India-Bharat divide and enablers in personal data revolution

India is the fastest growing big economy in the world right now and among many enablers and outcomes, internet revolution, or to say more specifically, ‘personal internet revolution’ is an intricate mix of reality and hype.

With two-third of the Indian population below the age of 35 years and more than half of it belonging to the Millenials (born between 1980-2000); smart-phone tusnami backed personal internet revolution could never have been possible without this big chunk. The mobile internet users in India are estimated to be more than 350 million by end of June.

But among these generalist claims and macro statistics, the intricate mix of hype and reality on the ground is quite easily ignored. This mix and its immense quantum in terms of differences, is what will drive the future of data revolution, which has been ignored as suited for the present hoopla on the subject. This intricate mix, which many may call a divide between India and Bharat (for various social and commercial subjects), is however, not a destructive force or a warning for future. It is rather a huge opportunity, waiting to be exploited and rode upon with success, if only, we accept and appreciate this divide. What else would you call a situation where the phenomenal growth has been rendered without even appropriately involving a huge chunk of population(Tier-3 and below have less than 30% of mobile internet users). The personal data revolution is not a nation’s or service provider’s success story, as yet. It is an astonishing but very limited outcome of narrow commercial business plans, meant to pluck the low hanging fruits only.

Majority of online traffic, heavy social media engagement (videos, video chats etc) and online commerce is still limited to top metros and tier-1 cities. The usage adoption in tier-III cities and below has been fast but with interesting riders in terms of adoption, usage and upgrade. This means that the personal data revolution achieved so far is encouraging but constrained and the next wave of revolution will have to come from smaller cities, towns and villages. Are service providers ready to tap these markets?

Below are some basic differences in the consumer profile and consumption patterns in geographical areas which have not been perfected by the data revolution champions. Without understanding these in detail, the ‘personal data revolution’ can never be extended to the huge chunk which is still waiting for that precious network signal without the need of exchanging their precious fortune.

Following insights among others, were particularly interesting to understand the profile and consumption patterns of the internet aspirants of ‘Bharat’s Millenials’ -

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• Smart phone/Tablet is the next big purchase for majority of the feature phone owners, for the sole reason of being able to browse data
• Smartphones have made inroads but not as conspicuously as in bigger cities, with balanced mix of local budget brands like intex and Lava, cheaper Chinese handsets and mid to upper brands like Micromax and Samsung
• For majority of data users, current data expense is between 100-200 Rs. In some cases this is more than monthly voice/sms expense.
• 2G is predominantly used for internet consumption, for the sole reason of it being cheaper than 3G
• Users are brand agnostic and switch internet and voice service providers based on value offered(based on temporary promotional offers). Dual sim phones have helped this trend.
• Social (WhatsApp, FB, Chat) is the major traffic generator, while Travel/commuting is catching up
• Almost 80% of respondents were dissatisfied with the 2G performance in terms of speed and also questioned value for money against 3G (Approx 1 GB plan for 3G is 250 Rs and for 2G is 175 Rs)
• Only reason to not switch to 3G in spite of inconvenience and dissatisfaction over 2G services, is cost
• An alarming trend that came out was that just like their metro-cities and Tier-2 cities counter-parts, Smartphones are becoming an addiction with majority accepting to check the phone the first thing in the morning and the last thing in the night. Many accepted to have developed a habit to sleep at night while checking phone, as compulsion.
• In order to restrict the cost of data consumption, following methods are widely adopted –
• Visiting college and school libraries, shopping malls etc where WiFi is available
• Almost always try to share app between friends through tools like Xender and Appshare  rather than downloading
• Avoid downloading heavy apps to save data
• Avoid updating apps in spite of reminders till it is unusable, often ditch the app if is not considered worth of spending data to update
• For almost half the users, data consumption is sporadic, by keeping the data turned off and switching on only when intended to use(chat, check facebook, check/send an email etc)

                      

 
      There are various insights that can be drawn from the above results but clearly only two factors drive data consumption in the smaller cities and towns – Cost and internet speed.

It is incorrect to assume that the customers are agnostic about the performance of the service just because they continue to use it. They are constrained by the pocket size and the marginal value offered by the service for every extra rupee spent. In many case the experience with 3G services had not been so significantly different from the experience these customers have had with 2G services, so they have developed a mindset that there is no actual difference between the two and hence continue to use 2G despite having ability to pay for 3G services. This is a technical and infrastructural issue where the service provider is unable to provide the premium experience despite charging higher amount.

‘Bharat’ is eagerly waiting for the Service providers to take cognizance of the ability and revenue strength of this segment, it is the providers who have to respond to this opportunity, but not with slight tweaking in their services designed for the metro-customers but design services keeping in mind the user profiles and consumption habits of its inhabitants.

  Jio with its aggressive plans in terms of costs and services has all the elements to woo this segment and if it can deliver superior services with lesser cost, they will embrace it wholeheartedly. However, hard companies may try, this segment remains a brand agnostic one and better value offering will always win.

Jio’s aggressive stance will surely influence and drive others to look at their pricing and product strategies and quite possibly reduce their own offering prices, if not match it with Jio. In either case, entry of Jio into the segment will, inadvertently, as part of its aggressive competitive tactic, address the issues ‘Bharat’ customers have been having and as a positive outcome will contribute to the next wave of personal data revolution. 

Inner-circle counter branding- Ear and eyes open!

I recently came across a print-ad for Nasaka water purifier from Okaya group, and in no time a peculiar fact hit me. Veteran actress Shabana Azmi is seen endorsing the water purifier in the ad. The peculiar fact was that her son (from Javed Akhtar’s first wife, Honey Irani) is also seen endorsing the same category product, Pureit from HUL.

While, it is understandable that Farhan Akhtar is not Shabana Azmi's own son, and this conflict can very well be no conflict, an important question to ask here is, how credible does a product endorsement come across, when close family members, with equally strong brand image and credibility, endorse or anti-endorse products that are in direct competition or even substitution of that product or category.

The context and its implications of such a situation, also makes it imperative to judge if it is critical now to extend the boundary of due diligence and selection process for a brand ambassador beyond the individual to his closest set of people? Simply put, how pertinent it is to given to the individual’s image, appeal, relevance and credibility, should or shouldn’t the inner-circle deserves some notes and thinking, before inking  that million dollar deal?

Coming back to the first example cited, Both Shabana Azmi and Farhan Akhtar are known to be thinking actors and have associated themselves to a social cause every now and then. They have also managed to stay away from any major controversy adeptly, while being known for speaking their mind up. Crafty! Such attributes make them very attractive brand ambassadors for food and health category. Hence, Okaya and HUL were both bang on with the choice of their endorsers. However,  Okaya recently got Shabana Azmi to promote their Nasaka brand of water purifier, while it was well known that Farhan Akhtar promotes Pureit.

This can be a clean overlooking or may even be a thoughtful move. As Jack Trout and Al Reis suggest, in order to build a positioning in customer’s mind, try manipulating what is already there, instead of trying to create something new altogether. People know Farhan Akhtar and that he promotes pureit. So when Shabana Azmi comes up with an ad for another purifier, it helps than remember Nasaka since they would quickly relate Shabana Azmi to Farhan Akhtar, who is related to Pureit, and in the process will remember Nasak water purifier. Or at least the Nasaka marketers would hope for that.

Now, it is quite possible that people don’t fret much about how endorsements by members of a a particular star family cut, overlap or even counter each other, and they are able to remember them individually only attached to their respective endorsements. However, going by the argument in the last paragraph, connections are the easiest way to remember things, for example, Network maps, and hence it cannot be completely ignored that people may notice that while a male actor is promoting a tobacco brand, his star wife is busy educating people about ill-effects of Tobacco. This will not affect the Tobacco consumers but will definitely raise eyebrows on the sincerity of the star wife, and hence can mar the anti-tobacco campaign.

In order to ensure that such confusions and complexities are never allowed to find their way in the prospects’ mind, it is important that the due-diligence which is a regular exercise, post personality-alignment between the brand and the prospective endorser, is not just restricted to the prospective endorser but also to his or her inner-circle ie, the closest family members. The due diligence must along with other things (acceptability, appeal, relevance, credibility, social status, legal baggage etc) include a possibility of prospective endorsements and a contingency plan in case the family member’s brand endorsement interferes directly or indirectly with the primary brand endorsement. While this is a internal preventive technique, marketers can also adopt a regulated preventive technique where contracts pertaining to brand endorsements can be made to extend the exclusivity and non-compete clauses to family members. These of course will be difficult to draft as well as implement, and beyond doubt much more expensive.

There are of course various factors to consider before choosing one of the two techniques and a risk-impact analysis is a must before making a final call. These techniques can help marketers avoid losing their sleep over a challenger brand piggy-backing on their brand ambassador’s family member (and hence manipulating an already established positioning of their brand in the prospect’s mind!).

5 things about Patanjali and its product placement in Modern Retail set-up

Patanjali has been at the center of limelight for quite some time now. Many case studies have been piloted and a lot of research has been done to analyze its purchasing, operations, logistics, marketing and to some extent financing.

In this post we will look at the more simpler yet distinct steps it has taken in modern retail in terms of product placement, shelf design and location and assortment display. Here are five things which you may have missed when you passed by the Patanjali ‘mini-store’ in a modern-store.

• Patanjali, with its strong consumer-demand derived strength, has been able to command for itself exclusive mini-store like spaces in the modern retail set-ups. These are a set of shelves especially reserved for Patanjali products. More often than not, these shelves will be separated from the long racks stocked with other manufacturer’s brand-lines, which gives Patanjali a strong visbility and adds to its distinct-ness.

• Apart from the distinct-ness created due to a separate display space creating an anti-me-too impression (much needed differentiation in FMCG domain!), Patanjali is able to keep all its products at one place irrespective of product category (food products like noodles, honey and chyawanprash, and personal care products like bathing bar, face-wash and face creams) that leads to extensive cross-product selling. Customer who would have wanted to buy Patanjali toothpaste can take a long look of, feel the packaging and read the content on the face-wash that is kept just next to it.

• Interestingly, Patanjali is only one of the very few known brands at the moment, who in the modern retail set-ups, have not resorted to multi-unit packings for products such as soaps (bathing and washing bars), toothpaste etc. This means, that consumers who do not want to spend 100 Rs on buying soaps (even if it means buying 3 soap bars) can always pick Patanjali soaps for as cheap as 13 Rs. Also, none of the products offered has gone to package size beyond the nuclear-family packs, hence, none of the product’s price seems outrageous (when your brain is not in the mood to calculate per kg or per 500 gm or per ‘normal unit size’ price of the product, it just renders pricing of bhujia at 200+ Rs (for 1 Kg!), and 400+ Rs corn flakes (1.2 kg!) as outrageously expensive, and for some time putting the “unaffordable” tag on the brand itself.

• Patanjali can attribute its success (provisional revenue for 10 months in FY 16 upwards of 3200 crores Rs) to many things and there is a lot already written about it. One of many such attributes is its products’ direct or indirect link to Ayurvedic roots. Patanjali Yog Kendra and Swadeshi Kendra have been selling ayurvedic products and medicines for quite some time but there haven’t been strong inroads for these products in modern retail set-ups. However, the presence of these products right next to the fast-running ones like soaps, toothpaste and biscuits makes up for their weak revenue generation. These ayurvedic products reinforce the connection of fast running non-medicinal products to ayurveda, just by being placed next to them, and helps in maintaining and growing brand credibility

• Critics observe that one segment which has not accepted the product the way a bigger chunk has accepted it is the Muslim community due to their religious beliefs and also with lack of resonance with the star ambassador of Patanjali, Baba Ramdev. However, the company has tried to make some inroads with the segment by putting the label on their recently launched spices packs in Urdu, along with other Indian languages. While, this is just a start, we may see more such attempts to woo the community by advancing Patanjali products to their ‘consideration set’ from the current ‘evaluation set’. 

Bigger is better, or not! – Package size experiments in Modern Retail

It was in 1990s when FMCG companies struck the right chord with its rural consumers riding on a concept introduced by CK Prahalad. Serving those at the ‘Bottom-of-pyramid(BOP)’, turned out to be phenomenal success. The success did not constrain itself in the rural markets and proliferated to urban areas as well.

‘Low unit packing’, or (LUP) was an action borne out of the call made to serve the BOP customers which helped to create newer markets and penetrate existing ones for FMCG companies in rural as well as urban areas. Some examples of LUP were ‘chota coke’ at 5 Rs, shampoos and hair oil sachets at 1Rs (started with even 0.50 Rs) and Biscuits at 2 Rs.

While much has been written about the concept for all the long years since, then, this post points out to a contrasting selling and purchasing behavior emerging now, completely opposite to what led to the rise and rise of LUPs in late 1990s and much of 2000s.

To establish the contrasts, let’s briefly look at the reasons which led to the success of LUPs in rural markets. It was when rural and poor urban markets weren’t considerably tapped by FMCG companies. Products in most categories posed high purchase risks for customers in these markets and at most times, were simply unaffordable for them. Lower disposable income with high seasonal effect, daily or weekly income pattern since most of the consumers worked as daily wage laborers in fields and sites, bare minimum expense on hygiene products and branded food items, and unavailability of affordable yet beneficial options in local shops were some of the major factors that made LUP a winner.

Smaller units available for consumption on one hand helped the price sensitive BOP customers to sample the product without much financial risk, and on other hand paved way for international brands in rural areas as well as in urban pockets. Consumers were now exposed to quality products from international FMCG companies like HUL and P&G raising their expectations from the products they used and consumed. For example, consumers were able to use urban- & metro- brands like sunsilk, pantene and head & shoulders shampoos, close-up and pepsodent toothpastes, lux and rexona bathing bars etc.

Fast forward 20 years and a new trend seems to be emerging, especially with the advent of modern retail (departmental stores, hyper markets, super markets etc) and fast changing consumer profile. Make no mistake, two-third of Indian population still lives in villages and many living town and cities still have smaller incomes, hence LUP as a rural marketing concept is not going anywhere any soon. However, urban pockets are seeing an upsurge of two competitive concepts as antithesis to LUP. While their presence and their strength, at this point is minimal, but it can sure not be ignored. I call these –

• Big unit packing (BUP)
• Multi-unit packing (MUP)

A Big unit packing, BUP is a large size packing for the product without any other change. The BUP offers the product in a 2 to 10 times the package size which it is normally offered in. The package dimension and the body copy on the package are adjusted to suite the size while the content remains the same. The pricing of the BUP is almost always kept more attractive for the obvious higher economic, psychological and social risk the manufacturer wants the customer to take by buying the bigger pack. The discount can range from a meager2% to almost 80% in some items. Some product example are  1000 ml shampoo bottle, 2 Kg corn flakes pack, 2.5 liters cold-drink pet bottle, 500 gm butter, 6x100 gm noodle pack etc. (see images)

BUP - Indian  Snacks

BUP - Corn Flakes

A Multi unit packing, MUP is bundling of multiple units of the normal size pack together as an offering, without changing any other attribute of the pack. More often than not the final package is just tied together with an adhesive tape or with temporary adhesive to create a bundle(or simly given out as loose multiple units). The MUPs are not tampered with in terms of per unit pricing but rather offer a free unit (sometimes more than one free unit) when bought as a bundle. Hence, these discounts may range from 20% (for Buy 4 get 1 free) up to 50% (for buy 1 get 1 free), latter generally in case of private brands at (modern retail stores). Obviously, MUPs offer higher per unit discount than BUPs but these are also ridden with controversies. Claims like bundling is resorted to sell products which have reached or about to reach their expiry dates are common. Also, MUPs for some products like soaps, have also come under fire as forced marketing where a customer is deliberately not given an option to buy a single unit. Some examples of MUPs are Buy 3 get 1 free soaps, Buy 3 get 1 free biscuit packs, Buy 2 get 1 free deodorant can etc.

MUP - Bathing Bars

MUP - Fruit Juice

The trends and realities leading to these two new packaging concepts are pretty much opposite of what led to the LUP’s success. These attributes can be segmented under the following heads.

• Consumer

• Higher disposable income with higher spend on food and hygiene categor
• Wants to reduce the physical risk in terms of efforts spent on reaching out to the stores to buy small items, by purchasing in bulk
• Wants to reduce economic risk by getting benefit in terms of per unit reduced price and discounts (& free units in case of MUP) attached to BUPs and MUPs
• Increased brand awareness and brand loyalty creates a favorable perception for bigger brands and companies, leading to reduced perceived health risks and hence higher confidence in buying products in bulk
• Mitigate psychological risk by reducing the frequency of information search and alternative selection process employed during buying cycle (pain of buying something repeatedly)
• 
  
• Companies

• Helps in improving top-line and bottom-line performance
• Lower attached costs like- packaging, logistics & distribution costs, storage & handling costs etc
• More stable revenues and volume predictions and forecasts for planning
• Ensured of higher number of days of product usage without switching. Very important for products that consumers may take time to get used to or for benefits to be visible.
• Bulk size leads to higher per serving consumption, hence leading to increase in purchase frequency per SKU
• Higher visibility of products in the shelves at the stores due to packaging size. Attractive discounts also help in securing additional promotional space within the stores (Eg. Pepsi in the image)
• Reduced pilferage and wastage costs

• Retailers
• Higher volume turnover and revenue generation
• Lower attached costs like- logistics, storage and handling costs, manpower & admin costs etc
• Reduced pilferage and wastage costs at storage and retail point

However, this new wave of opportunity in retailing hasn’t come without its own share of challenges for stakeholders like –

• Cumbersome to manage due to larger space requirement and weight

o   Size/bundling should not be increased to an unmanageable level

• Requires greater per unit investment from the retailer and consumer

o   Strong brand value, channel partnership and higher margins will encourage the retailer to stock BUPs and MUPs

o   Strong brand promise and its credibility and reduced buying risks for customer will influence the customer for purchase

•  Brand value erosion

o   Quality and packaging must not be compromised in BUPs, MUPs must not be encouraged. Cross brand selling with smaller value item is acceptable though (Example, a washing bar cake with 1 kg of washing powder)

• Reference price degradation

o   Consumers process pricing information in many ways, one of them being reference pricing which is based on fair price, last price paid and usual discounted price among other attributes. BUPs and MUPs affect ‘reference price’ in consumer minds for future purchases negatively

Standard Packaging - Patanjali

• Loss of LUP customers

o   LUPs should not be withdrawn from traditional channels and can be used in modern retail as part of cross-sampling with related products

o   LUPs, BUPs and MUPs can together go as greater depth(product variants) in product assortment rather than one substituting the other

 As mentioned earlier LUP is a very strong marketing innovation and is not going to be replaced or withdrawn in near future for economic as well as distribution reasons. Still, BUPs and MUPs are emerging concepts and are much visible in modern retail, while the traditional channel seems to have not been involved in this change to a great extent, for good. How are these concepts developed further by companies and their channel partners; and how are these accepted, ignored or worst, protested against by the consumers, will be an interesting development to watch.

Ad Review (Print) - Snickers

Recently, an otherwise dormant print ad world was rejuvenated, thanks to a clever ad campaign by Snickers. The campaign effectuated rounds of feedback, arguments and counter-arguments, a much needed boost to the old school ad channel. The ad series was published in a sports illustrated swim suit edition.

The campaign, through its series of ads  depicted professionals messing up at their work due to hunger and its effects. The hunger snack bar segment has been a space strongly held by Snickers and this series only reinforces that positioning, quite convincingly.

In one such ad, an intentionally flawed photo-shopped picture, showing a swimsuit model is shown with a strange  hand on her shoulder with no sign of the body of the person. The funny double twinkles in the model's eyes (which may not be as obviously visible as the hand, unless the picture is zoomed in) and a disaster 'navel' placement, clearly forms a visual message of blunders at retouching work, while the ad copy closes the ad with a witty message solving the puzzle about the blunder.

These visual mistakes immediately attract the viewer's attention and the textual message in the ad copy closes the story by squarely blaming the editing professional's hunger behind this editing disaster. Hence, the message is delivered home convincingly cleverly riding on humour without missing the objective of the ad.

This campaign is a clutter breaking effort, especially making a mark in print ad channel, which some critics are dubbing as a dead space.

Snickers blasts in itself strongly in the hunger killing candy bar segment with this ad, also going a step beyond from depicting irritated people due to hunger to dire consequences of hunger, especially at work. The ad packs punch in humour as well as relevance for the brand in terms of messaging and connect and is a 'hit'.

WhatsApp and millenials - 'Cause'-marketing and its effect

Social relevance and cause championship are the new buzzwords for brands, especially of greater importance  while trying to win over millennials.

Championing social causes has become a compulsory part of marketing to keep brands relevant and even ahead of the competition. Owning a 'social space' is as important as owning a 'mind-space' for a holistic marketing plan.

Millenials are quick to recognize this aspect about brands and are more likely to accept, own and flaunt brands which put them at the forefront of social causes.

Obviously, brands that have millenials as their major and strongest customers as well as critics, are doing everything to remain ahead of the curved and be the favourites of their TG.

WhatsApp, now owned by Facebook, recently revamped their emoji offerings for chat, with a host of new options, taking a lead on the matter of equality in races and sexual orientation. Recently it added options to choose from a fixed set of colours of skin for certain emojis, hence taking a race neutral stand, substituting the 'white-only' option they had earlier. This was hailed as a remarkable step and was much talked about. The move, which may have appeared as a small step initially, invoked a wider debate and sensitized the issue of colour and segregation based on it. Millenials loved the move and appreciated WhatsApp for its bold initiative.


 Soon after, WhatsApp has gone ahead and added emojis with same sex couples, with and without children. This is another bold move especially at a time when the matter of LGBT rights has gained much attention. WhatsApp's recognition of this community's rights in a billion people's group by placing these new emojis along with the earlier ones, asserts it's support for the community.

Millenials have embraced this move with great spirits and have shown their love for WhatsApp on various online portals. WhatsApp, with this small but bold step has managed to be ahead of the curve in terms of association with the social cause of fighting for equality irrespective of race, colour and sexual orientation.

Millenials love to flaunt their association but it is rarely mindless. The method behind this madness is a mix of contrasts - self-indulgence balanced with joy of 'giving back', brand loyalty meshed with curiosity for newer brands, ambitious yet conscience-driven goals and most of all, openness to new ideas while having beliefs and opinions of self.

Brands generally need to solve these complex contrasting equations in order to strike a chord with millenials, but social cause championing is one of the reliable methods to break clutter and be their BFF. WhatsApp has achieved it wonderfully with its subtle yet strong move to assert it's support for equality.

Celebrity endorsement - Never 'just do it' !

Nike and its tumultuous history with its brand ambassadors is a real case study. After Tiger Woods, Oscar Pistorious, Lance Armstrong, and very recently , it is now the Tennis sensation Maria Sharapova who has given a headache to Nike and heartache to her fans world wide.

Nike recently terminated its contract with Manny Pacquaio after what they termed as his 'abhorrent' comments on LGBT community.
In the latest round of strained relationships with its brand ambassadors, Nike this week severed ties with the 28 year old five times grand-slam champion Maria Sharapova after her shocking revelation of having been  tested positively for a banned substance - meldonium at Australian open earlier this year.

Back home, Snapdeal had to bear the brunt for its brand ambassador Amir Khan's comment on the intolerance issue in the country which took a political turn.

Such incidents demonstrate the risks that brands are exposed to, while nominating a brand ambassador. While having a celebrity brand ambassador is almost a norm and not a choice in several industries and product categories, the risks of associating with a celebrity are as high as the reward.

Obviously, any such association demands a great deal of focus on personality alignment between the brand and the prospective ambassador, an important but grossly ignored concept.

It is imperative to mention here that the celebrity personality in today's highly networked truly global world is no more only about how they do their job, like  modeling, acting or sports etc, but also their social, political and cultural views and inclinations. Again, while these are more public in nature, due diligence is of utmost importance about their personal lives. Tiger woods' and Oscar Pistorious' cases testify this argument.

Brand managers blindly expect the positive  personality rub-off from the celebrity to their brands without taking into consideration a host of other factors that must be looked into.

Some of the important factors are -
# The individual and the collective personality of the celebrity
# The desired brand image of the product
# The synergy between the first two personalities
# The overlaps and counter-laps between the endorser and product personality

While the first two factors are extremely important to derive at what are we dealing with in terms of possible association between two personalities, the third factor helps in understanding whether or not there is a broad alignment between the product and the celebrity. However, it is most often the fourth factor which is blatantly ignored, and often to one's own peril.


The counter laps or the points/occurrence/frequency of contrasts between the two personalities(the endorser and the product) must be closely researched and debated before closing a brand endorsement decision. The most important decision here is what aspects of the celebrity's personality may not/are not - align/aligned, with the core brand personality and its desired brand image.

Finally, a brand endorsement is a very expensive decision for any marketing manager and a thorough due diligence is not a choice but a compulsion to avoid foot in mouth situations that hurt the brand and the company. This may very well help in avoiding some issues altogether while mitigate ill-effects of others.