the public.
SPECIAL STORY The higher the percentage of brand lovers and haters, the greater is the polarization. For instance, McDonald’s is high on polarization since 33% love it and 29% hate it. On the other hand, Intel is low on the same since it is hated by just 3%. One way to reduce polarization is to do it the trivial way i.e confront the haters and change their mindset. This is exactly what General Mills followed in the late 2000s.It’s ready to mix cake mixes, icings and other cook-at-home products was suffering because of the rising concern about obesity. The company took several measures to assuage the percentage of haters. It came up with a social network MyBlogSpark to promote its products as well as to resolve blogger’s complaints. They were the first major brands to develop gluten free baking mix. The result of all these initiatives was that the percentage of brand haters dropped from 4.5% to 2.8%.
Some companies also succeed by intentionally provoking the brand critics. This can create ripples and reinforce the brand with its more enthusiastic consumers since they feel compelled to defend their favorite product. And this defend can sway the neutral consumers into becoming supporters. Ryanair was in news for coming up with extreme cost cutting measures recently (Charging exorbitant prices for simply printing boarding passes, charging ‘fattax’ on overweight customers to add a few). Although a reduction in the number of toilets was only implemented, the rest did create requisite buzz and cemented its reputation as a cheap carrier. Instead of narrowing down the gap and reducing the number of haters as General Mills did with Betty Crocker, some companies created more of this differentiation and improved their existing customer’s brand loyalty. Marmite , a highly polarizing product due to its strong taste has capitalized on its tagline “Love it or hate it”. Their 2010 promotions on FB, which ramped up the existing polarization, resulted in a clean wipe out of the product off the market shelf on the very first day of its arrival.
SPECIAL STORY Sometimes, marketers can develop a product’s polarization since trying to be all things to all people can backfire at times. At other times, marketers can also come up with ads that can turn off a certain share of viewers. For example, Progressive Insurance came up with a character called Flo who appealed to a certain set of audience while annoyed the rest. Facebook also hosts a couple of ‘I hate Flo’ pages. However, the noticeable part is that the negative publicity worked wonders for them and was in fact an angel in disguise for them. It increased their sales and raised their brand awareness.
All brand managers should be aware about their brand’s polarization and must track it over time. Fuelled by social media, a section of the haters can spread like fire. It is up to the companies to deal with them strategically.
MARKETING FAUX PAS Pepsi Atom comes in a 250 ml can at an introductory price of Rs. 15 and a 500 ml PET bottle at Rs. 25, The 200 ml returnable glass bottles (RGB) are also provided in select markets at Rs.10. But within six months, it’s overtly visible that Pepsi has to a very large extent under estimated Thums Up's entrenched positioning. When the advertisement of Pepsi Atom was launched in April during IPL 2013, and we saw Kai Po Che fame, actor Sushant Singh is flaunting his muscles and masculinity, it became quite clear that Pepsi Atom is PepsiCo’s offering to Compete heads on with rival Coca Cola India’s Machos Cola , the Thums up brand. The current market share scenario in fizzy cola markets is, Thums Up (15.3 per cent), Sprite (15.6 per cent) and Coke (8.5 per cent), Coca-Cola dominates the top-four list of fizzy drink market. Pepsi is at number three (12-13 per cent). Pepsi Atom is the second mainstream cola from the PepsiCo India brand portfolio after the company’s flagship brand, Pepsi, PepsiCo referred the Atom as the "Josh Cola" looking to counter the Toofani and the Macho attitude of Thums Up market that makes it the leading carbonated beverage brand in the country. Pepsi Atom
Thums Up has remained at the top with or without marketing support. Biryani with Thums Up has become almost a staple diet in Andhra Pradesh, one of the three largest cola markets in the country. This is the second time PepsiCo is trying to destabilize Thums Up, which has the strongest carbonation among all beverages. It had spiked its flagship cola Pepsi with extra fizz in Andhra Pradesh four years ago. The move didn't work . The essence to successful branding is undoubtedly consistency. And Thums Up has "consistently" maintained its rough, rugged and brawny masculine positioning. Thums Up has has the first mover advantage, it has been consistent, but more importantly it has been successful in earning "acceptance".
Any Cola which tries to challenge that massive positioning will have to struggle a lot.
MARKETING FAUX PAS It would require each and every aspect of the offering to be in complete harmony with each other and sadly, Pepsi Atom does not seem to do that at all. PepsiCo’s Media Planning also went quite wrong with Pepsi Atom. The first mistake they did was launching it in after almost half the summer and half of the IPL season was over. Many in the industry say PepsiCo's Rs 160-crore IPL spend for the year was too much to begin with. The poor distribution, after launching the cola on such a large scale, is just adding to the planning failures, it is still not available in many parts of the country. The 3 main Reasons why Pepsi Atom is proving to be a Pain to PepsiCo: Taste: Pepsi Atom tastes like an ayurvedic syrup or a cinnamon cola to be less harsh; people preferably and up till now don’t seem to like taste of cinnamon into cola. It feels that one is having some spicy cola. Some consumers even mentioned Pepsi Atom to be tasting like a liquefied chawanprash .This type of taste would obviously lack acceptability to consumers who like to consume Pepsi along with their meals. Branding v/s Truth: The branding of Pepsi Atom did quite good keeping in mind all the factors: Brand Ambassador like Sushant Singh Rajput, a powerful event campaigning and above all positioning it as
‘Josh Cola From Pepsi’. Since it was supposed to be positioned against ‘Thumbs-up’, it campaigned it as Josh Cola. Positioning a spicy cola as Josh cola is merely nothing but an exaggeration. Josh cola builds a perception that its an energy drink which is not reality. What they didn’t do: Its time when people have become health conscious. Since cola drink today are not considered healthy to which has reduced their overall sales, if they would have come up with a drink with combination of Cola and some kind of energy ingredients making it a real Josh Cola for Machos (Young Adults), then that might have been best way to shoot thumbs-up. The positioning is vague and seems to struggle between brains of sprite and brawns of Thums Up. PepsiCo’s tried to make this rabbit of a product fight with a lion like Thums Up. And what they have come up with, in no way seems to push this product for long. It may at max sell as an ephemeral fad because of Pepsi's brand power. It has proved to be just an attempt to grab more market share by Pepsico by introducing ‘Atom’ into its main stream cola drink category with unclear positioning.
Hall-MARK CAMPAIGN ORPHEA 4D protection, insecticide spray for outdoors They stuck invisible glue on the billboard which over a period of time trapped mosquitoes and the simple Billboard transformed into a mosquito trap. They also tried to prove that they have reduced the number of mosquitoes in the air with the billboard providing a sigh of relief to the prospective consumers.
Marketing is all about thinking out of the box and reaching out to the masses to ensure your product is easily available. It is also about creating awareness and hitting the bull’s eye to grab attention, be it an extremely busy road. This is exactly what ORPHEA 4D did in Milan Italy to advertise their product, an outdoor insecticide spray. At the busiest junction in Milan, ORPHEA put up an eyeball catcher Billboard which transformed to an effective insect trap! The main motive behind this was that with spring approaching, mosquitoes and flies multiply and are annoying and there isn’t any better way to trap them than trapping them with ORPHEA. It is easy to trap mosquitoes indoors but trapping them outdoors is a big task.
This ad was the brainchild of the Publicis Ltd in Milan and was extremely successful as it grabbed the attention of the masses at one of the busiest junctions in Milan in this fast paced world and increased the sales of ORPHEA 4D multifold. Publicis proved it’s not about just making creative ads but about connecting with the consumer at a deeper level, hitting the nail at the right time and the right place and thinking differently keeping the core benefit of your product in mind.
BOOK WORM Brandwashed - Martin Lindstorm I came across this book when it was referred to me by a friend. Now the name of this book sounded both confusing and intriguing. So I got hold of a copy and was astonished by its contents. After reading it, it seems like marketers do anything and everything in their power to manipulate and trick our minds to persuade us to buy, which coincidentally is the by-line of this book.
“ In Brandwashed, Martin yanks
back the curtains and serves up a page-turning exposé of how advertisers and companies make us feel we'll be bereft, stupid, and a social outcast unless we buy that new model of iPad.
Excerpt OCTOBER 2013
This book throws light into how marketers target children at an alarmingly young age, starting as early as when they are in the womb. It shows how new businesses secretly mine our digital footprints to track and uncover the most intimate details of our private lives, then use that information to sneakily sell us their products. It describes a revolutionary, multimillion dollar, unscripted social experiment which revealed that the most powerful hidden persuader of them all are our friends and neighbours. The term ‘brand washed’ means that it is practically impossible for a customer to buy non branded items. This book reveals all the tricks and manipulations in the form of a conspiracy which makes it even more interesting to read. The writer in the introduction says that the purpose of this book is not to get us to stop buying but to make smarter, sounder, more informed decisions about what we’re buying and why.
FEATURED ARTICLES The Nokia â€“ Microsoft Deal: How Will it Impact the Two Companies?
Pradyut V. Hande - SIMS, Pune
September 2, 2013 saw a long term plausible development translate into reality when the Microsoft Corporation purchased the mobile handset business of the now beleaguered Finnish company, Nokia. The deal valued at over 5.4 billion Euros ($ 7.2 billion) is expected to add yet another dimension to the ongoing global Smartphone war. Nokia, that once stood head and shoulders above its closest rivals till the early 2000s has gradually seen its strong market position wither away in the face of mounting competitive pressure across various platforms; most notably the Smartphone segment. Its failure to suitably respond to rapidly evolving consumer sensibilities and changing market realities
coupled with the rapid emergence and subsequent establishment of rivals such as Samsung, Apple, HTC, LG and off late; Google has collectively eroded its market share and brand credibility. However, despite all criticism; Nokia did valiantly attempt to stem the rot by bringing on board Microsoft's Stephen Elop on board as CEO in 2010 who embarked on turning around the ailing company by first discarding its Symbian operating system in favour of a potentially beneficial partnership with Microsoft and then channeling its energies and resources behind the Lumia range of Smartphones in 2011. The move although prudent at the time has produced mixed results globally. Microsoft's purchase of Nokia is being viewed as an attempt to keep up with its industry rivals such as Google which purchased Motorola last year. The acquisition would provide Microsoft the opportunity to singularly manufacture, manage and control an independent product range; thereby, furthering the aforementioned agenda in an increasingly competitive environment. It would also go some way in reducing its long term transaction costs.
FEATURED ARTICLES At the other end of the spectrum, the sale of its mobile handset division will offer Nokia the chance to focus its attention on its network systems division where its primary competitors include the Chinese company in Huawei and the increasingly sluggish Swedish giant in Ericsson. If Nokia can suitably leverage its advantage after buying out Siemens' 50% stake in the successful Nokia Siemens Networks (NSN) joint venture, then it can undermine the strengthening market position of Huawei. A measure of NSN's consistent performance since its inception in 2007 can be gauged by the fact that it made a profit of 8 million Euros during the second quarter of the current financial year while Nokia's mobile handset business accrued losses worth 227 million Euros in the same period. From a purely financial point of view, given the fact that capital is scarce to begin with; offloading a loss making venture to protect the overall bottom line makes sense. Nokia's mobile division acquisition by Microsoft throws up myriad technological and leadership oriented implications. Many believe that Stephen Elop who will be absorbed by the Silicon Valley giant along with 4,500 odd Nokia employees; is being groomed to succeed Microsoft's current CEO, Steve Ballmer.
Having worked extensively first at Microsoft and then in a major leadership role at Nokia, Elop could be vital in the strategic alignment of both companies down the line.
It may have been on the cards, but the alacrity with which Microsoft has wrapped up the deal has taken many by surprise. For Nokia, the fall from grace has been quite spectacular - from being the leading mobile handset manufacturer for 14 years to drastically falling behind agile competitors to surrendering its Numero Uno global position to Samsung in 2012 and eventually tasting capitulation and selling out to its close ally in Microsoft. In an industry driven by constant innovation and hypercompetition, Nokia committed the cardinal sin of taking its dominant market position for granted instead of improving its value proposition to increasingly fickle target consumer segments. Whether Microsoft benefits from Nokia's acquisition remains to be seen. However, what can be said with certitude is that the global Smartphone war has just gotten that much hotter.
FEATURED ARTICLES Crowdsourcing: Is it the new way of consumer engagement for brands?
Kanika Tandon - MICA Crowdsourcing is the new buzz in the marketing arsenal. Today Marketers are been trying to engage with the customers in every possible way though different platforms. Brands have come a long way from using traditional media, TVCs, mall activations, out of home billboards to exploiting the online media for the purpose of advertising and promotion. Crowdsourcing has revolutionized the way brands interact with consumers. In a market scenario where the consumer is perplexed with a number of available options for a product, It has become vital for a brand to connect with the consumers. Crowdsourcing provides that emotional connect with the brand, by making the consumer a part of the decision making. The brands create their stories around the consumers through user participation.
participation. It aids brands to connect with the target audiences without having to reach out to them physically. The brands convey their sensitivity to consumer feedbacks, contributions and concern though this channel. The ultimate buying power lies in the hand of the people and brands are using this as a competitive advantage. Brands are exploring crowdsourcing to reduce their marketing and advertising production costs but at the same time engage larger audiences through mass connect. Crowdsourcing is not just a means of increasing consumer engagement but also outsourcing new ideas. It is for this reason that the Government of India crowdsourced the design of new Rupee symbol in 2009. Be it product design, package design, logo redesign or a television commercial, creative thinking is not confined to the in-house team.
Crowdsourcing is a tool for obtaining ideas and creating content through the involvement of the common masses. It helps to build customer affinity through
FEATURED ARTICLES The concept of crowdsourcing ideas gives everyone an opportunity to contribute to the brand. The crowdsourced package design for Kurkure Diwali release pack in 2012 is one such example. The size of the addressable community of a brand increases through crowdsourcing, as consumers share their created content with friends, friends of friends over social media. The Fans and followers give feedbacks, like branded content, dislike it, compare it and talk about it. This helps to increase brand awareness and earn brand loyalty which in turn affects purchasing decisions. Personal conversations and interactions help the brands to gain consumer insights as well. The 2012 Lays 'give your flavor' initiative helped the brand to understand the audience it caters to and develop consumer's choice flavors.
The concept of crowdsourcing in not new in the market, newspapers and magazines have been practicing it for a very long time by inviting readers to contribute to their editions. This way they give the readers a platform to voice their opinions and make them feel that they are being heard. Recently Femina English invited readers across the country to contribute to the crowdsourced April issue titled 'Made by You' to mobilize its women readers. Today brands are working hard to involve the consumer in product feedback, idea generation and research participation. To encourage participation they offer incentives to consumers like featuring their story on the package (Meri Maggie) and introducing their choice of variants.
FEATURED ARTICLES Crowdsourcing has become an integral part of the marketing mix of various global brands like Pepsi, Harley Davidson, McDonalds and Starbucks. Crowdsourcing is gaining momentum in India with more brands adopting cost effective and innovative ways to engage with the fans and customers. Crowdsourcing has increased the reach of brands beyond their target audiences and has enabled them to distribute content, disseminate information through one-to-many interactions. Recently Maybelline invited its fans across the globe to contribute to the first crowdsourced 'Kiss' song by sending their kisses. This initiative on YouTube and Facebook received tremendous public response and became viral with the launch of the song, resulting in record breaking sale in the season.
Brands like Micromax, Vijay sales have invited people to share their ideas for designing a new logo for them. Many successful online contests are run on similar lines these days. The traffic police of cities like Pune, Chennai and Delhi have partnered with Facebook and have
started using crowd-clicked photos to reduce traffic-rule violations.
Crowdsourcing has created an uncontested platform for the brands to capture the needs and wants of the consumers. It has increased the brand reach at a lower cost, generating a higher return on investments. Despite the Success stories, some brands like Tantra have failed in an attempt to crowdsource their product designs. They were disappointed with the responses of the crowd which lacked originality. 'Dub the Dew' the attempt of Mountain Dew to crowdsource the name of its new green apple flavored drink went wrong as the amateur crowd made the contest a joke by voting for redundant names.
When crowdsourcing there is always a risk of being associated with "the wrong crowd". Crowdsourcing is an experimentation with the crowd, which may not always work. Despite the challenges, crowdsourcing still appeals to marketers and is the new way of consumer engagement for brands.
FEATURED ARTICLES Tata-Singapore Airlines Deal: Is the airline industry in India suddenly turning attractive?
Arvind Ratan - IIM Kozhikode
In February 2013, when the government withdrew both domestic and international flight licenses allocated to Kingfisher airlines, many industry experts were quick to ring the death-knell for the Indian aviation industry. After all, Kingfisher Airlines had the second largest share of the Indian domestic air-travel market pie until December 2011 and the signs of crisis were becoming too apparent to be ignored. The airline industry was hit hard by the subprime crisis of 2008-09, mainly due to a rise in prices of crude oil prices (jet fuel expense accounts for 40% of the airlines’ operating expenses). There was a brief recovery in the operating environment for the period between 2010-11, mainly on the back of a brief revival in passenger traffic, more prudent capacity
management than was seen previously and a period when the fuel prices were relatively stable. However, relentless increase in fuel prices, a deteriorating foreign exchange scenario and an increasingly intense competitive landscape ensured that the optimism was short-lived. Airlines’ bottom-lines began to look gloomier than ever before and most were surviving on wafer-thin profit-margins. Importantly, this outlook wasn’t limited to the Indian aviation industry. Recently, an International Air Transport Association (IATA) report revealed that only a select few of the world’s airlines have been able to sustain their profitability. If anything, the special handicaps that India’s regulatory framework imposes, like the route dispersal guidelines which force airlines to fly on unprofitable routes, makes India’s situation look bleaker than usual. And so at a time when the sector as a whole was seen as being untouchable by investors, Etihad Airways, UAE’s premier airline tabled a ₹ 2,058 crore bid to acquire 24% stake in Jet Airways, the leading Indian private carrier. It was almost as if the foreign airline could see
FEATURED ARTICLES Many labelled it as a case of corporate bravado rather than savvy business foresight. The domestic airlines’ sales had been declining in the last few quarters and the macro-environment didn’t look too encouraging either (see figures 1&2):
Figure 1: source ICRA estimates
Add to all of this the persistent inflation in jet-fuel prices (Exhibit 2) and there wasn’t much to justify the bid from Etihad.
Figure 2: source ICRA estimates
The deal got the clearance of FIPB (Foreign Investment Promotion Board) on July 29, albeit with some riders.
Prelude to the Tata-Singapore Airlines Deal Close on the heels of the announcement of Jet-Etihad partnership, Tata Sons, one of the largest business conglomerates in India, announced its intention of entering into the Indian civil aviation industry by tying up with the Tony Fernandez-led AirAsia to provide a no frills carrier. The news was received with some interest, not only because of the ailing nature of the airline industry in general but also because the Tata group already had a nearly 10% equity stake in the New-Delhi based low-cost carrier SpiceJet. To add to the confusion, it announced another alliance with Singapore Airlines to bring out a full service carrier (FSC). The owners of AirAsia were baffled just as much as the industry onlookers, some of whom expected the FIPB to disallow competing interests in the same industry from an airline provider. It isn’t too difficult to see what SIA wants to gain from the deal. SIA is a 100% international airline based in the citystate of Singapore and it’s been threatened by the growing clout of marquee gulf carriers like Emirates and Etihad. Both these airlines have been increasing their foothold in India via tieups with the domestic players. Therefore, a tie-up with the Tata group would
FEATURED ARTICLES provide it a recognition as well as access to low-cost capital which is a significant factor in a highly capital intensive business. Indian Aviation Industry: what works and what doesnâ€™t A close look at the successful carriers in India indicates that adopting a low cost carrier (LCC) model has become a must to survive the headwinds of the airline industry. Based on financial performance and operating efficiency, IndiGo is the only carrier that appears to be set on a road to sustainable profitability. The company has adopted a corporate strategy of steady expansion coupled with high-occupancy rates and no-frills air-travel. Having a low-cost operating model, however, is not a guarantee to succeed unless the airline company knows how to reduce costs to the bone. Even Deccan Airlines, the airline that pioneered the low-cost model in India, could not
implement this penny-pinching model and had to sell off its business to Kingfisher. That being said, being a full service carrier (FSC) in the current Indian aviation landscape is a sure invitation to failure, as the much publicized fall-fromgrace of Kingfisher airlines and Air India which has been on ventilator support (financed by the taxpayersâ€™ money) for a long time would indicate. The trends in the relative market shares of LCCs and FSCs reveal as much. The Verdict The Tata-Singapore Airlines deal, much like the Jet-Etihad partnership and the Tata-AirAsia partnership is based more on optimism than on any concrete macroeconomic factor that has made the industry suddenly more viable. The partnership would have to fight against several odds stacked against it if it wishes to reverse the tide.
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DOWN 1. The Red Star Beer 2. The watch Brand endorsed by Deepika 4. “Power to do more”- Identify the company
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