rdcs

A red-letter day

noreply@blogger.com (RC) — Thu, 10 Jan 2008 12:42:00 +0000

Today is a truly historic day. Never before has the world looked at Indian business with so much hope, awe and delight. Today TATA motors launched its famed ' 1 Lakh car'. Christened as 'Nano', this 33bhp hatchback with a 624cc engine, is priced half that of the current cheapest car in the market. According to information supplied by the company, Nano has a lower overall pollution level than two-wheelers made in India and the higher fuel efficiency (20 km/litre) ensured low carbon dioxide emissions.

Indian car sales are predicted to more than quadruple to $145bn by 2016. Tata will initially make about 250,000 Nanos and expects eventual annual demand of one million cars. This breakthrough product will surely find buyers in many other markets, including the developed markets for a higher version even if it were to cost $5000 - 6000. Coming to think of it, this fits exactly with the idea of how radical constraints can lead to breakthroughs in simplicity and entirely new solutions, which i had covered in my earlier post on Evan Williams

Are we therefore at times limited only by our thought? ...

My salute to everyone at Tata Motors who made this possible.

Emerging trends

noreply@blogger.com (RC) — Sat, 05 Jan 2008 17:23:00 +0000

Vinay Dixit from GM had recently asked this question on LinkedIn, and got responses that included the following interesting ones apart from the usual suspects:

1. Corporates exploiting social networks to a greater extent
2. Greater environmental consciousness and related opportunities like carbon trading
3. Re-birth of the family unit
4. Increasing co-creation of brand value by engaging consumers
5. Standardised global accounting standards
6. Expanded awareness horizons - global concerns competing with local / national issues
7. Collective intelligence e.g. blogs, wikipedia
8. Shorter product life cycles
9. Culture as a leveler over economics

The ones that i contributed were:

1. ‘Security’ will emerge as a strong human need – physical, psychological, emotional and social
2. Environmental consciousness amongst consumers will rise and this will benefit brands that advocate the cause
3. Education will emerge as a new big opportunity especially in countries like India and private businesses will join governments in driving this.
4. Simplicity and ease of use in case of technology products will become increasingly important as technology gets more complex.

How to be a better trend spotter?

noreply@blogger.com (RC) — Sat, 05 Jan 2008 17:05:00 +0000

Had recently asked this question on LinkedIn and got some interesting feedback. Toby Younis, President and Principal Consultant at B2B Marketing Pro based in Washington D.C., shared his approach which i thought was very systematic. Trendwatching site also has some tips for the interested.

There's a lot that one can learn in this area and i will come back with some more understanding.

The accidental innovator

noreply@blogger.com (RC) — Tue, 01 Jan 2008 15:01:00 +0000

Check out this interesting article on Economist online on Evan Williams, the founder of Blogger and Twitter. The article talks about how Evan stumbled upon both ideas. Evan believes that radical constraints can lead to breakthroughs in simplicity and entirely new things.

Market dominators

noreply@blogger.com (RC) — Sun, 23 Dec 2007 10:18:00 +0000

ET Brand Equity carried an article on how some brands like Amul, J&J, Nokia, Maruti etc. have been able to dominate the market for long in their respective categories.

The article says that most market dominators stay at the top for the simple reason that they continually work on putting distance between them and the competition through constant innovation.

The article goes on to cite Parachute as a good example of innovation. The brand it says is the leader because it has continually strived to raise the aspirational value of the category by making coconut oil contemporary and relevant to a younger set of consumers. I have a slightly different take on this. How long will hair oil remain contemporary is a challenge and therefore the brand has already started looking at the ‘next’ extensions – hair gel and cream. It’s more important that the younger consumers use ‘Parachute’, whether it's in the form of hair oil should be incidental.

There are plenty of examples of how even innovative companies have being overtaken by challengers not necessarily from their industry. Kodak was taken by surprise by the digital camera wave and then later by the camera phones. It did however try and still find a way to be relevant by literally ‘sleeping with the enemy’ – you can click on digital cameras or even cell phones and get them printed on a Kodak paper. But Google’s Picasa and Flicker still pose a threat as they make sharing pictures so easy without having to print them. Kodak should have owned photography but failed to see the change.

My sense is that it’s not just innovation but the ability to see the imminent change and its competitive implications that has served these brands better. It’s more about having a clear sense of how one can remain relevant despite the change, in fact a step further on how a brand can ride and exploit the change….or can it be the change?

We are like that only

noreply@blogger.com (RC) — Sun, 23 Dec 2007 09:02:00 +0000

Just finished reading a book by Rama Bijapurkar,‘We are like that only’. The author has some interesting observations about how companies in the past have faltered by overestimating the size of Indian middle class and considering it as a homogenous group. She therefore recommends constructing the picture of India based on your product class / industry and not going by the ‘one-size-fits-all’ estimates.

She also gives it a historical perspective by linking it to the addition of capacities in the mid 90’s and how by 2000, some of these hopes were squashed. She also emphasizes the ‘Great Indian rope trick of numbers’ – how even small percentages in the Indian context can mean large markets.

I'm back!

noreply@blogger.com (RC) — Thu, 13 Dec 2007 18:15:00 +0000

What a long break!

What was I doing all this while? Well, I changed job and relocated to the silicon valley of India – Bangalore, from Mumbai, which in fact is my first so far. Not just that, I have joined a new industry – FMCG, after a good 4 years in Financial Services. The transition so far has been good and very interesting. The experience of getting comprehension of an entirely new industry with its own dynamics and ways of operating is motivating.

So far so good. Hope to get down to business soon.

What, exactly, is a Brand?

noreply@blogger.com (RC) — Thu, 27 Sep 2007 07:39:00 +0000

One comes across various definitions of what a brand exactly is. Some would want to describe it in terms of it being the name, logo, jingle etc. that together help to differentiate one offering vis-à-vis the other. This I believe, though true, does not capture the entire essence of what a brand is. Others tend do describe it in more obscure terms of it being something mystical, the power of which needs to be experienced to be able to believe, that it resides in the hearts and minds of its consumers …..

My understanding is:

A brand is an intangible asset that creates value for all its stakeholders

* The company that owns it by aiming to ensure future cash flows
* The customers that buy and use it through functional, emotional, sensory and ownership related benefits it provides
* For the trade / retailers that distribute and sell it through the cash flows and footfalls it creates to be able to sell more stuff to more people
* Marketers & Agencies that help create and nurture it, through the value it creates for them at both personal and professional level.

I beg to differ with marketers who say that a brand belongs to its customers and not the companies. Customers are definitely the most important stakeholders but they are not the owners. They certainly have a big hand in the financial value created by a brand as they are the ones who decide and pay the premium for it over other similar products/services. However, this economic value is ultimately reaped by the legal owners who at times fetch more value for their brands than any of their physical assets.

Here is a take by Christopher Kenton in Business Week Online on the meaning of brand.

I believe that though the fundamental attribute of a strong brand is consistency, increasingly, it is the ability to creatively challenge customers and be seen innovative that is driving growth for brands like Apple, Nike, Sony, Toyota, Samsung etc.

Luxury goes mass market

noreply@blogger.com (RC) — Fri, 07 Sep 2007 06:13:00 +0000

This recent article in FORTUNE magazine talks about how dynamics of the luxury business and the definition of what constitutes luxury itself are changing. The worldwide luxury business is pegged at around $220 bn and is growing at a rapid pace.

I had, in my first post on this blog, talked about the nuances and challenges of marketing to affluent customers. 'Massclusivity' = Exclusivity for masses, is a unique trend that's both an opportunity and challenge for today's luxury / premium brands.

Incidentally, today's Business Standard carried an article on why Louis Vuitton wants a feel of Indian luxury market and is willing to roll out more of its brands here.

Brand = Interface, Interface = Brand

noreply@blogger.com (RC) — Thu, 06 Sep 2007 09:40:00 +0000

Check out this fascinating article on how some brands have created their own unique interface, their own way of how they interact with their consumer and the consumer engages with them. An amazing insight into how this can be integral to a brand and at times its major differential advantage.

Nokia's Big Plans for India

noreply@blogger.com (RC) — Mon, 03 Sep 2007 11:42:00 +0000

Nokia is an unusual example of a business leader in the sense that it's origins do not lie in the usual suspect countries of US, UK, Japan, Germany, Italy, France etc. nor in the Asian tigers.

For a company, which has its roots in paper, rubber and cables to become a giant in the field of technology and communications is a quantum leap. In 2005 Nokia sold its billionth phone when worldwide mobile phone subscriptions had passed the 2 billion mark.

India recently displaced the US as Nokia's second largest market behind China and this event has many ramifications (It seems Apple has refused to learn from this, it is yet to launch it's i-Phone in India or the other Asian markets and says it would be at least another year when that happens). In this interesting interview, the CEO Olli-Pekka Kallasvuo, while on his trip to India, speaks to Business Week on this tectonic change, how Nokia is gearing to benefit from it and how its next billion phones are going to be sold.

Droga5

noreply@blogger.com (RC) — Sat, 01 Sep 2007 05:00:00 +0000

I have had the opportunity of listening to David Droga for the first time in 2003 at AdAsia in Jaipur where he showcased some of his work. He, i believe, belongs to a different breed of advertising professionals who are ready to break the usual shackles and do stuff that is out of the ordinary. Droga quit his assignment as creative head of Publicis in 2006 to start his own agency, Droga5. This article in Economic Times - Brand Equity talks about his journey and reasons to form his own agency.

You can also check out case studies on his recent work at the new agency and the kind of work Droga5 aims to do.

How Steve Jobs prepares for his key note speeches

noreply@blogger.com (RC) — Thu, 30 Aug 2007 07:16:00 +0000

I regard Steve Jobs as one of the best Marketers along with Richard Branson. He is not only a creative genius but also a visionary in the true sense. This article written by one of his former colleagues, Mike Evangelist, describing his experience on working with Steve Jobs on one of his keynote speeches. For those who have not been exposed to this earlier, these speeches are an event in themselves, delivered in large auditoriums to a packed audience of analysts, nerds and Jobs/Apple die-hard fans. They are also put live on the Internet and watched by thousands of geeks. What goes into preparing these keynote speeches is any day worth learning and probably everything one needs to know on how to prepare for a 'standing ovation'.

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I have another treat for you. This is a video of one of Steve's keynote speeches and it's the one where i-Pod was launched. Enjoy!!

Defining the box!

noreply@blogger.com (RC) — Thu, 30 Aug 2007 06:25:00 +0000

‘Thinking out of the box’ is a phrase you might have heard or used many a time. However, no one elaborates on what exactly he/she means when they use the phrase. Everyone wants to be creative and a problem solver, however the essential question that is left unanswered is whether one needs to be a born genius to be creative or is it something that can be learned. Well, some of it is in your DNA but most of it can be honed over the years through exposure and experimenting. But how does one start? Not by imagining the box of course.

The Russians had developed a technique called TRIZ (a Russian acronym meaning Theory of Inventive Problem Solving), which looked at patterns in the way innovations take place. 400,000 patents were studied to look for these basic principles and patterns. Organizations across the world like Motorola, Proctor and Gamble, Xerox, Kodak, Hughes, Samsung, AT&T etc. use TRIZ as a method of solving problems and driving innovations.

TRIZ uses complex models and patterns that require use of specialized software. The American Society for Engineering Education came out with a simpler 8-dimension concept that can be used easily to solve everyday workplace problems. The recommended process is as follows:

First identify and define the problem by using ‘5W’s and H’.

W1. Who has the problem?
W2. What does the problem seem to be? What are the resources?
W3. When does the problem occur? Under what circumstances?
W4. Where does the problem occur?
W5. Why does the problem occur? What is root cause?
H1. How does the problem occur?

Now analyze the problem on the following 8 dimensions. The options / answers generated could more often than not give you the solution.

UNIQUENESS
§ Determine what does not change (e.g. the law of gravity)
§ Look for the distinguishing factors (USPs)
§ Magnify the differences (e.g Diet Coke – 1 calorie).

DIMENSIONALITY
§ Simplify – how would it appear to a non-involved person (a layman)
§ Time / Space / Interface / Cost etc. manipulation

DIRECTIONALITY
§ Work forward / backward (e.g. parking your car)
§ Work multiple ways (electronic goods working on both battery and electricity)
§ Find a better path to reach the same goal ( e.g. re-routing of phone calls through exchange)

CONSOLIDATION
§ Combine (e.g camera + cell phone + music player)
§ Find multiple uses of the same thing (Mobile SIM card also used for making payments)

SEGMENTATION
§ Divide / separate (Marketing uses this concept beautifully to segment markets and customers)

MODIFICATION
§ Rearrange (the fashion industry is known to apply this to bring old trends back into vogue e.g. Jeans are back in fashion today)
§ Extract unnecessary elements (e.g. sugar free, cholesterol free)
§ Substitute (e.g. plastic with Teflon, steel with aluminium in cars)
§ Add – overall / in between (e.g Gillette - Sensor excel &amp; Mach 3, 2 & 3 blades respectively)
§ Alternate use / application (e.g washing machines used to make ‘lassi’ in punjab)
§ Automate (e.g. push button start bikes v/s kick start ones)
§ Purify / filter (e.g. Speed, Xtramile brands of petrol).
§ Self modification – in situ (e.g. curd from milk, fermentation technology to make spirits)

SIMILARITY
§ Look for patterns (e.g video games)
§ Combine applications (e.g. pen that can also function as a stylus)
§ Old principle – new application (Old wine new bottle principle – music remix, remake of old movies)

EXPERIMENTATION
§ Simulate
§ Estimate / hypothesize and check.
§ Wild guess!

And before we close, a supposedly true story. Americans and Russians were both in the quest for putting a man in space. The Americans were busy developing an ink pen that could work in space without leaking. A NASA scientist was once describing the difficulties they were facing to a Russian scientist and inquired how they were trying to overcome them. “We use a pencil”, the Russian replied.

Happy thinking!

Bhel puri ?

noreply@blogger.com (RC) — Thu, 30 Aug 2007 06:18:00 +0000

I had met a German guy while travelling some time back. He was in India for making a short film on Indian movie stars. The theme was how a movie star shuffles between identities while acting in multiple movies at the same time and still is able to retain his own (?) without getting influenced by any of the characters in his movies.

This he said wasn't much of a problem in the west (read Hollywood) as a movie star normally does only one movie at a time. In fact his contract doesn't allow him to do any other ventures.Quite an interesting theme i must say. I told him that not only do the actors here act in multiple movies at a single time (with diverse roles) but do multiple roles of a college teen, father and maybe even the grand father...act, dance,do action scenes, make people laugh n cry ....all in the same movie !!

Hollywood has genres, romantic, action, thriller...but we Indians want everything of that in the same movie from the same guy...whew !This also speaks a bit about how we think as a race....think of the languages, cultures and religions we follow. We, I'm sure, must be the only ones to invent something like a 'bhel puri'. This goes in our normal diet as well. We want bread (rotis), vegetables, dal, rice, aachar, papads, raita, curd...everything at the same time.

Isn't that unique in some sense ? and what does it say about us culturally?

Brand Convergence

noreply@blogger.com (RC) — Tue, 28 Aug 2007 11:56:00 +0000

This article of mine was first listed on Interbrand's http://www.brandchannel.com/ in Nov. 2006. It was republished in TOI group's Retail Biz in Jan. 2007

It was also a recommended link on Urbanhonking's Co-branding discussion. There are some other good links as well on this site.

Marketing to the affluent class

noreply@blogger.com (RC) — Tue, 28 Aug 2007 11:38:00 +0000

This article of mine is a revised version of the one first listed on Interbrand’s brandchannel.com in June 2006 and was published in Images Yearbook 2007.

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Rich and mass-affluent customers are driving business for many industries including fashion, jewelry, automobiles, real estate and even banking & investments. The future growth from these segments is expected to come primarily from the emerging markets like India, China, Asia-pacific, Brazil etc in addition to the developed economies of US and Europe. In a survey conducted by The Knowledge Company on Indian affluent consumer (India Luxury Trends 2006), it was found that these consumers earning over INR 4,500,000 spend INR 400,000 or above on luxury goods. The highest spends were on categories like jewelry, clothing, digital accessories, timewear and cosmetics. The number of such consumers was estimated at one million, a number that is expected to treble by 2010. According to market estimates, the Indian market for luxury goods and services, currently pegged at INR 1,500-2,000 crores is likely to grow at a rate of 15-20 per cent every year over the next five years. This is owing to strong economic growth and emergence of neo-money clients who are ‘cash-rich and time-poor’. The attitude and behavior demonstrated by this segment is quite different for certain instances as compared to the traditional money clients. There are however certain things that run common and can serve as guidelines for marketing to this class of customers.

Before talking about marketing to these customers it’s extremely important to understand the segment well. Their age, income levels, occupation etc. helps to filter them from rest of the lot. It is however their behavior and psychographics that really matter in striking the right chord with them. What do they wear, where do they buy, how do they think, what matters to them, where are they seen or would like to be seen etc. is extremely important to get this understanding right. Let’s look at some aspects that can help us in this regard:

Ø Affluent customers want to be distinguished from the crowd – They only want to be seen at certain places, using only certain brands. Not just that, they want to be a step ahead of the crowd and look up to brands to identify the key trends for them and help them access/buy these before anyone else. Fashion shows are an attempt by luxury & fashion brands to define what’s next and help the customers access it.

Ø They seek exclusivity - Exclusivity is a big hit with these customers and therefore ‘limited editions’ or ‘only for select audience’ are tactics that certain luxury brands use for their brand extensions. They want access to the most exclusive brands and finest quality. They have a passionate desire for the best things in life. In fact snob consumers perceive price as an indicator of exclusivity and avoid using popular brands, a trend labeled as
‘Uber-Premium’ (exclusive products for status craving consumers, something out of reach of most). A separate store entrance or exclusive outlets, exclusive areas, different branding, very fine décor and ambience, differently dressed personnel servicing them can be used to provide this sense of exclusivity.

In fact the single most important reason for luxury retailing not taking off in India according to ‘India Luxury Trends 2006’ is the lack of luxury retail environments. Existing retail formats in this segment are either in 5-star hotels or as standalone stores. This has however started evolving. Brands and retailers have appreciated the importance of having retail formats catering to the affluent class of consumers. Shoppers' Stop is planning to enter the luxury retail segment with large format properties retailing a range of products from many well-known luxury brands. It has been reported that each of these stores would be spread across 1.2 – 1.5 lakh sq. ft. and will showcase more than 40 global luxury brands, including Louis Vitton, Gucci, Zegna, Hugo etc.

Ø They want to feel unique and special – Personalization of products and services helps to provide these benefits. Brands need to recognize this hidden desire and offer them products that help them achieve it. In the luxury market, high service levels are a given. Consumers are today more individualized than ever seeking goods and services that will satisfy their unique needs, a trend that will only catch on. In fact the Time magazine’s person of the year 2006 is ‘YOU – the individual’.

Ø They seek convenience - Affluent customers value their time as much as their money, making convenience fundamental to success in this market. Kingfisher First offering a mix of exclusivity, convenience, comfort and service has been quite successful in getting the consumers’ attention and creating a niche for itself in the air travel space.

Ø They are willing to pay a premium - They want the best quality, exclusivity, satisfaction and outstanding customer service. Brands that wish to target affluent customers will have to upgrade the quality/caliber of every person who represents them in the market or has any level of interaction with the customer.

Ø High involvement buying behavior – Marketing to affluent customers generally involves selling high-ticket items where the degree of engagement with the client also needs to be high, as most times these purchases are a reflection of the person’s self-concept and have strong self-expressive benefits. The buying decision tends to be more emotional with a touch of rationality to justify it to self and others. Making buying an experience in itself is the key here, something done well by retailers like Neiman Marcus.

Even in the case of emerging economies, these consumers are exposed to the best and most exclusive brands given their inclination to travel across the globe and own the best money can buy. The challenges therefore in the home markets are no less daunting than those in the more developed economies as far as these consumers are concerned. The best way to start therefore is to understand what has happened is the other parts and adapt it to the current environment. Basic human behavior and emotions seldom differ wherever one goes. Adaptation is however a tricky proposition and ‘cultural sensitivities’ need to be taken care of, a ‘cut-paste’ job is not very likely to yield results.

How can brands target these customers?

One point of essence is that it’s extremely important for the brand to have a clear positioning and the image in the minds of the customers, with efforts to keep reinforcing and refining it. Tag Heuer, Rolex, Cartier are all luxury brands but they have different positionings. Consistency in communication efforts plays an important role here and strong brands usually are protagonists for something that is of value to the customers. Celebrity endorsements or as brand ambassadors is also used by some brands like Armani, L’Oreal, Swarovski with good effect.

Though there cannot be a one-size-fits-all kind of an approach to reach out to affluent customers, ones that could be used beyond traditional advertising are:

Ø Direct Mail: Enormous efforts and thinking need to go in selecting the correct list. Equally important is the aspect of creating the mailer – the headline, copy, visual, production quality etc. and above all, the offer (don’t talk price, talk value). In fact Direct Mailing can be an important marketing tool for brands that don’t advertise or advertise only to create imagery.

Ø Endorsed mails: Mailers from brands whose services / products they already use make the maximum impact in terms of the communication being read and carrying the right kind of associations. It also takes away the apprehensions of these customers of being on unsolicited mailing lists, which only harms the brand.

Ø Referrals: Referrals from existing customers willing to share details of people they know who would be interested is the most tried and tested method of getting access to new clients. These customers may not mind their name being used to make contact with the reference (one needs to take permission) and at times act as your best ambassadors. The phenomenon of word-of-mouth can be very effectively used as a marketing tool here and the brand has to proactively manage it.

Ø Pull marketing: Show them benefits of your offering and tell them how you can create value for them by giving them convenience, personalized attention, exclusivity etc. Let them have a taste of it with no strings attached by inviting them to your events, launch parties etc. The idea is to make them aware of the need and giving selling a more consultative approach.

Of the emerging trends and concepts in this space ‘Massclusivity’ (exclusivity for masses) holds a lot of relevance. Luxury in itself has a certain sense of status attached to it. With concepts like ‘affordable luxury’ and the rise of the middle segment (mass affluent) consumers, luxury brands face a challenge to maintain their image and what they stand for. Constantly renovating themselves to stay relevant and being creative about everything they do could be a possible answer.

Happy marketing!