Tuesday, July 31, 2007

BRAND:Split wide open(Part II)

Continuing with the last article:

RULE No 5. Visual appearance is a key factor for the product – When a new product is launched in the market, the first impression is the last impression for the customers, which is looks of the product. E.g. Apple iPod has a very trendy, slim, Gen Y looks which attracts millions of customers. So due importance should be given to the visual appearance of the product.

RULE No 6. Try to attach to emotional needs of the customer- Indian companies have learnt it as we can see companies like HUL, MUL to name a few whose advertisements portray small kids doing the ads saying “Daag Acche Hain” and “My Daddy’s Big Car” respectively. These companies have understood that the real influencer is the minor of the families. So they are attaching the emotional aspect in their products. So the Mantra should be “Influence the Influencer”.

RULE No 7. Price is important – This is one of the most important features which can make or break a product to become a brand. Now one cannot over price the product nor can it under price the product. Every time a customers buys a product, he is doing some sort of trade-offs between different parameters like features, price etc. Now if the product’s price is justified, then a customer may buy the product.


So at the end of it all “customers don’t really care about new brands, they care about new categories. By first preempting the category and then aggressively promoting the category, you create both a powerful brand and a rapidly escalating market”. For example Coca Cola and Pizza Hut etc.

Hence if I have to take a judgment call then managers should always remember in which segment of market they are in, in other words we can say that marketers should never suffer from Marketing Myopia”. One of the important aspects of successful marketing strategy is that they should “identify and target the actual influencer”.

N.B. The list is not exhaustive but these codified set of rules can act as an eye-opener.



Monday, July 30, 2007

BRAND: Split wide open

BRANDS: Sometimes potion of joy and sometimes nightmare for managers. Why I am being theatrical about the statement is what this article aims at i.e. understanding the basic reasons why certain brands fail and why certain brands succeed in the marketplace. The main differentiating factor between success and failure of the product is the way it feels the customer’s pulse, but in different ways.

A product does not have to be particularly bad to flop and also it doesn’t need to be good to be successful in the market. So no matter how strong a brand is, the market is always elusive. So the best any brand manager can hope for is to look out for any pitfall which could catch them out. It is in the interest of identifying these pitfalls, rather than for the sake of schadenfreude, the Brand Manager should look for.
The 7 Thumb Rules for any brand success are as follows:-

RULE No 1. Do the right market research- Why did Kellogg’s cereals have a rough ride in India? One of the main reasons can be attributed to the poor market research on cultural grounds. So market research becomes more important for these reasons.

RULE No 2. Don’t clone your rivals Example would be Toshiba’s iRiver which could not establish itself in the market as customers thought it was a mere clone of Apple’s iPod (as Apple primarily leveraged “First Movers Advantage”). So the companies should try to build a niche for their product category first; viz. LG christened “BLUE OCEAN STRATEGY” to create its own niche in the marketplace.

RULE No 3. Concentrate on the brand’s perception Example is the introduction of New Coke in place of Coca-Cola, which is one of the biggest brand failures for the company because they were unable to qualify and quantify customer’s perception about their brand or company per se.

RULE No 4. Name of the product matters a lot so give due importance to it When brands try to venture into new uncharted territories due importance should be given to name of the brand. Examples like Coca-Cola venturing into China where they had to change their name and also General Motors Nova did not succeed in Spain because in Spanish it means “Failure”. So the bottomline is that no matter what the name means to your company, but it should suit the taste and preferences of the customers.

Check out the space for the concluding part!!!

N.B. The list is not exhaustive but these codified set of rules can act as an eye-opener.



Saturday, July 28, 2007

Dark side of Innovation

Continuing with the last article "Innovate to Differentiate"

Innovation is one part of the whole success story. There have been many brands – both established and new product which has failed miserably in the market. We can cite as many examples as we can. But delving deep into the reasons why these products have failed can give us new insights regarding the brand failures.

For example, Hero Honda Karizma was a major innovation in the motor cycle segment. Still it could not woo customers to buy the product in large numbers as the company anticipated. The product had everything that the customers would have loved like total new look, new engine, updated suspension etc. Still it could not pull out money from customer’s wallet. The same fate awaited Daewoo Cielo and Crystal Pepsi - one of the biggest brand failures of these companies.

Now the question is why?

If we dig into the whole problem we can understand that company’s perception about the product was different than that of the customers. Though these products were among the best innovated products, still it could not stir up the expectations of the customers.

Innovating a new product or extension to the old product without proper marketing strategies like positioning, segmenting, targeting, understanding customer’s value proposition & customer mind share the product may have etc, there is an odd chance for the success of the product.

That’s why time and again it has been said that “Innovation” and “Differentiation” are like two sides of a coin. It is the company who innovates and at the end of the day it is the customer who differentiates. But the irony of the situation is that you can never anticipate which side the coin will fall. But the uncertainty can definitely be reduced to a great extent.

Thats why I find a resemblance between product and a human being (to some extent, of course). Every human being is an innovation when it comes out of their mother’s womb. But how they add value and execute themselves in the course of time is what differentiates them from others.

So innovation should go hand in hand with marketing and understanding the need gap of the customers.



Friday, July 27, 2007

Innovate to Differentiate

Innovation is the key to success in the 21st century. There are lots of reasons for it. Nowadays product life cycles (PLC) are truly getting shorter because of an increased number of competitors from here and abroad and their readiness to copy anything that seems to be taking off. Secondly, customers have become less brand loyal than they were before due to more options in the market place from the competitors.

Now there is no easy way out for the companies and they have to go for innovation of their products or services. This point is perfectly exemplified by Steve Jobs of Apple Computers who knew that electronic firms will rapidly come out with new iPod versions. But he is a Marketing Genius and instead of defending his innovation with expensive advertising, he defended with more innovation. He upgraded the iPod to carry photos as well, while his competitors were only carrying music. Then he moved on to video. This helped him to keep his competitors like Toshiba’s iRiver at bay and also his product development keeps the competitors always lagging.

The same marketing magic is being worked by Howard Schultz of Starbucks who continues to add new innovations to the coffee service business.

In this way two things are happening simultaneously –

1. They are saving some extra bucks on marketing.
2. By innovation they are increasing the product life cycle by introducing new variants in their existing product line.

Now talking about Innovation, it can be in many ways like in case of Car company “X”, they can innovate by introducing models with new variants, new color, new engine – altogether a whole new product but still keeping the core competency alive. Now for a customer, brand takes a back seat when they see new variants in the same price in the same segment but from other brands and they may opt for it. Now if company “X” had already innovated a new product in that category which no other competitor has done, then it could have capitalized on that and added new customers to its base. So we can see that how “INNOVATION is helping them to DIFFERENTIATE” from the competitors in the fierce competitive market.

If we take the present competitive scenario in any sector, we can understand that until and unless companies innovate their products or services, it’s very difficult for them to stay in the game. I will try to explain the above statement:

Lately mobile telephone operators are working on a new service segment called Voice Message Service (VMS) which clearly shows that to be in a competitive market, companies have to innovate new products, be in form of service or product to woo the customers.

Now if we again take an example of any company “X” which comes with this service first, has an edge over its competitors, especially in a telecom market like India which is highly competitive and customers to a very large extent are less brand loyal. Customers always want better and latest value added services. So when company “X” is going for VMS then it has a good chance of retaining its old customers and also add new customers. But company “X” has to make sure that it doesn’t stop innovating its services because the competitors are always in a look out to replicate the services which are taking off. So it should keep innovating new services to keep a step ahead of its competitors.



Wednesday, July 25, 2007

INDIA : A Shifted Reality

India: the land of a billion people, the land of inherent paradoxes, the land of diversity in every possible imaginable way: the mammoth who has finally risen from its slumber.

I can’t help thinking that where we are heading? Are we heading towards a bastion of young, talented, energetic population driving our economy? If this is the case then I am one of those lucky few who will be dubbed as the “Flag Bearer” of this flamboyant economy.

But is this the true case? Think twice (if not more) before answering that?

Noted economists say “True Bharat” resides in places far away from high rise, plush apartments of the cities termed as urbane (urban) population (not that I have a personal grudge against people living in cities). On top of that, management thinkers like C.K.Prahlad with his BOP (Bottom of Pyramid) concept has very articulately convinced the big biz conglomerate to tap these virgin markets with its business tactics (no pun intended). Is this complete mockery of our economic policies which was not able to uplift these masses for the last 60 years?

In this context, still our primary leverage comes from urban population who earns and pays taxes, so on and so forth.

Basically if I delve deep into the driving factors of our economy after 60 glorious years of independence (again no pun intended), then I can’t help thinking of a
“bullock cart pulled by incongruent political parties (as bullocks) and the very wheels being the CREDIT CARD ECONOMY at one side & SACHET ECONOMY at the other”.

Now guess who can be the person driving the bullock cart? Now its upto the reader’s imagination to think who it can be?

The metaphor to this theatrical outlook is that though the two parallel economies (in form of the wheels) look at each other from a distance, still the gap cannot be reduced. But as educated minds we should argue that is it possible to make the two wheels similar upto some extent so that some sort of stability can be attained. Yes it can I say!!

One of the probable solutions can be efficient and effective utilization of resources and proper distribution of it.

N.B. - The author is not biased.


Monday, July 23, 2007

Market share or Profitability?

Along the way, I came across a lot of jargons. In all I can say my mind and soul has been "JARGONIZED". But one obsession for me has always been to know what a company is striving for – Is it Market Share or Profitability?

In the quest for this hallowed truth, my journey has taken me to almost to the depths of the insurmountable business model paradigms.

In the end of it all, I can justify by saying that Indian business model and International business model are two diverse ones. In the Indian context, customers vary in the buying behavior on local, regional, countrywide basis (god knows how many different reasons affect customer behavior) which makes the modern marketers task of classifying customers more complicated. One more irrefutable truth about Indian customer is that “They Think Emotionally but they buy Rationally”. This cannot be said about so called Western customers as their buying pattern are quite logical and with complete congruence with their rationality.

Now delving deep into the emotion & rational part of Indian customer, it can be very well understood that Indian companies are always on dichotomous position where they are hard pressed to go for either market share or profitability.

For example, Surf Excel’s catchy advertisement where two kids while coming back from school makes a scene in the road by jumping on the dirt. In this case mother should have shouted on them but she didn’t. She says that “Stains are good”. So we can very well see that “children have mothers to take care of them and mothers have Surf Excel to take care”— that is what HLL (now HUL) wanted to convey to the customers. Instantly the Ad puts across an emotional attachment with the customers. Now on the other side P&G comes with a product with well to do ad campaign but with less price (supposedly better quality). How many of us will go for Surf Excel? I doubt, not many! (Except for some for those who thinks ads are a waste of time) That’s the point of contention, that Indian customers are very less brand loyal than western counterparts. So with this example (of course there are lots of more examples like this), it can be easily understood that Indian companies are in a vicious circle of either market share or profitability.

P.S. - I am primarily taking companies where product aspect is more tangible than service.

Tuesday, July 31, 2007

BRAND:Split wide open(Part II)

Continuing with the last article:

RULE No 5. Visual appearance is a key factor for the product – When a new product is launched in the market, the first impression is the last impression for the customers, which is looks of the product. E.g. Apple iPod has a very trendy, slim, Gen Y looks which attracts millions of customers. So due importance should be given to the visual appearance of the product.

RULE No 6. Try to attach to emotional needs of the customer- Indian companies have learnt it as we can see companies like HUL, MUL to name a few whose advertisements portray small kids doing the ads saying “Daag Acche Hain” and “My Daddy’s Big Car” respectively. These companies have understood that the real influencer is the minor of the families. So they are attaching the emotional aspect in their products. So the Mantra should be “Influence the Influencer”.

RULE No 7. Price is important – This is one of the most important features which can make or break a product to become a brand. Now one cannot over price the product nor can it under price the product. Every time a customers buys a product, he is doing some sort of trade-offs between different parameters like features, price etc. Now if the product’s price is justified, then a customer may buy the product.


So at the end of it all “customers don’t really care about new brands, they care about new categories. By first preempting the category and then aggressively promoting the category, you create both a powerful brand and a rapidly escalating market”. For example Coca Cola and Pizza Hut etc.

Hence if I have to take a judgment call then managers should always remember in which segment of market they are in, in other words we can say that marketers should never suffer from Marketing Myopia”. One of the important aspects of successful marketing strategy is that they should “identify and target the actual influencer”.

N.B. The list is not exhaustive but these codified set of rules can act as an eye-opener.



Monday, July 30, 2007

BRAND: Split wide open

BRANDS: Sometimes potion of joy and sometimes nightmare for managers. Why I am being theatrical about the statement is what this article aims at i.e. understanding the basic reasons why certain brands fail and why certain brands succeed in the marketplace. The main differentiating factor between success and failure of the product is the way it feels the customer’s pulse, but in different ways.

A product does not have to be particularly bad to flop and also it doesn’t need to be good to be successful in the market. So no matter how strong a brand is, the market is always elusive. So the best any brand manager can hope for is to look out for any pitfall which could catch them out. It is in the interest of identifying these pitfalls, rather than for the sake of schadenfreude, the Brand Manager should look for.
The 7 Thumb Rules for any brand success are as follows:-

RULE No 1. Do the right market research- Why did Kellogg’s cereals have a rough ride in India? One of the main reasons can be attributed to the poor market research on cultural grounds. So market research becomes more important for these reasons.

RULE No 2. Don’t clone your rivals Example would be Toshiba’s iRiver which could not establish itself in the market as customers thought it was a mere clone of Apple’s iPod (as Apple primarily leveraged “First Movers Advantage”). So the companies should try to build a niche for their product category first; viz. LG christened “BLUE OCEAN STRATEGY” to create its own niche in the marketplace.

RULE No 3. Concentrate on the brand’s perception Example is the introduction of New Coke in place of Coca-Cola, which is one of the biggest brand failures for the company because they were unable to qualify and quantify customer’s perception about their brand or company per se.

RULE No 4. Name of the product matters a lot so give due importance to it When brands try to venture into new uncharted territories due importance should be given to name of the brand. Examples like Coca-Cola venturing into China where they had to change their name and also General Motors Nova did not succeed in Spain because in Spanish it means “Failure”. So the bottomline is that no matter what the name means to your company, but it should suit the taste and preferences of the customers.

Check out the space for the concluding part!!!

N.B. The list is not exhaustive but these codified set of rules can act as an eye-opener.



Saturday, July 28, 2007

Dark side of Innovation

Continuing with the last article "Innovate to Differentiate"

Innovation is one part of the whole success story. There have been many brands – both established and new product which has failed miserably in the market. We can cite as many examples as we can. But delving deep into the reasons why these products have failed can give us new insights regarding the brand failures.

For example, Hero Honda Karizma was a major innovation in the motor cycle segment. Still it could not woo customers to buy the product in large numbers as the company anticipated. The product had everything that the customers would have loved like total new look, new engine, updated suspension etc. Still it could not pull out money from customer’s wallet. The same fate awaited Daewoo Cielo and Crystal Pepsi - one of the biggest brand failures of these companies.

Now the question is why?

If we dig into the whole problem we can understand that company’s perception about the product was different than that of the customers. Though these products were among the best innovated products, still it could not stir up the expectations of the customers.

Innovating a new product or extension to the old product without proper marketing strategies like positioning, segmenting, targeting, understanding customer’s value proposition & customer mind share the product may have etc, there is an odd chance for the success of the product.

That’s why time and again it has been said that “Innovation” and “Differentiation” are like two sides of a coin. It is the company who innovates and at the end of the day it is the customer who differentiates. But the irony of the situation is that you can never anticipate which side the coin will fall. But the uncertainty can definitely be reduced to a great extent.

Thats why I find a resemblance between product and a human being (to some extent, of course). Every human being is an innovation when it comes out of their mother’s womb. But how they add value and execute themselves in the course of time is what differentiates them from others.

So innovation should go hand in hand with marketing and understanding the need gap of the customers.



Friday, July 27, 2007

Innovate to Differentiate

Innovation is the key to success in the 21st century. There are lots of reasons for it. Nowadays product life cycles (PLC) are truly getting shorter because of an increased number of competitors from here and abroad and their readiness to copy anything that seems to be taking off. Secondly, customers have become less brand loyal than they were before due to more options in the market place from the competitors.

Now there is no easy way out for the companies and they have to go for innovation of their products or services. This point is perfectly exemplified by Steve Jobs of Apple Computers who knew that electronic firms will rapidly come out with new iPod versions. But he is a Marketing Genius and instead of defending his innovation with expensive advertising, he defended with more innovation. He upgraded the iPod to carry photos as well, while his competitors were only carrying music. Then he moved on to video. This helped him to keep his competitors like Toshiba’s iRiver at bay and also his product development keeps the competitors always lagging.

The same marketing magic is being worked by Howard Schultz of Starbucks who continues to add new innovations to the coffee service business.

In this way two things are happening simultaneously –

1. They are saving some extra bucks on marketing.
2. By innovation they are increasing the product life cycle by introducing new variants in their existing product line.

Now talking about Innovation, it can be in many ways like in case of Car company “X”, they can innovate by introducing models with new variants, new color, new engine – altogether a whole new product but still keeping the core competency alive. Now for a customer, brand takes a back seat when they see new variants in the same price in the same segment but from other brands and they may opt for it. Now if company “X” had already innovated a new product in that category which no other competitor has done, then it could have capitalized on that and added new customers to its base. So we can see that how “INNOVATION is helping them to DIFFERENTIATE” from the competitors in the fierce competitive market.

If we take the present competitive scenario in any sector, we can understand that until and unless companies innovate their products or services, it’s very difficult for them to stay in the game. I will try to explain the above statement:

Lately mobile telephone operators are working on a new service segment called Voice Message Service (VMS) which clearly shows that to be in a competitive market, companies have to innovate new products, be in form of service or product to woo the customers.

Now if we again take an example of any company “X” which comes with this service first, has an edge over its competitors, especially in a telecom market like India which is highly competitive and customers to a very large extent are less brand loyal. Customers always want better and latest value added services. So when company “X” is going for VMS then it has a good chance of retaining its old customers and also add new customers. But company “X” has to make sure that it doesn’t stop innovating its services because the competitors are always in a look out to replicate the services which are taking off. So it should keep innovating new services to keep a step ahead of its competitors.



Wednesday, July 25, 2007

INDIA : A Shifted Reality

India: the land of a billion people, the land of inherent paradoxes, the land of diversity in every possible imaginable way: the mammoth who has finally risen from its slumber.

I can’t help thinking that where we are heading? Are we heading towards a bastion of young, talented, energetic population driving our economy? If this is the case then I am one of those lucky few who will be dubbed as the “Flag Bearer” of this flamboyant economy.

But is this the true case? Think twice (if not more) before answering that?

Noted economists say “True Bharat” resides in places far away from high rise, plush apartments of the cities termed as urbane (urban) population (not that I have a personal grudge against people living in cities). On top of that, management thinkers like C.K.Prahlad with his BOP (Bottom of Pyramid) concept has very articulately convinced the big biz conglomerate to tap these virgin markets with its business tactics (no pun intended). Is this complete mockery of our economic policies which was not able to uplift these masses for the last 60 years?

In this context, still our primary leverage comes from urban population who earns and pays taxes, so on and so forth.

Basically if I delve deep into the driving factors of our economy after 60 glorious years of independence (again no pun intended), then I can’t help thinking of a
“bullock cart pulled by incongruent political parties (as bullocks) and the very wheels being the CREDIT CARD ECONOMY at one side & SACHET ECONOMY at the other”.

Now guess who can be the person driving the bullock cart? Now its upto the reader’s imagination to think who it can be?

The metaphor to this theatrical outlook is that though the two parallel economies (in form of the wheels) look at each other from a distance, still the gap cannot be reduced. But as educated minds we should argue that is it possible to make the two wheels similar upto some extent so that some sort of stability can be attained. Yes it can I say!!

One of the probable solutions can be efficient and effective utilization of resources and proper distribution of it.

N.B. - The author is not biased.


Monday, July 23, 2007

Market share or Profitability?

Along the way, I came across a lot of jargons. In all I can say my mind and soul has been "JARGONIZED". But one obsession for me has always been to know what a company is striving for – Is it Market Share or Profitability?

In the quest for this hallowed truth, my journey has taken me to almost to the depths of the insurmountable business model paradigms.

In the end of it all, I can justify by saying that Indian business model and International business model are two diverse ones. In the Indian context, customers vary in the buying behavior on local, regional, countrywide basis (god knows how many different reasons affect customer behavior) which makes the modern marketers task of classifying customers more complicated. One more irrefutable truth about Indian customer is that “They Think Emotionally but they buy Rationally”. This cannot be said about so called Western customers as their buying pattern are quite logical and with complete congruence with their rationality.

Now delving deep into the emotion & rational part of Indian customer, it can be very well understood that Indian companies are always on dichotomous position where they are hard pressed to go for either market share or profitability.

For example, Surf Excel’s catchy advertisement where two kids while coming back from school makes a scene in the road by jumping on the dirt. In this case mother should have shouted on them but she didn’t. She says that “Stains are good”. So we can very well see that “children have mothers to take care of them and mothers have Surf Excel to take care”— that is what HLL (now HUL) wanted to convey to the customers. Instantly the Ad puts across an emotional attachment with the customers. Now on the other side P&G comes with a product with well to do ad campaign but with less price (supposedly better quality). How many of us will go for Surf Excel? I doubt, not many! (Except for some for those who thinks ads are a waste of time) That’s the point of contention, that Indian customers are very less brand loyal than western counterparts. So with this example (of course there are lots of more examples like this), it can be easily understood that Indian companies are in a vicious circle of either market share or profitability.

P.S. - I am primarily taking companies where product aspect is more tangible than service.

Tuesday, July 31, 2007

BRAND:Split wide open(Part II)

Continuing with the last article:

RULE No 5. Visual appearance is a key factor for the product – When a new product is launched in the market, the first impression is the last impression for the customers, which is looks of the product. E.g. Apple iPod has a very trendy, slim, Gen Y looks which attracts millions of customers. So due importance should be given to the visual appearance of the product.

RULE No 6. Try to attach to emotional needs of the customer- Indian companies have learnt it as we can see companies like HUL, MUL to name a few whose advertisements portray small kids doing the ads saying “Daag Acche Hain” and “My Daddy’s Big Car” respectively. These companies have understood that the real influencer is the minor of the families. So they are attaching the emotional aspect in their products. So the Mantra should be “Influence the Influencer”.

RULE No 7. Price is important – This is one of the most important features which can make or break a product to become a brand. Now one cannot over price the product nor can it under price the product. Every time a customers buys a product, he is doing some sort of trade-offs between different parameters like features, price etc. Now if the product’s price is justified, then a customer may buy the product.


So at the end of it all “customers don’t really care about new brands, they care about new categories. By first preempting the category and then aggressively promoting the category, you create both a powerful brand and a rapidly escalating market”. For example Coca Cola and Pizza Hut etc.

Hence if I have to take a judgment call then managers should always remember in which segment of market they are in, in other words we can say that marketers should never suffer from Marketing Myopia”. One of the important aspects of successful marketing strategy is that they should “identify and target the actual influencer”.

N.B. The list is not exhaustive but these codified set of rules can act as an eye-opener.



Monday, July 30, 2007

BRAND: Split wide open

BRANDS: Sometimes potion of joy and sometimes nightmare for managers. Why I am being theatrical about the statement is what this article aims at i.e. understanding the basic reasons why certain brands fail and why certain brands succeed in the marketplace. The main differentiating factor between success and failure of the product is the way it feels the customer’s pulse, but in different ways.

A product does not have to be particularly bad to flop and also it doesn’t need to be good to be successful in the market. So no matter how strong a brand is, the market is always elusive. So the best any brand manager can hope for is to look out for any pitfall which could catch them out. It is in the interest of identifying these pitfalls, rather than for the sake of schadenfreude, the Brand Manager should look for.
The 7 Thumb Rules for any brand success are as follows:-

RULE No 1. Do the right market research- Why did Kellogg’s cereals have a rough ride in India? One of the main reasons can be attributed to the poor market research on cultural grounds. So market research becomes more important for these reasons.

RULE No 2. Don’t clone your rivals Example would be Toshiba’s iRiver which could not establish itself in the market as customers thought it was a mere clone of Apple’s iPod (as Apple primarily leveraged “First Movers Advantage”). So the companies should try to build a niche for their product category first; viz. LG christened “BLUE OCEAN STRATEGY” to create its own niche in the marketplace.

RULE No 3. Concentrate on the brand’s perception Example is the introduction of New Coke in place of Coca-Cola, which is one of the biggest brand failures for the company because they were unable to qualify and quantify customer’s perception about their brand or company per se.

RULE No 4. Name of the product matters a lot so give due importance to it When brands try to venture into new uncharted territories due importance should be given to name of the brand. Examples like Coca-Cola venturing into China where they had to change their name and also General Motors Nova did not succeed in Spain because in Spanish it means “Failure”. So the bottomline is that no matter what the name means to your company, but it should suit the taste and preferences of the customers.

Check out the space for the concluding part!!!

N.B. The list is not exhaustive but these codified set of rules can act as an eye-opener.



Saturday, July 28, 2007

Dark side of Innovation

Continuing with the last article "Innovate to Differentiate"

Innovation is one part of the whole success story. There have been many brands – both established and new product which has failed miserably in the market. We can cite as many examples as we can. But delving deep into the reasons why these products have failed can give us new insights regarding the brand failures.

For example, Hero Honda Karizma was a major innovation in the motor cycle segment. Still it could not woo customers to buy the product in large numbers as the company anticipated. The product had everything that the customers would have loved like total new look, new engine, updated suspension etc. Still it could not pull out money from customer’s wallet. The same fate awaited Daewoo Cielo and Crystal Pepsi - one of the biggest brand failures of these companies.

Now the question is why?

If we dig into the whole problem we can understand that company’s perception about the product was different than that of the customers. Though these products were among the best innovated products, still it could not stir up the expectations of the customers.

Innovating a new product or extension to the old product without proper marketing strategies like positioning, segmenting, targeting, understanding customer’s value proposition & customer mind share the product may have etc, there is an odd chance for the success of the product.

That’s why time and again it has been said that “Innovation” and “Differentiation” are like two sides of a coin. It is the company who innovates and at the end of the day it is the customer who differentiates. But the irony of the situation is that you can never anticipate which side the coin will fall. But the uncertainty can definitely be reduced to a great extent.

Thats why I find a resemblance between product and a human being (to some extent, of course). Every human being is an innovation when it comes out of their mother’s womb. But how they add value and execute themselves in the course of time is what differentiates them from others.

So innovation should go hand in hand with marketing and understanding the need gap of the customers.



Friday, July 27, 2007

Innovate to Differentiate

Innovation is the key to success in the 21st century. There are lots of reasons for it. Nowadays product life cycles (PLC) are truly getting shorter because of an increased number of competitors from here and abroad and their readiness to copy anything that seems to be taking off. Secondly, customers have become less brand loyal than they were before due to more options in the market place from the competitors.

Now there is no easy way out for the companies and they have to go for innovation of their products or services. This point is perfectly exemplified by Steve Jobs of Apple Computers who knew that electronic firms will rapidly come out with new iPod versions. But he is a Marketing Genius and instead of defending his innovation with expensive advertising, he defended with more innovation. He upgraded the iPod to carry photos as well, while his competitors were only carrying music. Then he moved on to video. This helped him to keep his competitors like Toshiba’s iRiver at bay and also his product development keeps the competitors always lagging.

The same marketing magic is being worked by Howard Schultz of Starbucks who continues to add new innovations to the coffee service business.

In this way two things are happening simultaneously –

1. They are saving some extra bucks on marketing.
2. By innovation they are increasing the product life cycle by introducing new variants in their existing product line.

Now talking about Innovation, it can be in many ways like in case of Car company “X”, they can innovate by introducing models with new variants, new color, new engine – altogether a whole new product but still keeping the core competency alive. Now for a customer, brand takes a back seat when they see new variants in the same price in the same segment but from other brands and they may opt for it. Now if company “X” had already innovated a new product in that category which no other competitor has done, then it could have capitalized on that and added new customers to its base. So we can see that how “INNOVATION is helping them to DIFFERENTIATE” from the competitors in the fierce competitive market.

If we take the present competitive scenario in any sector, we can understand that until and unless companies innovate their products or services, it’s very difficult for them to stay in the game. I will try to explain the above statement:

Lately mobile telephone operators are working on a new service segment called Voice Message Service (VMS) which clearly shows that to be in a competitive market, companies have to innovate new products, be in form of service or product to woo the customers.

Now if we again take an example of any company “X” which comes with this service first, has an edge over its competitors, especially in a telecom market like India which is highly competitive and customers to a very large extent are less brand loyal. Customers always want better and latest value added services. So when company “X” is going for VMS then it has a good chance of retaining its old customers and also add new customers. But company “X” has to make sure that it doesn’t stop innovating its services because the competitors are always in a look out to replicate the services which are taking off. So it should keep innovating new services to keep a step ahead of its competitors.



Wednesday, July 25, 2007

INDIA : A Shifted Reality

India: the land of a billion people, the land of inherent paradoxes, the land of diversity in every possible imaginable way: the mammoth who has finally risen from its slumber.

I can’t help thinking that where we are heading? Are we heading towards a bastion of young, talented, energetic population driving our economy? If this is the case then I am one of those lucky few who will be dubbed as the “Flag Bearer” of this flamboyant economy.

But is this the true case? Think twice (if not more) before answering that?

Noted economists say “True Bharat” resides in places far away from high rise, plush apartments of the cities termed as urbane (urban) population (not that I have a personal grudge against people living in cities). On top of that, management thinkers like C.K.Prahlad with his BOP (Bottom of Pyramid) concept has very articulately convinced the big biz conglomerate to tap these virgin markets with its business tactics (no pun intended). Is this complete mockery of our economic policies which was not able to uplift these masses for the last 60 years?

In this context, still our primary leverage comes from urban population who earns and pays taxes, so on and so forth.

Basically if I delve deep into the driving factors of our economy after 60 glorious years of independence (again no pun intended), then I can’t help thinking of a
“bullock cart pulled by incongruent political parties (as bullocks) and the very wheels being the CREDIT CARD ECONOMY at one side & SACHET ECONOMY at the other”.

Now guess who can be the person driving the bullock cart? Now its upto the reader’s imagination to think who it can be?

The metaphor to this theatrical outlook is that though the two parallel economies (in form of the wheels) look at each other from a distance, still the gap cannot be reduced. But as educated minds we should argue that is it possible to make the two wheels similar upto some extent so that some sort of stability can be attained. Yes it can I say!!

One of the probable solutions can be efficient and effective utilization of resources and proper distribution of it.

N.B. - The author is not biased.


Monday, July 23, 2007

Market share or Profitability?

Along the way, I came across a lot of jargons. In all I can say my mind and soul has been "JARGONIZED". But one obsession for me has always been to know what a company is striving for – Is it Market Share or Profitability?

In the quest for this hallowed truth, my journey has taken me to almost to the depths of the insurmountable business model paradigms.

In the end of it all, I can justify by saying that Indian business model and International business model are two diverse ones. In the Indian context, customers vary in the buying behavior on local, regional, countrywide basis (god knows how many different reasons affect customer behavior) which makes the modern marketers task of classifying customers more complicated. One more irrefutable truth about Indian customer is that “They Think Emotionally but they buy Rationally”. This cannot be said about so called Western customers as their buying pattern are quite logical and with complete congruence with their rationality.

Now delving deep into the emotion & rational part of Indian customer, it can be very well understood that Indian companies are always on dichotomous position where they are hard pressed to go for either market share or profitability.

For example, Surf Excel’s catchy advertisement where two kids while coming back from school makes a scene in the road by jumping on the dirt. In this case mother should have shouted on them but she didn’t. She says that “Stains are good”. So we can very well see that “children have mothers to take care of them and mothers have Surf Excel to take care”— that is what HLL (now HUL) wanted to convey to the customers. Instantly the Ad puts across an emotional attachment with the customers. Now on the other side P&G comes with a product with well to do ad campaign but with less price (supposedly better quality). How many of us will go for Surf Excel? I doubt, not many! (Except for some for those who thinks ads are a waste of time) That’s the point of contention, that Indian customers are very less brand loyal than western counterparts. So with this example (of course there are lots of more examples like this), it can be easily understood that Indian companies are in a vicious circle of either market share or profitability.

P.S. - I am primarily taking companies where product aspect is more tangible than service.