Marketing Gk

8/3/2019 Marketing Gk

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Tuesday, September 20, 2011

The Changing Kiranawala!

80 Lakh Kirana outlets have been a number constantly quoted in various studies as

the first consumer choice for shopping across India. They have distinct advantages

that are obvious now; convenience, extension of credit, home delivery & leveraging

personal relationships. But threats from outside & inside have ensured that they

have evolved rapidly over the last 5 to 10 years.

Outside-threats are of course, the imminent opening up of the retail sector by the

Government, with the introduction of 100% FDI in this sector. Opposition or not,

perception is that the sheer size of the wastage our supply chain faces currently,

will reduce once foreign players are in full-on.

Now, coming to the changing face of traditional retail, there are two aspects to it.

One is the adaptation of the Kirana stores in light of organized competition &

changing consumer preferences, and the other is the importance with which

companies have started treating this traditional channel.

I feel the first aspect is a no-brainer; new Independent self-service formats within

Kiranas, computerized billing, stocking niche & imported products, the health angle,

a cold storage unit are few of the areas where they have evolved. But the next stepis Collective bargaining i.e. when groups of big Retail outlets start creating a

semblance of an ad-hoc DC (Distribution center) & start procuring centrally from

every big company. Theyll ask for better margins, differentiated service, more

visibility solutions; the list will become endless. Ive seen instances of this concept

being tried in a few key metros across India.

Now, lets us examine how companies are approaching this channel. Every FMCG

company has realized that if Modern Retail is growing at a phenomenal growth rate,

so is traditional trade. The projected numbers from various 3rd party agencies arequite mind-boggling. Hence focus towards garnering a higher share from within this

channel is soon becoming one of the biggest challenges faced by the top marketing

minds in this country.

In my previous article I had mentioned that HUL had already started treating its

key Kirana outlets with the same service pack that they are offering Modern Trade.


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This is one big step towards acknowledging the importance of the oldest channel in

this country. Other companies have also started offering differentiated service

packs & levels to the top contributing outlets within each market.

Studying visibility as a separate section throws a lot of light on the importance of

this channel. Decisions are made at Point-of-Sale; & companies are letting no stone

unturned in capturing premium real-estate within these outlets. Shelf level Displays

have become an essential part of any companys strategy, whether they are for a

launch, a re-launch, a new communication message, a new variant etc. This fight

for this space has automatically made the retailer smarter, whose bargaining power

has thus increased significantly.

But, I still agree that such an important medium for communication is still under-leveraged at this current juncture.

To end this small anecdote on the Kiranawala, it is very obvious that he/she is a

constantly evolving & adapting entity & will continue to co-exist with other formats

in many a years to come. The differentiation across outlets within this channel will

soon become starker over the coming years, with different clusters of outlets

getting formed basis the speed of evolution that each outlet undertakes.

Posted by Prahlad(Peggy) Krishnamurthi at 9:54 PM0 comments

Labels: channel, Distribution center, FDI, fmcg, HUL, kirana, Kiranawala, loyalty, organized retail, retail,

supply chain

Saturday, April 2, 2011

Who are the Blackberry Boys?

Raving reviews of O&M's new look for Vodafone Blackberry users. Now Blackberry

services are no longer accessible only to the top & premium segment.

All guns blazing, anyone who can afford it, please access it.


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The advertisement in itself, I agree is quite clutter-breaking & different. A group of

typical top management executives dance to a catchy tune of being the Blackberry

Boys. Then comes in a guy in summer wear & is followed by many more facetsrepresenting the Indian youth populace.

A simple & clear communication that a Blackberry is for everyone.

I agree that the market for smart phones have opened up; & coupled with growing

consumerism, many companies have started betting big & spending top money to

lure the young Indian.

Nokia is the company getting hurt, their dwindling market share, especially within

the smart phone segment has been led by the growth of Blackberry & other

competitors.

Now that the context has been set, the question Im raising here is Blackberrys

strategy. Especially for a high involvement product a smart phone costing

upwards of 10 grand.

The manager who is paying top rupee to purchase the phone with the most gizmos

& easiest access to business usage will now have his favorite Blackberry Bold being

used by one and all.


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How is Research-In-Motion (RIM) differentiating between these varied sets of target

groups by launching an umbrella Blackberry campaign?

Nokia had successfully managed to do the same by having extensions for their

various consumer segments & price points. But within Blackberry these distinctions

do not seem to come out that strongly.

Not to say that Blackberry needs to go the Nokia way, but just to bring about the

argument that it is easy for a smart company to take Blackberrys place in the

premium segment.

I thought maybe a HTC, but their recent strategy seems to be nothing in line, it

seems like all the companies need their phones to be sold to anybody & everybody

who can buy them.

Maybe something as basic as Targeting needs to be relooked.

Posted by Prahlad(Peggy) Krishnamurthi at 12:10 AM16 comments

Labels: blackberry, HTC, Marketing, mobile, nokia, phone, RIM, targeting, vodafone

Saturday, March 19, 2011

Has Shopping become complicated?


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Published article in Point of Purchase Magazine - Feb '2011

Who says shopping isnt complicated? With the number of variables being plugged into

shopping every day, it has become an art & a science both for the Shopper & the Marketer.

But, who has made shopping complicated?

In the current Indian scenario of such intense competition, the rate of change is constantly

pushing new limits. Just a couple of years back, an Organized Retail in-store innovation used

to make marketing headlines & office talk across companies. Now, they all seem common

place. Every week, companies are fighting for space & retailers are auctioning it to the

highest bidder. As the End-cap prices sky-rocket, brand managers need to innovate constantly

in-order to engage the shopper just that little bit extra.

The options for a typical middle / upper-middle class urban household meanwhile are ever

increasing. The phenomenal success of malls & multiplexes, irrespective of their high-endpricing speak for themselves. Shopping behaviour is changing & fast, led by: rising household

incomes, brisk entry of more foreign players, a younger India & penetration of technology.

For FMCG in particular, it is predicted by booz&co. that 30% of total trade will come in from

modern trade by 2020. 30% across India would mean a number in the range of 70% for Urban

India.


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The Concept of Shopping thus has & will continue to become more complex, especially for the

Marketer.

Almost every FMCG player has accorded special focus towards the Modern Trade format & has

infrastructure & managerial capabilities dedicated towards this channel.

What about Traditional Retail or General Trade as in FMCG parlance? Companies are realizing

the potential these 8 million mom-and-pop stores provide. Currently and in the near future,

they will continue to remain the most preferred format for a majority of Indians.

A leading FMCG company for instance, accords the same importance of a Modern Trade outlet

towards all of its top Grocery turnover mom-and-pop stores. The same margins, the same

schemes and the same quality of dedicated merchandising. This is the future, the evolution of

the so-called unorganized sector. Necessitated by the local retailers need in face ofcompetition, but driven by the various FMCG players in the industry.

As a fundamental consequence, this leads to a multitude of options for the Shopper. They are

spoilt for choice even within their conveniently placed local Grocer. Has this led to Shopping

becoming more complicated? Well, it has certainly become more attractive for the Shopper.

Let me cite the case of private labels in Modern Trade. Two of Indias leading Food Retail

chains both have private labels placed right beside popular brands from established market

players. These private labels play mainly on the significantly lower price or on the higher

weight for the same price angle. A typical Middle class shopper might get severely conflicted

during purchase in many low involvement categories, thereby playing into the hands of these

private labels.

A shopper thus starts to assimilate more & more information on price & weight (ingredients,

freshness, freebies etc.) comparisons thus leading to the point of inflection in the brand vs.

price trade-off. Ultimately the simple decision of buying a Floor Cleaner now involves a

complex matrix of numbers & scientific text.

Challenging times in Shopping behaviour ahead, the more the merrier seems to be the

shopper mantra till date, as the Marketer continues to grapple with building capabilities to

tackle the same.

Posted by Prahlad(Peggy) Krishnamurthi at 8:36 AM6 comments

Labels: grocer, grocery, marketer, modern trade, mom and pop, point of purchase, private labels,

Shopper, shopper marketing


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Thursday, September 9, 2010

The Mysterious Games we Play

It was a complete Mystery; I was flummoxed at the news article after reading it, HUL foxes

P&G through successful Ambush Marketing.

It was a great outdoor marketing campaign by P&G in Mumbai, and I think it did get foxed and

frustrated by HUL, but the outcome of the whole melodrama that followed is still uncertain.

There were huge outdoor hoardings, model bus-stops, and full page print ads by P&G to create

excitement over Pantene and its new packaging. Carefully ironed out, or so P&G envisaged. It

was too open to attack, and Dove took the bold step and stepped into the fray. Kudos to HUL

for getting it done within a day. I think it was more of a, done within a monththan a day.

Competition intelligence as they call it, has definitely come into play here. HUL was waiting for

the bait to get hooked on. But still, a campaign rolled out within a few weeks is commendable.

(Brand executives would concur)

But did it achieve anything for HUL? Brand connotation with the Mystery Shampoo is and will

always be Pantene; Dove did nothing to change that.

All that HUL visualized was a retort back at P&G through the necessary buzz within everybodys

mind. They achieved the buzz, but inside the marketers head. The consumer was left lurking

during the delivery of the Dove message. (There is no Mystery, Dove is the No.1 Shampoo)


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Marketing circles were talking about it for weeks, I should know, I was there. But the real

consumer, the actual user of the brand & the product didnt see any value in the fracas

between HUL and P&G.

Sadly, this event might in the short run; temporarily, end such campaigns, where the consumer

is kept at the edge of his/her seat before the prized message is communicated.

Posted by Prahlad(Peggy) Krishnamurthi at 8:03 PM22 commentsLabels: ambush marketing,brand executive, dove, hoardings, Marketing, mystery, mystery

shampoo,pantene,print ad, shampoo

Monday, April 5, 2010

Betting Big on Celebrity Endorsements


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Why do Marketers go for Celebrity endorsements? The reasons could be many; the highest recall among

consumers, immediate positive impact on sales, new brand launches and re-introductions etc.

As a few experts put it, the reason could also be one of pure pressure from the top management to

deliver on the brand and see immediate results. The pressure is definitely not unreasonable, as in

todays competitive scenario, the number of touch points that a consumer is exposed to, is showing a

manifold increase. Hence, after years of meticulous R&D on a particular product, there is a rush on the

Marketing side of the new brand.

The valid question that needs to be raised is the rationale or science behind each celebrity

endorsement, from the marketers angle. From the celebritys angle, the rationale is purely one of

personal choice or value of contract.

Breaking the clutter within multiple touch points, warrants the Marketer to come up with innovative

attributes that will latch onto the consumers mind. Unfortunately, this is definitely not possible each

and every time, with multiple people handling multiple brands in an organization. FMCG biggies in India

have all implemented excellent clutter-breaking media from time to time. But everyones had their

share of nave moments.

The prospect of bringing some sense of sanity and consistency into marketing leads to celebrity

endorsements. Statistics on the latest survey show that only around 30% of the consumers would

consider the purchase of a brand based on a popular face. A higher percentage would associate

themselves to a brand, if the celebrity is actually linked to the brand message in some way or the other.

Many pundits are now arguing about the TigerWoods phenomenon, putting all your eggs in one

basket.Whether the associated brands have been affected or not, is debatable. Only Gatorade, would

have suffered an immediate impact, due the withdrawal of an entire range of Tiger branded drinks.


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In India too, many brands solely run on the back of successful celebrities, the flip side would be a Tiger,

but the positives weigh much more than the intangible probability of the brand getting hammered.

Especially in light of Brand Managers changing almost every 2 years.

The only simple mantra, can be to stick to ones Brand message atleast for established brands,

irrespective of the celebrity or non-celebrity route, Airtel is a good case in point. For new brands like

Max, Karbon & MicroMax (IPL), celebrity power could be the only way forward in a highly competitive

category like Mobiles.

This post is a consequence of the Brand Equity article on Celebrity endorsements.

Posted by Prahlad(Peggy) Krishnamurthi at 4:27 PM17 commentsLabels: advertising,brand,branding, celebrity, endorsements, television, tiger woods

Tuesday, November 17, 2009

Gift Cards - The talking point in Organized Retail


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Retailers in India have already started the concept of co-branded credit cards. A

current example would be the aggressive salesperson in any Spencers store

showcasing the HSBC-Spencers offering.

Another vivid example would be the Future Group credit card which had TV ads

across channels for quite some time. The response though had been lukewarm.

With organized retail sales looking downward over the last year, especially in Q3

and Q4 of 2008-09, these offering had disappeared from the table. But, Q1 & Q2 of

2009-10 have been particularly good, with around 15% growth in the sector on the

back of a successful festive season.

The new buzz word that is coming up in Retail circles is the Gift card, which is

basically gift vouchers/certificates in the form of smart cards.

They will be profitable for retailers as it will breed loyalty through repeat purchases.

There will also be a significant portion of card value (10% in America: Economist)

which are never redeemed.

Retailers in India are still nascent when it comes to maintaining a comprehensive

customer database, and this will be a small, yet significant step towards the same.

The future for gift cards will yield many innovatively packaged offerings similar to

the trends in America.

A few examples from the Economist:

Target: Gift cards that double as wind-up toys

Gift cards through email

Best Buy: multiple people can contribute small amounts for an expensive gift

card to be created


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Time based gift cards during the day. E.g. Happy hour shopping times for Gift

card redeemers

Expiry dates in gift cards will foster consumers to buy within a specified period and

this will always help the retailer waiting on the other end. If not redeemed this goes

directly into the companys kitty. But a lot depends on how the retailer will handle

consumers who arrive at their store with expired gift cards. A balanced act will go a

long way in establishing the customer friendly side of a retailer.

Another interesting trend in America would be the auctioning of such gift cards

online. E-bay is estimated to sell 100,000 gift cards every month through the

second-hand route. Consumers give up gift cards that they are unable to redeem

online at almost half their price.

All this leads to a overall healthy trend for the gift card concept.

Manufacturers are already present in India for smart cards, who are currently in

advanced talks with retail biggies.

The advantage for consumers is pretty obvious; a gift card would be the ideal

choice for any wedding, birthday and other such occasions.

Posted by Prahlad(Peggy) Krishnamurthi at 1:56 PM12 commentsLabels: consumer, customer, economist, gift card, organized retail

Monday, November 16, 2009Volkswagen 'Road-block' for India


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German Engineering, Made for India

An entire Times of India edition blanketed with only Volkswagen, over andover again as each page was turned on by surprised readers & confused

marketers. Confused & in awe only because of the gravity of the money that

had been spent for the day, 11th November 2009.

This is the kick start of a 40 crore campaign by Volkswagen India, who have

also come up with a Television ad recently, showcasing their brands.

The print ads introduced and appraised readers to the various Volkswagenbrands that are currently available (Passat & Jetta) & the ones that are lined

up for India (Polo, Beetle, Touareg).

Each brand of Volkswagen caters to a different target group, and the

company is hoping that the 40 cr. media spend will help establish all itsbrands; they certainly got people talking for almost a week now.

The media spend will include print, TV, outdoor & the internet.

Expect the internet & outdoor impact to be similarly innovative-Mudra Group

The 40 cr. question?is whether this will boost their numbers, which were poor in Oct' 2009. They

operate in the very niche top end of the business, which accounts for lessthan 2% of overall car industry sales. India is touted as one of the growth


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markets for Volkswagen and they are not that far behind Mercedes or BMW

in their numbers. Apr to Oct sales show that they are only around 700-900

cars behind.

The main question is the relevance of such a blitzkrieg campaign in a dailyknown for being friendly (readers may spell irritating) to full page print

advertising. Is this the best channel for a niche top end brand like

Volkswagen? Would it do any good if the word-of-mouth continued in the

lower floor circles of an office?

Brand building, definitely yes! & a good job at it too, but at what cost, is the40 cr. question. Meanwhile entertainment galore for readers & marketersalike, lets hope the numbers look up, while people look forward to the

Beetle & Polo hitting the hard Indian roads.

Posted by Prahlad(Peggy) Krishnamurthi at 4:15 PM2 commentsLabels:branding, car, Marketing, times of India, volkswagen, word of mouth

Tuesday, May 5, 2009

The Coca-Cola University: Parivartan

FMCG companies in India are all looking towards increasing their penetration

into rural markets. Coke, the world's largest non-alcoholic beveragecompany is looking at semi-urban and rural markets as its future growthpaths.

The 'Parivartan' program- targeting retailers


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Coke's new strategy involves training retailers in a program launched by the

Coca-Cola University. In 2007, the company launched Coca-Cola University

a virtual, global university for all learning and capability-buildingactivities.

The company calls this the "parivartan" program (meaning "Change" inEnglish). Shop owners (traditional retailers) are given training on displayingand stocking products well. The goal of the innovative training program is to

provide traditional Indian retailers with the skills, tools and techniques

required to succeed in a constantly changing retail scenario.

Presentations (including audio/visual technology) in local Hindi languagehelp small retailers (with stores less than 200 square feet in average size) to

better understand the concepts involved. Each retailer also receives a Coca-

Cola "Certified Retailer" certificate at the conclusion of the program.

The program, which debuted on Dec. 18 in Agra, will equip "mom-and-pop"

shop owners with the skills, tools and techniques required to succeed in

India's evolving retail landscape.All invited retailers attended the session,

which allowed them to learn in a formal setting using leading-edgeaudio/visual technology and engaging presentations conducted in the local

Hindi language.

Here are some of them: print a visiting card with your telephone number;around 80% of your business comes from 20% of your products, so build up

visibility for these; try and display posters of discounts; organise a home

delivery facilty; be courteous to your customers-SundayET. The content isstructured around the four pillars of retailcustomer, shop, stock and

finance.

And this seems to be just the tip of the iceberg. The programme has covered

20,000 retailers in North India so far. Based on their feedback we are

developing Advanced Parivartan that will cover issues like shop layout and

location, display, basics of finance, knowledge of credit card transactions,people management skills, among others.

For Coca-Cola its a big pie. There are around 12 million retailers in the

country, out of which kirana stores account for over 90% of the Rs

7,40,000-cr retail business in India. But a company official maintained thatthese retailers would not be pushed to stock Coca-Cola products through this

programme. Some of these retailers don't even stock soft drinks.

The idea was supposedly born out of a meeting at the World EconomicForum in Davos around two years ago when Cokes global chief met the


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commerce minister of India and suggested running the programme in India.

Also, as a token of goodwill gesture, an accidental death insurance of Rs 1

lakh is being provided free of cost to all the attending retailers as aprotection against any eventualities.

In bigger cities the company has conducted Parivartan programme inclassrooms or by hiring hotels. The classroom Parivartan programme hasbeen organised across cities in UP and Punjab -Agra, Ludhiana, Chandigarh,

Amritsar, Gorakhpur, Lucknow, Bareilly, Haldwani, Bilaspur, Kolkata,

Faizabad, and Rajamundry.

The Coca-Cola University on Wheels has also covered small towns such as

Hoshiarpur, Mukeria, Nakodar, Phagwara, Nawanshahar, Malerkotla,Barnala, Khanna, Moga, Jalandhar, among others. Going forward in the

future, Coca-Colas plan is to scale up this initiative by taking it across India.

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