You can take the custoMEr out of Me but you cannot take the ME out of customer..

Do I sound obsessed with the words ‘customer’ and ‘me’? None but my mentor is to blame! 😉 In one of our conversation about social media he brought up ‘CustoMEr’…No, it’s not a typo but customer with a capital ME. Sounds geeky, does it? As you proceed reading this blog, I am sure you would find out there’s no differentio-integral calculus or any rocket-science here. It’s all about realizing that ‘There’s a little bit of ME in every customer’s life.’

 

Let’s get back to where this discussion started- the Social Media. The entire web-space is all about ME! And Social media is so potent because that’s a platform where the ME of every individual gets a dice to voice opinion, to share ideas, caution others of one’s mistake and learn from others’; where an individual is a user-id, a status message, a face behind that ‘green light’; anything but an anonymous member of a herd. Social networks thrive because they give a voice to an id, humane opinion to a silent profile; an identity to an Internet page. Each of this individually and/or combined form the ME I have been referring time and again. My friend-list, my communities, my tweets; it’s all about ME honey! 😉

custoMEr era

Social Media is the boldest manifestation of customerization however seeds of custoMErization were planted the day mass production was burnt on a pyre; when a generic and bland black led to a rainbow of customer choice/options. Even Sachetization is a milestone in the journey of custoMErization when manufacturers had to do away with ‘one-size fits all’ approach and break their offerings quantified to varied requirements. Convergence or bundling of products/services as per consumer’s requirement is another illustration of ME taking market dynamics by storm. It has arrived and arrived with a thunder. Now the size of the cake has to be modified as per individual’s bite!

 

Marketing constitution now draws from major political constitutions in terms of ‘freedom of expression‘. A company’s success is determined not only by sales figure but its ability to engage its customers. It depends on well is a corporate listening to its customers; how well is it catering to the ME of each custoMEr. This ME factor is now embedded intricately with any customer. In short you can take the customer out of ME but you cannot take the ME out of custoMEr. So Happy CustoMErization people! 🙂

~ Moupiya Niyogi

Batch of 2012

MBA, DoMS IIT Madras

(UN)BRANDED (UN)ORGANISED

(Un)organized retail

Look at this picture carefully. What does it remind you apart from a sunny summer afternoon? The setting looks mundane but I learnt a very important marketing lesson which is best captured in this picture.

We often tend to dismiss everything which is not packed or branded as an offering from “unorganised” sector. This market which includes sherbets, freshly crushed juices, ready to serve fruit based drinks, regional and traditional drinks together form a big threat to the giants we know as Coca cola and Pepsi. The Goliath here could be making a costly mistake in ignoring this David which they prefer calling “unorganised”.

A closer look at this picture will help us understand the business Model. The shopkeeper has made sure that anyone who enters the shop finds something for him/her self. The offering includes tea, mineral water, soft drinks fruit based packed beverages in addition to own offering of fresh juices. We might have read and discussed the classic “Marketing Myopia” threadbare in our B-schools, but these are the real practitioners of that framework. The shop goes beyond a fresh juice shop and offers everything which anyone can demand. He definitely runs his business in a more organised way.

Let us go a layer further into his business model. He smartly uses the “push” and “pull” concepts of marketing without ever having read a page of the Marketing Guru –Shri Shri Philip Kotler.He pushes his own offering of fresh juices as the prime product for 2 reasons. First that is his core business and second that it offers a sales margin no packed, branded product can ever give. Add to it the constraint that the fresh fruits are perishable and have a shorter shelf life.

A fruit based beverage can be broadly classified as a thirst quencher, an instant refresher, a healthy nutritive drink. More often than not, the purchase process is a “low involvement process” or an instant decision. Another interesting observation in this purchase process is that the occasion plays a major role in selecting the appropriate drink. For instance, a person would prefer a glass of freshly crushed juice after morning exercise, a packed juice along with breakfast, tea in office, carbonated drinks at lunch and a cola drink with friends at a fast food corner.

Another equally important factor is the easy availability of the desired beverage at the right time. For instance, a person gets used to having a particular beverage at a particular time not only because he precisely wants it but perhaps because that is what is available. At the same time, there are beverages like Tea which has a very strong association with the daily schedule of individuals. For instance, it is very difficult to substitute the early morning tea or an evening tea.

Convenience to buy, to drink, to serve and to carry is another set of factors which cannot be overlooked. In fact, this factor is one of the drivers of the constant innovation in the packaging of beverages.

Let us now go back to our fresh fruit juice corner to understand how does he take care of this complex matrix of the variables influencing the buying behaviour .He keeps the branded beverages to add his portfolio and hedge the risks. But as far as sales are concerned, he is least bothered about the targets of the respective Area Sales Manager. He leaves the sales to the “pull” of the individual brands and the efforts of the Sales team of the individual products. Banking on these shop owners’ initiatives to drive sales of these so called “organised” branded products to achieve the Sales targets will be a costly mistake a novice is likely to make at the operational level

But a bigger mistake at the strategic level would be to dismiss these players as “unorganised” just because we cannot see them as a single competitor brand. Let us not forget that they thrive because they are relevant to the customers and offer something which is still not substitutable by the so called organised, branded offerings.

At the outset of my career as a business professional, I’ve started correcting the mistake by calling them “traditional” or “unbranded” products rather than “unorganised”.

~ Vivek Mani

Batch of 2011

MBA, DoMS IIT Madras

WORD OF MOUTH

When the consumer is exposed to a surfeit of choices, brands and their advertising campaigns, what really helps making up his mind is valued opinions expressed directly to them. This is not only simple but also free thus, making word of mouth ‘The most effective and inexpensive’ tool of marketing.

A majority of buying decisions are influenced by word of mouth. This is high time when word of mouth is taken as an important medium in communication mix. Word of mouth has much greater influence when the customers are buying for the first time or when the product is very expensive. These two factors lead to people seeking more views of their friends and of the opinion leaders around them.

With the digital revolution its influence has to grow. Digitalization has empowered word of mouth by enhancing its reach from one-on-one communication to a one-to-many. Social networks are the media through which the reviews and opinions are being disseminated to the world these days.  Some customers can even go the extent of creating Web sites or blogs to praise or punish brands.

Today we find that the word of mouth marketing is not used to its full potential by leading companies.  Only a few companies invest in generating intentional word of mouth, firstly because the effects of word of mouth are difficult to measure and secondly many marketers are unsure if they can successfully create a buzz which can transform into successful campaigns.

There are many ways in which word of mouth starts as a buzz. It most commonly starts when the customer’s has a direct experience   of the product or service. The buzz initiates when the experience does not meet the expectation. It is very rarely that people propagate about products or service when their experience matches expectation. If the expectation is not met, a dissatisfied customer can contribute massively to negative word of mouth hurting the brand sentiments.

A buzz can also start when the customer is exposed to traditional marketing campaigns. The buzz can be about the product or the campaign itself. Use of celebrity endorsers is a common method companies adopt to start a positive buzz, especially during product launches

Marketers need to consider both the direct and the pass-on effects of word of mouth when determining the message and media mix that maximizes the return on their investments

There is clearly an art to effective word-of-mouth campaigning. Yet the science behind word-of-mouth helps reveal how to hone and deploy that art. Word of mouth has a huge potential to become a mainstream marketing campaign and must be utilized effectively.

~ Preetdeep Kaur

MBA Batch of 2012

DoMS IIT Madras

Indian R(et)ailways

In a fervent mood to get back home, my last-minute plan could only acco

mmodate an Ac-2 tier ticket for an ‘only’ 30hours journey. Besides the two movies and a book, what kept me amused was the uninterrupted stream of hawkers. And mind you, it’s not merely about the red-attired pantry-car staff trying to sell cold samosas yelling ”garam samose”; neither about the jhalmuri-wala you patiently wait for. This blog is about the myriad moving, rather, rolling marketplace called Railways.

Since my childhood, I have been tempted to trains- there has always been something more to its inherent charisma of drawing naive eyeballs. It represented a cadre of illegal offerings that my sane and hygiene-conscious parents would never succumb to and I would never tire demanding (in vain undoubtedly): the cholera-endowed (so vouched many ‘wise’ people around me) aam-panna, the unhygienic yet seductively alluring kulfi (which was always made of undrinkable water); the cheap and multi-coloured katthi-meethi lozenge; the list goes on and on. A little independence and just enough pocket-money opened the gates to this heaven and now in reminiscence I realize ”aspiration needn’t necessarily arise out of positive publicity” or ”aspirational brands could well be unbranded”.

Childhood fantasy ride

Even years later, a rail journey is equally entertaining and (if you pause to notice,) illuminating even today! National and regional sentiments run parallelly as two railway tracks- each city brings its own share of variety to the shaking table. 😉

At each state border occurs a transition to the local taste. Come Bihar-Bengal border and enters peppy Jhalmuri, cross Tamil-Andhra border and welcome the cashew-vendors. No rocket science in this, right? Then why am I reinventing the wheel?

Because this 365-day circus called Indian Railways depict the organized modus operandi of the so-called Unorganized Retail. Be it local or express train, some form of retail in all possible permutation and combination of product and communication mix is omnipresent. Each station has its fleet of hawkers: the chaiwalas, the samosa and puri vendors; and amazing is the co-ordination among them: each of them operate in mutually agreed-upon zones and do not tread into each other’s territory. (I have so often seen them changing compartments to avoid any sort of tussle.) Live and let live, rather sell and let sell is their mantra. Awesome is the synchronization they have with the ever-delayed schedules of Indian Railways. Even at 2am, you could be woken up by a “chai chai” somewhere! How many times did you actually find a station devoid of hawkers??

Strange is the game and equally strange are its rules. KYC doesn’t play too important a role here. Rather focus is on generalizing the requirements of this diverse population and matching the resources at hand. No customization yet the products sell, from tea to tooth-brushing daatun, from coffee to cold-drinks, from books to bindi, from pens to puri; the list continues! I believe this has happened with many of us: we boarded a local train empty-handed and ended up buying ‘three bagsful’ of something or the other:

ü  ‘one for my master’: here master being the regular household requirements

ü  ‘One for my dame’: the churis, bindis, and similar paisa-wasool stuff that earns the lion’s share in ladies compartment in particular 😉

ü  ‘And one for the little boy who lives down the lane’: it comprises all the forbidden childhood temptations that I have mentioned earlier that satisfies the child in me, you or every adult.

Well……….. to come back to my story past all the gyan, I must tell 30 hours, (rather 33 hours courtesy Railway Standard Time 😉 ) did fly in a jiffy for you can never be alone or get bored in a train. It’s the only place where you have uninterrupted entertainment and company (whether you like it or not) and in case you have no better work you can also make some business sense out of it as I did.

~Moupiya Niyogi

Batch of 2012

DoMS IIT Madras

THE BURGER WAR

In 1984 McDonald’s spent more than one fourth of a billion on television advertising which is like almost 29,000 dollars an hour. And of-course it was selling a lot to get that kind of money back.

How did this mammoth enterprise get started??

The story begins with the coffee shop, an institution then popular in America which was usually a mom-and-pop institution with a counter and six to seven tables having a range of food and drinks available.

ENTER McDonald’s

McDonald’s was born when Kroc succeeded in launching an offensive attack against the local coffee shop. Later Ray Kroc rapidly expanded its operation to do it on a national scale.

Kroc just made an obvious choice by looking at “what is the most popular item on the coffee shop menu? The hamburger and its second cousin, the cheeseburger”!

More than anything, early expansion of the chain allowed McDonald’s success and its dominance in the developing burger industry. Even today McDonald’s outsells Burger King, Wendy’s and Kentucky Fried Chicken combined.

There are few other factors for the success story to be complete:

v  Company’s strict standards and procedures

v  Its fanatical devotion to cleanliness

v  Intense training given to franchise owners at McDonald’s Hamburger University

Burger King’s Way

The first chain to apply an effective strategy against McDonald’s was Burger King.

After McDonald’s became the largest national fast food chain, they were no longer on the defensive, they were on the offensive.

Offensive principle of finding a weakness in the leader’s strength and attack at that point felt to Burger King. McDonald’s strength was the hamburger, its uniformity, instant delivery and the inexpensiveness.

The weakness inherent in this strength was that it was an assembly line that McDonald’s used to deliver inexpensive hamburgers quickly. For getting anything special you had to wait in a separate line. So in early 70’s Burger King came up with a strategy to exploit this weakness. “Have it your way” said the ads, “without the pickles, without the relish.”Or any-way you wanted it.  At the burger king, the advertising promised, you would not be treated like an outcast if you asked for something special.

 

The battle of the burgers

Burger king has turned again and again to the middle of McDonald’s line. The classic offensive strategy is of exploiting a weakness inherent in a leader who has overextended his line.

The other classic commercial was one that implied that burger king hamburgers taste better because they are flame- broiled as compared with McDonald’s hamburgers, which are fried. “Broiling vs. Frying” instantly captured the attention of the public and the lawyers at McDonald’s who promptly filed suit.

It was the best thing that could happen to burger king. This issue caught the attention of television networks and dozens of TV stations and newspapers around the US. The sales of Burger King shot up by 10 percent.  Meanwhile, as Burger King was busy launching these offensive attacks, another chain was using a different marketing warfare strategy.

Flanking McDonald’s

Founded by a former Kentucky Fried Chicken vice president, Wendy’s after a late start came on fast with a flanking move at the adult end of the burger market. Wendy’s started making its pitch to grownups. No free hats or balloons and have it your way meant “Without pickles, without relish, and without kids.”

Even the smallest burger over there was a quarter-pounder which was shaped square so that it sticks out of the bun. “Hot-N-Juicy” was the advertising strategy that drove the adult burger idea into the public’s consciousness. You could not give your kids a burger like that.

The most important in helping Wendy’s Sales was the fact that the slogan captured the essence of Wendy’s Strategy: the bigger burger for the adult-size appetite.

The low-end guerrilla

No burger war discussion is complete without the mention of White Castle.  This small chain continues to do its business exactly the same way as it has always done. A nostalgia burger is another way to look at the product’s appeal.

There is more than one way to sell a hamburger, as long as you use appropriate strategy. So White Castle peacefully co-exists with their big aggressive neighbours.

The war on burgers has seen many ups and down, many players have come in, tried different strategies and sustained in market in various ways. The war teaches us that marketing strategies can’t be fixed, neither with time, nor with any environment. The marketing strategies have to keep on evolving as the market evolves. So in the nutshell, there are many ways to sell your product, you just need to have to the context right.

Reference: Marketing Warfare –by Al Ries and Jack Trout

 

~Preetdeep Kaur

MBA Batch of 2012

DoMS IIT Madras

CULT(URAL) MARKETING

I am my editor’s biggest nightmare and my editor is my biggest asset. I have the liberty of committing horrendous crimes while writing yet eventually the article comes out clean, thanks to the filter called EDITOR. I sometimes wonder why do people commit such mistakes, first reason can be that the person might be naive to the semantics of the English language, he is excused. Second reason, which better suits me, is that I am too casual to take care of rules and structuring norms in sentences. The second reason has something to do with the culture also, like Indians are considered to be ‘nay – nay sayers’, Australians are considered generally brash, Canadians are considered to be quieter than their Glorious American counterpart, Scandinavians are thought to be warm and friendly etc. There are different PERCEPTIONS about various nationalities.

Why am I talking about cultures here? Today my Prof shared a personal experience with us, while visiting Japan to learn about work culture there he came across a middle level manufacturing firm operated by a man of age 77 at that time. They had a floor manager, a lady, in her mid forties; you might wonder at this moment what is so strange in that, but there is, there is something unusual about this lady. The lady I am telling you about came back to the company after a break of 13 years-,when she had left the company she was working as a ‘foreman’. She wasn’t on a sabbatical these 13 years, she wasn’t working in any other company, so where was she? The lady took a leave on Pregnancy grounds and was busy raising her children back at home, when she considered her kids to be mature enough to be left alone, she decided to come back to the organisation. A colleague of my Prof asked the Grand Old Man of the company, why has she been given a promotion to manager when she had left as a foreman 13 years ago? That Wise man said, “Raising kids and managing a family is a great job in itself, this lady is well equipped with that experience and that experience will help her manage the plant”. In which part of the World do you think this is possible to happen?

Japan is going through a tough time right now. They were facing financial hardships since the global meltdown, Banks were keen to bring about changes in the market scenario and the USP of Japan ‘Quality’ was under question (thanks to multiple automobile call-backs by Toyota) and now a devastating Earthquake and tsunami. Even in this hour of hardship, their leaders sound optimistic, they are raring to get back and get going. I salute their determination and pray for normalcy and better days ahead.

Now let’s get back to the discussion on the cultures and behaviours, when we assess the BEHAVIOUR there are two different aspects to it.

The first one is a fallacy called STEREOTYPING, when we stereotype nationalities we tend to become subjective and try to put our own prejudices, this leads to the phenomenon of categorising and labelling on people. Stereotyping is damaging because we don’t take into account the individual regional differences. Once under the stereotyping cycle we end up ‘not providing’ chance to someone else to prove wrong the stereotype.

The second aspect is ANALYSING CONSUMER BEHAVIOUR. This is poles apart from the stereotyping effect. Every country and every region inside its territory has different set of likes and dislikes. When planning for marketing and sales strategy these factors need to be taken care of.

From whatever I have read till date I can recollect some instances of how culturally adapted marketing strategies did wonders and how culturally not-adapted marketing strategies bombed. If my will to complete this article sustains I will try to include some start-ups on the basis of culture.

India, My Beautiful country in partnership with its perpetually pissed and angry neighbour China has FORCED the world to think of ‘large population’ as an untapped market (I wonder why I see less of family planning advertisement now). Liberalisation made organisations across the globe take notice of India. MNCs started flooding the Indian market. The Indian middle class accepted the foreign electronic products and automobiles almost immediately.  Though ‘Case studies’ were made about products and companies which were sensitive in one form or the other and needed to be Indianised.

McDonalds had to face the cultural shock when people realised that McDonalds offers ‘Beef’ in its menu. Serving No-vegetarian food in a predominant vegetarian society and serving beef on top of that was not a good idea. Cow is considered a sacred animal in India. McDonalds had to scrap off the beef part of their menu. Second wave of change came when the taste buds of Indians were not responding the way McDonalds would have expected! So what did they do? They ‘Indianised the Menu’ and this Indianisation was done not only on the national level but also on the regional level also. McDonalds was not alone in doing this, Dominos, Pizza Hut, Café Coffee day, Barista etc. were forced to put things like Paratha Pizza, Pizza do Pyaza, Chicken  Chettinad sandwich and many more variants.

In a similar segment of Food, Kellogg’s entered India. Kellogg’s wanted people who CONSUME puri-bhaaji, paranthas, idli-vada, Dosa in their breakfast to change to corn flakes. Kellogg’s misread the initial trends, the initial spike in sales was contributed to ‘Curiosity buying’, the middle class did give the brand a chance, but the chances were not repeated. Kellogg’s has made some inroads into the market thanks to the product called biscuits. Kellogg’s tried many other variants. In fact they kept on pumping their other best-selling brands into the Indian market.

I have previously said that automobiles had an easy foray into the Indian market as compared to these foreign food products. The statement is true with the exception of Mercedes Benz E-class, Mercedes opened their plant in 1995 and thought India being just a DEVELOPING market will accept their model which was one step behind the model sold in Europe. The Indian Upper Middle class rejected the idea, by 1997 Mercedes was using only 10% capacity of about 20000 cars. They failed to tap the pace of expectation growth of Indian;, India might have been growing at some modest number but the mindset started flying much earlier and much higher.

Coca Cola bought the brand ThumsUp and forayed into the Indian market. What helped them? They inherited an established distribution network. The Brand had to fight internally with ThumsUp, ThumsUp remained market leader for many years to come. The Indian taste buds found coke ‘less fizzy’. Similar case is with CitiBank and Whirlpool, they had tremendous products but they were not adaptable to the new playground called INDIA.

When Whirlpool entered the Indian market it found a very peculiar taste prevalent in india, there were very few takers for the models with capacity more than 165 litres.

To end this article I want to say two more things.

  1. I have to apologise for not incorporating start-ups on the basis on culture variation in India. I will do it very soon.
  2. Segmentation of customers has gone to an altogether different level because of these prevalent cultural differences. Major market research companies have incorporated various techniques for segmenting the customers across the globe. Segmentation can be seen to be happening on the basis of SEC (socio – economic class) and type of city one resides in. I would recommend everyone to appreciate these differences and how they shape market trends. Products can be a huge success and an outright failure just because of the fact these differences. In fact we should be proud of Late Mr. C.K. Prahlad who gave the theory of the fortune at the bottom of the pyramid, which revolutionized the perception of marketers. On the other hand the theory gave a chance to the lesser fortunate section to savour the luxuries of life ‘What if they come in small sachets’.

~ Saad Bin Hamid

MBA Batch of 2012

DoMS IIT Madras

Does endorsing many products lead to dilution of celebrities’ appeal?

After 3 days of contemplation, I chose this topic to write my next blog, moment I decided on it, I knew I would be on the ‘yes’ side of the debate. Take example of Amitabh Bachchan and Shah Rukh Khan -the two most ubiquitous faces of Indian advertisements they promote anything and everything under the sun,\: garments, cosmetic creams, medicine, cars, colas, candies, sim cards, insurances etc.  Just when I noticed there was no advertisement featuring these two in this cricket world cup, I saw Khan promoting his own film Ra one.  So should not this type of overexposure; dilute brand appeal of celebrity him(her)self as people keep seeing the same face over and over again with every other product? Also look at Bachchan, who endorses Himani cream which is a mass product. Yet how can the audience accept him endorsing Parker; will it not lead to miscommunication? Initially my answer to these questions was yes as I thought there should be consistency in types of products a celebrity endorse and limit on number, so as to maintain credibility of the celebrity.

But while conducting literature survey on celebrity endorsement in India, I found that each endorsement undertaken by these two benefited  the brand. While stagnant brands like Boroline and Ddabur Chawanprash got new interest, Parker became aspirational brand for many, and i10 became a well recognized brand very quickly. This case is also applicable to few other celebrities like Dhoni and Sachin. Appeal of these celebrities cuts across the classes in the nation and association with these celebs bring benefits to the brand.

While analyzing this, I came across two reasons: one, predominant hero worship in our culture; probably it was this reason that Coke had to rope in Aamir Khan for its promotion, while it used to reframe from using celebrities at other places across globe. Secondly humble and dignified conduct of these celebs in public  attributes which are widely appreciated in our culture.

So the number of products and the type of products that a celebrity can endorse entirely depends on the appeal of the celeb but his appeal does not depend upon them (probably case models would be different; blog on that some time later). In case  celeb over exposes himself a market feedback will instill him at his right place, guess Invisible hand working. J

~ Varun Joshi

MBA Batch of 2012

DoMS IIT Madras