Saturday, July 26, 2008

Brand Loyalty in a Cola? You must be kidding!!

History has shown us that there have been several firms and research agencies that have deeply analyzed the different marketing strategies adopted by the two Cola majors, Pepsi and Coca Cola, alongside their "big bucks" spending on ads with top celebrities, in every media vehicle possible, apart from their event sponsorships ranging from small cricket tournaments to the Olympics.

(The budget allocated being based on the competitive parity method -Setting the promotion budget to match competitors' outlays)

Pepsi going for the Youngistan theme recently, trying to portray the Pepsi drinker as a part of the Young India, whereas Coke went in with the Jashn -E-Manale campaign and also relies on its positioning of "a drink to celebrate and also to quench the thirst") etc..

A ROCE (Return on Capital Employed) ratio and a measure of the ad effectiveness and its impact of these on the sales would have also been studied.

So are these ads really effective? Is there really a strong brand loyalty following to these drinks?

Reports suggest yes, but I'd say NO! And this is why:

A quick survey (in India) across several respondents posing the question: Do u drink both Coke and Pepsi? If only one of them, are u so loyal to one that u don't drink the other (This is given the situation, that the store stocks only one of these brands)

Sample Respondent data:

Respondent 1: Prefer Coke to Pepsi. Pepsi's too sugary sweet, but if u go to a store and u find only Pepsi, will definitely take it.....

Respondent 2: Pepsi no coke. If he doesn't have it i will go with coke.

Respondent 3: I drink both.

Respondent 4: I drink both. Whichever is available in that store I buy that.

Results haven't been quite surprising and are just as expected: 95 % of the surveyed, say they drink both. Some of them accept they do prefer coke to Pepsi or vice versa , but when given no choice in most stores which stacks only Coke products or Pepsi , they drink whatever's available and do not prefer travelling that extra mile jus to get the other drink

Studying the distribution layout and format of both Pepsi and Coca Cola helps us identifying the situation more clearly.

Apart from a major air conditioned supermarket , like Spencer's Daily ,Nilgiris, Trinethra etc , all the other departmental stores(mid sized) and Kirana(small retail stores) which still forms a major chunk of the entire sales stack only one of the two brands. Either Pepsi or Coke enters an agreement, where they provide a free cooler to store only Coke's range of products (or Pepsi) and in promise agree not to sell the other competing brand.

The same thing holds for a restaurant chain too. E.g. McDonalds serves only Pepsi, KFC serves only Coke, Pizza Corner with Coke and Pizza hut with Pepsi and so on, forgive me if I have mixed up with the associations) or in a sports arena , where you have only one of them .Either a Fountain Coke or a Fountain Pepsi. Definitely not both!

I can say with assurance, people go to these departmental stores or restaurants purely based on factors such as convenience, locality, etc and definitely not based on whether they sell Coke or Pepsi in particular .

So the important question that arises is: Do Brand loyalties exist for coke or Pepsi? My answer: No

Why? It's because people drink a Coke or a Pepsi purely based on what's available in that store at that moment. So its jus a matter of availability and not really a matter of choice. There's only a very few people who might take the trouble of going somewhere else just to find a Coke, if the nearby store has only a Pepsi or vice versa and don't really count in the majority. So a concept of brand loyalty in Coke or Pepsi might exist in paper but in reality it DOESN'T!

The difference between sales of Coke and Pepsi is purely based on the strength and no of distribution outlets and not based on brand loyalty or preference

The same case though doesn't apply for a personal care or any other edible product. People are very much branding loyal from toothpastes to soaps to creams, but definitely not in the case of a Cola! The only place where a brand loyalty comes in place is only in a supermarket, where People are given both choices.

Even then, the probability of picking up one of them is also affected by the product placement. If coke is more prominent and kept in front in the cooler or kept in a place which is quite easy to reach by than a Pepsi kept in the lower level of the same cooler , any guesses which one you will pick up ?

And me personally, I drink both and frankly don't find much of a difference.

Hence my point!

John Wanamaker, the department-store magnate, once said: "I know that half of my advertising is wasted, but I don't know which half."

(P.S. The above article may be applicable to India , as the distribution formats for other countries are unknown to me)

Tuesday, July 22, 2008

Accidental Branding

Accidental Branding

An intriguing and a fascinating book that explores the life of people who managed to create extra ordinary brands,David Vinjamuri ,the author, has managed to woven a smooth link across several "accidental brands" and finds the common quotient between them .

The list includes the famous designer J.Peterman,Craig Newmark(craigslist), Gary Erickson (Clif Bar) , Myriam Zyroui (Art of Shaving) , Gert Boyle (Columbia Sportswear) , Julie Aigner (Baby Einstein) and so on

These people weren't the typical Harvard and Ivy League types , who upon pursuing a MBA started up successful entreprenurial ventures . They were just simple persons who listened to the people, understood their needs and developed a brand , which acted as the need of hour , the major trend setter and not just a fad !

Consider the example of Craigslist ,cited here. A brilliant idea ,combined
with a simple website has proved to become a huge brand and one that has definitely made lifes easier . A simple free classified listing website that allows people to post in their service offering , be it a rental or company info , or from selling computers to finding life partners , the site does an amazing job.

The advent of technology and the internet has beautifully embraced upon by a simple programmer , and enabled him to translate a superb idea of integrating all the classifieds of several fields into one website which was accessible to all and Free !

So what lies common between them , apart from the fact they were already "common' people" . How were they able to build extra ordinary brands out of simple products.

They were visionaries . They had the patience to listen to people ,their desired needs(yet unheeded by the big brands ) and a skill to translate the needs into products that can be easily incorporated into everyday life...

Consider the example of Clif Bar. It jus happens to be a energy bar for cyclists and rock climbers.So how do u differentiate in it.
The desire to consume a "sweet" energy bar , rather than one which gets bitter after the fourth one , was well heeded by Clif ,who made a phenomenal difference to these people by making his bar tasty and sweet.

The reason why most brands fail is , the companies create the brand and then lure people to buy it. Instead it should be the other way around , where you first listen to your customers , understand the way they use a product ,identify the gap between needs and existing product and then go back to the design floor.

Probably a definitive example is where Diet Coke succeeded while Blue Pepsi failed.
A low calorie Coke is anyday much needed and preferred than a Pepsi which is just blue in colour !

The book is an enlightening and informative read and I recommend it to all !

Wednesday, July 16, 2008

Is it the real you ?

An interesting article in the Chennai Chronicle, which analyses the current scenario in online matrimonial sites, where people have found to fake their profiles and portrayed themselves to be a different "natured" person . One quick look at their profiles in social networking websites such as Orkut and Facebook , and u know they are lying.

Do some people prefer to portray an alter ego in their social networking sites? Do they really turn out to be the real person when u meet them?
whats the validity of a profile in sites such as Orkut or Facebook. Do they really turn out to be the campy,cheesy,humorous,fun loving persons as they have mentioned in their page ? Do they even have an inkling of resemblance with their "About me " column ?
So why do people lie ? To impress the opposite sex ?
Well little do they know , that if they have portrayed themselves in these profiles , their true personalities,being a little short tempered , moody,shy , and a reflection of their emotions itself is enough to attract a small group of followers

So when do you know the other person is really "real"(If u happen tobe in different cities or country ) ? When do you proceed to allow them to come to your comfortable zone ?

Some people it takes time.Some say otherwise.
I totally accept the "Blink" approach here.
" The power of thinking without thinking". When you get to feel this gut instinct about them , trust that totally.

So what 's this got to do with marketing and branding ?

It directly correlates to the brand promise .

The brand promise is what the customer is assured of receiving as a result of their relationship with the brand and the brand’s guarantee to fulfill a specific need for the consumer and for itself in an ever-changing market.

When you advertise or promote your brand , the assured features,
performance and promise has to be in the exact way as specified through your communication .

When someone buys a Volkswagen , for the safety tag and the air bag fails ,
or the safety mechanism fails to load
When Taj promises you the maximum luxury , and you get to find one of their cots is broken
When you buy a Nike athletic shoes , and it gets torn in a couple of months

Thats called failing to deliver on the brand promise.

Sprite has been a wonderful example , who was quick to catch on this concept
They didnt promise a great rush of adrenalin feeling if you drink it (like Thumbs Up) or the "cool factor" when you drink it. All they promised is ,
A simple drink to quench your thirst and they managed to over-deliver and succeeded big time

Another famous example is Fed Ex. Their brand promise of overnight delivery ,(their tagline reads :When it positively absolutely has to be there !)
and their passion and commitment to fulfill the promise , has given them the edge over others

The 2 immutable laws of Karthik Murali

1) Brands should not try to portray as one which they aren't
or can never be!
2) Brands should promise less , and over deliver

If you dont follow them , this is what happens !

Picture Courtesy : Tom Fishbourne

Saturday, July 12, 2008

A new Business Idea

Chennai has seen an unprecedented growth over the past five years , especially
in the hotel industry . There has been a sprout of restaurants , adopting various themes to differentiate.

There are two strategic alternatives to differentiate in a restaurant, if you plan to open. You differentiate either through the food you serve or the hotel experience you provide(some try to do both)

In the former case , there has been several examples , such as Japenese Restaurants,Italian Restaurants( Eden,Little Italy etc),
Korean (The Kyongbokong) ,Chinese(Mainland China,Shanghai etc),
Mexican(Mexi-Cann),Punjabi(Dhaba Express, Punjabi Khana,)
Murugan Idly Restaurant and the list goes on

In the experience you provide , there has been examples of theme based
restaurants , such as The Rain forest,Rail Restaurant,London styled
Main Street(Residency Towers),Rooftop Restaurants etc .Apart from these ,
you have the innumerable pizza restaurants,small diners,fast foods etc.

So how do u differentiate from this clutter ? What does Chennai lack ,
that may actually become a huge success ? Who do u wanna target ?

After much research , I struck upon the solution that the only thing Chennai doesn't have is a "Drive Thru Restaurant" . We did have a couple of "Drive In " restaurants
though one of them was closed down recently, but never a "Drive Thru " restaurant.
( I presume Bombay and Ahmedabad have one)

The no of cars have almost multiplied several times, and the Tata Nano,Hyundai and Maruti's promise for budget cars is almost there .Yet,with increased work timings and stressful hours on the job people might not find much time in going to a restaurant often ,yet need a "quick bite"

A "Drive through" restaurant can offer a standardized menu similar to
Mcdonalds or a Murugan Idly Restaurant , and can offer a mix of North Indian
and South Indian cuisine with 5 items in each

The maximum waiting time , should not be more than 4 minutes , with a
delivery time of 1-2 minutes. Two parallel counters that can be serviced simultaneously.(To reduce billing time, the menu cars can be distributed to the second and third cars,who will be ready with their selection when they arrive)

You pay the bill in a counter , and by the time you reach the next counter ,
your food parcel is ready !

Design of the restaurant : Design it like a "Ferrari" F1 pit crew ,with red and white flags,signals with racing sounds in the background making it like a real
quick "pit stop". Keep the pricing low, as comparable to these small diners(persons coming in cars doesnt necessarily mean , they may be people with higher incomes)

Location : Should be located in a residential area ,probably a street away from the main road , with different entrance and exits(preferably in the opposite ends)
All that requires is a small 250 sq.ft to prepare the food , a small billing counter ,
and a clear path for cars to drive in.
Wanna try it out ??

Tuesday, July 08, 2008

Game, Set and Match Nadal !

Is this just a game of tennis at the end of the day or a war between the masters at the prestigious centre court in Wimbledon?

Is it just a game full of forehands, backhands and aces or a pride display of the finest skill, perfected throughout their lifetimes trying to better his opponent with an even powerful stroke?

Is it just a Championship final or an enthralling encounter of the game's best players battling out among the thundering downpour in a gruelling five setter, stretching out to almost five hours and still retaining that last bit of energy to stay in focus and win the game?

Was it all for that golden trophy you get to lift when you win the game, or for the standing ovation you receive from the thousand and odd crowd in the finest of suits, saluting you as the champion of the world

Was it Nadal who just etched out an extra point against the Swiss King, Federer, to stop him from surpassing Bjorn Borg, the better player or is it Federer, who finishes second and admits to saying

"I tried everything", the better man at the end of the day?

Reminds me of a Rudyard Kipling poem. it goes like this

" If you can dream--and not make dreams your master,
If you can think--and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build 'em up with worn-out tools

If all men count with you, but none too much,
If you can fill the unforgiving minute
With sixty seconds' worth of distance run,
Yours is the Earth and everything that's in it,
And--which is more--you'll be a Man, my son!"

How wonderful !!

Sunday, July 06, 2008

Update on my previous post

Update on my previous post

I might have as well written this as a comment , but probably many might have missed it..I gladly appreciate all those who took the time to comment in detail thought u might have completely disagreed with me on my views. Its purely a different perception each one has

There are a few more points i might wish to include, and also in response to few people's comments

As per the comments i receieved , and if one were to target only the metrosexuals, I
am sorry to say India is still "not there" yet and the percentage of these people might
not even be 0.1 %,so serving such a tiny market can never be profitable ,and i can
safely assume they already use all kinds of creams and gels from Nivea to
lakme to watever

There was a time, when there was only coconut hair oil available in the market ,
and these so called "metrosexuals" found it so "uncool" to use them or even
admit doing so , because of the stickiness and the smell.
This is where Brylcreem found an amazing category,that of a men's hair cream and a gel ,
which was followed dutyfully by the likes of Parachute themselves ,
by introducing a hair cream .Can u believe that? Parachute Hair Cream !!

HUL , might have wished to emulate the same in the fairness cream segment,
where most men found it so uncool to admit using one.
So they bring up a men's fairness cream

Reason why Brylcreem succeeded and not Fair and Handsome :
Well for starters , Brylcreem was a great product .Great packaging and more importantly a excellent brand name that exuded masculinity. Their Target segment was so clearly defined in their brand name itself.

Reason why Fair and Handsome will fail. Its a girly name.. Fair & Lovely, Fair & Handsome ! That is some creative thinking !
Even a fifth grader can come up with a better "masculine" name.
I asked around twenty female friends of mine across the country,
what would u say ,if ur friend said he used Fair and Handsome or seen carrying one
Their reply was in unison : I'd laugh like anything

The surprising thing is , a fairness cream is a product that is totally accepted..It is not even remotely connected to a product that is still considered Taboo in the country (Still the brand names and the positioning, makes it feel so uncomfortable)

My solution (again) : Reposition towards "health" and not "fairness"

Thursday, July 03, 2008

Do Men have skin ?

The Recent launch of Menz active , by HLL and Fair and Handsome by Emami has
created quite a stir in the media , with the creation of a new category over night

While the product's effectiveness and the "promised fair skin" still lingers a
doubt in the consumer's mind , there is a much major issue that has been
completely overlooked.

Creating a new category (Fairness creams for men) and differentiating is
actually a good strategy , but whats the point of creating a category for
which people don't have use for ?

When u pose a question such as what makes a man handsome , the
typical reply would be : Masculinity,height, confidence,humor and attire

Do u expect anyone to reply as fair skin ? Impossible !

The ads of Lux ,Fairever or Fair and Lovely usually emulates a typical girl
who aspire to become beautiful and have a fair skin like Aishwarya Rai.
Thus the fairness creams for women ..The aspirations for a guy on the
contrary is quite the opposite.

He tries to emulate a rough and tough , cool guy and probably aspire to become a
Sachin tendulkar or a Christiano Ronaldo or whatever his profession might be.
No one would even think of a concept of becoming fair ,as evident from that
fact that 90 % of the men do not even know the texture of their skin
or exact skin color.

The dream of possessing physical looks similar to another person , is strictly
confined to females and definitely not a guy ( Have u heard anyone
saying I wanna be as handsome as Tom Cruise?)

HUL has come up with survey results,reports indicate, that nearly 25 % of
men use fairness creams . A true marketer has to understand that the product
can be used in multiple ways by both sexes , probably even in a completely
opposite way . The purpose of using fairness creams by these men is not for
getting fair skin , as commonly misinterpreted in that report but actually for
skin protection from sun and to maintain a healthy skin .

Men do not care about their skin color , but they definitely worry about their
health of their skin.

The issue under concern is , whether do men really aspire for fair skin ?

So what is the major problem to be solved ? Positioning !

Solution : Adopt a repositioning strategy,and targets the men who worry about
their skin ,and needs a cream,which can protect their skin, and also one that
they can proudly take it with them anywhere

Create an ad , that depicts a salesmen or a traffic police getting their skin burnt
by the sun , and they are in desperate need of a solution to protect the skin.
The product then appears that acts as a boon to all the people who constantly
travel or exposed to the sun for a long time. ( Do not term it skin care ,and
give it a feminine name , like Fair and Handsome)
Probably a "Power Protector" ,"Blue Eyes" or "Freeze" cream can do the trick

Fair skin for men anyone?