Thursday, December 11, 2008

New Market New Rules

Rural markets have gained significance, because of the growing economy which has resulted into considerable increase in the purchasing power of the rural communities. Owing to green revolution, the rural areas are consuming a large quantity of industrial and urban manufactured products. In this environment, a special marketing strategy, namely, Rural Marketing has emerged. Rural marketing is over and over again confused with Agricultural marketing – the latter denotes marketing of produce of the rural areas to the urban consumers or industrial consumers, whereas rural marketing involves delivering manufactured or processed inputs or services to rural producers or consumers. Rural marketing experts also term it as developmental marketing, as the process of rural marketing involves an urban to rural activity, which in turn is characterised by various peculiarities in terms of nature of market, products and processes. Rural marketing differs from agricultural or consumer products marketing in terms of the nature of transactions, which includes participants, products, modalities, norms and outcomes. The participants in case of Rural Marketing would also be different, they include input manufacturers, dealers, farmers, opinion makers, government agencies and traders. The existing approach to the rural markets has viewed the markets as a homogeneous one, but in practice, there are significant buyers and user differences across regions as well as within that require a differential treatment of the marketing problems.

These differences in approach could be in terms of the type of farmers, type of crops and other agro-climatic conditions. One has to understand the market norms in agricultural input so as to devise good marketing strategies and to avoid unethical practices, which distort the marketing environment. The importance of rural marketing can be understood from the fact that today modern inputs i.e. diesel, electricity, fertilisers, pesticides, seeds account for as much as 70% of the total cash costs and 23% of the total costs incurred by the farmers in the Green Revolution areas. Further the percentages were higher at 81% and 38% for small; farmers owning 1.85 hectares of land. Rural market offers huge opportunity to marketers, infrastructure is improving rapidly, and social infrastructure has improved a lot in past decade with more kuccha houses getting converted into puccha houses, percentage of people below poverty line has declined and literacy level has improved by huge numbers. Other opportunity is the use of available infrastructure of post offices (1, 38000+),haats, mela’s etc.Proliferation of large format rural retail stores which have been successful like DSCL Haryali stores,M & M Shubh Labh stores, TATA/Rallis Kisan Kendras etc. Rural marketing involves more concentrated personal selling efforts compared to urban marketing. Firms should desist from designing goods for the urban markets and subsequently pushing them in the rural areas. Distribution strategy need to be devised in a different manner compared to urban market. Communication channels should be chosen very carefully as only around 20% of the rural population has access to a vernacular newspaper. So, the audio visuals must be planned to convey a right message to the rural folk. The rich, traditional media forms like folk dances, puppet shows, etc with which the rural consumers are familiar and comfortable, can be used for high impact product campaigns.

Some successful examples are of Escorts which had an focused approach depending on geographical and market parameters like fares, melas etc. Looking at the ‘kuchha’ roads of village they positioned their bike as tough vehicle. Their advertisements showed Dharmendra riding Escort with the punch line ‘Jandar Sawari, Shandar Sawari’. Thus, they achieved whopping sales of 95000 vehicles annually and HLL which started ‘Operation Bharat’ to tap the rural markets. Under this operation it passed out low–priced sample packets of its toothpaste, fairness cream, Clinic plus shampoo, and Ponds cream to twenty million households. Thus, looking at the challenges and the opportunities which rural markets offer to the marketers it can be said that the future is very promising for those who can understand the dynamics of rural markets and exploit them to their best advantage. Rural marketers should understand this fact and try to tap the huge untapped potential in our country, so they can successfully impress on the 230 million rural consumers spread over approximately six hundred thousand villages in rural India.

Contributed by: Manish Sharma & Prasenjit Sen

Monday, December 8, 2008

Customer is Queen

Indian women has elbowed her way into yet another male domain-purchasing .The present day women is not an easy target for marketers, as beside being value conscious and price sensitive , she is sharp ,educated and thinks before making up her mind .Marketers have learnt that women (working and non working ) are more influenced by advertisement, studies product carefully and make informed choice. A woman as compared to men are influential in task such as information search but prefers to be in comfort zone this makes them tougher to change their buying habits. Research suggests that men look for label and brands, women look for style, specific features and quality. They are more confident purchaser and are consulted by their male counterparts more often. Most even take the final call of purchase be it automobiles, white goods or home improvement. Consumer researchers are interested in women’s multiple roles, time pressure and changing family structures basing on which they can formulate effective marketing and communication programs to reach them. The ad industry also faces a key challenge as advertiser can no longer have single generic advertisement that runs across all categories because women are keeping their eyes open and making sure that information about the financial and technical product is impeccable.

Many women do mirror the lifestyles of their male counterparts, especially as they take on androgynous roles in the workforce and social activities. Acknowledging the changed equation, Electrolux brought out a range called “affirmation of self” a premium brand for new, affluent multitasking women. Lifestyle changes, an obvious off-shoot of better earnings and for a fashion alert society ensures that there is assured market for women’s product .When it comes to residential and family matter , it is always the women who dictates the choice and 80 percent of the housing choice are made by them .This is so because apart from being quality conscious and comfort loving they are assertive about their needs and also has flexible income to splurge .It is not financially independent women who are splurging on shopping during weekends ,but homemakers too ,who throng the malls on weekends .Manufacturers too are ensuring that women –specific products and services should be designed to woo the financially independent and discerning target. Idea Cellular had launched the first ever Women’s Card because they understood the need gaps of women and offered value adds such as tips on beauty, fashion, health and safety alerts .On other hand, Cox &King provides women traveling in groups into hotels with women –only floors and provide them with an experienced woman guide .
Women have inimitable criteria for buying and sellers just can ignore them as “Customer is Queen” is the new marketing mantra.

Contributed by: Prof. Sapna Parashar

Wednesday, December 3, 2008

Ambush Marketing

Ambush Marketing, a term first coined by marketing guru Jerry Welsh.

The word Ambush means, the act of concealing yourself and wait to attach by surprise. But the word Ambush Marketing means something very different. It means a tactic whereby a company attempts to ambush or undermine the sponsorship activities of a rival that owns the legal rights to sponsor an event. In simple words it is where a company runs a marketing campaign around an event in which it is not directly involved or has paid a sponsorship fee. Ambush marketing is always associated with events. Ambush marketing is a planned effort by an organization to associate them indirectly with an event and gain some recognition and other benefits .

It is typically targeted at major sporting events like – like the Olympic Games or the world cups in various games and is a strategy adopted by rivals of the official sponsors. For example, in the Winter Olympics held in Lillehammer, Norway in 1994, Visa was one of the official sponsors. Its rival American Express launched an advertising campaign with the slogan: “If you are traveling to Lillehammer, you will need a support, but you don’t need a visa”. An example more familiar to Indians is Pepsi’s hugely successful campaign on the slogan “nothing official about it” during 1996 cricket World Cup, for which rival coke was one of the sponsors. Similarly, when Pepsi sponsored the 1999 Cricket World Cup, Coca Cola put hired people in the stadium and made them furl Coke flags, drink Coke, wear Coke T-shirts etc., in full view of the worldwide TV audiences. In 2004, the tables were again turned. Coca Cola sponsored Euro 2004, but Pepsi used its association with David Beckham and other players to produce a celebrity ad that successfully deflected and diverted viewers’ attention from Euro 2004.

There two forms of ambush marketing:
1) Association Ambushing: The non-sponsor gives the impression of being an official sponsor by using symbols and words associated with the event.

2)Intrusion Ambushing: The non-sponsor company creates hype in the media and goes for spectator exposure of the event by advertising near the venue of the event.

Some Strategies of Ambush Marketing:
1) Sponsoring the media coverage of an event: Kodak sponsored the broadcast of the 1984 Olympics where Fuji was the official sponsor.
2) Sponsoring a sub category within an event : During the 1996 Olympics Samsung which was not the official sponsor took an aggressive strategy against Panasonic which was the official sponsored the event by taking rights to a parking lot near the venue of the event. Panasonic managed just 3% awareness after the event while Samsung managed as high as 9%.
3) Making a sponsorship related contribution: Ian Thorpe, an Australian swimmer is the brand ambassador of Adidas while the team is sponsored by Nike. To protect his personal contact with Adidas he draped his towel over the Nike logo while receiving a medal at the Olympics.
Engaging in advertising with coincides with a sponsored even t- Pepsi floating a hot air-balloon over the final in Sharjah where Coca-Cola was the official sponsor.

More recently, there was a straight fight between Hero Honda, a global sponsor of the Champions Trophy taking place in Sri Lanka, and its rival TVS. TVS has, according to industry experts, paid Rs 12 crore to rope in cricketer Sachin Tendulkar as its brand ambassador for three years.Nike became the official uniform suppliers of many hockey teams during the Olympics without paying the huge sponsorship sum of $5 to 50 million.

Ambush Marketing has many ethical issues related to it. Nowadays there some legislative laws being put into place to curb the issues regarding ambush marketing. One such recent example is current ICC controversy. It is precipitated by the desire to protect official sponsors of the Champions Trophy. The ICC does not want to allow any company to cash in on its events secured by other sponsors paying huge sums of money. The objective was to protect the exclusive rights granted to the sponsors at a whopping cost of $550 million (until 2007).

Some measures which can be taken to curb Ambush Marketing:-
· Preventing tickets from being used as competition prizes
· Policing the event more strictly for “ambushers” and denying them access
· Using event regulations and participation agreements to restrict the rights that participants can grant their own sponsors (e.g., what athletes may wear or carry when they compete).

As such ambush marketing at the margins will arguably always occur and law alone will prove for the ingenious marketing strategies .The challenge now lies with lawyers to determine what strategies can be identified to curtail ambush marketing

Contributed by : Fahad Bagadia & Mohit Kapila

Monday, December 1, 2008

Are Mascots Worth Thousand Words ?

Mascot is ‘a person or animal or thing that is supposed to bring luck to its users.’ Mascot is used by a company as a part of a marketing strategy to interact with the customers or consumers. It is a way to gain more customers by using a mascot as a medium for physical and psychological interaction with them and distinguishes brand by having a marketable character. A mascot helps to brand the company/product and can be used in creating games (flash games, computer games etc.), commercials, advertisements, toys and cartoons. Effective ‘Brand Mascots’ increases awareness, sales and profits whereas ineffective ‘Brand Mascots’ do not amass customers or wealth, yet incur ‘MASS COSTS.’ A strong mascot marketing effort enables to create media exposure and excitement, generate goodwill for the brand, act as an ambassador for the brand by providing a voice for the company's social conscience and provide tie-in identification at point-of-sale (the mascot boldly featured on packaging, in-store merchandising, trucks and T-shirts), and sell products.

For effective development of a character or mascot a company should spend reasonably to develop a professional character that is worthy of the product, contact professional firm to guide through the important development phase. Character development, particularly for mascots, requires a special base of knowledge to make it work successfully as they must have strong identification with the brand and use mascot everywhere from signage to collateral to in-store merchandising to packaging, advertising and events which will enable brand association .Apart from this whenever a company wants to introduce a new mascot they need to identify that whether the present mascot is consistent and helping company to increase sales, the withdrawal of the existing mascot is a good decision and will the new mascot be efficient enough? To answer above questions and decision more accurate one has to fall back model to the model knows as Brand Mascots v/s Brand MASS COST. In this model one needs to compare few things like:

1. Relevance v/s Irrelevance:. If it is a highly industrial category or a highly technical category, it may be prudent to look at other branding means rather than use ‘BRAND MASCOTS.’ This is because the target audience is serious and there is high probability that they may consider mascots frivolous and casual, thereby destroying the rational product story, the technical competence as well as the product efficacy image. While on the other hand in categories like services, FMCG or other consumer products, a ‘Brand Mascot’ may work out to be relevant and effective.

2. Attract versus Distract :If the ‘Brand Mascot’ is able to attract consumers towards the brand, not only in terms of awareness, but also in terms of trials, purchase, consumption and repeat purchases, then the ‘Brand Mascot’ is working. However, if the Brand Mascot distracts from the brand and its products and service usage, then it would just be a Brand Mass Cost. In fact many years ago, 7-up lost its product usage because Fido Dido actually distracted consumers from the product. Consumers bought the concept of Fido-Dido - the ‘Brand Mascot’ and did not buy 7-Up, the brand itself. There is a very thin line between attraction and distraction and must be worked on very carefully.

3. Focus versus Hocus-Pocus :Over a period of time there has been a focus on the Air-India Maharaja. Its consistent usage has definitely helped the Air-India business and created a special identity reflecting the culture and splendor of India and its history. The ‘Brand Mascot’ clearly symbolises that the passenger would be treated like a King. This focus has helped. In some other cases constantly changing brand mascots under the garb of boredom leads to a shallow, inconsistent hocus-pocus thus leading to ineffectiveness.

4. Brand Mainline Versus Brand Sidelined :Everything a ‘Brand Mascot’ stands for should keep the brand in the mainline and mainstream to bring out its core values and benefits. It should not let either the brand or its benefits get sidelined. There was a feeling that Gattu, the ‘Brand Mascot’ of Asian paints had outlived its utility and the brand was brought back in the mainline with Gattu being removed so that the mother brand does not get sidelined. If a choice has to be made between the brand and the brand mascot, it is better that the ‘Brand Mascot’ be sidelined because ultimately the brand is the hero and celebrity, whereas the mascot is only a support.
Thus, as per this model if the four parameters are appropriately evaluated, ‘Brand Mascot’ will work, otherwise it may turn out to be just a ‘Brand Mass Cost.’ After all a mascot is supposed to bring good luck to the user, isn’t it?

Contributed by: Vaibhav Gupta

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