Sunday, November 15, 2009
Debiprasad Mukherjee, Techmahindra
Colour is one of the most crucial elements which impacts hugely in creating brand identity. The primary aim of a brand identity system is to encode a brand in customer’s memory and retrieve it from their memory. In a visual system, the two most powerful components are the consistent recognizable shapes and colours. (Brad VanAuken, brandingstrategyinsider.com). It is considered as the best if these shapes and colours are distinctive, meaningful and appropriate (at least within the product category). Colour can have a significant effect on people's perception of a product or brand in terms of level of recognition & recalling. For instance, burgundy and forest green are perceived to be upscale while an orange label or package indicates an inexpensive item (marketingprofs.com). Colours can actually create an affect on a person's state of mind and cognitive ability as demonstrated by numerous research studies. For instance, pink is assumed to have the power to increase a person's appetite and calm prison inmates (brandingstrategyinsider.com).Not only that, if a brand is sold across the globe in different cultural zone, colours can have different symbolic meanings (not all positive) in different countries and cultures. If a brand is trying to create impact through visuals, it is basically sending certain messages about product or service through certain visual stimulating components what make it special and differentiates it from competing brands. And colour can act as the major X-factor behind the success of visual branding. Every colour sends a distinct message. This means that if a logo uses four colours, it is actually sending four different messages at once (John Williams, 2008, entrepreneur.com). Even if the messages are complementary, few consumers can remember and associate that many ideas with your brand if the applied colour fails to trigger memory and evokes emotion. Colour greatly boosts brand recognition and plays a huge role in a consumer's choice of product if it as well-chosen in terms of brand identity creation and reinforcement of brand attributes.
Communicate through Colour
When consumers see the colours red, blue, or yellow, how do they react? Do they feel happy? Do they feel sad? Do they feel at peace? Do they feel angry? Does it create any impact at all? Yes. Colour can be an enormously powerful means of altering a mood (Sean Adams, smartcompany.com.au). The difference in effect between red and blue, between green and yellow, between black and white, is immense from brand identity creation point of view. Brands need to stand out from their competition. They need to be easily recognized. They need to create the right mood in the hearts and minds of their consumers. In a recent high profile court case, Cadbury attempted to stop competitor Darrell Lea from using the colour purple for the packaging of its products. Cadbury claimed that consumers associated their products with the colour purple and that Darrell Lea was therefore engaging in "misleading and deceptive conduct" in using a similar colour. Consumer reacts to certain colours depending on culture, religion, upbringing, and/or personality. Colour is vitally important when doing business and is the first visual impression and most instantaneous method of communication for conveying your marketing message and meaning. It helps in distinguishing a business from competitors and is an integral part of the brand identification process. Colour symbolizes abstract concepts and thoughts, expresses fantasy and wishes, recalls brand identity, triggers brand association, and produces emotional or visual responses. Colour as a primary aesthetic tool generates a sense of visual harmony which sustains and enhances customer's interest. Colour is a key element in communicating, enticing, and attracting people towards a brand. Often called the "silent salesperson," colour attracts your customer's eye, conveys the message of what your product/service is all about, creates brand identity, and, most importantly, helps you make a sale (Neil Zhu, theforumgroup.com, 2009).
Emotional impact of Colour
Colour is everywhere, from the green grass to the blue sky to the black night. Colour affects and influences us both emotionally and psychologically on all levels, whether it is personal or business. Certain colours have the ability to raise our blood pressure, cause our breathing to become rapid, increase our pulse rate, adrenaline, and Galvanic Skin Response (GSR). Beyond our control, transmitted to the brain is a chemical message that releases the hormone epinephrine that causes these physiological responses (carnrightdesign.com). In business, smart entrepreneurs use this uncontrollable response to their advantage by studying the emotional impact specific colours have on the buying market. Colour influences every level, from the brand logo, image, signage, display, print materials, and the product itself. According to Leatrice Eiseman, director of the Eiseman Center for Color Information and Training, executive director of the Carlstadt, NJ-based Pantone Color Institute, “60 to 70 percent of the buying decision is made at the point of purchase. With so many products vying for the consumer's money and attention, the effective use of colour is one way to capture their attention. Consumers are in an emotional mode when they shop. And when they are in an emotional mode, they are more visually attuned." With that in mind, every successful brand explored the emotional impact different colours have on the buying market.
Selection of Colour
Strategic colouring of a brand can revitalize and reinforce the brand image. Because consumers often take buying decisions on first impressions through the colour that your business that communicates to the public what your enterprise stands for straight way. “A new colour is one of the easiest and most powerful ways to communicate that something has changed,” says Allen P. Adamson, managing director of Landor Associates, a brand consultancy. “It signals the consumer to look at you with fresh eyes.” And, notes Al Ries, chairman of the branding consultancy Ries & Ries, a brand can be that much more memorable when associated with a specific colour that projects its own psychological and emotional stimulus. Adamson, the author of Brand Simple (Palgrave Macmillan, 2006), says it’s important that the entire company be on board with the choice of colour. Colours should not be tied to any particular industry (though some may be better suited for some services/products than others). Some brands like eBay choose to go with many colours to represent variety — but one can also choose a couple of colours that work well together as brand demands. Most importantly, Consider differences in cultural interpretations of your colour. For example in the Western world, white is considered the colour of purity and peace, however, in some parts of Asia white is the colour of death. Designers should use colour to formulate special and unique brand identity strategies. By choosing a colour or a combination of colours for a brand identity, it will basically evoke certain emotions and feelings towards the brand.
Colour – Nothing but a Language
Colour is considered as universal language: Colour is considered as a universal language that crosses cultural boundaries as well as boundaries of our electronic/technical/satellite linked "Global Village." Colour helps to persuade and induce the customer to respond in a positive way to your marketing message. A brand can convey message properly to target segment through Brand Name, Logo, Packaging, Advertisements, Company website & office, even in Product itself.
Colour selection for a business or a brand should be targeted for proper demographic (www.carnrightdesign.com). Colour selection should not be biased by own colour preferences, it should have a particular marketing message in mind also. It will be wiser to consider the psychology of colour when designing your marketing materials as colours not only enhances the impact of appearance of the item, also influences purchase behaviour (Lifen Yeh, Eric Min-Yang Wang, National Tsing Hua University, Hsinchu, Taiwan,
2007). Most of the fast food restaurants are decorated with vivid reds and oranges. Studies said that reds and oranges encourage diners to eat quickly and leave. Many of the adult sites are having lot of reds and blacks as these colours are supposed to have sexual connotations (brandingstrategyinsider.com).
Color is not at all a universal language: Color is a kind of language which is encoded and interpreted differently across the world based on sex, age, geography, culture etc. If a brand is planning to introduce a color to its logo and is dealing on a global level, may have disastrous results if the afore-said factors are not taken into consideration. What color works in one country or industry or brand may not work in another. Personal preferences usually cause brand disasters. It is necessary to look at the symbolism of any color scheme. Take purple for example: it symbolizes spirituality, mysticism, magic, faith, the unconscious, dignity, mystery, creativity, awareness, inspiration, passion, imagination, sensitivity, aristocracy & royalty, conceit, pomposity, cruelty, mourning and death. It is also the hardest color for the eye to discriminate. Consequently, purple is not a good color choice for the food industry but is an excellent choice for astrology, magic or spiritual businesses (carnrightdesign.com). Few aspects of evaluation of colors are described below:
Cultural Aspect: - For example, white is the color of death in China, purple represents same in Brazil and Black in Germany. Yellow is sacred to the Chinese, but is sign of sadness in Greece and jealousy in France. In North America, green is associated with jealousy while green stands for holiness in Arab and in Malaysia, it is treated as the color of danger. Red is the color of strength in Scandinavia, color of love in USA but color of death in Africa.
Age Differences: - Generally Children prefer brighter colors, while adults prefer more subdued colors.
Class Differences: - As per marketing research in USA, working class people prefer colors blue, red, green, etc. While more highly educated classes goes for colors that are more obscure: like taupe, azure, mauve, etc. (Tom Altstiel, Advertising Strategy: Creative Tactics from the Outside/In, 2005)
Education Differences: - The more educated, the more sophisticated the taste, including color subtle color mixes, deeper tones, more elegant tints, more interesting color palettes where as less educated tend toward simpler, more straight forward colors (interiordesign.net).
Climate Difference: - People who live in warm climates prefer bright, strong colors, people who live in colder climates prefer cooler, more washed out colors (interiordesign.net).
Gender Differences: - Generally men prefer cooler colors (blues and greens) while women tend to prefer warmer colors (reds and oranges)
Trends: - Colors preference is sometimes depend on simply popularity. Colors tend towards seasonality and designs reflect the season they were built in: winter blacks, whites, and greys; spring greens and bright colors; summer yellows; (omiru.com)
Research conducted by the secretariat of the Seoul International Color Expo 2004 documented that 92.6 percent sample said that they give importance on visual factors when purchasing products and 84.7 percent of the total respondents think that colour is the most important factor for choosing products. Research reveals people make a subconscious judgment of product within 90 seconds of initial viewing and that between 62% and 90% of that assessment is based on colour alone (CCICOLOR - Institute for Color Research). Colour increases brand recognition by up to 80 percent (University of Loyola, Maryland study). Psychologists have documented that "living colour" does more than appeal to the senses. It also boosts memory for scenes in the natural world. Thus colour can be used as effective brand-recall weapon. (Source: The findings were reported in the May 2002 issue of the Journal of Experimental Psychology: Learning, Memory and Cognition, published by the American Psychological Association). Colour ads are read up to 42% more often than the same ads in black and white (White, Jan V., Color for Impact, Strathmoor Press, April, 1997). Colour can improve readership by 40 percent, learning from 55 to 78 percent, and comprehension by 73 percent. ("Business Papers in Color. Just a Shade Better", Embry, David, "The Persuasive Properties of Color", Marketing Communications, Johnson, Virginia, "The Power of Color", Successful Meetings).
The color red and the name Virgin are well linked in the minds of customers across the globe. Virgin did lot of R&D to ensure that exactly the proper red appears on their publicity materials, trains, cola cans and company vans. it helped consumers instantly identify a Virgin company or a Virgin product. Virgin finds this important enough that the company produces an eighteen-page guide to ensure ‘Virgin Red’ links all the company’s activities.
The name NIVEA itself derived from the Latin terms "nivis" and "snow." Similarly, to maintain a look of freshness and cleanliness, the designers used the color blue. When the blue was introduced in 1925 this was also a socially acceptable color as it had no links to political parties.
In 1915, when the Shell Company of California built their first service stations, they choose bright colors as it would not offend the Californians because of strong Spanish connections. The Shell emblem - or Pecten - remains one of the greatest brand symbols in the 21st Century.
There's a predominance of black (sophistication) and silver (prestige) in Jaguar logo. Jaguar markets to people with high incomes who view themselves as sophisticated and look for a prestigious vehicle.
Samuel and Company first shipped kerosene to the Far East in tin containers painted red. In 1915, when the Shell Company of California built their first service stations, they choose bright colors as it would not offend the Californians because of strong Spanish connections. The Shell emblem - or Pecten - remains one of the greatest brand symbols in the 21st Century.
There's a predominance of black (sophistication) and silver (prestige) in Jaguar logo. Jaguar markets to people with high incomes who view themselves as sophisticated and look for a prestigious vehicle.
The evolution of IBM logo depicts confidence, value, quality and innovative technology for its customers. Black tint is used graciously in the IBM logo, which is one of the most professional colors
Manan Shamihoke, XLRI Jamshedpur
Martin Baird, author of ’Guaranteed Results’ said, "Most people receive 4,000 messages per day, so a lot of creative thinking is needed if you're going to get noticed. I think most marketing efforts aren't nearly innovative enough." This observation led to the development of Ambient Marketing.
Ambient marketing is defined as marketing or advertising wherever customers happen to be, part of the immediate surroundings. The main idea is to create a loud mind-buzz using extraordinary marketing techniques and which can be used in conjunction with mainstream traditional media, or even as a stand-alone activity. Increasingly, it is now being bundled into the burgeoning out-of home, non-traditional media space.
Types of Ambient Marketing
Ambient marketing appears in various forms all around us. Most of the companies today try to find routine activities done by the target group and they are then targeted in an unusual manner while doing those activities. Spar Restaurant, Mumbai had giant clam shells scattered on the local beach. When people opened the shell, they found a piece of paper marketing the restaurant’s seafood festival. The campaign was an instant hit as it involved the customer in the experience.
Even though today most of the companies vie for unusual media, Ambient Marketing can also be done using conventional media in an unconventional manner. For e.g. the following billboard ad by Formula toothpaste had generated interest in onlookers.
Charles S. Gulas and Peter H. Bloch (1995) specified that ambient scent has the ability to influence consumption activity. In their research, when a pleasant ambient scent was introduced to one section of a casino, slot machine gambling significantly increased compared with non-scented periods in the same area. However, any ambient marketing campaign must be related or relevant to the environment/ambience around. Location based advertising (LBA) uses location-tracking technology in mobile networks to target consumers with location-specific advertising on their mobile devices. A London based online and phone bank, First Direct, sent a text message to about 33,500 of its customers, who lived in surrounding areas, to tell them about their offer. This was followed by running displays in the involved outlets and also advertisements in newspapers.
Strengths and Challenges
Criticisms and Challenges
The difference between ambient and experiential marketing is not clear. According to some experts, ambient exists only in non-traditional media formats without direct interaction; and experiential actually interacts with the consumer engaging them directly. Others believe that experiential, ambient, whatever we want to call it, the challenge is to make it happen at the street level.
Another major criticism is the present lack of measurement. Most ambient research to date has focused on the qualitative not quantitative aspects, so it continues to fall short of the type of data that most clients and media planners expect.
Further, it is directed more towards a set of people and hence cannot replace mass marketing. Some experts feel that it can be used only in restricted environments like universities and shopping centres.
One of the major challenges that ambient marketing is facing is that of sustainability. As the “unexpected” factor is one of the major strengths of ambient marketing, so any program cannot run for a very long time as it would become a little passé and more mainstream once consumers become aware of it. Washroom advertising is one such media that has transcended ambient and entered into the mainstream arena and, as such, has lost the element of surprise that initially made the medium so effective.
Mccrindle Research, in its report on Marketing with Diverse Generations has mentioned that the current generations learn by an interactive and multi-modal method. Thus spontaneous, multi-sensory and participatory stimuli appeal to them & messages delivered through experimental, ambient type marketing work best to them.
Ambient marketing is about getting integrated with the social environment of consumers in such a way that it catches people’s attraction without having them to look for it. The research also says that peers, friends and social factors were the biggest influence in the lives of 51% of Generation Y. Further, any marketing for the current generation must be fun & entertaining, cool & desirable and new & innovative; all of which are the main reasons behind the origin of ambient marketing.
The precise challenge of becoming expected and mainstream actually drives ambient specialists to continue to evolve and push the boundaries. It is a changing landscape where people come up with new and interesting ideas of how to reach a consumer and thus it evolves with the community and with innovative ideas. Also, the issue of becoming more obvious and less effective is not isolated to ambient marketing alone; almost all the marketing mediums today, be it billboards or Internet are facing this problem.
Another advantage of the medium is that it doesn’t require a substantial monetary investment; it rather needs more time, energy, information and imagination. The nature of being applicable anywhere, anytime provides this media the best prospect to innovate & keep reinventing itself.
In order to find out the “perceived effectiveness” of Ambient marketing over conventional marketing, a primary research was conducted in the form of a survey. The first objective was to find out if people pay attention to the conventional media or not; followed by finding people’s perception about the need for new/innovative media to market products. Also, the difference in the recall rates of conventional and ambient advertising was to be found.
A survey was conducted in which apart from asking questions to fulfil other objectives, the respondents were shown two advertisements to get data related to the third objective. First one was a print Ad of Lipton Tea in a newspaper and the second one was a photo of an ambient marketing campaign by Lipton Tea with bushes cut in the form of huge tea cups and Lipton tea tag hanging from them. The respondents were then asked about which one of the two advertisements they would be able to remember for longer duration. The data was collected from 49 respondents.
Out of the 49 respondents which filled the survey, 19 were working professionals while 30 were students. Age wise, 27 belonged to the age group of 21-25, 18 to 26-30 and 4 to the group of 30+ years.
59.18% people said that they do pay attention to billboards while outside but only 36.73% said that they pay attention to print ads while reading a newspaper and not searching specifically for ads or promotions.
When asked about the need for a marketer to use new and innovative ways to catch people’s attention, almost all people agreed.
People were also asked about the medium that they notice more and hence are better in creating awareness. The results clearly show that though people do notice the conventional outdoor media, they also feel that anything different or unusual would capture their attention more. The results are shown in the alongside graph. Finally, a direct question was asked about comparing the two advertisements shown above and their preference in terms of the Ad they feel they’d be able to recall more clearly, afterwards. The results clearly show that ambient advertisements are preferred over conventional advertisements. Qualitative inputs from the research specify that people find these advertisements better to recall because of their atypical nature. This again is congruent to the above results that consumers can be attracted better by using unconventional media.
The secondary as well as primary research both show that now Ambient Marketing is the way to go for companies if they want to attract more and more consumers towards their products and brands. The consumers have got used to of the presence of the conventional media and hence the recall value of the same has gone down. Even consumers expect that marketers employ newer and innovative tactics to capture their attention.
However, Ambient Marketing as a field has a long way to go before it can be considered as a mass media. The drivers that give fillip to Ambient Marketing are innovation, creativity, unusualness, fun and the ability to coalesce with everyday life of consumers. At the same time, the uniqueness and rarity of these campaigns create a mark in consumers mind and help the brand to increase recall. So, marketers must be careful not to overuse this medium as no consumer would like to find an advertisement everywhere he looks, no matter how different it is from previous works. Marketers should also come up with diligently defined metrics which can help companies measure the return on an Ambient Marketing campaign.
With brands across telecommunications, FMCG and financial sectors (and even the likes of movie production companies) spending on ambient campaigns, it could be that the market here is only just starting to realise its full potential. Inevitably though, without a robust measurement currency in place, it is a niche that will have to fight for a smaller slice of many brands' marketing budgets than traditional media.
Dr. Sanjeeb Kakoty ,Varshik Nimmagadda, Kaushik Subramanian, Pranab Talukdar| IIMS
“The struggle to save the global environment is in one way much more difficult than the struggle to vanquish Hitler, for this time the war is with ourselves. We are the enemy, just as we have only ourselves as allies.”~ Al Gore Majority of the corporate world is still in the dark about the actual practicality of sustainable business. This article questions the very rationale of development and delves into the world of sustainable business practices with the help of case studies of actual corporations that are changing the way businesses around the world operate.
Whenever I think of the concept of sustainability in marketing, my mind wanders back to a train journey I had undertaken as a young undergraduate. As I sat down and the train began to pull out of the station, an elderly dhoti clad person, sitting next to me picked up a conversation. He came to Shillong as a thirteen year old. He painted for me the picture of Shillong in 1945, with vivid and vibrant strokes of color. His first job was a salary of Rs 8/- a month. He kept on narrating how hard he worked to accumulate his first hundred rupees that became the seed capital to start his own business and also about the achievement of becoming the proud owner of five shops and figuring among the top businessmen of Shillong at the age of 82. Within a space of a train journey he had given me his entire life story and as we neared Guwahati, he suddenly became quiet and thoughtful. Suddenly, he started talking again. He said “Beta, those days are gone”. Talking of profit margins he said “In my days the philosophy was to eat little so that there will be enough to eat everyday! But now days, the idea seems to be to eat as much as you can today and forget about tomorrow!” He proudly spoke of his Spartan lifestyle. He spoke of his hurt when he sees the new generation squandering away the gains made by decades of toil and sweat. He concluded that the “end was near!”
Fast forward to 2009, I find myself teaching sustainability at IIM Shillong. I talk of concepts in sustainable development, of strategic planning, of supply chain management, of integrated marketing communication. But in the end everything boils down to the question: Is it sustainable? I am brought back to the basic argument put forward by my co-passenger on that train, decades ago. That business is not merely about maximizing profits, but ensuring that those profits keep coming in for all times. Was the old man, who had not even attended high school, suggesting sustainable marketing?
The innate logic of his words taunts me. Is it not ironic that a man, who had not passed high school, had practiced what the most educated find hard to accept? That sustainability is no longer an option but the only way forward. That CSR is no longer Corporate Social Responsibility but Corporate Sustainable Responsibility! That the concept of Triple Bottom Line is not a quirk in accounting, but a fundamental tool to ensure sustainable business. That growth rates and GDP’s are not interchangeable with the term development. Incredibly, in the current scheme of things, if one walks instead of using the vehicle, or decides to open a window instead of turning on the air conditioner, his contribution to the GDP is zero! This makes it apparent that development cannot be measured only in terms of growth rates but one has to include parameters of human development as well as the human happiness index.
One might argue that “the business of business is business”. Hence, the purpose of a B school is to teach and train people to become successful business leaders. Their concern should be about bottom lines and balance sheets. Period!
But what about the contention that “the sustainability of business is sustainability”! If this is acceptable, then businesses cannot rest content by keeping an eye on the quarterly returns alone. Long term sustainability has to be factored in too. While doing so, it may be pertinent to keep in mind that sustainability is not merely “going green”. It is more about realizing the fact that resources of the world are finite and scarce, and best business practice demands that these resources be used judiciously and in a manner that allows its regeneration through the natural process.
But this is easier said than done. Ever since the Industrial Revolution, mankind has embarked on a journey that sought to CONQUER NATURE. By this, everything that mother nature offered , be it plants or animals, minerals or water, mountains or seas, all was sought to be subjugated, used, exploited and controlled for the use of man. This philosophy of the conquest of nature provided the justification for the man’s eternal quest to maximize the exploitation of nature. That this philosophy stood in sharp contrast to the ancient wisdom of the orient, that man is a part of nature and that mankind has no option but to live in harmony with the natural world, did not seem to bother anyone. But come the 21st century, mankind is faced with an unprecedented predicament. Human population is at an all time high. Food productions have largely stagnated. The gap between the affluent and the poor have never been so wider. The prevailing political system seems both unwilling and unable to
addresses these issues head on. This has created seething anger and frustration among the deprived millions.
Perhaps the only way out is to redefine the concept of development and ensure inclusive growth. This would entail a paradigm shift in our orientation. And for this business has to lead the way. But here, it should be kept in mind that the leadership expected of business is not based on an appeal to their sense of philanthropy, but merely a call to the performance of duty enjoined by their position. Such companies have the resources, the administrative apparatus and the required leadership to lead this change. What is required is the will and the mindset. And the time for this is now.
This represents a historic opportunity for businesses. If Brands= product + image, imagine the brand leadership a company would enjoy once it builds around itself the image of sustainability. Setting aside funds for R&D to come up with cutting edge technology that would make companies inherently eco friendly is both possible and profitable. Renewable energy sources are viable options. Bio mimicry could provide solutions to most human problems. Resources can be used in a sustainable manner. Alternative and non wasteful lifestyles can be made into fashion statements. For achieving this,
the onus would lie on the business leaders of the world. Whether it will rise to the occasion could well determine the difference between survival and annihilation. Not just of their companies but of mankind itself.
Walmart’s Sustainability Index: The Game Changer?
Sustainability has become one of the hottest buzzwords in the corporate world today but doubts still persisted over the commitment of the business world to adopt something that was perceived to cost more in the short term. But all that is set to change now with the biggest corporation of them all making an emphatic statement toward sustainability. Walmart has launched the sustainability index which it expects will define its commitment toward becoming a greener organization. The impact of this initiative can be gauged from the fact that Walmart has sales of more than $400 billion and more than a hundred thousand organizations supply to it. The potential greening effect resulting from this decision will be enormous.
The Walmart sustainability index is, as the company puts it, a step toward becoming a greener organization by creating a more transparent supply chain, driving product innovation and ultimately providing their customers with information they need to assess products’ sustainability. The index will be introduced in an iterative process and composes of three steps. The first one, supplier assessment, aims at assessing the sustainability of the major suppliers of Walmart in four broad areas, i.e. energy and climate; material efficiency; natural resources; and people and community. Walmart is not grading the companies per se but it hopes to achieve transparency in the system and believes that the market will force the suppliers to change. The second step is Lifecycle Analysis Database in which a consortium of universities will collaborate with suppliers, retailers, non-governmental organizations and government officials to help organizations to analyze the impact that their product has on the environment. The entire effect of the product from the raw material to the wastage and disposal will be covered in this phase and the products will be rated based on their carbon footprint. The third and most important phase is to provide the customers with a simple way to access and use this information. A consumer application will be developed to do this.
An important factor in the development of this index is that although it was started by Walmart, it will be headed by independent organization with no vested interest in the outcome. The threat of Walmart cutting of suppliers who did not meet its criteria would also act as a powerful factor in forcing the supplier to look at alternative sustainable products and greening their value chains. This would play a major role in raising the power of this index. It has also invited other retailers into the process to facilitate wider acceptance and increase transparency in the process.
However there are some major caveats to the process. The entire business model of Walmart depends on competing on price and this in turn has forced its suppliers to turn to low cost manufacturing in the developing countries. It remains to be seen whether the core customer of Walmart would actually pay more price for sustainable products or whether Walmart can successfully adapt its value chain to produce the goods at the same cost. Critics have also pointed out that the Walmart index is less exhaustive than some indexes that have already been formulated by other companies. For example Nike’s Considered Index scheme is much more sophisticated formulation. But the approach being followed by Walmart is more of a ready fire approach in which the company starts off a sort of beta version of the product and use the inputs from the best minds in the country to continually improve on it.
The consensus seems to be that however imperfect this index might be it represents an important step forward for sustainability and will be the game changer that finally contributes to tipping the debate on sustainability. But the ultimate verdict will be in the market place when customers of Walmart accept and embrace this newer and greener Walmart.
Patagonia - A business case for sustainable marketing
“Working for the earth is not a way to get rich, it is a way to be rich” – Paul Hawken
Corporates have realised that by conducting their business in harmony with nature, they become the actual beneficiaries. The benefits can be felt and seen by the companies across different functional domains, but one domain where it can reap maximum benefits from is marketing. This speciality has come to be known as “sustainable marketing”. Advocates of this concept state that conducting business in an environmentally and ethically responsible way creates a positive buzz about the brand image of the company and results in increased customer patronization.
One such company which has been a pioneer in the field of “sustainable marketing” is Patagonia Shop & Clothing Gear, U.S.A. The mission statement of Patagonia reads thus – “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
Patagonia has kick-started a number of environment friendly programs to promote the cause of a greener and cleaner world. One of their numerous programs include the “Common Threads Garment Recycling Program”, whereby customers can return used/worn out Capelin Performance Baselayers, fleece clothing, cotton t- shirts, certain polyester products etc, which after recycling is used in the manufacture of new clothing.
How does this process work? Once customers return worn out clothing to Patagonia, it’s sent to their centre in Japan, where through the fibre- to- fibre recycling process, new polyester is made. Scientific research has proved that making polyester from recycled material has significantly lesser detrimental effect on the environment than when made out of virgin materials derived from petroleum. Also diverting used materials from landfills reduces solid waste. Similarly diverting them from incinerators results in an energy savings of 76% and CO2 emissions are reduced by 71%.
Another practice that Patagonia follows is the use of recycled paper, certified by the FSC – Forest Stewardship Council, for their catalogues. It’s printed on paper made with 40% post consumer recycled content and the cover is printed on 50% post-consumer recycled content and made with wind power. By doing this they help in conserving energy, reduce wastewater equivalent, solid waste equivalent and greenhouse gases emissions.
Other programs of Patagonia include, Footprint Chronicles, World Trout Initiative, 1% for the Planet, Conservacion Patagonica, Enviro Internship, Conservation Alliance and Organic Exchange.
Positive Impact on their Brand Image
Now how do these initiatives contribute to the success story of Patagonia? The products of Patagonia are targeted at those individuals who are adventure sports enthusiasts, nature lovers and those who are concerned about the conservation of planet earth. In line with their target market, products of Patagonia are nature friendly as mentioned in the preceding segments. Also since Patagonia contributes 1% of their annual turnover to save the planet, customers are inspired to buy Patagonia products and feel good about themselves as they are contributing to a noble cause. As a result of this their recent sales figure stands at around $240 million.
In addition to this Patagonia has a highly accredited website which attracts 25,000 hits daily and is a major sales driver. This website gives in detail description of the various sustainable initiatives of Patagonia and evokes interest among the visitors. These environment friendly manufacturing processes, nature friendly products and sustainable initiatives have a tremendous positive impact on the business of Patagonia, since their target market is such, as mentioned above.
In an interview to The Guardian, Mr. Rob Bondurant, VP of Marketing, says how Wal-Mart has approached them to learn and practice environment friendly business similar to that of Patagonia. These statements go on to highlight the fact that Patagonia is a highly successful company whose brand image as “environment friendly”, has not only garnered them newer customers by the day, but also won them the respect and admiration of giant peers such as Wal-Mart.
No further proof is required to substantiate the fact that working for the earth is “the” way to be rich.
BMW: Efficient Dynamics
Charles Darwin said “It’s not the strongest species that survive, nor the most intelligent, but the ones most responsive to change”
What is this change? When will it come? How should we respond to it? These are the questions that a company should be ready to answer.
BMW was one of the first Automobile Companies to realize the importance of this change. The “change” that has become the Buzz word of today i.e. “Sustainability”, BMW realized it way back during mid 1990s. Those days, globalization was becoming more evident, BMW was about to launch its first SUV X5 series and Mercedes Benz was giving a fierce competition.
Initially, during mid 1990s, BMW started developing fuel saving and alternate vehicle concepts through clean production processes. From here on started the initiative which is now known as the BMW’s “The Efficient Dynamics Concept”. Launched as a standard technology fitted into the entire model range, 1.3 million cars with Efficient Dynamics features are already on the road around the world. Between 1995 and the end of 2008 the BMW Group cut fuel consumption of its vehicles sold in Europe by more than 25 percent. On statistic average, a BMW or a MINI brand (owned by BMW) vehicle burns significantly less fuel than the average new car produced in Germany. In emission front, BMW cars have CO2 emission level of 158 g CO2/km which is 18 grams lesser than the next best competitor. On the whole, BMW is better prepared to face the more stringent environmental regulations planned for 2012 and 2015.
BMW Group’s management board declared sustainability as one of the company’s core strategic principles in 2000 .The BMW Group is the only company in the automobile industry to have been listed in Dow Jones Sustainability Indexes (DJSI) every year since this index was established in 1999. In 2009, for the fifth consecutive year, DJSI rated the BMW Group as the leader in its industry, making it the world’s most sustainable automobile manufacturer. Corporate Sustainability is firmly entrenched throughout its entire value chain - from the development of fuel-saving and alternative vehicle concepts through clean production processes to green recycling practices.
From the marketing point of view, the following is the impact BMW has created on the 5 Ps of marketing:
By far the most efficient premium-class vehicles on the German automobile market are built by BMW and MINI. This gives a cleaner image to the already strong Brand of BMW.
BMW is going to new markets like that of India, Malaysia etc. The green tag helps it to get a better image association in these new markets.
The official site of BMW has the Efficient Dynamics as its theme. It wants people to know about its sustainable practices. Its advertisement also it has the green touch. One of its ads shows BMW thanking the nature: “The Soil”, “The Breeze”; “The Water”. Its Efficient Dynamics is one of the central themes of the Geneva car show for quite some time now.
BMW brand is traditionally very highly priced. It targets the premium segment and this segment is ready to pay extra for getting something closer to nature. Though, BMW has been clever in its communication to its customer. It has always been focused on “Saving Green” rather than “Spending Green”
One of Mckinsey’s researches says that 55 percent of the consumer feel that environmental issues are important and should be addressed by corporate executives. The target group of BMW loves driving fun and sporty, yet elegantly designed cars. They have high interest in outdoor activities. BMW is targeting their emotions with the Green image but also keeping its Sexy image intact with its performance.
BMW is giving focus to its strategic principle of sustainability. It wants to redefine the boundaries of emission and efficiency.
They are coming out with something called the “Thermal Dynamic Generator” which is based on space technology. It basically takes heat from the engine and transforms that into energy which can be used. Thus, when one is pressing the gas, he/she is actually saving energy because heat energy is generated back into the car.
Altaf Fakhrul Mohammed, Thattey Chinmay Sudhir | IIM Ahmedabad
Park Avenue is one of the many brands offered by the Raymond Group. It provides stylish and innovative wardrobe solutions and is famous for its good fittings. The brand provides formal clothing for various occasions like regular office wear, high powered corporate meetings and festivals. Park Avenue started off as a men’s wear brand. In 2007 ‘Park Avenue Woman’, a range of business wear for women was launched. It is designed for the working women professionals of today.
Brand Proposition of the original product- Park Avenue Men’s Wear
The rationale for using the name Park Avenue for Raymond India’s ready to wear men’s clothing (premium segment) was to give a western name which was synchronous with great fabric and great fit.
The brand has over the years undergone many changes as it tries to reach out to the urban young corporate consumer. While it started off as a brand that was fashionable and meant for slightly older customers who trusted the Raymond heritage, the brand repositioned itself later to tap the new managers, who wanted to be different, that emerged in the 90s.
In 2000 the brand came up with the new positioning tagline- ‘Start Something New’. The brand launched a new print and television campaign in order to shed its old image and target the young entrepreneurs who were emerging in the booming IT era. It realized that these young consumers wanted to be different and break away from the traditional ways to start something new.
The logic for this new positioning, along with which the company also came out with smarter designs, was the fact that though Park Avenue was seen as a premium brand, young consumers viewed it lower in status and less fashionable as compared to other brands like Arrow, Van Heusen and Allen Solly. The latest tagline that the brand has chosen is “Play the lead” whereby it is once again trying to target the young ambitious consumer who aspires to be a leader.
Analysis of the Brand “Park Avenue”
On the basis of discussion with consumers, analysis of ads, discussion with retailers and information gathered from the website, we have done the following analysis of the brand -
- Target Audience: The brand targets young middle class corporates who are fashion conscious but need to wear formal clothes on a daily basis. The brand also has a secondary audience in the form of older men which is primarily due to the strong heritage that this brand has.
- Brand Personality: Park Avenue symbolizes a person (male) who likes to explore the unknown, do something different. He has an entrepreneurial spirit and wants to be a leader in everything he does. He is a person who wants to express himself and his style through his clothes.
- Key Brand Values: The key brand values are- Smart, innovative, different, exciting, premium, trusted. We also believe that the brand also stood for masculinity before venturing into female clothing.
The brand has extended into:
- Accessories: Ties, belts, shoes, cufflinks
- Men’s Toiletries: Soaps, deodorants, aftershave, shaving cream, talcum powder, gels
Analysis on the basis of Criteria for Brand Extensions:-
The new category into which a brand extends should be in line with the nature of the parent brand and sometimes even the expertise it represents.
- Accessories: While extending into accessories, Park Avenue leveraged its expertise in clothing and the association that consumers make with looking good in a corporate/formal environment. Thus we believe that this is a natural extension for the brand to give consumers the full range of formal dressing-right from clothes to belts and shoes.
- Men’s Toiletries: Men’s toiletries are an extended part of a man’s looks. We believe that there are products in this category which fit in line with the brand Park Avenue. By doing this, they have made an attempt to evolve into a brand that not only cares about your clothing, but rather a brand that stands for complete male grooming. Thus in this category the company is not leveraging its expertise (clothing) but rather is leveraging its image as a classy male grooming brand.
The value perception
A successful brand extension has to ensure that there is consistency in the value perception of the brand in the new category as compared to in the original category
- Accessories: The accessories that Park Avenue sells are premium and elegant due to which they fit in with the values that the brand stands for. The description that we got for their accessories on their website was as follows:
- Shoes: Crafted from fine European leather and finished with a lustrous shine.
- Ties: Complete your ensemble with the perfect tie from Park Avenue. These exquisite woven and printed ties come in various designs. These silk ties give a new meaning to the term power dressing. From these descriptions, it is clear that Park Avenue continues to maintain the premium, classy, new age, youthful image that it has built in clothing.
- Men’s Toiletries: The deodorants and perfumes that they sell have a label which reads as follows-“Genuine French Eau De Parfum” with information on the pulse points which act as mini fragrance pumps. The French fragrance again adds uniqueness to the perfume which is in line with the brand values. The logic behind entering perfumes and deodorants was that research showed that there was no major perfume brand in the men’s market. Also most international brands were too mild for Indian conditions.
On talking to some consumers we felt that the key differentiating aspects for the Park Avenue soap were its good masculine fragrance and its large size, which again strengthens its masculine image.
On analyzing the distribution strategy of Park Avenue’s toiletries, we saw that the company’s distribution strategy is in line with its pricing strategy. Park Avenue soaps and deodorants are available at normal general stores. Perfumes are available at supermarkets unlike big brands which are available only in shopping malls. This is because the perfumes, which are priced at around Rs. 450, need to be made available easily to the middle class consumer. We felt that the pricing strategy in toiletries was in line with the pricing in clothing which is to appeal to the middle class consumer.
On the whole we felt that Park Avenue’s brand extensions maintained the original values of the parent brand.
The last criterion we used for analyzing the brand extensions was to see the competitive edge. A great brand in one category need not always offer a competitive difference over other brands in another category. It is necessary for the brand to offer consumers some advantage in order for them to adopt the product in the new category.
We felt that the brand’s strong heritage and its ability to produce the best quality clothing helped it to easily extend into ties. However that is not the case for shoes and toiletries. Here the brand is leveraging on values of the parent brand like the premium and classy feeling that have been created over the years.
How are the extensions helping the brand?
It is interesting to see how these brand extensions have helped ‘Park Avenue’ as a brand.
To study this we will first have a look at how a brand pyramid gets built over the time period & then look how various extensions have strengthened the ‘Park Avenue’ brand.
- Presence: Initially consumers become aware that such a brand exists. It’s very important for a brand to have a solid base as it builds on this (i.e. only those who are aware of the brand are likely to consider it for further evaluation). Success of this stage primarily depends on effective communication & word of mouth (which in turn depends on performance, the third stage of this pyramid).
- Relevance: Out of those who are aware of the brand, some find its proposition relevant to their needs. This is the stage where a brand gets into the consideration set of prospective consumers.
- Performance: If the first two stages of the brand has invoked enough interest in the consumers’ mind then they experiment with the brand. Those who find its performance satisfactory at this stage put the brand into their repeat consideration set.
- Advantage: Those consumers who are satisfied at the 3rd stage of pyramid, start repeating the brand & their interaction with the brand starts. At this stage they start experiencing the ‘extra advantages’ that the brand offers to them.
- Bonding: Out of those who have found extra advantages about the brand, some interact very frequently & intensely with the brand & form an emotional bond with the brand.
- Now let’s have a look at how various extensions have strengthened ‘Park Avenue’ overall as a brand:
- Presence: As ‘Park Avenue’ did advertisement (especially Print ads) of accessories & some toiletries (especially soap), it strengthened base (presence) of the ‘Park Avenue’ brand.
- Relevance: By evolving as a “complete grooming solution”, they have increased their relevance to the consumer.
- Performance & Advantage: Here the brand values of ‘Park Avenue’ which were transferred to extensions, boosted these two levels of the brand pyramid.
- Bonding: Consumers’ bonding with the brand increased as it gave them ‘a complete grooming solution’.
- So, we can infer that the extensions have led to strengthening of the brand pyramid (& hence have been successful).
Trends in GLOBAL MARKETING
By Dipak C. Jain
Dean Emeritus Kellogg School of Management Northwestern University
“Insights and agility are the keys for marketers as rules shift, forcing leaders to anticipate changes and embrace ambiguity while adapting to new circumstances in a world with fewer real boundaries.”
Conventional marketing wisdom says that companies must remain close to their customers to thrive. Such intimacy, which is a departure from earlier “make-and-sell” models, invites consumers to help refine offerings, sometimes even as co-creators.
Today, in competitive, technology-driven markets where customers are scarce, classic marketing models no longer function as well, as they once did. As a result, marketers must employ an integrated, holistic, “sense-and-respond” approach to achieve success, in partnership with their customers and leveraging the power of modern distribution and communication channels, most notably the Internet.
With proper cultivation, these relationships can spark breakthroughs, and customer engagement will remain crucial for firms in the years ahead. New scientific tools promise to shed more light on biological factors underlying motivation and behaviour, offering marketers additional resources. Meanwhile, advances in digital technology continue to impact consumer engagement too, putting more power into marketers’ hands, and into the hands of their customers. Old patterns of information asymmetry give rise to more level platforms where all parties have access to data.
The importance of engaging customers through channels like podcasts, Webcasts, blogs, viral marketing and other forms of social networking is difficult to overstate. Marketers must make smart use of these resources to communicate their brand and value proposition to the right audiences. These tools allow for better, cost-effective reach into markets, including niche ones, and let marketers deepen their relationships in those segments.
But these tools are a “two-way street,” with consumers also able to gather and disseminate information quickly about a brand, and they are prepared to share their impressions with anyone who is interested. So unless marketers are wise enough in to understand how they use these resources, technology alone is insufficient for success. Using technology to listen and gain insights that help you genuinely help your customers is the key to success.
True customer engagement means anticipating needs and working with consumers to solve their problems. Given the power of social networking, it’s essential that marketers develop relationships that will have customers talking (positively) about the brand. This word-of-mouth amplifies the brand message, but it is a relationship that requires constant attention — and enough mouths — to work.
Like technology, globalization is a powerful force that must be understood. While these forces have acted to remove many barriers and unite people, globalization has not obliterated all differences. It is still strategically important that marketers understand regional and national variations. In particular, marketers must appreciate the differences in laws, language, business objectives and supply systems that may confront them depending on where they are in the world.
In nations as vast and complex as India or China, for example, it would be a mistake to assume that marketers can simply impose a standard “Western” marketing model. At the same time, it would be an error to assume that there is no similarity between these countries and the U.S. or Western Europe. The truth is more complicated, and marketers must respect and respond to the opportunities and challenges presented by global markets. That said, most of us generally are trained to look for differences. I believe that we should spend more time seeking the common traits that unite us. We may then benefit from shared cultural wisdom, such as that offered by India and its traditions. Ancient knowledge may have much to offer the Western world; in particular, notions of compassion, morality, humility and moderation found in Buddhism, Jainism and other “Eastern” faiths may provide insights whose value enhances both personal and professional life.
For marketers, global competition in a world marked by complex geopolitical and cultural forces is pushing them to think outside their comfort zones as they identify and evaluate new market opportunities. Doing so requires that these practitioners possess several additional skills, including:
1. The ability to anticipate change
2. The courage to manage ambiguity
3. Willingness to adapt to new circumstances to capture value
These talents are central to what we may call the “new economy” that is built largely on managing information and information industries, where firms with the best knowledge are more likely to win, since they will be able to sense and respond to market needs sooner than their peers. As a result, they will have the chance to produce more original, technically superior products that meet customer demand — and do so profitably. With better information, firms have the opportunity to create higher value through customization; what’s more, technology is letting marketers achieve this level of personalization faster than ever before. While the “old economy” model, built around the idea of managing industries, has not disappeared — particularly in many parts of Asia, where manufacturing remains a very important part of the economy — marketers often will find themselves employing aspects of both older and newer models to keep up with rapidly changing commercial environments.
But to gain such insights also requires devising the right metrics to assess the impact of any marketing efforts. Whether focusing on measures like brand awareness, churn, net present value, customer lifetime value or word-of-mouth social media reach, it is important for marketers both to justify their expenditures and demonstrate how the marketing spend is impacting organizational success. While one might be expected to assume that all professional marketers use these kinds of measures, recent research by my colleague, Mark Jeffery, indicates that the vast majority (more than 80 percent) of organizations never adequately track or monitor marketing campaigns using data-driven marketing tools. In addition, some 55 percent of marketing managers reported that their staffs do not understand key metrics. These startling figures suggest that too many marketers are not fully utilizing the analytical tools to produce the information that can help them compete in a challenging global environment.
The ability to sense and respond to change and ambiguity will come to bear within a broader framework of product innovation, process innovation and business model innovation. Each element is integral for success, but marketing’s real future will require new ways to think about business models.
Corporate leaders must be able to think obliquely to determine potential threats and opportunities, and then take strategic action. For example, early in my tenure as a director on an airline’s board, I posed these questions: “Who is our true competition? Who could ultimately displace our company?” Yes, other airlines posed a direct immediate threat, and it was important to understand and respond to such competition. Yet, looking ahead it was clear to me that an entirely different threat existed too: video conferencing.
After all, this technology, as it matured, could result in significant cutbacks on business travel, even while the conferencing helped strengthen customer intimacy. A visionary airline could buy a teleconferencing company and leverage the acquisition, including by turning their airport “red carpet” lounges from cost centers to revenue centers by providing premium clients with a convenient way to enhance productivity.
Such innovation comes from dramatically rethinking one’s core business, just as Google Inc. did when it redefined its value proposition. Other search companies existed before Google, but while those firms regarded their customers as being people conducting a search, Google saw the potential for a business oriented around those being searched. One could cite similar innovations behind the success of Reliance and Wipro and many others.
Marketers looking to change the rules of the game will also find ways to harness the power of diversity. Innovation comes from people, and in global business we can expect the best ideas, regardless of geography, to rise to the top. In the next few decades, developing nations will play a larger role in bringing fresh thinking on many social problems. This is why marketing’s future also must adopt a truly “global perspective” while devising a new way of measuring value that extends “beyond business.” By this I mean embracing endeavors like social entrepreneurship — those ventures making a difference in various ways, from eradicating hunger, disease and pollution to providing better education.
In so doing, marketing secures its future by building on conventional success in the cultivation of a broader mission of social significance that unites the community.
Ms. Devita Saraf is the CEO of VU Technologies and the Executive Director of Zenith Computers. She is the pioneer in bringing the concept of luxury technology to India through VU Technologies. Voted as one of the ten young tycoons by The Week, Ms. Saraf writes for guest columns in the Wall Street Journal and the Economic Times.
Markathon: Zenith has largely focused on lower value products satisfying core benefits, whereas VU is aimed at the upper strata of the society. How do you see the integration of both these business models, as VU must have inherited some of ZENITH values?
Devita Saraf: Innovation in products has to be done, no matter what strata you are selling to. Vu has inherited Zenith’s aggressive and innovative core values, albeit reaching a newer market segment.
Markathon: India being traditionally a price conscious market, what is the scope of luxury technology here?
Devita Saraf: Indian consumers are being exposed to new products and concepts daily. The Indian buyer is as knowledgeable as any international buyer. This also makes him a more discerning buyer because he understands quality and is willing to pay for it. So the scope for luxury technology exists because Indian buyers now want the best.
Markathon: With respect to high end electronic gadgets, Indian consumers generally prefer globally established brands. What is the marketing strategy of VU Technologies to overcome this?
Devita Saraf: Even established brands have to work hard at winning over the Indian consumer. This is because we are an inward looking country, and we don’t follow trends of other countries blindly. This is a good thing, because brands are forced to innovate separately for India. VU has always innovated for customers and that is why we have been able to win hearts and trust in such a short time.
Markathon: Being a niche market, the luxury segment is dependent on word of mouth promotion. In this context how do you create brand awareness without mass marketing?
Devita Saraf: We do a lot of BTL activities throughout the year. For example, we partner with Oberoi Hotels for their events. We associate with other brands that are luxury and also try and do co-branding and events. We also have our own events and exhibitions for Vu Owner’s Club members.
During festive season, when sales are high, we do ATL activities such as newspaper ads, outdoor campaigns, special offers etc.
In marketing, you have to keep attempting a mix of marketing programs because luxury brands are subtle and loud advertising will have a bad effect. So you have to quietly slip your brand into the right places.
We also do high-end ads in magazines such as Vogue, but we haven’t calculated the RoMI there yet. A lot of experimentation is always on at VU.
Markathon: VU Technologies have a presence across major social networking sites. What role do social media play in the exclusive segment that you cater to?
Devita Saraf: Social media is important because of two reasons:
1. Consumers spend a lot of time online and reach amongst a younger segment is very high
2. Social media marketing is a mix between PR and advertising and you can build a good base of current and potential customers by educating them on your brand.
Markathon: With its high focus on innovation, how does the California based VU Technologies design for the Indian consumers?
Devita Saraf: Innovation is at the core of everything we do. We don’t really look at competition for inspiration, but we interact regularly with customers for feedback. For example, in USA people watch home videos in a dark room with a loud surround sound. In India, we like to watch TV in bright sunlit rooms in the day with the tube lights on! So the TV has to be sharp enough in this lighting environment. At VU we keep these insights in mind and create products accordingly.
Markathon: Being among the young business tycoons of India, who are ready to inherit and give new dimensions to their family businesses, what is your vision for the company as well as expectation from the management circle in achieving the same?
Devita Saraf: Young Indians have a chance to play on the global playground, which our seniors did not. We have to play by the rules of global competition and win. But the challenge is to win in our unique way. What this unique way is, I don’t know yet. It’s a learning process.