Do you think the brand revamp that Star Plus has gone in for will be successful?

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Sandeepkumar A, Welingkar,Bengaluru

Satellite Television Asia Region popularly known as STAR is owned by Rupert Murdoch’s News Corporation. In the year 1992, the then government of India opened up cable television to private players. Star Networks leveraged the situation to its best benefit. Star Plus (then Star TV) was dominant in the general entertain-ment segment in multiple slots for the next 10 years.

There are lot of reasons for a company to go in for brand revamp, in our case with the new tag line “Rishtawahi, SochNayi” it appears that the channel wants to keep its target audience intact and target them with new age, refreshing content. The challenge for STAR Plus is to stand out in the heavily crowed entertainment clutter. After “Kaun Banega Crorepati” sequence, the content pipe line has literally dried up in comparison to other general entertainment channels.

The brand revamp exercise saw STAR Plus spending around INR 200 million. It has created fantastic awareness among the target audience, but how much of it will translate into interest is a wait and watch proposition.

Not leaving any stone unturned, the channel is in the process of launching series of new programs, some in the prime time, a critical slot it lost to Colors few months back only to regain it later.

Analyzing and anticipating the competition from 200 odd new age general entertainment channels is a sensible strategy it has adopted. Brand revamp has provided the channel with a broader visibility. With solid content and other activities around the brand (STAR TV), it will help it fly through the turbulence safely for few more miles.

Counterview

Bhavesh Kothari, Welingkar,Mumbai

Once upon a time there was a storyteller, whose stories became a hit among the women of every household, women who had grown up listening to grandmother tales. These women started to find themselves in the characters of the storyteller, as the modestsister, or son-forsaken mother--in laws.These stories were identifiable, like they were scenes picked out from their very lives!

This storyteller, none other than Star Plus, had ruled the Indian GEC segment for 7 years in a row but Colors, whose shows weren’t merely household stories, were so different & contemporary that in 2 years, it displaced Star from the no.1 position!

That was the time when Star started to think seriously about its positioning. After a yearlong research, they decided to revamp the brand with a new look, new logo, new tagline and even new shows. On June 14th, 2010, their 10th anniversary, Star Plus unveiled its new red colour looks and the new tagline “Rishtawahi, SochNayi”, clearly signifying that it will follow the path of Colors. But they couldn’t back this ‘new thinking’ promise with its shows. The channel could manage to get only 443 TRPs in the following week, just slightly more than its previous rating.

Channel revamping has seen a varied degree of success in the Indian television scenario; SAB TV revamped itself to success with its light hearted soaps; Sony tried but failed last year. So far, the Star Plus revamping has not brought enough points to its TRP kitty, but it will be interesting to see if the Indian women accept the old storyteller in the new look!

SV - Samsung 3D LED TV

Winner: Karthikeyan T, NITIE, Mumbai

Honorary Mention: Kawal Mahatre, Welingkar, Mumbai

Customer, the new Marketer

Indu Mahapatra, Soumyasankha Maiti, XIMB

A prize money of Rs. 50 lakh and 1% on the turnover: this is the new promo campaign for anyone who comes up with a hit new flavour for Lays. This is in essence the idea of Co-Creation wherein you are involving the consumer (one of the stake holders) of your product into its development.

If winter comes can spring be far behind? So almost at the same time Bingo asked people to create games, quizzes et al, around the theme “Bingo har angle se mmm..”. It got the wackiest of responses from someone suggesting George Bush should say “I’m sending Bingo ChilliDhamaka to Iraq”, and not bombs; to a blind man seeing with his mind’s eye how “yummy” the chips were.

The new trend is to use the global brainpower to develop new products, new commercials, and new virals – whatever a global brainstorming to solve your problems.Every solution has a reward and big corporation is asking Innocentive (Innovation+Incentive) for help.

Customer is the Designer
‘Customer is the King’ not only in terms of purchasing power and negotiation, customers are now contributing everywhere; starting from creating ad campaigns, product or service development contests, co-creating for the corporations by tapping into their intellectual capital, who in exchange give them a direct say in what actually gets produced, manufactured, developed, designed, serviced, or processed. Consumerism will never be the same.

P&G realised it, when the then CEO, A.G. Lafley, found that he was running out of ideas and it was getting impossible to keep up with the demands of consumers. P&G’s Connect + Develop were launched to ask customers to help. Its “Pringles Prints”, where interesting things were printed directly on the chips was launched at almost no cost & in no time. Through ‘Connect’, it found a small bakery in Italy which could do the job for them, proving cheaper & faster than developing the process in-house.

And the results so far have been amzing, to say the least: everything, from Swiffer Wet Jet, Olay Daily Facials, Crest Whitestrips & Night Effects, to Mr. Clean Autodry, Kandoo baby wipes and Lipfinity.

Customer Incentives
Most companies are trying to translate the enthusiasm of their most highly-engaged customers into valuable marketing. For the customers it can be any of the following:
•Status: people love to be seen; love to show off their creative skills and thinking
•Bespoke lifestyle: something consumers have been personally involved in should guarantee goods, services and experiences that are tailored to their needs
•Cold hard cash: getting a well deserved reward or even a profit cut for helping a company develop The Next Big Thing is irresistible
•Employment: in an almost ironic twist, customer-made is turning out to be a great vehicle for finding employment, as it helps companies recruit their next in-house designer, guerrilla advertising agency or brilliant strategist
•Fun and involvement:there's pleasure and satisfaction to be derived from making and creating, especially for brands one loves, likes or at least feels empathy for

How different is it?
Unlike most advertisements which furnish the consumers with all the information about the products, mob marketing ensures consumers get involved with the brand and have a feel of it. Consumers today are often well informed and selling them ideas extolling brands may eventually end up pushing the customer away. It is difficult now to influence consumers purely by overwhelming them with information and ‘nice’ advertisements.

For Example, At the Apple’s iTune’s store, user-created playlists enable customers to upload their favorite music selections and share them with others, who can then buy the songs if they like. Then there is the open marriage between customer-made and user-generated content. The four-year-old South Korean online newspaper OhMyNews works with 26,000 'citizen reporters', who send in stories and pictures to make up 80% of its content. OhMyNews pays up to USD 20 per article, though for many citizen reporters, getting their name in the paper is the real reward. Fiercely outspoken, it has successfully challenged the traditionally conservative press in South Korea.

Effectiveness of the medium
This form of communication with the people makes them feel involved with the brand. If companies create enough buzz about such campaigns then the rest of the promotions can be carried out word of mouth, helping companies cut down their advertising costs. Thus brands can register in the ‘Top of the Mind’ of the consumers and also drive sales.

The Electrolux Design Lab 2005 saw entries from 3,058 design students from 88 countries where they had to design household appliances for the year 2020. 12 finalists participated in a six-day design event in Stockholm, including workshops, model building and a competition for cash-awards, & appliances etc.

Core 77, the industrial design site, teamed up with Timex for a global design competition called Timex2154: The Future of Time to celebrate Timex's 150th anniversary. Designers from more than 72 countries explored and visualized personal and portable timekeeping 150 years into the future, with over 640 entries.

New Trend
Crowd sourcing seems to be a profitable model for businesses. “Innocentive” uses the global brainpower to develop new products, new commercials and new virals; a global brainstorming to solve your problems – can you beat that? Every solution has a reward and big corporations (P&G used Innocentive to launch Pringles print) are turning to Innocentive for help.

Moving past contests and gifts, this is where it gets really interesting: co-creators receive a cut of profits from whatever gets developed based on their input, suggestions, design or ideas.
Danish ‘Vores’ (‘Our Beer’) claims to be the world's first open-source beer. The recipe and the entire brand are published under a Creative Commons license, meaning anyone can use ‘Vores’ recipe to brew the beer or to create a derivative. As long as home brewers publish the recipe under the same license, they’re free to make money from their effort, which includes free access to ‘Vores’ design and branding elements.

Conclusion
But with the gap between traditional business practices and truly empowered consumers now reaching significant proportions, the ‘Customer is Designer’ trend will only accelerate, moving from the fringes to mainstream. In fact, ‘Customer is Designer’ may turn out to be one of the most exciting and long term engines behind change and innovation that the world of business has seen in years: a way of thinking that has the power to redefine the relationship between customer and brand, between consumer and producer, something that taps into the most awesome reservoir of intellectual capital ever assembled.

So, what is the future for the ‘Customer is Designer’ revolution? Maybe Customer-owned? As the number of ‘Customer is Designer’ initiatives grows exponentially, savvy members of generation will demand serious compensation; if not a fair percentage of whatever it is they've co-created. Soon, a simple iPod in exchange for designing the firm's Next Big Thing just won't do. Also expect a slew of intermediaries coordinating millions of knowledge exchanges between producers and consumers, from talent brokers to project managers.

Who disrupts the disruptor?

Asit Kumar Jain, Venture Analyst, Innosight Venture

We can all recall the Aamir Khan Starrer “ThandaMatlab Coca-Cola” campaign which was a genuine attempt by Coca-cola to reinforce its leadership in the cola market. Similarly Pepsi tried hard to match Coca Cola through its Youngistan and now the My Game campaign. But can these leaders with their marketing ploys survive the onslaught of time and virtual competition!!! In the language of value & volume they might be the largest, but hang on; we really don’t know the size of the unorganised (beverage) market thriving at every nook and corner of the country. The article is nothing about numbers or ranking, but unravelling a new development taking place at the bottom of the market. It’s a fight between two unorganised disruptors which ultimately confirms a theory that a disruptive substitute is always replaced by another disruptor. Let’s see how it goes…

The beverage market at least in India has gone through lots of ups and downs. It’s simply because it is not yet the replacement of water as is the case in the western market. Unable to change the behaviour of Indians, consequently all major cola companies began to sell packaged drinking water. As a result they have begun eating away the market share of Bisleri. Many liquor manufacturers are also following their footsteps. (It’s better to sell plain water with more profit then the colored spirit with lots of regulations). But still their biggest competitor is not just water, but many other beverages sold locally, by unnamed manufacturer.

Think of their volume/value of sales in India’s tier 2 and tier 3 cities and you will definitely get a feel of their presence. I am not advocating that they are as big as the branded ones, but they have the capacity to disrupt these incumbents. When packaged water made its entry into India, people were skeptical about its survival but now every other manufacturer is making money and they have also started serving Himalayan glacier water to us Indians! But do they know how susceptible they are to disruptors?

After the entry of the packaged drinking water which is served at around rupees 10 per bottle, there was one similar entry focused only for the people at the bottom of the market. These were water pouches, a sachet cousin of shampoos and masalas. Although they are unfriendly to environment (plastic pollution), they have followed a perfect path of disruption and so are the ones who disrupted them, about whom I will explain later So these water pouch manufacturers started in very small scale, selling only in their localities. The big brands took a notice of the development but chose to ignore it, since it was not hurting their customer base. There was only Bisleri and some other brands which were available in the road side shops and railway stations and Bisleri even became synonymous with bottled water. But the pouch manufacturer without bleeding, continuously served the bottom of the pyramid (1 rupee pouch) and raked in enough capital to march into the next phase of disruption. They started manufacturing bottled water and served the local market. The transportation as well as marketing cost worked in their favour as compared to the branded one’s, eventually which they passed on to the retailer. The retailer was happy enough to sell the local bottle water making double the profit as compared to selling a branded one that too at a low price point. The consumer too was happy enough to take away the local product in the name of Bisleri (bottle water = Bisleri). So what I found is nothing but a trail of disruption working over the years to challenge the incumbents. As explained by Clayton Christensen, the distinguished professor of Harvard and the one who coined the term Disruptive Innovation, disruption works whenever there are underserved or overshot customers. It works in the way as explained below:
1) The incumbent ignores the entrant as their customer base is not affected
2) Rather it gives space to the entrant to grow, as serving the bottom of the market is less profitable
3) It moves upward serving more profitable customers giving the less profitable ones to the new entrants
4) In the mean while the entrant with a very cost effective business model makes profit and passes through a techno-managerial development
5) It goes up-market and starts serving the customer base of incumbent with simplicity, affordability and convenience
6) The customer responds to the call of the entrant and the incumbent does nothing but again flees up market for better profitability with very high quality products and the race continues till the other calls it quit.

We can rightly equate the development of bottled water industry with the theory explained above. Now they have started selling mineral water (an expensive product). Again, the branded players may be growing at double digits but their local colleagues are not way behind. Certainly a time will come when they will be left with no other option but to acquire these local units at sky rocketing prices to quench their thirst for profitability.

Similarly for the cola companies there are disruptors as well, but not working in the right direction. Rather they have become a disruptor to the water pouch industry. These are again locally manufactured soda water or sweet water available at similar price point to the water pouches. Recently I found that water pouches were being banned in one of the major city of Orissa and the biggest beneficiaries of this development were not the bottled water manufacturer but these local made soda/sweet water companies who were certainly a weak disruptor to the cola companies, but finally worked somewhere.

Aviation-Flight Plan to the Dream Destination

Shweta Srivastava, Debanjana Sinha | IIM S

The first quarter of 2010 brought some good news to the Indian airlines industry. According to Directorate General of Civil Aviation (DGCA), domestic air travel in India has reported growth of 20% in the first quarter of 2010. After the double-digit fall in traffic in the first quarter of 2009, this means that passenger numbers are up around 7% in Q1, 2010. India’s domestic traffic slump began in June 2008 and it eroded the bottom line of almost all the carriers and led to industry consolidation. Battling rising Airline Turbine Fuel costs, excessive low cost carrier challenge, errant employee unions and political interference, the dream destination for this sector looks quite far.

The 9th largest market in the world, the aviation industry in India is one of those sectors that saw a constant pace of growth among the other industries in the world over the past many years. One of the most dynamic industries, it has witnessed an exponential growth over the last two decades. Ever since the government’s open sky policy was implemented, the industry trudged on a growth path registering y-o-y growth rate as high as 18% resulting in the entrance of many overseas players. For some time, it seemed that the fairy tale will never end.
Then the recession came and the aviation sector that witnessed a double digit growth in recent years began resorting to rationalisation. Private Indian airlines, which in the past had experienced massive growth, started demanding a “bailout” in the form of reduction in taxes and airport charges etc from the government and even threatened to ground their planes if their demands were not met. A case that needs special mention in this context is that of Air India. The Maharaja piled up accumulated losses of over Rs 7,000 crore and debt exceeding Rs 16,000 crore. As a result, it was forced to cut salaries and cancel order for new jets. The situation got so grave that it headed for a major government sponsored restructuring, after being denied bailout. Joining it, among others, were Kingfisher Airlines, IndiGo and SpiceJet, with accumulated losses of Rs 2,444 crore in 2007-08 and expected to stay in the red in 2008-09 with losses of over Rs 10,000 crore. The following two figuresshows the current condition of the Airlines Industry.


Challenges are many and problems need to be overcome. The current status speaks high of the sad plight the industry is in, but we would like to list some reasons as to why I think the industry will revive and be among the top 5 aviation markets in 5 years.
Standing by the customers
Recession, undoubtedly, took its toll over the aviation industry but one must stop awhile and look at what happened in the western airlines. US Airways started charging for blankets, and they already charge for water leading to a seeming decline in airline provisions and the imposition of new fees on almost every service of value to travellers. Ryanair is famous for being the most hated airline in Europe, since it hardly takes care of its customers. Interestingly, bad times have not resulted in a disregard for customer service in Indian aviation.
Surprisingly, this is not the trend in Indian carriers. Private airlines have ramped up their customer service even in the Economy Class with special focus on personalized service. Jet Airways recently won the Best First Class award, and Kingfisher does everything it can to uphold its 5-Star Airline status. Indigo started the use of automated screening systems to validate passenger names on the boarding passes, a technology used for the first time by an LCC in India. The airlines also came up with special deals on all their routes.
Is it that someone forgot to tell these airlines that they were in a recession? Probably not! But their focus on keeping the customer happy will definitely pay off in the long run. It is a known fact that it costs 5 times as much to bring in a new customer, than to keep an existing one. And this mantra was religiously followed by the Indian carriers by utilizing the “back to basics” of customer service. The loyal customers will never ditch them. And when good times return, these same happy customers will contribute their best to generate enough brand awareness through word-of-mouth to bring in new passengers.

Being resilient pays off
Unlike airlines in the Middle East, most airlines in India do not have any special privileges like reduced oil prices or backing from a government with deep pockets. This forced them to act on their own to cut costs to remain afloat in these difficult times. And they successfully did it. Instead of bothering the customer with frivolous charges like in US airlines, Indian carriers cut costs where it mattered.

Kingfisher Airlines swiftly postponed plans for more overseas route launches like Singapore, Hong Kong etc – since they tend to be resource heavy at the beginning. Jet Airways did away with glamorous but bleeding routes like that to San Francisco. Moreover, they both either delayed the delivery of new aircraft, or leased them to airlines like Turkish and GulfAir. Most airlines in India switched to focused marketing efforts, rather than blanket campaigns to get more bang for the buck. And Kingfisher and Jet Airways came up with a code-share alliance to save costs keeping aside their competitive aspirations. It is this resilience and fast action that will pay off well in the end.

Indian economy among the fastest growing even during recession
The word “recession” has disappeared from the vocabulary now. The International Monetary Fund (IMF) has raised its India growth forecast for 2010 to 9.4 per cent from 8.8 per cent. Despite the fact that India's civil aviation industry was the second largest loser after the US due to the recession worldwide, more than anyone else, it’s the Indian carriers that will reap the best rewards of a still-active Indian economy, if they play their cards right. And till now, they haven’t let most people down when it comes to crises handling.
The Indian Aviation sector has the potential of absorbing up to USD 120 billion of investment by the year 2020. It’s high time that the regulatory and policy framework is aligned with the needs of the civil aviation industry to encourage serious investment in the sector and create a safe, secure, efficient and environment friendly system conducive to healthy growth.


Kingfisher Airlines- CRM the way forward…
Kingfisher Airlines (KFA) is positioned as “Full Frills - True Value Carrier”. In order to achieve this, KFA had to differentiate itself from the then market leader, Jet Airways. It dedicated itself to Customer Relationship Management to initiate its customer base and retain its profitable customers. Some of the initiatives by Kingfisher Airlines are:

Roving Agents
KFA combined its IT expertise and customer service to create the concept of “Roving Agents”. The Roving Agent is a Kingfisher staffer carrying a handheld that is connected to the main reservation and check-in system wirelessly using Wi-Fi, and a portable thermal printer, attached to the staffer's belt, that links with the PDA using Bluetooth. Guests flying with Kingfisher carrying only hand luggage can be intercepted near the entrance. Using a ticket's PNR number, a Roving Agent can help guests choose a seat on their plane, print a boarding pass from the printer on the Rover's belt and send passengers straight to security check. On a typical day, at a busy airport like Mumbai or New Delhi, this initiative can help save a passenger seven or eight minutes. It might not sound like much, but for a business traveler pressed for time and catching a flight at the last moment, eight minutes can come very handy.

Partner Program
Although frequent flier’s program is done by all major airlines in the world, KFA’s partner program tied with best brands in across industries to provide functional quality to its loyalty program, the King Club. It teamed with the stalwarts in various sectors to help its loyalty program members earn and redeem points. All its partnering and co-branding efforts are targeted towards acquiring and retaining its most valuable customers, i.e., the globe-trotting business traveler. Some of the examples are:

• Passengers can earn miles by travelling in the major international airlines around the world. This includes Emirates, Air France, KLM Royal Dutch Airlines, Qatar Airways, Delta Air Lines and Continental Airlines.
• It tied up with the major banks, both national and international, such that the each brand’s star and premium credit cards can earn mileage to King Club customers, through each transaction.
• Their hospitality partners include The Hilton Family, Oberoi Hotels, Leela Hotels, Ananda, Trident Hotels, Ista Hotels, The Park Hotels, The Paul Hotels and ITC-Welcomgroup.
• They even tied up with publishing partners like Harvard Business Review and Fortune to expand its global customer base.
• Such diverse portfolio of partnering is unheard in India and it has provided KFA the competitive advantage over other carriers with true focus that “The right Customer is the king”

Add-On Selling strategies:
Kingfisher Airlines have successfully integrated its Customer Relationship Management to cross selling very well.
This includes transaction in Air Boutique ONLINE – KFA’s premium online reward shop. It is the first of its kind in the Indian airline industry. This is a 24 hour service that is exclusive to King Club members and customers can redeem reward points merchandise.
The reward points or the King Miles for KFA are transferable to family and friends at a nominal value unlike many carriers in India. This flexibility allows KFA to acquire newer customers and strengthen its customer base considerably. It has also integrated its Kingfisher Holidays with its loyalty program. This completes the full circle of impact of UB group in hospitality industry.
All the above examples show the superiority of Kingfisher Airlines in delivering the right mix of technical and functional quality in its service. Its ability to manage customer service at the actual touch points and provide newer avenues of experiencing its superior pre and post journey is unmatched in the India airlines industry. Only time will tell if its customer focused strategy will help it pass through the difficult times of negative bottom line and an immensely regulated airlines industry.

Way Ahead
India is yet to witness a success story like Southwest Airlines where the integration of marketing, CRM and technology and route optimization led to record revenues irrespective of condition of the industry. With the domestic traffic boosting up, it is high time that carriers utilize the best practices in customer service from around the world and turn the tables for the Indian aviation industry.

Pepsodent Kids

DebDipta Majumdar | BIM Trichy

Pepsodent has established itself as a strong, reliable brand commanding the second place in terms of market share next to Colgate from Colgate-Palmolive Ltd. The product line of Pepsodent is wide spread right from lower end to the higher end addressing the basic needs of decay protection & advanced whitening to specific medical needs with Pepsodent G gum care and Pepsodent Sensitive. The customer expectations of the toothpaste market are good taste, fresh breath, clean teeth, more foam and proper cleaning.

Children are influencing around 41% of the total purchases in the total consumer market and children are permitted to make decisions in 65% of the total purchases in the toothpaste purchases. In this case ideally, a product for the children, launched properly should be a runaway success. Realizing this, Pepsodent introduced Pepsodent Kids and Pepsodent Junior in November 2007. Contrary to the expectations, Pepsodent Kids did not taste success. Colgate’s Bubble Fruit is the direct competitor of Pepsodent Kids. Pepsodent Kids comes with an attractive squeeze down pack in attractive colors with three variants, namely -

1. Barbie (pink color)

2. Superman (Blue color)

3. Tom & Jerry (Orange color)

Product Strategy

Retailer observations for product improvement mainly involve two factors:

1. Size of the Pack

2. Color Variants

Small sized packs

As against the popular notion of high price of the Pepsodent Kids, the market can be sustained based on the exclusivity of the product for the Kids. Indeed the high pricing of Pepsodent Kids as observed in survey is not real but a perception created by its ‘Pack Size’. Analyzing the competitor Colgate’s Bubble Fruit pricing strategy sheds light on the same as given below.

Product Weight(Gms.) Price(Rs)

Pepsodent Kids 80 45

Colgate’s Bubble Fruit 40 22

As it can be observed, the pricing is not high but it is the pack size that gives them that impression. Tooth Paste Customers (Parents) can be classified into:

1. Informed Customer - the one who looks into the details deep into the contents of the product even that is not communicated by the marketer.

2. Un-Informed Customer - An uninformed customer is one who doesn’t look into all the details.

? Alternatives

To take the product to the masses, the competitor reference prices in the minds of the customer must be made comparable. In other words, Price need not be reduced but the Pack Size can be reduced. Two inherent advantages in this approach are:

• The uninformed customers’ views that the product is in the same price as others.

• The informed consumer who may be price conscious will try to use it.

An average Indian family of 3 members uses single 80 grams pack for a month. Introducing 80gms pack in the child segment might not be well received because there is only one consumer in place of 3. The size of the family usually determines the quantity of the toothpaste bought and in our case the number of kids in the family forms another important factor.

Hence, reducing the size of the pack may be a viable and apt option to increase the children toothpaste market share.

Color Variants

It’s been a proven fact that children are attracted to bright colors more than the dull dark colors. The variants available in the market are Tom & Jerry (Orange Packs), Barbie (Pink Packs) and Superman (Dark Blue Packs). By the sales figures in the retail outlets, it was seen that the children respond positively only to first two variants.

? Alternatives

• Attractive colors can be introduced to keep children pulled in to try the new variants every time.

• Special limited editions during festive seasons & holidays can be sold to increase revenue.

New cartoon characters in the current day channels (Jetix, Cartoon Network etc.) can be added as new variants. By the TRP ratings, children are found to watch Jetix channel’s Power rangers show more and form a potentially attractive market for the new variant. Moreover, each character in the power rangers can form a pack design adding more income to the sales figure through the collectors’ series.

An additional survey conducted among the children of age 10-14 years indicated that children tend to remember the swadeshi products more than the foreign products. They are able to remember Ruf & Tuf jeans though the kids watch Lee and Wrangler advertisements more. Creating paste for our own Indian characters like Krish or Mowgli in Jungle Book may be more appealing to children.

Marketing Strategy

First, the child, the consumer watches the advertisement, urges the mother or father for the ownership of the same, parents verifies whether it is safe and purchases for the child.

Alternatively a child can get impressed by the product attractiveness, on visiting a retail outlet or through his friends in school. The urge may come at first sight or because of the impact of the advertisements. But in either case, the stress will be higher only when the product has established its footprint in the child’s mind.

In the second stage Decider or Ultimate Buyer, the parent analyzes the products safety and whether it is good for the child’s health. Based on their inferences and the level of urge by the child they decide to buy the product.

Retailers strongly feel that the ‘urge’ from children is missing in the case of Pepsodent Kids. Hence the marketing strategy must be targeted in two directions – towards the children and the parent.

? Alternatives

• Colorful television commercials featuring cartoon characters of interest for current generation children.

• At the same time, Newspaper/Television commercials must convince the parents that the product is effective and makes brushing fun for children.

Pepsodent has already established trust in the minds of customers as a total family toothpaste. The time of telecast of the two advertisements and the programs which need to be sponsored should be different for two sets of advertisements.

The one which aims at the mothers must be telecasted during day hours and sponsoring the vernacular TV Serial shows will help the product. The message can be “Mummy, my mouth tastes sweet and look my teeth shines like silver.”

The other aimed at the children must be telecasted in Cartoon Network, Jetix, Animax and others. Thus, the marketing strategy gets tuned to winning the child’s heart and parent’s trust at the same time.

More than the Survey

In an FMCG industry, any consumer contact with theproduct/brand initiates a communication between the product and consumer/customers.The following personal suggestions derived from the survey, emphasis on the way the product is presented to the end customers.

“Pepsodent Junior” and “Pepsodent Kids” can be bundled together. Pepsodent Junior launched along with the Pepsodent Kids is moving well in the market. Pepsodent Junior can be bundled with the Pepsodent Kids in a small total dental solution kit.

1. The kit can be introduced along with a “Kids Stand” to hold only the Pepsodent Kids toothpaste and toothbrush in sockets. The sockets must be made to hold only the Pepsodent products.

2. The Kids Stand can be introduced in variety of themes matching different characters. The kit can also contain a booklet/ sheet depicting a small story or characters description. The children view these as their toy and also feel proud of owning it.

3. Children generally use the toothbrush for 3 months but the toothpaste gets over in a month considering 40 gm pack. Hence once the tooth paste gets over, children refill the socket with Pepsodent Kids toothpaste in that place.

Promotional Strategy

Every children’s product has to be promoted not only through TV commercials but also from non-conventional events. A nation/State wide drawing competition can be organized for children of classes 1 to 7 standard. The competition can be conducted only to the children belonging to upper class, upper middle class and middle class families i.e., in the schools in which they study. The competition can be conducted in district levels, state levels and national levels. Prizes can be characters in the Kids series or the Pepsodent Kids Kit itself.

This campaign must be supported with a newspaper campaign and the combined cost will be lesser than a TV campaigns. The school management will support the initiative since such initiatives bring out the inborn talents of the children.

Display pattern

During the personal interviews with the store managers and the assistants, it is noticed that in some stores that the product is not actually displayed at a height easily assessable to the children. In a research for consumer browsing pattern of the products done with help of eye cameras fitted in the goggles, it is found that the adults mainly look at the products at the level between their chest and hip and the children at their eye level. Adults do not generally look at the products at their eye level. HUL’s sales representative must be informed to ensure the product placement at a height range of 110cms to 130cms. This enables easy identification of the product needs by the children and they urge their parent to buy.

Conclusion

By following this marketing strategy we can bring up the sales and market share of Pepsodent Kids in no time.

Temples Go The Corporate Way

Akhil Vinaik, Bijal Dani | NMIMS

India has always been known for its diversity and cultural heritage. It is home to various religions and communities that co-exist in harmony. Hindu temples now have a noticeable presence across the globe and form the cynosure of India’s cultural tradition and spiritual succour.

TEMPLES – TOURIST ATTRACTION
Since time immemorial, temples have been identified as major tourist attractions for India. Not only do they qualify as brand ambassadors of our nation’s heritage, but also contribute to the economy. Therefore, it becomes imperative to view temples and their potential from a different lens. Over the years, temples have evolved from being just centres of pilgrimage and prayers. They are now avenues where people seek knowledge on Hindu philosophy, Spiritual Transcendence, Ayurveda, Yoga and Meditation. Temple Tourism is emerging as a powerful and popular stream of the tourism industry, much ahead of eco-tourism, adventure tourism, heritage tourism, medical tourism “Having temples listed on the stock exchange” A distant reality! Not Really? The tourism industry has huge growth potential due to increased disposable income in the hands of growing middle class population and Government campaigns similar to “Incredible India” to promote tourism.

For instance, in Andhra Pradesh, heritage temples are being spruced up. Under development of heritage tourism circuit, then Tourism Minister and the present Municipal Administration Minister Anam Ramnarayana Reddy has sanctioned Rs.23 crore in 2008 for developing heritage temples in the district and lot of development work is under progress.

BULLION VAULT
India is arguably the largest bullion market in the world. It is worth noting that Indian temples own more gold than even the Reserve Bank of India. This is primarily due to the fact that temples receive gold coins and jewellery as donations. The scale is so huge that commercial banks have tie ups with temples to process their gold holdings and big temples have dedicated departments to manage their donations that come in the form of gold and silver ornaments, in addition to coins.

SERVICE BRANDING
Having understood the significance of temples beyond the obvious, it would be worthwhile to study and analyse how they can be moulded in the shape of brands having a distinct image in the minds of the people. In a broad sense, they are service units catering to a mass population of pilgrims and worshippers. Therefore the need for temples to be recognised brands with best-in-class service that reaches out to the common man. Three essentials of a service branding exercise encompass Reach, Recognition and Reputation, the 3 R’s as we popularly call them.
Drawing a parallel with any service industry where operations form an integral part of any business entity’s existence, temples too need a strong operational plan in place. In essence, it would mean formulating a framework and set guidelines to provide service to the visiting pilgrims and make their visit to their place of worship a comfortable and fulfilling one. There is a paradigm shift commensurate to the above reasoning, as can be substantiated by the fact that temples are going in for ISO certifications. An ISO certification essentially signifies a standardization of procedures and processes, practices, monitoring mechanisms and continuous improvement plans. In a nutshell, it is a measure for quality management systems.
A Ram temple in old Bhopal now flaunts an ISO certification for following a quality management system. The certificate was awarded to the trust for standardising the process of worship, for the facilities provided to devotees, for quality management and transparent purchase system, while sticking to their Vedic traditions. The government is also planning to set up an apex body to promote temple tourism and facilitate the modernization of temples in India. In addition, the advent of the internet and its ease has led to revolutionary changes in the way many temples are managed.

THE STATUS QUO

Golden Temple

• Tie up with Financial Institutions: Tied up with HDFC to accept donations online through a secure payment gateway.

Siddhivinayak

• Adoption of technology : Temples now offer convenience of darshan to the devotees through “Online darshan”-Live web casting of the deity
• Dedicated website : The temple officials are in the process of even updating their financial results on the website
• Payment gateways : Provide a mechanism to receive donations, through Credit Card, Online Banking accounts, Cheque, Demand Drafts or Money Orders
• Auction gold and silver ornaments donated by the devotees : Part of the auction money will be given to social causes and the rest will be utilised for activities in temple

Tirumala Tirupathi

• Religious significance : Sri Venkateswara temple in Tirumala has a significant importance in India’s religious milieu
• Service facilities : In the form of sevas, with advance booking
• Online Booking : Sevas constitute special prayers and can now be booked online
• Online donations
• Distribution and marketing : Cassettes and CD’s of Vedas, Sankirtanas and Pravachanams
• Purohita Sangham: Dedicated association known as the ‘Purohita Sangham’ which conducts marriages and other sacred functions like naming ceremony, etc.
• Strategic Tie-ups :Tie-ups with professional marriage agencies and cottages are provided for accommodation

ISKCON

• Spiritually rich culture :Individuals from all over the world visit Sri Sri Radha Rasabihari temple and spend a few days to benefit from and inculcate values from the spiritual culture
• Guesthouses & Travel assistance: The Guesthouse at ISKCON Juhu facilitates guests to attend spiritual program at the temple. Dedicated department to facilitate travel for devotees
• Imparts spiritual education : Versatile Institution actively disseminating spiritual education

THE HIDDEN AGENDA
The above mentioned snapshots of various practices lead us to conclude that temples are indeed more than mere places of worship. The whole concept now encompasses a gamut of activities and services. These make the entire experience an enriching and memorable one for the common man. The brains behind this have appropriately struck the right chord with the Indian populace and tapped the right nerve, namely, the emotional and religious sentiment. Indians, by tradition relate personal goals, joys and sorrows to their religious Gods. Thus, a huge potential to make it a viable and sustainable model.
It is worth noting that many temples are now trying to have a global presence to reach out to the Indian community abroad. In particular, this is of relevance in UK, USA, Canada, Singapore and many such countries where there are a lot of Indian immigrants.
In addition to this, movies are a very strong medium by which Indian temples and tourism can be promoted. In fact many Bollywood movies use exotic temple locales to shoot important sequences. For instance, Rab Ne Bana Di Jodi, is the most recent example. Considering the massive spread and reach of Indian cinema, it gives a huge exposure to India as a tourist attraction.

If such is the magnitude to which temples impact the economy of the nation, it would not be a Utopian dream or an improbable suggestion to have Corporates engaging themselves in this domain. As an abstract example, if the Tatas tie up with the Siddhivinayak temple or the Isckon temple, to improve upon the operational aspects and other issues pertaining to its management, the whole concept of the ISO certifications and service quality becomes all the more validated. This would also enable Corporates and business honchos to project such activities as CSR (Corporate Social Responsibility) and enable them to improve and build upon their brand equity. Public-private partnerships to make it a professional set up is also on the cards. However, the core element of any such venture should be to make the entire experience for the devotees a comfortable and fulfilling one.

There has been an instance where Amitabh Bachchan was invited at a temple in South India to offer prayers. Roping in celebrities to endorse a temple can add immensely to the emotional value and connect with the masses. Temples also promote art and culture and provide a platform to veteran and upcoming artists to perform. Sometimes, even commercial shows are held with historical monuments and temples in the backdrop. Such forms of display add to aesthetic beauty around which the event is centered and help pull crowds. In addition, a series of religious festivals are celebrated with fervor. Many of the funded temples are willing to extend necessary financial aid to poor and deserving students.

Strategizing the Road Ahead
Definitely, the marketers and companies would benefit from booming religious tourism, since they would get a platform and discover new territories to sell their products and services. They would also take part in developing these strategic locations along with local development authorities.

• Provide basic sanitary facilities: Along with they could promote their products i.e. if a company sponsors the Free or Paid Rest room facilities, its products would only be sold.
• Constructing rooms : For devotees to stay and promote their products
• Offer free/paid transportation facilities : Promotion of their products/services
• Pharmaceutical companies : Sponsor free medical camps to promote products
• Food products companies : Set up their outlets to sell products with subsidized /actual prices
• Clothing/Garment companies: Set up stalls to promote their products and services

Are the huge investments in 3G spectrum justified for the telecos?

SV - Airtel Express Yourself

Winner: Deep Hegitse, Welingkar, Mumbai

Honorary Mention: Bharat Suvarna, Welingkar, Mumbai

Marketing for Tomorrow: Social Media Marketing

Avirup Ganguly, Tanvi Saraf , IIM B

Today’s marketers are increasingly harnessing the viral power of social media marketing (marketing through online social forums and social networking sites) through innovative campaigns. The proportion of marketing spend allocated to this marketing form is predicted to quadruple in the next 5 years. This article looks at social media marketing through various lenses and examines ways in which it scores over traditional marketing. Validation of social media marketing from a social psychology perspective has been presented and several innovative campaigns have been discussed.

Introduction
What do you do when you are faced with the seemingly impossible job of creating visibility for a tiny brand on a shoestring budget and you are promoting something as unexciting as a blender?
Here’s an idea: Take $50, use it to purchase a rotisserie chicken, Coke, a bag of marbles, golf balls and a URL. Then, turn on the video recorder and ask your CEO to engage in extreme blending wherein he blends marbles, golf-balls, chicken and Coke to show off the power of his blender. Upload this video on your URL and within days, clips of the CEO’s extreme blending exploits will pop-up in YouTube and your brand will get instant fame – all for $50. This is the story of BlendTec, a Utah-based blender’s successful viral marketing campaign.

This is just one among the numerous colourful examples of the ways marketers are harnessing the power of social media marketing.

Recent Developments in Social Media Marketing
Facebook CEO Mark Zuckerberg says that the social networking site now has over 200 million users. If Facebook was a country, it would be the 5th largest in the world! In May 2007, Facebook opened its network to external developers. This marked the beginning of numerous social media marketing innovations. Other common social media marketing tools include Twitter, blogs, LinkedIn, Flickr and YouTube.

According to a 2009 survey, a company’s spend on social media marketing averages around 3.5% of its total marketing budget. This figure is predicted to grow to 6.1% within a year and to 13.7% within five years.

Through the lens of Social Psychology – The Third Person Effect
Sears has a unique strategy for generating word-of-mouth publicity through female Facebook users. Instead of naively pursuing each user on its own, it asks women to ‘help others choose their prom dresses’. Sears has correctly identified the implications of the “Third-person effect”.
Numerous social psychology studies have demonstrated that we consider other people to be more influenced by media than us. This effect is particularly strong in the context of social-networking websites. Hence Facebook users believe that they can help others, who they believe to be more gullible to aggressive marketing communication, by recommending brands they personally believe in.

These and other such behavioral tendencies of consumers can be exploited by social media marketers by careful planning of their campaign.

Transcending Beyond Reality
Nokia has initiated a very successful Facebook marketing campaign called “Somebody Else’s Phone” which is a flash micro-site that allows one to look into the phone of a hero named Luca. The idea is as follows: by exploring somebody else’s phone (text messages, address book, music stored, etc) one can tell a lot about the person and his way of life. Users can then ask Luca questions through his fanpage to gauge if they have understood him correctly.

Nokia’s campaign satisfies a very basic human craving – the urge to peek into other people’s lives. The internet can prove to be extremely liberating for it allows us to indulge in our otherwise difficult to satisfy needs from behind a shroud of anonymity. Nokia’s initiative shows how marketers can satisfy otherwise elusive human emotional needs by using internet technology.

Integrating Social Media Marketing into Brands
Despite the challenges involved, several companies are finding innovative ways of integrating social media into their brands. IKEA is one such example; the company was successful in converting idle browsing into a flourishing bottomline. An account of one of their store managers was created on Facebook and showroom furniture images were uploaded to his Facebook photo album. Using the all-popular “tagging” feature, customers were able to locate items in the pictures and put their name on it. The first person to tag an object got to take it home.

Facebook users started embedding links and images in their own profiles and across news feeds. In turn, thousands and thousands of users willing
ly promoted IKEA. The cost of reaching out to thousands of these users was just that of giving away some furniture.

Social Media Marketing versus Traditional Marketing
There are several avenues through which social media marketing scores over other traditional methods:

•Viral Nature
Consumers initially targeted via social media pass along marketing messages to a large number of their friends and the overall growth of marketing campaigns snowballs very quickly. Most recently, Harley-Davidson zeroed in on social media marketing. They launched social media initiatives on Facebook on July 2008 by creating an account for their brand. They accrued 145,904 fans on Facebook within a period of just 10 months.

•Focussed and Targeted Growth
The rise in fan base achieved by Harley-Davidson was purely through organic growth, without any promotional pushes. Such growth helps companies to reach out to like-minded people, to fish where the fish are, so to speak. Hence, marketing campaigns can be designed in a focussed and targeted way.

•Voice of the Customer
One of the greatest advantages for social media is the voice of the customer. If Harley-Davidson posts a question, such as, ‘Are you in favor of darkening the bike out, blackening the bike out or shiny chrome?’ it is not unusual to receive 300 to 500 comments. Social Media marketing helps companies to intercept what consumers are saying about its brands outside its walls.

•Harnessing Influential Personalities
Traditional marketing often uses celebrity influence to further their brands. Nowadays, bloggers and site owners also represent an exceptional and dedicated segment of the communications and media landscape and their influence is on the rise. Social media marketing helps in harnessing their support and promotion through such endorsers is more economical as well.
HP used this influence to their advantage by providing 31 HP laptops to bloggers to create their own unique contests specifically catered to their readers, winners of which would receive the HP laptops (one per blog). The promotion spread over 31 days, garnered positive discussion about HP on the internet which quickly led to a rise in sales. HP registered a 84% increase in sales of the model being promoted and 14% overall increase of traffic on their website.

• Economics
The total cost of the HP promotion was that of the systems given out and shipping; this amounted to just $ 250,000. The economics of social media initiatives usually compares very favourably in terms of economics with traditional marketing methods producing similar benefits.

Conclusion
Social media marketing offers a unique opportunity to marketers to achieve marketing success by making best use of its viral and focussed nature. The trick to perform well in this game is to understand the forces that guide human interaction and creating innovative campaigns to harness these forces.

Several successful social media marketing campaigns show us that if the campaign is well designed and is innovative enough to create a buzz, the cost of marketing is really low in social media marketing. Hence, in future one expects to see more creative talent in social media marketing and campaigns which will extend the boundaries of creativity these forces.

Marketing in the time of crisis

Amit Agarwal, Sachin Paul, XLRI Jamshedpur

Webster’s define crisis as “an unstable or crucial time or state of affairs in which a decisive change is impending”. In period of crisis, nothing is important for a brand more than ensuring the operating flexibility necessary for innovative and market-driven decisions.

Global financial crisis that struck the whole world in 2008, has affected almost every business. Infact, brand loyalty has become a concept of past as consumers have been switching between the brands too frequently. Everyone is questioning whether the collapse in the brand valuations is going to be the next bubble to burst after financial bubble?

What Market Survey shows
Over the past few decades, financial markets have consistently pushed up the stock prices of brand-owning companies. But, as per analysts at WPP Group-owned advertising agency Young & Rubicam, over the same period consumers have been “falling out of love” with brands. As a part of “brand asset valuator” research program, in 1993, consumers said they trusted 52% of the brands researchers asked them about. But, the trust level has fallen to 25% now.
Researchers have estimated the size of the “brand bubble” to be $4 trillion, much bigger than the size of the subprime mortgage market.

With the survey it is clear that the branding has become more and more difficult with customers focusing more on the product itself rather than the brand.

How to Maintain Marketing Fundamentals in the times of crisis
Maintaining marketing fundamentals will definitely help even in the times of low market sentiment. Here’s what a company can do ride over the hard times:

STP: THE FUNDAMENTAL NECESSITY

Refine the Segmentation
Crisis limits the resources and companies cannot and shall not make products for everyone which makes re-segmentation necessary. The common segmentation techniques based on demographics, geography and even psychographics will not work as they just measure people’s lifestyle, self-image and aspirations but are very weak at predicting what any of these people is actually likely to purchase in any given category. Hence, the segmentation technique selected must find out:
• Who “can pay premium” / “will demand lower prices”
• Which customers drive profits & what values they share
• The dissatisfied customer who is likely to switch
• Those likely to make first-time purchase
• Which benefits and features matter to the customer
• Which attitudes actually affect buying decisions

Refine its Target Segment
Individual marketing can be very costly to start and expand in the crisis times. Hence, the most common marketing to be used shall be either Local Marketing or Niche Marketing whereby we need not make customized products for each and every individual but for people living in a particular area or segments with specific needs. Similarly, the refined segmentation done before shall prevent marketers from doing Full Market Coverage and go for either selective or product or market specialization.

Example: Nike In 1999, Nike started reengineering its customers’ experience around very targeted and specific customers to improve its brand presence. For this, Nike started a global foundation and adopted global processes to position the company for growth as a brand. And the results were clear. It not only improved Nike’s key performance with greater cash flow but also led to improved inventory management and profitability.

Refine the Positioning
The product must have a clear positioning. However, repositioning can always be used to rejuvenate the brand and help in maintaining clarity in positioning. The same can be done via:
Reverse Positioning: This can be done by shedding product attributes the rest of the industry considers sacred & supplementing the stripped product with one or two carefully chosen attributes that would typically be found only in highly augmented products. This practice works best with services industry.

Breakaway positioning: This can be done by getting away from one category & associating with an altogether different one. The conventions of the new category are used to change how the products are consumed and with whom they compete. This works best with Packaged Goods.

Measuring the basics by Marketing Metrics
In tough times, marketers are pressured to deliver hard data on how their efforts increase the company's bottom line. Thus, only a focus on metrics can form an efficient marketing effort.
Following could be done to measure marketing activities:
• Understand objective behind any marketing activity
• Choose correct marketing activity for the goal
• Outline the measurable components of that activity
• Communicate clearly what needs to be measured

But, what to measure is actually becoming trickier these days for the marketers. They need to take a disciplined approach to using accurate, timely and meaningful marketing metrics. In order to help develop more insightful and useful marketing metrics, focus should be on these four fundamentals:

Essential metrics criteria-
It's important not to have too many metrics. Focus on those metrics that:
Return good business results, and,
Can be measured precisely, consistently & cost effectively

Customer-acquisition metrics-
All marketers want to acquire new customers. So metrics to be used to measure the effectiveness of acquisition marketing efforts shall include the following:
• Awareness levels ,
• Purchase-decision drivers ,
• Market share , and,
• Cost of customer acquisition
• Product "wow" metrics

A great product or service is the most important element for building an exceptional customer experience. Examples of product "wow" metric include:
Ease of use,
Satisfaction versus expectations, and,
First-time user experience metrics

Customer-retention metrics-
Marketers want customers not only to continue using products but also to buy other products. Some key customer retention metrics include:
Retention Rate,
Lifetime Value, and,
Brand Equity

Some Best Practices to be followed in the times of Crisis
Protect and cultivate Your Brand: Innovation is the key to success here. Brands can be made or broken in crisis. Retaining profitable customers and reaching out to new ones requires greater innovation. Innovative ideas like new products, services or strategic acquisitions can help in tough times.

Get Closer to Your preeminent Customers: In difficult times, customers look for reliable, trustworthy suppliers. The organization need to segment its customers by risk, size, and value so that it can optimize its sales potential by offering targeted, value-based pricing.

Retain Your peak Talent: Top talent can work wonders for the firm. Thus, organizations need to create programs to retain them and build a team that can help it achieve its growth objectives.
Manage Cash and Run Lean Operations: As credit lines tighten and spending slows, organizations should do the following:
• Manage their cash-to-cash cycle,
• Pay particular attention to balance-sheet health,
• Make liquidity management a vital part of organization’s core processes, and,
• Reduce leverage & boost cash flow through working capital practices to support long-term cash.

Spend on the brand: Market sentiments affect the brand in a long way. Any kind of negative news from market can cause customers to get defensive and gravitate away from brands. Also, companies might be tempted to reduce their marketing expenses and pass these savings in the form of price cuts to customers which may lead to enhanced negative impact on future brand preference.

Spend on brand significance: Brand significance is the alignment of a brand with primary needs & wants of the target audience. Firms need to try & associate the new brand in the domain with the consumer’s personality.

Avoid the sale attitude: Sales promotion provide an attractive alternative to marketers but the impact they have on the position of brand cannot be undone. They puzzle consumers regarding the brand positioning which might change the brand acceptance and association altogether. This can lead to customer dissatisfaction with the brand & loss of brand loyalty.

Example of Brand Revival
Apple Inc.: Apple is a prime example of how a company reinvented itself by creating a customer experience second to none. First, Apple dropped those products that didn’t contribute to its bottom line. Then, the company created a new line of products that took Apple back to its roots (elegance, ease of use, fashionable). Finally, it launched new services like iTunes which was needed for their other products & which they provided for free. A focus on branding, customer experience, and the bottom line was the only way to survive. In last 5 yrs, Apple’s revenue skyrocketed from US$6 bn to $32 bn & its brand value grew from $5 bn to $13 bn.

Consequences and Future Implications
If the Brand Bubble bursts in near future, most of the companies will not be able to save their brands from its effects. But there are certain set of brands whose value continues to rise in both consumer’s and investor’s perspectives. A few of them are Adidas, Apple, IKEA, Red Bull, and Toyota & Tesco. These provide a ray of hope for the future.

But these brands are becoming fewer in number. This shows that the investors and the consumers will increasingly shift brands that will genuinely deliver superior value, from those that are simply going through the motions of branding but are in fact little more than commodities.

Thus, all we need is an altogether new brand-building mantra called brand energy. This brand energy is nothing but the continuous innovation that can excite consumers and builds the brand’s reputation.

Also, there is still a need to stress on the need for marketing considerations to cross corporate silos and learned corporate strategy. If consumer and investor perceptions of brand value have indeed been diverging, a huge re-evaluation of the value of brand-owning companies needs to be done in the near future.

All Lines are Busy!

Gagan Arora | Umamaheshwaran B S | Samita S. Patnaik | Saurabh Kr. Sinha, IIM S

Telecom industry has undergone a sea change since last year from price wars commoditizing the telecom services to the 3G auctions that saw a collection that far exceeded the government’s expectations, giving the hope of achieving a fiscal deficit below 5%. But there is cautious optimism surrounding the future of telecom market with falling ARPU and huge debt in the balance sheets of the service providers not making the investors too happy and sending the market capitalization for a toss. Even in the post 3G auction scenario, Indian telecom giants like Airtel are exploring other markets and acquiring companies. The dynamics of the Reliance empire is making the industry all the more happening with Mukesh Ambani buying stakes in Infotel and Anil Ambani trying to sell stakes in RCom. This article attempts to draw a sketch of the entire industry scenario analysing the strategies of the various players and what future holds for them and for the industry as a whole. We have classified the industry players into three different categories depending on their period of existence and the analysis has been carried out on the GSM mobile service providers…

The last mile?
Take a flashback to the year of 2005, when Airtel, Vodafone and BSNL together constituted 68.91% of Indian GSM cellular subscriber base. Today going by the statistics of May 2010, these three service providers’ together account for 69.03% of the mobile subscribers. Not much of a change. But going deep we gain a significant insight: their combined monthly additions of new subscribers in May 2005 were 68.61% which drastically has come down to 58.97% in May 2010. The numbers were much better in May 2008, but after that the journey has become tougher.

Going by the numbers, Airtel and Vodafone have done remarkably well to grow in this hyper competitive telecomm industry, whereas BSNL has fallen prey to competition and has been consistently losing market share. But this growth story has been changing since last two years with continuous increase in market share of Idea and Aircel. The market share and monthly additions of both Airtel and Vodafone has fallen significantly on a year to year basis in May 2010. The entry of newer players like Tata Docomo, Uninor and Videocon has also increased their worries.
Airtel and Vodafone have followed different marketing strategies for their survival and growth. Starting with differentiation in the market, Vodafone has relied heavily on its brand image; network quality and value added services whereas Airtel has banked on its connectivity, functionality, special tariffs and creating a mass appeal. Airtel has often been identified by its music and its brand ambassadors ranging from Shahrukh Khan to Sachin Tendulkar to Kareena Kapoor to A.R Rehman. On the other hand Vodafone has the brand imagery associated with the Hutch dog and recently through its zoo-zoos. Cricket has been another platform for Airtel for reaching out to masses and it recently bid for Indian cricket team sponsorship and also became the official sponsors of Championship League. Vodafone is also not far behind and it leveraged IPL seasons for maximum eyeballs for its zoo-zoo ads. It is also using FIFA World Cup 2010 for connecting to people and promoting VAS.

Both of the operators have been targeting youth and working professionals with high preference for metros. But because of its association with celebrities and coverage, Airtel has been comparatively more successful in penetrating into rural markets. Both of these operators have embraced changing customer trends in their pricing and introduced attractive tariff plans and discounts for different groups of customers. Off late, neither distribution nor ease of recharging & bill payment has helped anyone of them to gain competitive edge over other. But these are the areas where BSNL has lost the plot in spite of having excellent network coverage.
Partnership is yet another aspect of competition between Airtel and Vodafone. The long-standing partnership with Nokia has given Airtel an edge into latent markets of eastern India by providing infrastructure and managed services. While both of them brought Apple iPhone to India, Vodafone has already partnered with Apple for launching Apple iPhone 4. It has also collaborated with Research in Motion for Blackberry handsets in India. These partnerships are even more important keeping an eye on the launch of 3G services. BSNL has again lagged behind in partnerships and has paid the price for the same.
Considering the 3G spectrum bidding strategy, Airtel has majorly opted for pre-dominated circles bagging 13 of them. Vodafone also adopted similar strategy and won licenses in 9 circles. With such massive investments, they are looking forward to increase their falling ARPU. For that, they are keen to upgrade their existing customers to high end services which may not be very difficult in Delhi and Mumbai but definitely far from easy in other circles because of the fear of losing them. For Delhi and Mumbai, both Airtel and Vodafone together with Reliance will also be looking to snatch subscribers from operators who won’t be able to provide 3G services.

New claimants to the throne?

Had Maggi sauce’s punch line not been “It’s different” then it would have been Tata Docomo’s for sure. This has been the whole essence of Tata Docomo’s brand positioning from day one. It introduced revolutionary pay per second pricing, mytunes and buddynet. In fact it is the only one among Idea, Aircel and Reliance not to have a brand ambassador. Pay per second pricing has changed Indian telecom landscape by forcing all other major telecom providers to follow the suit. This enticing pricing offered by Tata Docomo was a huge success for Docomo as it helped in building up a sizeable segment of consumer base rapidly specially in South India and Maharashtra. In fact, it was Reliance Mobile in first place, which positioned itself on the basis of aggressive pricing strategy, making money on scale but trying to assure it’s not skimming the market. Reliance is accredited with changing the face of Indian telecom market by introducing ultra-cheap calling rates, but the only problem was that the offering was in CDMA technology which failed to entice many and ultimately Reliance mobile CDMA primarily became a bottom-of-pyramid product. Thus, it ended up tapping a substantial chunk of rural market and it has continued to do so by bringing out ultra-cheap products like mobile internet phone at a paltry price of Rs480. The major difference between Reliance’s and Docomo’s strategy has been that Docomo used aggressive pricing to gain market share and then shifted its focus on VAS and innovation whereas Reliance has more or less chosen to stay differentiated through pricing.
Idea and Aircel of late have been involved in engaging customers in creating brand equity by running campaigns like “save paper” & “save tigers” respectively and hence, helping themselves in chalking up effective brand salience points. The brands have been successful in running the campaign as 360 degree campaigns to take them to masses by various media like TV channels, media partners, social websites etc. Initially Idea was a JV between Tata, Birla and AT&T and it created a huge stir in the telecom market. Eventually it did not live up to the hype and AT&T (now Cingular wireless) and Tata sold their stakes to Birla. Idea started with focus on improving the infrastructure and tariff plans and based
its branding on the same. In due course Idea, as a brand, began to take shape around 2006. It got major brand ambassador and then it continued to reap eyeballs when it roped in Abhishek Bachchan as its publicity by sponsoring Mumbai Indians and Deccan Chargers in IPL II and IPL III respectively.

Aircel has come off age with a small beginning. It has found innovative ways of branding. Be it the projection of its logo on the Gateway of India, ‘Just arrived’ boxes at the airport, or the IPL Scoreboard put up at the Mahim Causeway, Aircel has managed to create an unbeatable buzz. The inflated raft Aircel put up on Milan subway in Mumbai to be used during an emergency caused by heavy rains was a huge success and Aircel has planned to take this idea further to other cities. Aircel has shifted its focus on creating differentiation via innovative VAS services rather than innovative pricing as it used to do earlier. It has used its brand ambassador MS Dhoni very effectively for the same. It was the first ones to bring the idea of “pocket internet” and internet recharge cards.
Aircel has won all under tapped and promising circles like North East in 3G auction thus looking to gain strong presence in those circles whereas Docomo and Idea chose to bid for markets where they already have a strong presence. There is one fear with the 3G spectrums that some operators are going to use large amount of these spectrum for managing eternally increasing voice traffic, as Indian VAS market is yet to see highly expected Hockey-stick growth. Fortunately, this will be a temporary trend because to compensate for falling ARPUs (Average revenue per user) companies will have to shift their focus on VAS.

New kids on the block…
Slowly eating into the market share of the telecom giants are the new entrants. But breaking the telecom clutter is easier said than done. The price war, that characterizes this industry, was itself turned into a differentiating factor by Uninor, a telecom venture of Unitech and Telenor. The company, which has today’s ambitious youth looking for quality and service as its target group, attempted to achieve differentiation by
introducing ‘24x7 Badalta Discount Plan’. According to this plan, subscriber would be granted discounts inversely proportional to the traffic handled by the BTS they are currently covered by. Uninor is set to change industry practices with such dynamic pricing. In an industry where towers are the most essential as well as the most expensive investment, dynamic pricing will help utilize BTS better while providing the customers with discounts ranging from 5% to 60%. The discount offered will be continuously updated and displayed on the handset screen thus empowering the subscriber to control his tariffs. This is an attempt to redistribute the call traffic to ensure better utilization of resources and also delivery of better services.

While Uninor had one of the largest launches in terms of footprint, Videocon Telecommunication Ltd. hopes to flex parent company’s distribution muscle to get better reach and availability. The parent company has a good brand recall and retail penetration which gives the service provider a unique advantage. The parent company’s presence in IPL only helped in increasing the brand awareness of the Videocon’s telecommunication services. Uninor which is operational only in 13 circles interestingly stayed away from the 3G auctions. With the target of attaining 8% market share by 2015, Uninor is following the ‘voice is where volume lies’ mantra and is keen on leveraging opportunities available in 2G. On the other hand, to achieve its ambition of 10 Crore subscribers within three years, Videocon, having lost 3G bids is now trying to penetrate data savvy subscribers by providing free access to Facebook, mobile broadband and charging solutions. Its inclination towards mobile data services is based on the realization that though voice is still the mass market, mobile internet penetration continues to improve rapidly across the country.
In a scenario where all the players want to be present in the GSM platform, being restricted to CDMA is a risk that MTS has taken in the hope of high rewards. In LTE (Long Term Evaluation) standard CDMA and GSM would come together. So there might not be much difference in future. Besides, CDMA is better for data services. This gamble can prove profitable for MTS with the development of generic handsets.
Way forward…
This dynamic and vibrant industry has come a long way from incoming calls being charged to dynamic pricing. The consumer seems to be gaining the most – better and cheaper voice and data services. They have got very good dividends giving them the lowest tariffs in the world, courtesy the price wars. Since there cannot be any major price differentiation among operators,

Quality will be the driver. Valuation will move from subscriber base based to a model based on margins and Minutes of usage. With the much anticipated MNP, rise of tariffs will be impossible. Hyper competition is going to be a common place in the coming days with each operator trying to come up with innovative pricing plans to offset that of competitors.
Rapid re-basing of prices by the major players will make the existence of smaller players unviable and the consolidation will happen sooner than later. With business becoming all the more mobile and dynamic, there will be a need for instant data access and this will lead to smartphones ruling the upper middle class urban India. But to penetrate rural market, price has to come down rapidly and there must be applications relevant to the rural population as voice alone won’t help the players much.

Mobile VAS industry will definitely come to the rescue of the industry as it is growing at 50% CAGR. It will compensate for the falling ARPU and aid profit margins. As of now, Voice and rentals form 90% of the revenue with VAS contributing a measly 5% of the revenue. With reality shows ruling the roost, interactivity is increasing between the viewers and program which augurs well for VAS.

Mobile advertising is something that will pick up going by the sheer spread of the subscriber base. Though mass advertising is highly criticized, it is definitely a very good model in terms of returns. In the future, companies are planning to go in for targeted advertising after proper customer profiling which would be welcomed by one and all.
The mobile market in rural India has significant potential with number of subscribers anticipated to grow at a CAGR of around 32% during 2009 to 2012. Experiences in rural India show that information and communications technology can enhance poor people's opportunities by improving their access to markets, health care and education. Post 3G, fishermen can negotiate prices for their catch before heading for shore by sending in pictures of the type of fish they possess. Similarly, farmers who have perishable produce can use 3G services to bargain for the best prices before harvesting and giving the middlemen a skip. The amount of infrastructure needed will be even more when 3G rolls out because of the need for more closely spaced towers as 3G waves being of the higher frequency, cannot travel long distances without distortion. There is the political pressure group acting with TRAI insisting that telecom gear makers submit their entire source code to while away any security fears. Currently, Regulators hold the trump card as the players can’t afford to lose out on the huge business opportunity that India presents.
Even though the industry is cluttered, innovations just don’t stop. For instance, Tata Teleservices and Future group have launched a co-branded GSM mobile service called T24 that offers free talk time to customers who have purchased things at retail outlets owned by future group across the country. We have seen some innovations in the retail sector when discounts are offered. But this is one step further.

The industry is going to provide us with high intensity drama. The players have betted big in spite of huge uncertainties and it seems they will go to any distance to win the battle. With so many stakeholders eagerly looking forward to see how the drama unfolds, it is going to be interesting days ahead. It has all the makings of a perfect case study.