Better luck this time?

Tata has recently launched the 2012 Edition of the Nano. But as sales continue to sag and customer confidence wears thin, will the facelift really change much for India’s wonder car?

During the run up to its launch and all the hype that surrounded it, the Tata Nano, with its $2,500 price tag, was touted as a dream come true for the common man. It was also a great moment for Ratan Tata personally, who came upon the idea when he saw a family of four riding a scooter in the rain. However, as the events unfolded – right from the political debacle at Singur, West Bengal to the low & erratic sales numbers to the rising component prices to the cases of burning cars – it became clearer to one and all that the car was following a strategy, which Dr. Michael Porter calls ‘stuck in the middle’ – a place where a product is stuck unsure of the positioning it wishes to follow.

We call it the devil and the deep sea issue. The rich man doesn’t want it; the poor man can’t afford it. After adding a bouquet of features to the world’s cheapest car, Tata Motors assumed that it would enjoy a cult-like status in the market – the kind Apple has.

It seemed a given when customers started flocking to showrooms when the Nano bookings opened in 2009. In fact, customers had to buy application forms and only a few lucky ones got their dream car. However, when a car comes that cheap, it has to justify its existence in a product portfolio with far greater numbers. Consider the higher priced Eon, launched by Hyundai Motor Company in October 2011 to primarily compete with Maruti Suzuki Alto. By November 5, the company had already completed over 9,000 bookings! The cheaper Nano sold only 3,868 units in October 2011.

What is more astonishing is the fact that despite reducing production, sales of Nano have been considerably low compared to last year. The production of Tata Nano in April-October 2010 was 40,492 units, which dropped to 34,068 units this year. Similarly, Nano recorded sales of 40,467 units in April-October 2010, much more impressive as compared to this year’s figure at just 33,245 units.

The latest ploy from Tata to rev up the sales is the Tata Nano 2012 edition. It has been launched in three variants – standard, CX and LX. Besides minor modifications with the external design and classier interiors, the car is being powered by a 624 cc and 38 bhp engine and tubeless tyres for a smooth drive and offering it at just about the same prices. The new edition also promises additional promotional offers with a Rs.15,000 cash down payment and discounts on all variants with extended warranty schemes. But will this facelift really be able to do to the Nano what the original product could not?

More than anything else, the Nano project has suffered the burden of flawed assumptions. It was assumed that two wheeler owners will upgrade readily to the Nano. The mistake was, perhaps, in the positioning space that Nano straddled. All advertisements of Nano at that time portrayed the non-rich family – one Nano advertisement even showed the family living in a place similar to a village. This immediately alienated the upwardly mobile city middle class which perchance are the largest segment for car sales. The Nano became, and perhaps still is perceived as, a poor man’s car. Playing on the Rs. 1 lakh pricing tag line too gave a dent to Nano that was unexpected. Consider a family in the present scenario buying a new residential accommodation in a high rise, where the parking lot is sold separately. So to park a Tata Nano, which costs around Rs.1.24 lakh, the customer would have to pay around Rs.2.5-3 lakh for the parking lot.

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Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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India’s Best media agencies 2011 and client expectations

4Ps B&M in association with Indian Council for Market Research (ICMR) brings to you the list of India’s best media agencies – those that are rewriting the rules of the game in today’s contemporary, fast-paced, media-buying world. Additionally is presented a graphical report on client expectations

While consumerism in India is today on an all-time high, product life-cycles are on an all-time low. Even the right product, at the right price point, may not serve the purpose of the marketers sans the right advertising push. Investment is short and in such a circumstance, the companies turn to the media planners, giving their kind more respect and making them more central to the entire decision ad-placement process. Therefore, to zero in on the best media agencies for the year 2011, we initially started with the set of India’s most recalled and successful media agencies. The final list was arrived at by testing each agency on several technical and financial parameters, which included number & quality of clients, billings generated in the recent past and ROI delivered (for their clients). Apart from this, an in-depth survey was also conducted amongst India’s top marketers (which included CMOs and Senior Marketing Executives of companies like Bharti Airtel, Idea Cellular, Fortis Healthcare, Lava International, Ashiana Housing, et al) to understand the factors/parameters they take into consideration while selecting a particular media agency to design the marketing mix of their respective companies. A total of 247 interviews were conducted using a structured questionnaire across five main centers in India namely Mumbai, Delhi, Kolkata, Chennai and Bengaluru. We’ve attempted to ensure that the 4Ps B&M-ICMR listing is cogent, structured and represents the factual positioning of expectations of the respondents.

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Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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How festivals have fed consumerism in India

4Ps B&M brings to you a spectacular analysis on how festivities have transformed the consumer space more than any other factor in the marketing history of India post-liberalisation, and why the years ahead don’t look any different

20 years of celebration
In the post liberalisation era, Indians learnt to earn well, and learnt to spend even better! And 4Ps B&M’s angshuman paul argues that it was the festival season that truly brought the onset of consumerism in India to the marketer’s delight. And consumers aren’t complaining either.

When it comes to defining God, there are numerous typical questions that people have asked and there are as many or more answers that spiritual leaders have come up with. Speculation is never ending on whether God is male or female, does God have a form or is formless, which religion has a better chance at bringing one closer to God, et al. People in India, particularly with the dominant Hindu population, have traditionally worshipped millions of Gods, and speculated on these very questions and come up with even more confusing answers. However, there is one aspect about which we can be more conclusive in comparison – God in the 21st century is, far more often than not, ‘Made in China’!

Surely, there are no surprises there, as most of you who glance at the bottom of those beautiful idols (in organised retail shops as well as myriad gift stores) to check the price tags would have also noticed the fairly ubiquitous name of the country of origin. It may make you feel uncomfortable for a moment, but look at the invaluable lessons in marketing and economics it provides you. When it comes to business, the world (thankfully) speaks one language, belongs to one religion and worships one God (in this case, the God that the customer worships)! The deal goes to the company who is the most competitive and knows the customer best.

From an economy that was supposed to be tapped only if you had a ‘compulsively unrelenting’ death wish, India transformed into a booming customer market for numerous global economies with export surplus, and China is obviously the most well known and prominent. Liberalisation in India was a major inflection point in India that transformed consumer mindset as well as producer orientations in terms of marketing and branding like never before. A study by McKinsey Global Institute in 2007 revealed that if India grows at the current rate, average household incomes would triple by 2025 compared to 2007 and India will become the fifth largest consumer market globally compared to 12th in 2007. In terms of economic classifications, the deprived (bottom of pyramid) households would shrink admirably in number to 49.9 million in 2025 compared to 101.1 million in 2005 and seekers in turn would swell from 10.9 million to 94.9 million and the globals at the top would grow in number from 1.2 million in 2005 to 9.5 million in 2025. Private Final Consumption Expenditure (PFCE) accounted for around 57% of India’s GDP (at market prices) while retail accounted for 37% of PFCE at $291 billion in FY 2009-10 (Deloitte). The report projects that India spends a major portion (59.5%) on Food & Grocery followed by 16.9% on beauty & wellness and 9.9% on Beauty & Fashion. It’s a virtual bonanza for MNCs. “However, liberalisation was not only limited to foreign players coming in but also Indian players, especially small scale players like us could imagine going overseas,” feels Tarang Arora, a Jaipur-based second generation entrepreneur who took his jewelry brand Amrapali to Europe and has 10 exclusive stores in cities like London. During the late 1980s; be it for a scooter or for a sack of cement – demand was high but supply wasn’t, leading to black marketing and monopoly of sellers. So brands like Bajaj, Titan (from the stable of Tatas), Rasna & Onida (from Mirc Electronic) were thriving.

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Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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“Customers are Filtering Their Media Exposure”

Abraham Alapatt gives his set of 10 mega trends which he believes are Transforming The Market today, and why marketers need to adapt to them

In today’s world, everything has to be quick and seamless. Even the classical brand and marketing concepts are being rewritten completely. Here are 10 mega trends which I believe are transforming the market today and that we, as marketers, need to continually adapt to.

1. We cannot control what messages go out to customers: Social networking, virtual communities, blogs, mobile, et al, have ensured this. So, just make sure you have a lot more good messages than bad to share.

2. The power of social networks has multiplied manifold: Harnessed by technology, the influence of social networks is now, both a potent marketing weapon for those who use it well and a dangerous minefield for those who don’t.

3. Increasingly, customers will try to find you – not the other way round: So, you need to be easily visible to succeed. Use tools like search engine optimisation, listings, key words/tagging, wide retail network, kiosks, et al, to maximise your visibility.

4. DIY (Do it Yourself) customers – who want to evaluate products and services without an intermediary and make decisions themselves will become the norm, especially in services: Marketers should merely be facilitators and providers, not sellers or hawkers.

5. Customers want to own and influence brands, and not the other way around as it was traditionally: Let ownership transfer happen without hindrance. Nike, for example, in US borrows design cues for the next season by inviting youngsters (playing basketball in their neighbourhood) to pick new shoes from an open dumpster, and noting down which designs they go for first. They call it “Bro’ing” (marrying “borrowing” with “bro”). Apple is another cult brand that demonstrates this – Apple users are so involved with their company’s new products that they both ensure their success and/or failure – faster than their rivals. So, Apple knows real quick whether they have a winner on their hands or not!

6. Customers want to be able to choose/filter their media & media environment and not be bombarded. Privacy (or perceived privacy) is critical: Anti spam, DND listings, HD DTH subscriptions without ads, DVRs are symptoms of a growing trend, especially with more affluent customers, who want to filter their media exposure every way they can. Decide time, place, content and delivery to suit their mood and convenience.

7. Young like that: With a young demographic increasingly being the largest consumers, every brand is trying to be young, at least in imagery and metaphorically.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Just when you Thought you’d had Enough of Reality

With The Launch of the new Frooti tvc, Parle Agro has Kickstarted a new Genre of Reality TVC through its Clutter-breaking “why grow up?” Campaign series. 4PS B&M takes a first-cut look Behind The Scenes!

Just when you thought reality shows were losing sheen and thus taking away the very element of ‘freshness’ and ‘spontaneity’ (all thanks to allegedly ‘pre-planned’ content), Parle Agro’s Frooti has decided to remodel the concept of reality ‘shows’ into reality ‘TVCs’. Can the concept pack its intended punch? Well, to Parle’s credit, a reality TVC has rarely been done before. In order to dramatise mangoes in an entertaining way while keeping Frooti’s ‘Why Grow Up’ philosophy intact, Creativeland Asia (creative agency for Frooti), along with Equinox Films, has created the mango themed reality game show called ‘Mango Slam Bam Bam Bam’, with an intent to grab eyeballs by showing ordinary people playing innovative and fun games like ‘Mango Rodeo’ and ‘Pluck a Mango,’ and then enjoying a Frooti to refresh and rejuvenate themselves after every crazy round of games. Earning another point is that in this first of its kind Indian reality TVC, the cast has comprised people living next door rather than high profile celebrities or actors or even ‘fixed’ contestants. The set for the game show was created at Priyadarshini Centre in Mulund, Mumbai, where the director, Ram Madhvani (Equinox Films) found a perfect shooting forum with a 17 feet deep pool that could adhere to all the necessary safety norms.

Both the participants and the hosts of the show were made to wear comedic outfits that looked like gigantic mangoes to add to the already high fun quotient of the game show. A set-up of eight cameras was positioned strategically to capture the varied reactions of the participants from all possible angles. Nadia Chauhan, Joint MD & CMO, Parle Agro is confident that these are the differentiating points that make the TVC click. She shares one such anecdote us, “There was a participant who probably had the biggest adrenaline rush of his life just before plucking a mango from a mango wall – and the way he screamed right before grabbing the mango, was enough to scare all those who were standing balanced on the trampoline.” Sajan Raj Kurup, Founder & Creative Chairman, Creativeland Asia talks about another such incident, “There was this one lady who actually fell on the giant Mango Rodeo, and you could not help but laugh your guts out at that visage.” The fact is that when read literally, these incidents don’t perhaps tickle the funny bone to a Chaplin high. But in a reality show, the mere visual of a real life human attempting a comedic move, and failing at that, is enough to achieve at least one critical objective – phenomenal brand recall.

But certainly, the task for Kurup and Madhvani was not that funny as they finally had to go through 150 hours of unedited footage to come up with the two TVCs that are on air currently. Add to it, the post production lasted exactly a month, and Kurup worked closely with the edit members every morning and evening, before and after his office hours. Kurup claims that despite watching the footage for endless hours, he never got bored – and this, he confesses, used to happen to him with other ads. “But this one has only grown on me with time,” he says. In fact, he also talks about how thrilled the participants were when they got to know that their contribution to the show was going to be used in Frooti’s TVCs.

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Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Toyota Liva vs Honda Brio: Marketers at War

So far, Toyota and Honda have more or less shared honours in their Internecine Battle in India. Will The Brio and The Liva change that?

They have competed fiercely with each other in every market they entered, but for their fatherland, it would be sacrilege to choose between the two! After all, both Toyota and Honda have been symbols of Japan’s iconic rise as an industrial superpower post World War II, and are also key to the country’s bid for an economic recovery in this century. Besides these similarities, they have been celebrated case studies for their successful forays into multiple global markets, and have also been viewed quite negatively for the ‘recall’ wave they unleashed some time back.

While Civic and Corolla appeal to a similar TG, both these models have been able to carve their respective spaces in US, Japan and even in the domestic circuit. The same is the scenario with Camry and Accord. At the end of February 2011, Camry and Corolla stood at the 3rd and 4th position respectively in the list of the top selling vehicles in the US market, while Accord and Civic booked the 6th and 8th positions, respectively. However, they are markedly different when it comes to strategic approach. Toyota is one of the more aggressive players, while Honda has a slow and steady approach. “Honda first studies the market and then launches a product,” said a consultant on condition of anonymity.

As far as the Indian market goes, both Honda & Toyota have been equally cautious and have avoided taking the expressway too early. The duo entered the second fastest growing automobile market in the world during the mid-90s and they have been building their consumer base in a slow and steady manner. The playing field has been restricted to a couple of sedans and SUVs so far. In the segments where they have competed, they are more or less even. In the executive segment, Toyota Corolla posted sales of 8,769 units in the April 2010 to January 2011 period as compared to Honda Civic’s sales of 4,121 units in the same period. In the premium segment, Toyota posted sales of 330 units with the Camry & Prius combined, compared to 1,988 units for the Honda Accord in the same period. In the mid-size segment, Honda is the leader with 40,190 unit sales in the period, but Toyota is making waves with over 2,000 units of the Etios sold within two months of launch. In the MUV segment, Innova alone sold over 50,000 units in the period, while CR-V managed only 435 units.

The launch of Toyota Etios Liva and Honda Brio will catapult these companies into the high volume fetching hatchback segment, and this is where the battle will get very interesting. The question is – who looks more par for the course?

“The buzz around Etios started from the Auto Expo that took place in the capital in January last year,” says Sandeep Singh, Deputy Managing Director – Marketing, Toyota Kirloskar Motors. Undoubtedly, a lot of research and synergy has gone into the development of the Brio and the Liva and both Japanese giants would not like to gamble with the success equation for these models in particular. For both companies, Liva and Brio will surely bring new customers under the Toyota and Honda umbrella, but an overwhelming buying experience will build loyalty with these consumers as they upgrade over time. “There is a lot of anticipation for Honda Brio in the market and we are confident that the car will be appreciated by the Indian customers,” says Jnaneswar Sen, Vice President - Marketing, Honda SIEL Cars India.

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Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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D&H Just 68 years!

Their team synergy wasn’t evident initially, but complementary traits have in fact done wonders for Vaybhav and Tirth

"As we speak, we’re in the process of taking on the role of Senior Creative Directors at JWT on the Airtel business,” declares an exuberant Vaybhav Singh, CD, Dhar & Hoon. With the ‘we’, he refers to his better half – Swami Anand Tirth, who also works as Creative Director at the same agency, and has been working with him for eight years now.

Interestingly, the sparks flew off in the air for them when they first exchanged glances at Grey, but with different partners. At that time, a campaign at the agency had propelled them to spend a weekend, as a team, with the execution and finishing stages completed by them. This was a campaign for Hindustan Times which was soon followed by another stepping stone in the form of a campaign done for Business Today. The campaign not only fetched great reviews among their peers but also marked their establishment as a team; as they soon shook hands with the bitter but true reality – that in the field of advertising it takes two to tango most of the time! Thus the duo gradually started using each other as a springboard to push the bar on their work. Since then, they have been sounding boards for each other’s ideas, as well as of those who’ve worked with them. And still, after years the aura, this effervescent relationship is still evergreen.

However, as said, their understanding wasn’t a given at the beginning of their relationship. Tirth reminisces about Vaybhav as he shares, “He thought of me as an absolutely spooky advertising fellow who remains soaked up in his own creativity, while I thought that he was senior to me, as he worked with Pat (Pratap Suthan) at that time.” But the start wasn’t as disastrous as it is made out to be. The duo’s jam sessions after office hours helped them break the ice, until the two overtime became great friends and realised the value of that camraderie. “Being in a business that’s about ideas and people, it’s great to work with people you respect and yet have the freedom to question. And working in a team gives you the opportunity to have both,” admits Vaybhav.

And soon enough, the duo had changed track to agencies like Ogilvy, Saatchi & Saatchi and McCann Erickson. It was their stint in McCann Erickson, however, which was the most special one. The reason was that they got the opportunity to gain as much as possible from the iconic Indian ad guru Prasoon Joshi, an opportunity many others in their ilk would sell their souls for. Over time, everything just “fell in place.” And as of today, Vaybhav says, “It’s the understanding that we’re together to do good work, if not great; that keeps us curious and pushing each other.”

The duo bring with them an incredible client list. At their earlier agencies, they had chalked out creatives for some of the biggest brands like RIG, Reebok, Microsoft, Happydent, Chevrolet, Santro and of course, Hindustan Times to name a few. Despite having already worked with such big names, both of them feel their best work is yet to come. As Vaybhav asserts, “From our last agency, the work we feel closest to was for RIG, a utility clothing brand. For the armchair explorer, the campaigns pushed beyond boundaries to an exploration of landscapes filled with incongruous imagery and visual oddities; and to that extent aroused the interest of both the viewer and the advertising within the category.”

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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