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Monthly NewsletterTRANSCRIPT
JUNE 2011
- Monthly Newsletter
INSIDE THE ISSUE
Page 2
Revamp of the “THANDA”:- Coca-Cola in India
Page 3
The Ifs & Buts of Celebrity Endorsements
Page 5
Let them eat cake (Luxury Marketing)
Page 6
Evolution of Marketing trends in Bollywood
Page 7
Experiential Marketing--‐ Is this the future?
Page 8
Pros & Cons of Celebrity Endorsement for a brand in
the Indian Context
After a series of faulty steps during recent years, the beverages of the US$31 billion multinational are back on the shopping lists of Indian consumers, and Coca-Cola India is reaping the re-wards. During the last financial year, its sales volume grew more than 30% and it turned a profit for the first time since it re-turned to the country in 1993 after a 16-year hia-tus. Much of last year's growth for Coca-Cola -- and its rival PepsiCo -- came from urban and semi-urban mar-kets, but experts note that Coca-Cola's rural push helped it consolidate its overall market leadership. Cold Drinks, Very Hot Markets The reality is that the consumers that Coca Cola covers the most today are in hard-to-reach rural India. Coca-Cola realizes that its future will be deter-mined in the countryside. Today's farmer could be tomorrow's city resi-dent; better to capture that market quickly. But unlike others, India is a market that makes neither distribution nor invento-ry management easy, and is hugely diverse in terms of tastes and buying power. Indeed, even established con-sumer-goods companies in India have covered only about a tenth of the country's 600,000 villages.
One reason why Coca-Cola's India for-ay faltered after it re-entered the coun-try was that it did not pay enough at-tention to refrigeration. In India, con-sumers -- urban or rural -- want a "cold drink" and not just a "soft drink," says Jagdip Kapoor MD of Samsika Market-
ing Consultants, a brand marketing-services firm in Mumbai. "Initial 3-4 years it was grappling with whether it should focus on Thums-Up or Coke, and refrigeration took a back seat." The key to the turnaround, Singh says, is a greater focus on refrigera-tion. In electricity-deficient areas, such as some of the hinterland in Uttar Pradesh, Coca-Cola now pro-vides shops with coolers that oper-ate with brine solution so its prod-
ucts can stay chilled up to 12 hours without electricity. In other places, it has trade agreements with local ice makers. As for distribution, Coca-Cola India has moved from a centralized distribution model to a hub-and-spoke approach. Rather than transporting beverages directly from the bottling plants to retailers, its goods are now sent first to a "hub," and are then parcelled out to nearby "spoke" centres when orders need filling. Among the benefits, this approach reduces costs because fewer long-haul journeys in large, uneconomi-cal vehicles are needed, while efficien-cy increases through more timely, tai-lored fulfilment. The High Cost of a Low Price The company also erred in adopting the low price-point strategy like many
other foreign consumer-goods companies to sell their products in rural India. "People think Indian consumers want low-priced products," says Kapoor. "There cannot be a bigger myth. They want good-quality products at a rea-sonable price." It’s a common practice for rural consumers to pay one rupee more for packaged beverages to cover the cost of keeping them chilled. "How can anyone say they are highly price-sensitive consumers?" he asks. Yet about seven years ago, Coca-Cola set out to woo rural consumers by halving the price of a 200-milliliter (seven-ounce) bottle to Rs. 5 (11 cents). Rs. 5 is a “psychological price point"; a price greater than Rs. 5 means the con-sumer has to "break a Rs. 10 note.". Now, Indian retailers found themselves arguing with customers, who wanted the drink for Rs. 5 and were unwilling to pay the extra rupee for refrigera-tion. Meanwhile, a price war erupted as rival PepsiCo matched the Rs. 5 price. Both
firms have since dropped the strategy. "The price barrier has definitely been a
Marketing Tidbits!!
A new anti-wrinkle pill which is based on tomato extracted Lycopene, has been jointly produced by a food company and a
cosmetic company. The companies are Nestle & L'Oreal
Revamp of the “THANDA”:- Coca-Cola in India
- Shashank Kumar Verma
Page 2 MARK - AVENUE
which is expected to help raise awareness of the brand, gener-ate positive associations for it and build purchase intention among its prospective customers. Sometimes, it’s merely a reactionary
step meant to nullify the impact of celebrity endorsement exercised by a competitor. The last decade also wit-
Globally, ‘celebrity endorsement’ is a very powerful marketing tool, em-ployed by firms to build their brand equity. In India, the Lux soap is known to have been endorsed way back in 1941 by the then famous film actress Leela chitnis. The in-troduction of celebrity endorsement in Indian TV advertising is marked by the com-mercials of 80’s featur-ing Kapil Dev, Sunil Gavaskar and Tabas-sum endorsing various consumer products. So, the potential of this concept has been well acknowledged, and tried and tested on the Indian soil for over 70 years now.
Why Endorse?
The compelling rea-sons for companies to yield a strategic posi-tion to celebrity en-dorsement in their marketing schemes vary. Very frequently celebrities are roped in during new brand introductions. The basic idea remains to cash on the popularity, credibility and mass appeal of the celebrities
nessed a novel application of celebrity endorsements for crisis management,
manifested bril-liantly in the Cadbury case to weather the ‘worm’ storm.
What are Fre-
quently En-
dorsed?
Among the in-dustries that have generously employed this marketing tool, and have reaped healthy dividends are those repre-senting FMCG, consumer dura-bles, automo-bile, construc-tion, healthcare and gems and jewellery among others.
Who Endorses?
Among the public figures, cinema and TV actors, artists and sportspersons
problem in rural India," concedes a spokesperson for Coca-Cola India. "Soft drinks that come in a glass bot-tle have to be returned to bottling plants, and no mechanism can provide such drinks at a cheap cost due to freight charges. We are now looking at alternative packaging and how to organize distribution." Neglecting Thums Up There are thornier issues involving brand management that Coca-Cola India has had to confront like its failed
attempt to let the popular Thums-Up brand fade away in the mid-1990s so that its own Coke brand could gain more market share. "Coca-Cola bought Thums-Up when it ruled the market."Initially, Coke ne-glected the Thums-Up brand. Then it started paying attention, and Thums-Up is still number one in India, with Coke and Pepsi following." As Desai of Future Brands notes: "Thums-Up is a brand that refuses to die ... although Coca-Cola never in-
tended to let the brand live. There are huge pockets of enthusiasm for it across the country, and it tends to appeal to rural audiences more than other brands. Wherever it is strong, it has a good rural profile." Today, after the resolution of these problems, can we say that Coca-Cola now is ready to rule the coveted Indi-an market??? Only time will tell......
The Ifs & Buts of Celebrity Endorsements
—Khalid Kamal Rumi
Page 3 BY MERCUR—I
are said to be the first choice for en-dorsements in India, followed by poli-ticians, journalists, activists and some others who have been, or, promise to be very successful in their niche areas.
It is also true that a number of ordi-nary faces also gained celebrity status with their appearance in some iconic ads, like Surf’s Lalitaji, the Complan boy and the Rasna girl to name a few.
Choice of Celebrity
The ‘consideration set’ of personali-ties for endorsement must be guided by the nature of customers a brand serves. Its target market or segment can be broadly identified on the fol-lowing parameters: geographic, de-mographic and psychographic. A com-pany needs to feel the pulse of its cus-tomer as the heart of a successful ce-lebrity endorsement lies there. It de-cides the avatar a celebrity personi-fies, the message she communicates and the medium through which it is conveyed. The lingo, accent, dressing and props used in an ad that may ap-peal to urban customers may not be the most popular and effective ones in rural settings. Similar is the case with distinct genre of celebrities appealing to different members in the same fam-ily, say, children, teenagers, house-wives and elderly. The role a celebrity plays in an ad de-pends on the kind of brand being en-dorsed. When it comes to lifestyle, fashion and luxury products, the en-
tire aura and cult figure of the celebri-ty needs to be accentuated. In the minds of consumers, this kind of prod-uct is usually placed as an aspirational one and the focus is more on emotion-
al appeal. But when there is a repeat purchase or low involvement product, the functional benefits tend to be highlighted more. Hence, to add to the believability factor, the celebs are usually made to resemble a common citizen representing shared points of pain and happiness.
Rocketing Endorsement Fees
Financially, celebrity endorsement is a
costly proposition for most compa-nies. With contract fees crossing Rs 1 crore for top celebrities in India, due diligence needs to be carried out to closely estimate the expected returns on investment (ROI). It is thus better advised to take professional help be-fore a company takes a call on celebri-ty endorsements.
How are Celebrities Valued?
In the US, the brand value of a celebri-
ty is indicated by some popular indices like Q score (a function of favourite and familiarity) and Davie-Brown In-dex (DBI) (a function of appeal, influ-ence and trust). In addition, a num-ber of renowned publishing houses like TIME, Forbes and Businessweek also come up with their Power & Influ-ence lists every year. In India, several publications like Filmfare and India Today release similar lists valuing ce-lebrities on expertise, likability and trustworthiness factors. After valua-tion, most of the endorsement deals are carried out through celebrity agents and expert ad agencies.
Endorsement Risks
Celebrities attract the maximum glare of today’s 24X7 media. Even a minor aberration on their part draws cen-sure from all corners of the society. The fallout for the brand she endorses may be devastating in some cases if the person over a period of time has become a synonym for the brand. There is another risk for the brand getting permanently associated with the personality of the celebrity, popu-larly known as the ‘celebrity trap’.
In the case of sports celebrities, bet-ting entirely on the performance of the endorser may have a more severe
impact on the brand popularity than in the case of artists and actors endors-ing the brand. Also, as a rule of thumb, viewing endorsements as a mere substitute for good products would only tantamount to a strategic blunder.
In Celebrity’s Shoes
From a celebrity’s point of view, the more offers for endorsement she gets, the more she becomes a house-hold name. The subsequent offers only promise a better deal for her. But
Page 4 MARK - AVENUE
“Let them eat cake” – a famous
phrase supposedly spoken by a great
French princess in 18th century, upon
learning that the peasants had no
bread. The cake was then a luxury for
the peasants. Whatever the poor can-
not have and the elite can, was identi-
fied as luxury. Is there any change in
the definition of luxury since then?
This old definition has lost significance
and in the new age, luxury means
different things to different people; it
may be exclusivity
of the product for
some, high crafts-
manship, precision
and quality for
some, and premi-
um priced for
some. But one
thing is certain. Luxury is no longer
the sole preserve of celebrities, aris-
tocracy and the super-rich. New cate-
gories are created which are called
accessible luxury or mass luxury.
But a rational marketer would accept
that marketing luxury products is not
playing the game in the same old turf.
Hence we try to put forth few points a
marketer should remember while
dealing with luxury brands. The most
important of these is the consumer of
a luxury product desires to fulfill his
actualization needs of the Maslow’s
hierarchy. The article Eight Things
That Every Marketer Needs to Know
about the New Luxury Market by Pam
Danziger, aptly summarizes the pur-
pose of this article.
No marketing analysis is complete
without discussing the perspective of
4Ps. From the product perspective as
outlined in eight things, consumers
expect luxury performance from the
product and quality a cut above the
average. Pricing of luxury goods has
very little to do with the money; afflu-
ent luxury consumers can afford to
pay full price for just about anything
they choose to buy. From the distribu-
tion perspective, unlike the regular
goods, luxury goods are available in
LET THEM EAT CAKE
-Srinath Akula
with every contract signed, she is re-stricted in her choice and the exercise of her free will is curtailed to some extent, at least in public appearances.
It would also be interesting to study the impact on celebrities switching their endorsements for rival brands (most of them doing so in the wake of their being dumped by the previous brand owners). They are sometimes signaled in the media as no-more-good-
enough and when they switch loyalty they are berated for chasing only money. Its immediate consequence is a loss of face, which may hit the lesser mortals more critically than the very established ones.
Celebrity Proliferation
The onslaught of mass media is churn-ing out celebrities every day from a plethora of domains. Leveraging web 2.0 platforms, they have been able to
garner, engage and entertain their bevy of fans and followers quite effec-tively. Many seem to be mere a flash in the pan, but their impact in influ-encing consumers is nevertheless felt. So, the relevance of celebrity en-dorsement is not the heart of the de-bate today, the crux is, who should we call a celebrity?
Page 5 BY MERCUR—I
Today bollywood is industry in itself
and growing big. Every year many
movies hit the Box office but things
have changed from past where only
couple of movies used to release on
Friday, Now every Friday the box
office is bombarded with at least 4-5
movies so to create a buzz for a mov-
ie, the marketing team of film has to
be very specific about how they want
to go about publicizing the film.
They don’t just have to attract but
also need to convince the audience to
visit theatres to watch the movie
which the audience might otherwise
end up watching on laptop.
The film marketing holds a great sig-
nificance today and very often the
marketing strategies of new movies
can be found, implementing the basic
principles of marketing which is STP.
An Aamir production Latest movie
Delhi belly has clearly targeted India’s
urban youth and positioned the movie
exclusively for 18+ and old .There is a
particular promo going air where
Aamir khan says that Delhi belly is not
a movie for you if you are old. Today
the marketing of film is as importance
as the story of the film, Earlier the
marketing was reduced to few ban-
ners , hoardings and print advertise-
ment but today these things have
become simply the hygiene factors.
Marketing of movies in case of bad
movies act like hedging of risk where
risk is reduced because even a bad
movie if marketed properly ends up
doing some business rather than just
going flat at box office. Due to mar-
keting , the buzz which is created
make people to come and watch the
movie and by the time people realize
that the movie is not good , the movie
recovers some part of its
cost .Similarly an average movie if
promoted properly can do wonders
for the film makers like Ghajini. Very
creative ideas are adopted to stand
out of the other film promotions. This
publicity is aimed at all the target au-
dience in the country for creating a
“buzz” about the movie. Aamir khan
in order to promote his film went on
to give fans, the Ghajini haircut. Simi-
larly he also visited many schools for
promoting Taare Zameen par.
Marketing has really taken off in last 4
years and the benchmark was set by
Krrish. The way the merchandisers
related to
the movie
like krrish
mask,
outfit were made available at the re-
tail stores, it created huge buzz in the
kids, Kids were excited to own such
stuffs. It started with that and today if
the film makers really believe that
they have a blockbuster, then they
certainly put a lot more effort in mar-
keting. Aamir Khan, known as Mr.
Perfectionist ways came with innova-
tive ways of marketing the film. Begin-
ning with the butt chairs that have
been set up at leading multiplex
chains across the country, Aamir did a
host of other activities to promote his
film. He walked the ramp with co-
stars Sharman and Madhavan for a
ramp show where they unveiled their
range of 3 Idiots T-shirts by Panta-
loons.
Marketing of a movie can be thought
of as creating instant brand identity.
As films have limited distribution win-
dow and therefore a limited shelf life,
the marketing has to happen at abso-
lutely the right time to get audiences
into the cinemas.
Evolution of Marketing trends in Bollywood
-Kumar Vaibhav
select stores or exclusive outlets. Pro-
motion
is predominantly aspiration-
al appeal focused and exclu-
sivity focused.
Celebrity endorsement is
widely used to create Refer-
ence group appeal. As a last
set of words, to ensure suc-
cess of a luxury brand, the-
se are the basic foundations
The brand must be expansive
The brand must tell a story
The brand must be relevant to the consumers’ needs
The brand must align with con-sumers’ values
The brand must perform
Page 6 MARK - AVENUE
What is Experiential Marketing?
Experiential Marketing is buzzword in
marketing world these days. Market-
ing world always try to invent the
wheel over and over again. Experien-
tial marketing is not new in this world,
yes the coy term “Experiential Mar-
keting” is new. Western world always
take clues from past and re---brand it
into a new approach.
Experiential marketing is a form of
relationship marketing. Here marketer
create emotional connection with a
consumer and try create a customer
experience using one or more senses
like touch, taste, smell, sight or hear-
ing. The moot point is to create a
memorable, emotional and interactive
experience. This is also called as right
brain experience. This ploy exploits
not only rational decision making abili-
ties but also emotional aspects of de-
cision---making. This new experience is
created using various things like M&M
to sell there tractors created a simula-
tor which gave farmers feel how their
new tractor can be used in fields. In
Australia, Absolute vodka used the
same ploy to create a buzz about their
new offering called “Cut”. They dis-
tributed a bottle of “Cut” to everyone
in two bars in Sydney and Melbourne
and in turn consumers where given
chance to contribute to exhibits of
photos.
Why use experiential Marketing?
Experiential Marketing is generally
targeted toward very small number of
consumers. So why use experiential
marketing!! When there are many con-
ventional methods available, when
marketers can easily reach to masses
using web, TV or press media. The
reason is simple, today there is very
large number of brands cluttering eve-
ry place possible, and consumer atten-
tion is getting shorter and shorter.
According to one of studies a consum-
er internationally and domestically are
bombarded with more that 5000 mar-
keting messages every day by various
means like TV, web, press etc. High-
lighting the same problem, Herbert
Simon says “…in an information---rich
world, the wealth of information
means a dearth of something else: a
scarcity of whatever it is that infor-
mation consumes. What information
consumes is rather obvious: it con-
sumes the attention of its recipi-
ents.
Hence a wealth of information cre-
ates a poverty of attention and a
need to allocate that attention
efficiently among the overabun-
dance of information sources that
might consume it” (Simon 1971, p.
40---41) So in this world of too
many brand, marketers need
something unique to get the atten-
tion.
Is this the future?
Not really. In my view experiential
marketing is the oldest form of
marketing that marketers have
been using. Think of world when TV,
web, press was not in so much domi-
nance. In those times only way to ad-
vertise was through showing the
product and word---of---mouth. When
a marketer showcased the product
he/she was actually creating an experi-
ence for customer, it use to create an
impression. And marketer through
customer’s reaction use to know how
good was their product. Is
“Experiential Marketing” that we talk-
ing about different from this? Not real-
Page 7 BY MERCUR—I
Experiential Marketing--‐ Is this the future?
-Aditya Anand
ly. Yes ways and means to do the
same has changed. There are more
reasons why experiential marketing
can’t be “the” future.
Firstly it is very short lived. A marketer
who is aiming to create a lasting
brand can’t use it for very long time.
Secondly it can’t be replicated very
easily. Experiential Marketing needs
special arrangements, which is not
possible for all products and all social
environments. Like Absolute Vodka
“Cut” can’t be advertised in India in
similar fashion.
Thirdly experiential marketing is not
fit in all cases, like you can’t promote
a well know product using experien-
tial marketing as users know the prod-
uct. Similarly experiential marketing is
not proper for all kinds of product,
like commodity FMCG products (read
soap, shampoo, flour etc.), software
(although trial version is form of expe-
riential marketing), electronic devices
and list can be very long. Experiential
Marketing is good for creating a buzz,
hype and catching attention of con-
sumer for very short duration, it is
definitely not the answer for future
and its not new.
Page 8 MARK - AVENUE
Among the very first memories that I have of a celebrity endorsement is the Kapil Dev- Palmolive ad –remember “Palmolive da Jawaab nahin”.( Need-less to mention that I had no clue then as to what the word ‘da’ meant and for the Kolkata boy in me, it always meant the short form of the word dada).
For the average Indian like me, cricket and movies were the stuff of dreams and all celebrities from those twin worlds back then were the last word in everything. Growing up, with ration-al thoughts replacing the foolishness of childhood, I realised how much sense celebrity endorsements made, in a country like ours’.
Till about the 90’s, any celebrity could just turn up for an ad and get the product selling. All you had to do was to say “Bingo!”, if there was also a fit
or say “look XYZ is buying it, ergo I buy”.
However as time changed and India too evolved to her modern avatar, consumers began looking at ads ob-jectively. Hence an Amitabh Bachchan endorsing a brand like Parker Pens, ICICI home loans and the famous Cad-bury ‘trust’ campaign, or a Rahul Dra-vid promoting Castrol went home well with the audience and contributed to the respective Brand Equities.
However lazy advertising like using Steve Waugh for ANP Sanmar or Boris Becker for Siyaram got the boos from the audience. At times it is not exactly the celebrity who is the wrong choice, but the product /positioning itself that is the bad fit. Amitabh Bachchan and his son Abhishek were the brand am-bassadors for Maruti Versa and de-spite that the brand tanked badly, it was only after repositioning itself as a ‘family car’-‘joy of travelling together’ that there was an upswing in sales.
To look at the positive aspects of a celebrity endorsing, a feeling of credi-bility is often lent to the brand, for e.g. if we were to look at the Cadbury- Amitabh commercials after the worm fiasco and the subsequent regaining of market share. Another aspect is the attention grabbing one, which is the most common reason for a celebrity
endorsement, case in point being Nakshatra Jewellery and Aishwarya Rai. A celebrity using a brand creates an aspirational value to the product, like the Tag Heuer watch endorse-ment by Shahrukh Khan.
The Psychographic connect is an as-pect for which Lux is always famous
for –“The Beauty Soap of Film stars”. Of course who can dispute the demo-graphic connect that these different stars have, when they are able to ap-peal differently to the different demo-graphic segments. For example a Sal-man Khan can appeal to the masses, while a John Abraham can be for a particular segment.
The other side of the coin is when ce-lebrity advertisement can act as a neg-ative impact on the brand. It may so
Pros & Cons of Celebrity Endorsement for a brand in the Indian Context
- P Vivek Krishnan
happen that the celebrity sometimes completely overshadows the brand, a recent example is the Priyanka Chopra Nokia ad, where Nokia though a pow-erful brand in itself could not help be-ing overshadowed by the celebrity.
Often the celebrity could, owing to his own actions, impact the brand negatively a.k.a Celebrity Credibility. The Salman Khan- Thums up Ads and the Fardeen Khan- Provogue botched endorsements are testimony. Some-times when the market leader is a very strong brand in itself, and the compet-itor advertises using a well known
celebrity, it can misfire. For e.g. Amit-abh Bachchan who endorsed Nerolac was wrongly associated with Asian Paints according to consumer surveys.
Sometimes the celebrity becomes so
associated with the brand that all re-peated advertisements somehow con-trive to fit the product to the celebrity and when they finally decide to get rid of the star, it fails-Celebrity Trap. For example the Binani cement ads with Amitabh and how they finally got rid of the star albeit with a different pre-
text. The Pantene Pro-V Katrina ads, the Tiger Woods-Accenture experienc-es are good examples for it
Whether or not celebrity endorse-ment has a positive impact, is a de-bate that can well stretch into the
next century too. However there is no denying the fact that celebrity en-dorsements do have a strong impact on consumer psyche and especially the Indian one. For as long as there are star gazers, there will be stars. Corporate Brands acknowledge the celebrity pull and hence are currently prepared to ride the celebrity en-dorsement bandwagon.
Page 9 BY MERCUR—I
A Short Quiz :
1) Whose Idea was twitter?
2) Which similar social networking site sued Facebook for allegedly stealing
source code?
3) What is the word limit for a Google search term ?
4) Which search engine was originally called 'BackRub'?
5) How much did Facebook pay to get its current domain name?
6) Recently against which company, Nokia approached Advertising Standards
Council of India against a TV ad which plays on the Nokia brand name
phonetically?
7) Generally what duration (in months/years) can be considered as long term in
Internet Marketing?
8) How many friends does the average Facebook user have?
We want to hear what you think about this issue…..
Please send us your comments\suggestions\feedback at [email protected].
Monthly Article Writing Competition, Cash Prize of Rs 500/- for the win-ner .
If you have any query regarding the competition, please reach out to us at [email protected]
Nikhil Gupta
Secretary
Cell - +91 8878 951 117 Email – [email protected]
Shashank Verma
Member
Cell - +91 8878 944 458 Email –
Harish Kumar Raju
Member
Cell - +91 8085 7 27 536 Email – [email protected]
Kiran Krishnan
Member
Cell - +91 8085 728 146 Email – [email protected]
Srinath Akula
Member
Cell – +91 8085 726 398 Email - [email protected]
Kumar Vaibhav
Member
Cell – +918349 479 454 Email – [email protected]
Team
Answers:
1. Jack Dorsey 2.ConnectU 3. 32 4.Google
5. $200,000 6. Onida 7. One Year 8. 130