Blockchain & Its Application in Marketing - Part 1

This is the first post in the series of two posts on Blockchain Technology. This post is intended to create an understanding about the Blockchain technology  and it will be followed by the second post which will talk about various applications of Blockchain in Marketing.

A distributed ledger, a peer to peer network and a decentralized network system. Blockchain has been called all of that, and rightly so. There have been numerous posts and articles written about blockchain and what it can possibly do in future in various fields. These articles however, have still left many in binds about the fundamental and the prospects of the technology.

In this post, we walk through this new technology elixir in a ridiculously simple way to understand its founding. This may hurt sentiments of some experts, but I believe, like the fundamental of Blockchain itself, the democratization of its concept should also be transparent and decentralized.

So what are some of the problems that the Blockchain technology has potential to solve? Let’s briefly look at those first. Mind you, Blockchain is a technology that at its core create, process, store and manage data efficiently (too simplistic). Hence, it will be fair to assume, that its application will help in problems related to data. So here are some of these problems –

•                Lack of data security, For eg. loss, theft and change in data
•                Lack in data transparency, For eg. invisibility of data and how its stored
•                Difficult real-time tracking of data For eg. real-time asset location and movement
•                Inability to locate the accurate and precise value chain movement of product
•                Data ownership and control over data by limited parties in a centralized manner

Systems like ERP, CRM, SalesForce and others have in some way tried to help but none were able to solve all of the above problems at a time.

Hence, it should be understood that anywhere and everywhere, the problems cited above are present, Blockchain technology will find its application. Period. So now, think of all those places where how the data is created, stored, shared and managed, causes problems or create loopholes and darkspots. Yes, Blockchain can be applied to all these areas to solve those problems.

How does Blockchain do this?

So imagine this scenario. You want to buy a diamond ring for your loved one. You are also concerned that the diamond you buy is not from a conflict zone which helps in funding local conflicts or wars or is extracted through violence in the area. You wonder, if there is a way to find out that the particular diamond is ‘guilt’ free? Broken supply chain tracking and data opaqueness makes it difficult for anyone to confirm the source and the journey of a diamond from the mine to the jeweler. The keywords again are real time data, data accuracy and opaqueness.

A small platform pilot, Tracer, created on blockchain technology for De Beers involving a handful of miners and manufacturers was able to precisely do that. The platform helped in creating a secure and indelible trail of selected diamonds(high valued 100 diamonds to be precise) from the mine cutter, to polisher and finally to the jeweler, hence creating a strong asset-traceability. (Source:Reuters)

Now imagine this scenario. A financial transaction is initiated by you that is recorded in your account detail. The account detail is stored with the bank with which you have the account. The ownership of the data and any authority over it remains with the bank at all the times. Essentially making the bank the owner of the data. In case of an incident of data manipulation, since the data is centralized at one place (bank’s server in this case) with a single owner (bank in this case) and there is no transparency over how and where the data is stored, a data fraud or manipulation will be difficult to detect and reverse. This exposes the customer and the data to manipulative practices which are difficult to pin point and even more difficult to correct.

With Blockchain technology, the ledger (the book that records transactions) is distributed. Which means the book is not owned and controlled by one party but multiple parties or systems. Due to this arrangement, an isolated manipulative change in the data on one system will not be accepted. This is because the entry with this fraudulent transaction on one system will not match with entries on other systems. Any legitimate change on the other hand, can be implemented only on consensus  mechanism. It means that if  a change needs to be implemented, it can only be done through consensus between all the parties on the network and not by a single controlling party (like a bank or a data hacker in the above case)

This means that with Blockchain technology as foundation, fraudulent practices can be reduced to minimum, thanks to its distributed–ledger, consensus based updating mechanism and decentralization. Clearly, Blockchain technology can be implemented at multiple places where data security, transparency and ownership is complicated but important for functioning.

So based on what we know about Blockchain technology now, a definition can be put together for the same –

A decentralized distributed ledger sitting upon a network of computers which are updated for every transaction that happens in the system through consensus mechanism. This creates an indelible trail of transactions which makes the system transparent, shared, secured and watertight.

Of course, like any new technology or invention, Blockchain has its own challenges which need to be addressed for it to be viable, relevant and scalable. We will look at these challenges in the next post when we discuss what could be the potential uses of Blockchain in Marketing. Not like a laundry list which is abundantly available on internet, but based on Blockchain’s applicability which we know now. For more details on how Blockchain works technically, please watch this video.

Starbucks at it again: When people throw lemons at you, make lemonade!

Leaders aren’t those who never make mistakes. Leaders are those, who make mistakes, accept them and learn from them to make better decisions in future.

Does the recurring issue with Starbucks over sensitive topics like race and sexual orientation reflect a flaw in its corporate culture and leadership? Or the way these issues are handled by the company makes a case for a sensitive, progressive and forward looking organization?

While there can be arguments on both sides, it for sure will be biased towards latter. This for a simple reason that these issues have not kept Starbucks away from standing for what it believes in. Also, it has always responded to controversies with a calculated yet sensitive actions which make it the company people look up to for its values.

There have been multiple stories about Starbucks being the vanguard of progressive workplace values in this new service world. Its initiatives like health insurance to part-time workers and to hire 25,000 veterans were path breaking ones in the industry. It was also one of the earliest organizations to support the cause of gay marriage in spite of resistance from some of the investors.

Its employee friendly policies came to light again when after the corporate tax cut in the US, Starbucks expanded benefits to its employees in terms of monetary support and family leaves. Its coffee procurement policy and practices across the world have been much lauded for empowering local farmers.

It is surprising then, that such a progressive company, consistently finds itself on the wrong end of controversies on very sensitive topics. While Its failed #RaceTogether campaign in 2015 and the ‘Holiday cups’ controversy in 2017 were more on symbolic aspects, the recent controversy where cops were called on two black men waiting in the café, was more serious in many ways. This because a store manager was involved in supposed racial profiling and then a knee jerk reaction of calling cops on these men. Her actions were said to be prejudiced due to the race of the men in question. Unlike other incidents, where Starbucks found itself in soup due to miscommunication or mis-perception of its proactive initiatives, this time it was in controversy for actions that went against its self-proclaimed ethos and values of equality.

However, like always, Starbucks has come out with utmost humility and accepted its mistake graciously, which in itself is a mark of excellent corporate values. Not just that, they did something which was unheard of till date. In response to the incident which laid bare the unconscious racial bias which some of its employees may carry, all Starbucks owned outlets in the US, 8000 to be precise, were shut and the employees were engaged in a four-hours racial-bias training on 29^th of May 2018. Starbucks created the curriculum and the video for this training, which is now available for everyone.

Starbucks Chairman Howard Schultz in an interview said, "I don't know of another company in the history of American business that's done anything remotely close to this". While this step was seen as being transformational by him, many people doubt the credibility of a four-hours training to be able to change racial bias in people. Virtual Training in itself, is considered a weak tool for achieving behaviour change. While this may be true, but two strong benefits of this response by Starbucks are – 

•          Starbucks’ response has created a template for service recovery for other comapnies across industries to follow. This also becomes now a more of a hygiene response to address such issues in future; and
•      This has again brought to fore the sensitive discussion about racial profiling and bias in businesses which needs a consistent acknowledgement and addressal

Starbucks in particular, after their call for this action, has established itself as a truly progressive company while also accepting that it does have flaws too but it is ready to accept them and work on them to be better. It has also showed that being socially conscious is not about one initiative here and there. It is about imbibing this behavior in your core values and be ready to take the pain that comes with this promise.

Starbucks has done that with utmost brilliance time and again, and it has been able to do this because it doesn’t push its mistakes under the carpet, but accept them publicly and promise itself and its stakeholders to be better in future.

Customers love companies who act like good human beings. That is companies which are kind, moral and ethical in conduct and most importantly, aren’t scared of their flaws and being vulnerable. Customers love companies which are like them, not perfect but committed to be better. That’s why they love Starbucks!

“What Got You Here Won’t Get You There” - Is Patanjali listening?

“Patanjali Clocks Whopping Rs 10,000 Cr Revenue, Becomes 3rd Largest FMCG Player; Will Soon Open ‘Nutritious Restaurants’”

“Patanjali eyes 2-fold rise in revenue to Rs 20,000 cr in FY18; to be biggest swadeshi brand in 2 yrs”

These and similar headlines with unsubtle exuberance were making its headway about an year back. Interestingly, both the headlines are picked up from the news in the month of May in 2017.  Patanjali had a meteoric rise from when it started in 1997 as a small pharmacy to an FMCG force to reckon with. With revenue figures of 10,561 crores Rs in FY 2017, it was rubbing shoulders with the big boys of FMCG in India.

Patanjali's Year on year Revenue in Cr Rs

While the target to close the FY 2018 at 20,000 cr Rs, set by the company for itself, at the start of the year was always ambitious, the result that is going to come out for FY 2018 is expected to be oonly marginal better than last year. So much so, that the company is expected to close the year with revenue a little higher than the FY 2017, reflecting a near flat growth.

Where did the company misfire? What led to the sudden speed-braking of the supercharged company? Well, the answer lies in what made it an overnight success. The company got too focused on sales targets and in the process became myopic.

This was exacerbated by the compulsive expansion, which strayed the company from serving the consumers with the best. Let’s look at some more specific reasons that have been attributed to the bad year of the company.

• Product and Price Issues
• Quality: There has been an increasing clamor around the quality of Patanjali products. It is not uncommon to read negative reviews about some of the Patanjali products on internet. This has significantly affected the loyalty towards the products and repeat purchase.
• Not so much value for money: While Patanjali started with the economic value for money products, there has been a shift towards premiumization. Quite a few Patanjali products have now been moved towards the premium segment and the prices are pretty similar to he other competitors in the market.

• Channel and Supply Issues
• Channel Conflict: As Patanjali, in its mission towards making the product available to customer everywhere, started selling out products to various channel partners, a conflict has risen between them on margin, supply and pricing.
• Supply Issues: With the expanded demand for the product, the logistical push has not happened and the very frugal distribution model has not come under the fire. Issues like intermittent supply, preferential supplies and holding up of orders for having minimum supply volume in the area has led to retail vying for fast running items. This has not only irked the retailers, but also the modern trade set pus which have very high real estate cost.

• CAPEX and Acquisition
• The falling profit margin, as per the company has also been because of the heavy investing that the company claims has been making in the food processing and production capabilities
• Patanjali has emerged as the highest bidder for the Ruchi Soya, which is famous for selling Nutrela soya chunks. This added expense is also going to hit the operational capabilities of the company.

• Macro Issues
• Lingering effects of the demonetization has also been blamed for the flat growth this year, though the issue along with the GST challenges is a generic phenomenon that affected the whole industry and not just Patanjali.
• While touted as a great help in long term to the economy, in the short terms this has been a major issue in the country owing to lack of awareness to handle the new systems and dependency on each supplier for the filing to right GST.

• Related and Unrelated Diversification
• A very critical reason for the flat growth of the company has been its overly enthusiastic demeanor towards expansion in the new categories. It currently sells 1,000 products spanning home care, personal care and packaged foods, and will soon launch apparel. Some of the other recently launched as well as planned diversifications that the company has are as below –
• Media and broadcasting through three broadcasting channels for southern part of India
• Solar power by acquiring Advance Navigation and Solar Technologies
• Patanjali has already launched a Sim with BSNL as a co-branded product
• Patanjali launched a communication app akin to WhatsApp, Kimho
• Besides, the company is also planning to foray into dairy products
• The company has already chalked about plans to enter into apparel, clothing and garments segment this year

• Changing Competitive Scenario
• Unlike the initial years when Patanjali caught the other FMCG giants off-guard with no herbal or Ayurvedic offerings in their stable, situation has changed a lot now. All the FMCG companies are having brands in this space and hence it is not any more Patanjali’s exclusive territory. For example, HUL, the country’s largest FMCG firms bought Indulekha, the Ayurveda hair-care brand in 2015 and relaunched Ayush in 2016.

Patanjali hit the nail right when it built its USP on ayurvedic offerings at a time when people had started looking for natural and herbal options for the personal care products. Unpreparedness of the other companies in his space and a strong brand ambassador in Baba Ramdev catapulted the company to top-5 FMCG companies in the country in terms of revenue.

However, they cannot rest on their past laurels and as Marshall Goldsmith said in his book “What Got You Here Won’t Get You There”, the first step to change is wanting to change. Patanjali need to take a deep hard look at their business model and ensure that they adopt strategies that are apt for a company their size. In the timeless book on Marketing by Al Ries and Jack Trout, Marketing Warfare, authors suggest that a company needs to adopt strategies based on what they are – leader, challenger, flanker or Guerrilla, depending upon the size, market share and available resources. Patanjali has to accept the fact they are no more a Guerrilla in the market but a credible Challenger, and hence their marketing strategies need an overhaul before they get trapped in their own web.

Facebook's Sandy: The hero it deserves?

Facebook might be having a midlife crisis. More precariously, it is at a time when the number of young users are finding solace on much younger platforms like Instagram, Snapchat and Pinterest. Facebook is trying hard to woo the younger lot which made it the biggest country in terms of Facebook users in the world last year. With about 250 million users and counting, it has maintained a comfortable margin against the second biggest country in terms Facebook users, the US.

Number of Facebook users in countries (in millions)

The phenomenon is not restricted to any particular country or continent, this is spread across the globe, more so in western countries. Guardian quoted in one of its report that teens and young adults are ditching Facebook, while its popularity grew among people over 55 years. It went on to state that in 2018, 2.2 million 12- to 17-year-olds and 4.5 million 18- to 24-year-olds will regularly use Facebook in the UK, 700,000 fewer than in 2017, as younger users defect to services such as Snapchat.

Some of the reasons that has led to this phenomenon is, Facebook is facing competition from Pinterest and Instagram which have novelty and exclusivity factors attached to it as yet. This is an obvious advantage to the younger audience. Secondly, with lot of people in their 40s and 50s joining Facebook, a lot of young people are finding their parents and relatives on the network and are trying to avoid activities that make them cognate to these people. Thirdly, advertising has so far been non-intrusive in case of other platforms like Snapchat, Instagram and Pinterest unlike Facebook. This makes these platforms friendlier. Fourthly, Platforms like Instagram and Pinterest are more visual and attractive, especially to the younger audience. With falling data costs, it is cheaper and easier to access picture and video content, hence upping the usage of these platforms against Facebook. Finally, Facebook due to its multiple functionality is considered as a generic social solutions without a serious attempt to solver one networking problem. Other platforms have considerably simpler usage features and functionalities, making them practical and relevant to the younger audience.

It is strange then, that out of the series of advertisements that Facebook came up with in a recent campaign, the first one had a protagonist, who ostensibly calls himself Sandy and boasts his flamboyant yet family-oriented lifestyle. Sandy is in his fifties. Is it a self-goal or a bigger strategy by Facebook? At a time when Facebook needs to strengthen its credentials as a young social network, for functional as well as demographic reasons (two-third of India population is below 35 years of age), is promoting itself as a preferred social networking medium of people in fifties a good strategy?

I am Sandy!

Facebook, however, has supplemented this ad with other ads too that are having younger protagonists, it is still baffling that why would Facebook want to woo a segment of older population at the cost of a swelling younger audience. The segment which has made Facebook what it is in India, the biggest social network in the country and the country with the largest number of Facebook users in the world? Time will tell. 

Will Ayush be able to challenge the Patanjali juggernaut?

It was in 2001 that Hindustan Unilever (HUL) launched Ayush, the Ayurveda based portfolio of wellness products. The brand was later shut down as it didn’t find much traction with the audience. The brand was ostensibly targeted at the premium customers who would embrace it for its ayurvedic core values. HUL representatives claimed that the products were ‘ahead of time’.

The Rise of Patanjali

The year 2006 welcomed another kid on the CPG (Consumer Packaged Goods) platform that touted itself as the ayurvedic alternative for all the ‘unhealthy’ and ‘westernised’ products. Clubbed with the ‘nationalist’ sentiment the brand struck a chord with a mass audience, majorly due to its brand ambassador, Yoga-guru Baba Ramdev. To add, right pricing for the right audience hit the sweet spot of the Indian consumers and the cash registers stated ringing for the brand. Patanjali soon became a household name and crossed a revenue mark of 10,000 crores in the last financial year displacing major bigwigs of the FMCG (Fast Moving Consumer Goods) industry.

Baba Ramdev, who already had won millions of followers through his Yoga practice, promoted the products in an unbashed manner. For his followers it was a marriage made in heaven between their favourite Yoga-guru and Ayurvedic products. His follower base that majorly came from tier-2 and below cities stood by Patanjali and helped it rise miraculously. Media channels like Aastha and Sanskar in the played a major role in making Baba Ramdev a houshold name in 2000s. Even he himself acknowledge the fact that media was a big factor in the rise of the brand.

India is a price sensitive market when it comes to CPGs and the right pricing almost always holds the key for the success of a product. Failure to do so can wipe the brand off the shelves of stores and minds of customers in no time. Patanjali got it right here too.

Patanjali hit the jackpot with the trinity of – Brand Ambassador, Brand Resonance and Pricing. A very difficult but extremely rewarding endeavor.

Positive Word-of-Mouth

Patanjali also succeeded in acquiring new customers and retain the old ones by creating a positive perception of the quality of products, which was subconsciously influenced by its reasonable prices. After consumer acquisition, Patanjali products were able to make good of the promise made to them hence eliciting a positive post-purchase behaviour largely driven by the Halo effect and lower financial risk due to cheaper products.

On the other hand when Ayush was launched as a premium brand in 2001, the market wasn’t gungg-ho about Ayurveda based products. Ayush could not offer anything concrete to its audience to trust (HULs house of brand strategy was not very helpful). Subsequently, the audience turned a blind eye to the products. The Brand had to be shut in the aftermath of consistent poor performance.

Brand Ambassador

Among the three aspects highlighted, Brand Ambassador was the key in the phenomenal rise of the Patanjali Brand. Baba Ramdev never shied away from marketing Patanjali brand and while his followers went by every word he said about the products and Patanjali, even those who did not follow Baba Ramdev were able to trust the credibility around the brand. His unapologetic rant against the MNCs also made him the poster-boy of nationalistic sentiment that clicked with the burgeoning middle class of the country. On the other hand, Ayush has brought in film stars Akshay Kumar and Tamanna as brand ambassadors. This was a run-of-mill approach as both the actors have no genuine link with Ayurveda and are seen in many other ads that create more confusion then clarity. The ad showing the actors also chose to claim to be the real Ayurveda based brand which may be perceived as arrogant or even petty. Due to the missing connect with the core offering of the brand, the ambassadors stand no chance against the massive appeal of Baba Ramdev and his Patanjali products.

Brand Resonance

The core offering of the Patanjali brand was no-nonsense Ayurveda based products which didn’t have fancy packaging and touched up images of good looking models. The ads also didn’t look ‘rich’ and were intentionally painted ‘simple’ to demonstrate its values. This strategy personified the brand as honest, simple and trustworthy, hence making people believe in the offering. Ayurveda based products must be able to invoke emotions like  purity and trust due to many factors like – lack of knowledge in people regarding the roots of the products, formulation and application, mushrooming of a huge number of Ayurveda based product companies and finally the perceived physical and health risks involved in using the products. Ayush has maintained its premium packaging and hasn’t been able to come up with a major differentiator vis a vis a host of other products available in the market. In absence of a strong usp, it hasn’t been able to make any specific place for itself in the segment.

Pricing

In terms of pricing, while Ayush has shed the premium tag with its re-launch a quick analysis of the products show that they are still quite expensive than Patanjali. The Ayush products taken into consideration are anything between 33% to 94% expensive than Patanjali products. Clearly, the reference point for Ayurveda based products in customers’s mind is Patanjali and a quick comparison between Patanjali and Ayush products will lead to an easy choice for her, if it is based on price only. With a more than satisfied customer base of Patanjali products, Ayush doesn’t have footing on the quality attribute either while some detractors and a small customer base who map uality on price may give Ayush a shot. But this will be a small base, far from viability for HUL. Hence, the price point becomes even more important which doesn’t seem to be helping Ayush.

In a nut-shell, Ayush’s relaunch by HUL may be more of optimism and an 'easy way out' rather than a of rational ‘Product Development’ growth strategy. Whether Ayush has more punches to pull in future, only time will tell. As of now, it doesn’t seem to be too much of a worry for Patanjali.

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’ -

·        

• 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!).