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MARKATHON

MARKETING MAGAZINE OF IIM SHILLONG VOL 2, ISSUE 9

JANUARY 11

COVER STORY: Newsmakers

2010

INTERVIEW: ANJANA VIVEK, FOUNDER OF VENTURE BEAN CONSULTING

FROM THE EDITOR

Dear Readers,
As I write this editorial the screaming headline that caught my attention was the entry of the iPads in India. This gadget has earned the title as the fastest selling gadget ever. Within a year of its launch, it has sold nearly 15 million units, earning close to $10 billion in revenue. It was first launched exactly a year ago in the US on the 27th of January, 2010 and was up for grabs since April 2010. Considering the launch in India has been pretty delayed, also taking into account that it was launched in Hong Kong & Singapore in July 2010. Now why am I talking about the iPad in a marketing magazine? Yes, the brand Apple in itself is a case study in itself for budding marketers. But here am talking about the effect that the iPad/tablets as a product category can have. It has the ability to change the face of marketing. I will tell you why.

The top stories that captured the audience of the consumers, the latest innovations that caught the eyes of advertisers, brand turnarounds, new ideas employed by FMCGs to get closer to the consumer and much more. In Vartalaap, we have Ms. Anjana Vivek, the founder of VentureBean Consulting, a venture consulting firm and a Guest Faculty at IIM Bangalore. She shares her thoughts on the Venture Capital industry in India and the changes that have occurred over time, what are the factors that are considered while funding a new venture and the importance of marketing in the success of a start-up. Hope you like the issue as ever before and looking forward to your precious feedback as always. Signing off and wishing you a happy and prosperous new year once again on behalf of the entire Markathon team. Happy Reading!

Kaushik Subramanian

Our December 2010

Cover Just the game changing nature of the product is mindboggling. Industries as varied as entertainment, media, gaming, business solutions are waiting to see the long term effect of iPad per se and tablets in general with bated breath. An entire ecosystem is getting created around the iPad. Applications for Apple products are a flourishing industry. Most apps available will go pay sometime in the future, creating a new stream of revenues for content producers. Mobile advertising that has been an enigma to advertisers since time immemorial due to the small size of phone screens can now come of age owing to the larger screen size of tablets. For advertisers whose primary complain is their inability to reach out to an increasingly fragmented market, tablets will offer a new opportunity of creating targeted messages for a well defined TG. The introduction of iPad and other tablets sure is going to ensure exciting times ahead for marketers. In this months Cover Story we have decided to look upon the most popular newsmakers in the world of marketing.

THE MARKATHON TEAM


EDITOR
Kaushik Subramanian

SUB EDITORS
Debanjana Sinha Samita Patnaik Samrat Singh Yadav Saurabh Kumar Sinha Varshik Nimmagadda

CREATIVE DESIGNERS
Keshav Sahani Priyanka Pandit

MEMBERS
Gaurav Ralhan Jitesh Patel Kaustubh Rawool Rahul Mantri Ritika Nagar Sria Majumdar Sana Parvez Akhtar Yashwanth Reddy Mandipati

markathon | january 2011

CONTENTS
FEATURED ARTICLES STRATEGIC ANALYSIS
A lot has happened over a cup of coffee
VIPUL K SAINI | IIFT KOLKATA

4 6 8 11 14 19 22 24 25 26 27 28
3

PERSPECTIVE I
Marketing Trends for the new decade
DEEPA| IIM S

PERSPECTIVE II
Micro Turns Max
PRIYANKA KUMAR, ASHWINI, PATIL | NMIMS UNIVERSITY

PERSPECTIVE III
Top Ten Trends in consumer Research
DR. PREETI KRISHNAN | IBS BANGALORE

COVER STORY News Makers 2010


PRIYANKA DENORONHA | RAGINI IYER | SRIA MAJUMDAR| IIM S

VARTALAAP Anjana Vivek


FOUNDER OF VENTURE BEAN CONSULTING, VENTURE CONSULTING FIRM

PRODUCTOLYSIS Maximum kick to maximize profit


JASJEET SINGH | MDI GURGOAN

WAR ZONE EYE 2 EYE


Tata chemicals has just become the first branded national player in pulses. Will entry into this segemnt, which has so far been avoided by big players, work?
ARUN YADAV | IIT KGP, PAYAL BANGAR | IIM S

SILENT VOICE
Parle must chips relaunch

SPECIALS ADDICTED
KAUSHIK SUBRAMANIAN

RADICAL THOUGHTS
VARSHIK N

UPDATES
JITESH, GAURAV

Strategic analysis

markathon | january 2011

A lot has happened over a cup of coffee


Vipul k saini | iift kolkata
Starbucks , the coffee pioneer, which is all set to celebrate its ruby anniversary (40th) in March this year, has decided to revamp its image by changing its logo while retaining the old starry experience. Expectedly, much heated argument has ensued over the new logo and the statement of the companys PR team that the change is a subtle but meaningful update has angered some of its customers, who have termed this move as nothing short of a hot mess. With the companys performance currently at its best both financially and commercially, this change in logo is nothing less than a rude shock for most of its loyal customers who feel that the Starbucks logo is synonymous with a good cup of coffee. At the beginning of last year, Starbucks had tripled its profits to over $241 million and by the end of the first quarter of the previous year itself, Starbucks profits had quadrupled as compared to the year before that. The major question is that, does it make sense for a company, which has an iconic brand, synonymous with its product, to modify or drastically change its logo. The impact of this decision is already creating waves in the marketing world and an equal number of people are known to be in favour of the new move as well as against it. In the following article we try to make sense of this controversial decision to change the logo or to retain the original. Does this move qualify as a brand evolution or a revolution? The earlier logo, which is now proposed to be ditched for a newer more chic looking one was the driving force behind the success of Starbucks and helped make it into one of the worlds best recognized brands. Now, many in the company feel that it is not obligatory to advertise it at every nook and corner. They also feel that as the company matures and enters into a wider array of business avenues and international markets, it makes better business sense to have a more profound logo which showcases the multifarious interests of the company. In an official statement, officials from Starbucks said"Our new evolution liberates the Siren from the outer ring, making her the true, welcoming face of Starbucks. For people all over the globe, she is a signal of the worlds finest coffee and much more. She stands unbound, sharing our stories, inviting all of us in to explore, to find something new and to connect with each other. And as always, she is urging all of us forward to the next thing. After all, who can resist her?" This statement was received with a mixed bag of emotions. While a large number of customers supported the move and agreed that the new logo not only looked more attractive but also enhances the brand visibility. As one of the members of the Starbucks Facebook fan page wrote- I think it's terrific that Starbucks has set the siren free. It has become an identifiable global brand. Like Target, Apple, and Nike, it will not need type to be recognizable. It sounds like Starbucks has done its homework and is being strategic. Revitalizing is good and healthy if done well. Kudos. Likewise, other more conservative ones have adopted a rigid and strong stance against this move and they contend that the existing logo virtually beckons and calls out to them and it identifies intimately with the brand. Starbucks took a few decades to achieve the brand awareness that it now enjoys and hence they feel that it would be ridiculous to modify or change it in any manner. They feel that its bold design symbolizes the strong taste and aroma and experience of true coffee.

Is Starbucks change of logo a subtle but meaningful update or will it turn into a hot mess?
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Strategic analysis

markathon | january 2011

Some of them are so angered with the new logo that they have even branded it as the equivalent of a design for an old candle shop. Another loyal fan wrote in to say that - I don't think many consumers ever paid much attention to what was at the centre of the round green and black logo. That's where Starbuck's error lies -- it's actually the words in the circle with which we identify. "Releasing the Siren" is releasing something new that resonates very little with most people. The green and black combo of the Starbucks logo is so well known worldwide that not only has it encouraged knock-offs but has even been known to have influenced the activists, who vehemently protest the addiction of coffee and caffeine, to design their logos and slogans around it. In addition to simplifying its mark and bringing the siren forward, Starbucks is also planning to revamp some of its old ways and one of the major changes, by which an attempt is being made to appear more sophisticated, would be the introduction of bone china mugs instead of those chucky mugs. Plans are also underway to introduce a new mechanism with which customers would be able to make payments through their mobile phones and earn loyalty points which would be redeemable at Starbucks grocery stores. The company, which earlier sold only coffee is now not only seriously considering offering beer and wine at some of its cafes but is also known to be venturing into the food business. With these major moves to revamp its existing structure and intentions to enter newer sectors and markets, it does make some sense for Starbucks to adopt a new logo. One of the major constraints encountered by Starbucks was the need to change the written part of the logo, which needed to be modified, as per the location and the local language. By doing away with the written word, Starbucks has not only become more international in its appearance but also easier to identify with. Whether the new logo will ultimately take Starbucks to newer heights, like what happened in the case of Nike and Apple or will it end up like GAP; which, under market and public pressure, had to revert to its older logo; only time will tell.

Starbucks Logo

Over The Years

1971

1992

2011

perspective

markathon | january 2011

Marketing Trends for the new decade


Deepa | IIM S
The end of the year 2010 marked the end of a decade which saw both the rise and the fall of many prominent marketing practices. There were many important marketing trends that came up in this decade and were highly successful. Some of these came up only recently. These trends marked a change in the lifestyle, personality and behaviour of the consumers. But, only a few of these trends have the potential to survive and be successful in this new decade. In the Indian context, the focus is on some of the important trends discussed below. When celebrities were out there endorsing almost every product that you could think of ranging from cars to fairness creams; there was one prominent trend in branding that emerged in the decade gone by. This was the use of social cause marketing for building and enhancing the brand equity. Some of the most prominent examples were the Tata Teas Jaago Re each of them bringing up a different socially significant issue. Though the impact of the cause related marketing campaigns both on the brand and social cause enhancement has been debated a lot, it has been observed that consistent efforts over time have had a significant impact on both. This can be gauged from the huge popularity and number of visitors on the Jaago Re website. The fact that class and elegance factors, especially in the service industry are limited by the amount of money, no longer holds true. This was one trend that became visible in the airline industry in the year 2010. This was the year when almost every airline in the country went in for a change in their cabin crew uniform. However, it is the makeover of the cabin crew of the countrys largest low-cost carrier IndiGo, which dedicated website could be successful. Then there were Ideas various advertisements, Use Mobile, Save Paper, Walk When You Talk, Education for All;

campaign, TOIs Lead India initiative, Aircels Save Tiger advertisements, etc. Each of these campaigns was based on some of the most pressing social issues. While Aircels Save our Tigers campaign came at a time when there were reports that just 1411 tigers were left in India; the Jaago Re campaign by Tata Tea focussed on increasing the involvement of the youth in the electoral process and building a corruption free India. Tata Tea, already a well-established brand when it came up with this campaign, boosted its sales further. It was a perfect example of how cause related marketing along with appropriate print and television advertisements, and a

perspective

markathon | january 2011

stands out from the rest. IndiGo used the services of the renowned fashion designer Rajesh Pratap Singh and the famous stylist Ambika Pillai to come up with the change. The new uniform, a single piece western tunic outfit complete with hats (the first airline in country to use hats) and scarves has actually signalled the emergence of an entirely new brand type, especially in the service industry of India. Projecting itself as a Cool brand, offering value for money to its customers; both the class and elegance effect are clearly visible. As a part of its rebranding exercise, it is promoting itself as a cool and stylish brand, and has set out to achieve better cabin ambience which is a very important aspect in services marketing. One major cause of this makeover is the planned launch of its international operations by the end of this year. However, it is the change in the psychographic profile of the consumers brought out by this makeover which is worth taking notice. It has ushered a new genre in the service industry. The increase in overall spending power of the consumers, especially those living in the urban areas has resulted in a change in their lifestyle and behaviour. An attempt to capitalize on this change has been made by Asian Paints. It has tried to focus on the segment which has the capability and is willing to spend money. Its latest campaign tries to project that painting a house is just not another task but rather an activity which requires a lot of involvement and is a cherished experience. It signifies the psychographic change in the customers. The company has tried to strike an emotional chord with the customers and develop a bonding with them. This is visible in its Surprise your

Spouse advertisements. It focuses on the urban population projecting Royale play more as a dcor story rather than a paint story. Over the last few years, the demographic as well psychographic profile of consumers has undergone a tremendous change. In the coming years, these changes are here to stay and will increase in prominence each year. These changes have further contributed to the popularity of social media marketing and digital marketing. Each of the above mentioned trends highlight the changing costumer tastes and preferences which, if noted properly by other companies, can result in numerous successful branding campaigns in the coming years not only in the same sectors but also in other sectors thereby once again proving the importance of a good ad campaign for the success of the product or a service. Thus ad campaigners need to come up with different innovative ads to attract the consumers and maintain a relationship with them.

perspective

markathon | january 2011

Micro Turns Max


Priyanka Parmar, Ashwini, Patil | NMIMS University
It came. They saw. It conquered. Who wouldve imagined that an Indian mobile company would manage to grab a whopping 6% market share within two years of its inception! Thats Micromax for you in a nutshell! As the Indian market gets increasingly competitive in the handset category, Micromax comes as a fresh breath of air with its innovative offerings. Below is an attempt to analyze how this brand has managed to capitalize on a price sensitive yet technologically oriented customer of todays India.

concentrating on the continuous innovation in coming up with smarter, better phones in the premium ranges. Micromax, a company primarily into distribution and the business of PCOs found itself staring at a really big opportunity when it noticed people had to charge their batteries by lugging it to trucks or even had to pay for charging due to electricity issues in the rural areas. At the same time, as the telecom companies slashed prices, the only impediment for a person to use a cell phone turned out to be the cost of the phone. Capitalizing on this, Micromax launched its first cell phone in the rural Micromax market with a 30 day back up battery at an absolutely unbelievable price. One of the major challenges of operating in the rural areas were the logistic issues faced but Micromax built a network comprising of 34 super distributors, 450 distributors and around 55,000 retailers. Also the highlight of their distribution strategy was that Micromax managed to make these distributors pay in advance by offering them more margins. Micromax was not really a pioneer of this strategy (to offer such kind of discounts for advance payments (cash discounts)), but it managed to convince the distributors accept this offer. Tapping the rural markets could have proved to be a risky move but the price point and the differentiating features of the model won the battle for Micromax. With stiff competition in the telecom sector which is still prevalent, operators kept coming up with various offers luring customers to switch loyalties. The price conscious Indian thus felt the need to own more than one SIM card in order to leverage the benefits. Micromax was the first to identify this requirement and launched its dual SIM phone opening up more cost effective options for the users in terms of tariff plans.
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Micromax is the latest buzzword among cell phone enthusiasts and is perceived today as Indias answer to Nokia. A quick reality check and one finds that Micromax happens to be the 3rd largest handset producer closely behind Nokia Samsung and Nokia. Many companies have been here, done this before so what is that Micromax does so differently that it gets talked about? The cell phone market has evolved considerably since it was first launched in the Indian market about seven years ago. Nokia has always had the first movers advantage in the Indian cell phone market. Despite the competition from other players, no entrant has been strong enough to pose a threat to Nokias domineering position. Nokia initially had no specific product range customized for the Indian market. But once competitors emerged, Nokia had to change this strategy. Nokia strengthened its position with the launch of Nokia 1100 popularly known as the Made for India phone, a handset meant for the rural markets. Touted as one of the best examples of understanding consumer needs and developing a product, Nokias glocalisation strategy seemed to be truly in place. But at the same time, Nokia never built upon this concept. Nokia failed to harness the potential of the market that this phone had opened up for it. Neither did any of its existing competitors focus on it, rather

perspective

markathon | january 2011

But it is very important to note the fact that he didnt stop with this success but ventured further which has led it to its present position. The growing middle class residing in the tier 2 and tier 3 cities in the country was no longer content with the lower end product thanks to immense exposure due to the advent of internet and television. Noting this, Micromax zeroed down on the next market it wanted to target. It realized that it was important to cater to the needs of the mid-market customers with the launch of premium handsets rather than simply catering to premium customers. As Micromax targeted the semi urban and urban markets it launched a series of handsets with innovative features which had never been seen before. The aspirational QWERTY keypads earlier available only to the high end smart phone users were made available at affordable prices. They addressed the need of using chat based tools on cell phones. These models continue to outsell Blackberrys as of today, by huge numbers. The launch of the Swarovski crystal phone appealed to the low price chic, incorporating great features and style emerging as a status symbol in the tier 2 and 3 cities. Also a cell phone working as a universal remote control just exhibited the out of box thinking and workmanship at Micromax making people curious about its forthcoming product ranges. Thus with a lot of firsts to its credit, which include introducing Handsets Switching Networks (GSM CDMA) using gravity sensor, Operator Branded 3G

Handsets, OMH CDMA Handsets, etc. Micromax has essentially become synonymous to innovation. After having gained enough foot hold in the rural and semi urban markets, Micromax has now finally begun its brand building exercise in a fullfledged manner with aggressive marketing strategies allocating a budget of around 100 crores. Cricket being one game which cuts across religion, gender, age proves to be an ideal platform for promoting a product which has universal appeal, usage and need. Recently, they have sponsored the India cricket series and used innovative technological practices to stand out among the herd of its competitors. It has solely sponsored an entire series rather than single matches to break free from the clutter of sponsors that the viewers are exposed to. It has also begun creating awareness among the youth by tying up with MTV to launch a phone MTV X360 with Yamaha amplifiers targeted at music loving individuals. Also its gaming phone Gameolution has become popular with the youth with its innovative features which works on motion sensor technology and can convert PC/Laptop in gaming device.Although Micromax has achieved a substantial market share in the past two years, a closer look at its overall branding strategy shows that the brand has mostly spent heavily on advertising of its individual products. The recent roping in of the celebrity couple Akshay and Twinkle Khanna to endorse their Gamolution and Bling versions respectively is a demonstration of this strategy. Several reviewers have criticized the ads for creating noise and missing to communicate the point to the viewer.

perspective

markathon | january 2011

Amongst its reputation of being reasonably priced and having a strong product line, it becomes extremely critical for a brand of this magnitude to shift focus from individual campaigns to a brand identification exercise. Hence, as this product centric strategy has not proved the most appropriate way to go, the brand has only recently ventured into overall brand promotion. This conscious move from product awareness to brand building is evident in the latest advertisement by Micromax, (for the very first time focuses on the brand as such rather than on an individual handset) shows absolutely unthinkable uses of a cell phone, rightly ending with the tagline nothing is anything. Being on the forefront of technological innovation in the handset market, the brand may also suffer from low individual product recall value as the numerous technologies introduced in the different handsets may create confusion in the minds of the consumer. Also, it faces the risk of its technology being easily replicated by other smaller brands. Ask a Micromax user what he would like to change about the phone, and one is most likely to get a reply stating its Indianish interface. With an increasing user base, Micromax would also have to focus on erecting customer service centres which are currently not even half as much as Nokia or Samsung has. Initially when Micromax entered the markets, it was devoid of the overheads like advertising, etc. which helped it give its customers huge value for money. But as it competes with the cell phone giants of the world it is questionable whether such advantage can still be sustained. Though the story so far has been nothing less than phenomenal, the future is only going to get tougher. Android based smart phones are a lucrative

opportunity to capitalize on. With app stores being the talk of the town lately, Micromax can innovatively cater to different user application needs across app stores across the world. Innovation being its core strength, the way ahead is to build an image of being a credible technological handset producer for a price sensitive customer. Currently, the brand targets the rural and the technology conscious urban youth. It could also expand its target audience to the older generation by introducing phones with large keys and a help button. Similarly, it could also expand its technological expertise to suit the needs of children. This could be done by packaging it as an add-on phone with child lock and a single dial phone designed to be very simplistic. It could also venture into foreign markets like Middle East, etc since it already has plans to build up its manufacturing capacity in Taiwan, China, etc. Recently the IPO for Micromax having been approved, the resulting investment would bring forth a great opportunity since the timing cannot be better with people getting more expermentative and mobile usage and development at its helm. The brand may boast of being Nothing like anything but has a long way to go to become everything! It is important to keep this model fresh and rejuvenate it with the changing times. The reason is that it is a medium which is catering to the attention span of the people on the move. Thus, the execution has to be highly precise. Nothing can be closer to truth than this. It is important to understand that every new medium would meet resistance and would take time to gel with the status quo. At the end of the day, it is the people who drive the market.
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perspective

markathon | january 2011

Top Ten Trends in Consumer Research


Dr. Preeti Krishnan | IBS Bangalore
in the arc of time, consumer behaviour and the ideology of consumption have diffused across the world to every corner, to virtually every individual, to such an astonishing scale that living and consuming are more complexly interdependent than at any other time in human history. - David Glen Mick Consumer research endeavours to gain an understanding of the beliefs, emotions, attitudes, preferences, behavioural intentions, and behaviours of individuals. This paper endeavours to present the top 10 global trends in research on consumers as gathered by the author through extensive readings. The objective is to assist marketers and researchers to gain a fresh perspective on where the research is headed across the world. The following are the top 10 (randomly arranged) trends and directions of consumer research. Topics related to consumer health, obesity, antismoking, etc., have earned a higher probability of presentations and publications. There has been a growing number of journal articles on such topics some examples are as follows: on eating patterns: paper by Khare and Inman; on credit cards: Bernthal, Crockett, and Rose; on products as remedies: Bolton, Cohen, and Bloom; on anti-drinking: Szykman, Bloom, and Blazing; on health: Moorman.

2 Combining Ideas across Domains:


This is not a novel ground breaking trend. Much of consumer research has always been about drawing an idea from one domain and applying it in another. For instance, the placebo effect in medical sciences has been applied to consumer behaviour in the following two journal papers: Shiv, Carmon, and Ariely and Irmak, Block, and Fitzsimons. Such a trend is expected to continue. In another instance, a paper by Ferraro, Shiv, and Bettman on mortality salience was apparently triggered by them reading a Wall Street Journal article about people going off diets after the 9/11 tragedy in USA.

1 Consumer Welfare Agenda:


This is the research focus of the US-based Association of Consumer Research (ACR) under the banner of transformative consumer research. A special roundtable session titled Disseminating Transformative Consumer Research: Getting Research Results Out of the Tower and Into Consumers Lives was conducted at the ACR 2006 Conference at Florida, USA. Questions addressed included: (a) Where, how, and to whom should our research findings be communicated? (b) Who should/could be involved in dissemination of the findings? (c) How can relationships be leveraged to facilitate the information dissemination? Research that would benefit consumers has been strongly encouraged by ACR.

Dual-Process Theories of Processing Integrating

the Conscious with the Non-conscious: Conscious processing involves controlled, rule-based, serial, and aware processing constrained by the working memory. In contrast, non-conscious processing involves automatic, unaware, parallel, rapid, and associative processing by the consumer. Several scholars such as Chartrand and Bargh have noted the ubiquity of nonconscious processing.

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This idea has led to much research in both consumer behaviour and psychology (e.g., non-conscious goal pursuit, mimicry, priming effects on behaviour, etc.). More recently, it has been argued that much of consumer behaviour is driven by non-conscious processes. It is believed that combining ideas from nonconscious and conscious research domains can be very fruitful (instead of choosing the one that might be most truthful between the two).

judgments by monitoring their feelings toward the target which serves as diagnostic pathway to evaluation in judgment and decision making. Research on affect has now become the in-thing. Every ACR and Society for Consumer Psychology conference now has sessions allotted to consumer affect and its impact of choice, coping, etc. The study of emotions as mediators, moderators, motivators, and measures in the consumption process will stay as a research focus in the years ahead.

4 Neuroscience and Consumer Behaviour:


Sophisticated Functional Magnetic Resonance Imaging (FMRI) scans are used in consumer research to identify the brain sections that are triggered during consumption experience. For instance, researchers have combined ideas from neuroscience and brand relationships, using fMRI, to examine how consumers respond to people vs. brands. ACR hosted a pre-conference titled Exploring How Neuroscience Can Inform Consumer Research to explore how neuroscience could inform consumer behaviour and decision-making and to discuss how neuro-imaging would complement other research methods to advance understanding of consumers. Even though not every researcher would be able to access such a methodology, the trend is expected to continue in the years ahead.

Consumer Research using Visual and Digital Media

and Methods: Research will be conducted using visual techniques video recording, movies, documentaries, etc. data collection, presentation, and special issues. ACR conducts regular film festival (devoted to research using film technology). There has been a growth in publications that will provide options for visual journal articles not plain text. For example, the journal Consumption, Markets, and Culture which was started in 2005 provides, apart from the text version, a DVD presentation of the research as an accompaniment or a complement to the text. Efforts have been made to provide an overview of video-graphic methods of consumer research.

Affect plus Cognition Models of Consumer

Behaviour: There were two critical paradigmatic shifts one in the 1980s and the other in 2001 that have inspired research in emotions/feelings/affect. These shifts are: a. Experiential Consumption: The study of consumer behaviour has evolved from an early emphasis on rational choice (microeconomics and classical decision theory) to a focus on apparently irrational buying needs to the use of logical flow models of bounded rationality. b. Feelings Guide Consumer Judgment and Decision-Making: People often make evaluative

7 Research on Vulnerable Populations:


Adolescents and children are classified as vulnerable consumers. This section of the population is a growing research priority as they represent the next generation of customers. Recent trends in research involving children include evaluating how children in singleparent households make decisions on consumption on the basis of love, how children process on sale and discounts, etc. The ACR doctoral consortium 2004 had a session devoted to the impact of advertising on vulnerable populations. For example, Richard Netemeyer spoke on childhood obesity and positive adbased campaigns, and Connie Pechmann raised the

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question would adolescent-focused antismoking messages within TV shows be effective or would these messages have a boomerang effect?

9 Techno-Culture as a Research Domain:


Technology is the new habitat for humanity Technology increasingly pervades our lives through new gadgets and machines, mediating our relation to nature, the social environment, and other beings. Tasks that were once done by humans are being executed by machines. Face to face social life is replaced with commercially and technologically mediated communities. The growing availability of consumer-generated information on the Internet about products, services, and companies has increased market transparency. Power is shifting from producers to consumers who share their knowledge, experiences, and opinions. Nevertheless, the Internet is only one aspect of the techno-culture. There is an entire plethora of gadgets and gizmos in the market that have changed the way people interact, relate, and buy/use products. For example: mp3 players, games, mobile technology, etc.

8 A New Paradigm in Consumer Well-Being Focus


on the Positive: Popular well-being related topics in consumer research have revolved around topics such as compulsive consumption, materialism, obesity, nutrition, and health, smoking and substance abuse, hyper-choice, and disadvantaged populations. From this list, it appears that consumer well-being has focused on human weakness, inability to make good decisions, unhappiness, and negative consequences (perhaps because we take our cues from psychology which primarily studies maladaptive behaviors such as depression, anxiety, anger, schizophrenia, fear, etc.). However, the discipline of psychology itself is undergoing a new paradigmatic shift. There is a move towards positive psychology which is predicated on the principle of human strength and the ability to do well, flourish, etc. For example, Seligman (2002) mentioned that it is not sufficient to just cure depression to keep one from committing suicide, but to provide positive reasons for living as well. Popular topics include: wisdom, creativity, resiliency, hope and optimism, positive esteem and efficacy, sharing and caring, compassion, spirituality and forgiveness, love, gratitude, positive emotion, courage, honesty and trust, open mindedness, future mindedness, etc. Consumer research has seen a similar shift towards positive consumer psychology. Though such research is still limited, we should see a move towards the positive. Here is a sample of recent research -- Hope: Krishnan (2011), MacInnis and De Mello (2005); Positive Emotion: Roehm and Roehm (2005); Creativity: Moreau and Dahl (2005).

10 Online Commercial Behaviour:


The Internet has revolutionized the way people buy products and services. The vast and easy availability of information has made the consumers, perhaps, more po werful than the suppliers. This will continue to have managerial as well as research meaning. There has been substantial research in this area in the last decade and will continue to be an important domain in the years to come. However, there needs to be more research on consumers who operate in dual environments, i.e., online as well as offline. Important research streams include internet pricing, multi-channel retailing, online recommendations and word of mouth, customization, information search and decision making, priming and atmospherics, haptics and virtual product representation, click-stream modelling, internet advertising, trust, etc.

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cover story

markathon |january 2011

NEWSMAKERS

Priyanka Denoronha | Ragini Iyer | Sria Majumdar

Yet another year has passed us by and we (Team Markathon) couldnt help but ponder on campaigns and issues that challenged, and sometimes approval you five such topics which made the headlines and earned the critics
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changed, the status quo in the world of marketing. In this issue, we bring to

cover story

markathon |january 2011

When Newspapers Talk Volkswagen Audio chip Ad Lutz Kothe, Volkswagens Marketing and PR Head, said that the idea behind a talking ad was to generate awareness for their new product while instantly establishing an emotional connect with the reader. Except for a few worried readers who suspected the chip to be a bomb and hurriedly informed the police, going by the overwhelming tweets on Twitter What worked for Volkswagen was the surprise element it managed to create for readers who had never experienced the sound medium in print. The technique focuses on conveying the benefits of the product through greater consumer engagement, a proven success strategy. Marketing experts who termed this innovation as groundbreaking predict that it could set off a new trend in the advertising industry, with companies considering alternatives to print, broadcast and outof-home advertising methods. It remains to be seen, however, whether Volkswagens talking ad will translate into sales for the company.

In September 2010, over 25 lakh households in Mumbai, Delhi, Bangalore and Chennai, were perplexed by a strange looking chip embedded on the last page of the newspaper. A light-sensitive audio chip that switched on automatically when the reader turned to the last page was employed as an advertisement vehicle by Volkswagen to mark the introduction of Vento, its entry level luxury sedan in the Indian market. The first ever in India, this new approach of incorporating voice-recorded devices into newspapers, made Volkswagen the talking point in the country. Over twenty two lakh chips were procured for this one time advertisement that marked the launch of Volkswagens 360 degree campaign to promote Vento. While the costs involved arent precisely known, the promotional campaign is expected to be budgeted at Rs. 5 crores. The German car manufacturer, with its central focus on innovative ads, sought to make an impact in an already crowded automobile industry. Creative and effective, this audio advertisement in print, aimed at capturing the attention of the reader

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cover story

markathon |january 2011 smartphones and iPhones started capturing and dominating the mobile phone markets, Motorolas smartphones led by the Droid wreaked havoc for Nokia. During the second quarter of the last year, the company reported a profit of $162 million, which compared when compared to $26 million earned for the same period last year, is phenomenal. Its Mobile Devices division reported, for the first time in years, earnings of $87 million. 2011 promises to be a promising year with the amicable split, which was long time due, of the company into Motorola Solutions and Motorola Mobility on 4th January. With SanjeevJha of Qualcomm taking over Motorola Mobility business, and the aggressive strategy of the company in the smartphone market, it wont be long before each one of us will be vying for that Motorola gadget.

Motorolas Turnaround Razr

History repeats itself and Motorola has proved it yet again. Motorolas journey in the cell phone market has indeed been a topsy-turvy one. An industry leader for decades, Motorola took a real blow when the networks changed from analog to digital in the mid-1990s. The perception of brand Motorola was closely associated with that of analog networks and Motorola was slow to change. A new CEO and a closed team, toiling day and night on a secret project, managed to uplift the fortunes of this then struggling company. The secret to success was a tiny device called the Razr launched in 2003. Razr was a terrific device, revolutionary due to its size, shape and the sheer R&D that went into the project. Motorola has a good run for a few years but unfortunately, in 2007 the mobile phone division of the Motorola Company was making losses again. The handset division recorded a loss of US$1.2 billion in the fourth quarter, while the company as a whole earned $100 million during that quarter. The company lost many executives to rivals, and the web site Trusted Reviews called the company's products repetitive and unimaginative. Analyst Mark McKechnie from American Technology Research cynically commented that Motorola "would be lucky to fetch $500 million" for selling its handset business. Motos story has been no less than that of a phoenix rising from the ashes. In the last couple of years, Motorola has revived and rejuvenated its brand with the help of Googles Android. As

VoxPopuli Ross Perot

It seems like a number of organizations have recently got wind of what Ross Perot (of Perot Systems fame) once quoted Spend a lot of time talking to customers face to face. You'd be amazed how many companies don't listen to their customers. We observed that organizations have started taking a closer look at the grass-root level to understand the gap between what the consumers actually need and what is being provided to them, in the last year. Gone are the days of courtesy phone calls and emails in the name of market research and pilot testing. The trend that has been started involves the senior16

cover story most officials of the organization. They take time out to interact with consumers in person. It is more popular in the FMCG sector where senior management of Pepsico, P&G, Marico, Future Group and other such corporate honchos claim that personal visits have opened up a sea of opportunities. This has led to bridging service gaps and has also helped in identifying new markets, launching new products and improving the existing ones. These personal visits are not the clichd chats. The consumers are involved in some creative activities like collage on themes that connect with the brand. This often reveals more about a consumer and his or her needs when compared to verbal interaction. This kind of consumer interaction is more prevalent in the automobile sector. Most of these organizations are innovating continuously to measure the consumers pulse and the recent initiative taken up by Hindustan Unilever Ltd is testimony to this fact. HUL has taken personal involvement a level higher by establishing a small phone booth called voices from the street in its plush head office. All the senior managers are expected to spend at least fifteen minutes a week addressing the consumers concerns or making note of the suggestions given. They have gone to the extent of including this exercise as an attribute in the performance appraisal procedure of the managers. So far they have gained some valuable insights and the same have been incorporated in their offerings such as the instructions on the Dove Serum. While one can count such initiatives, there are definitely more in the pipeline. Hence, consumers are in for a plump bonus, considering the fact that most of the organizations have finally realized that consumers are the real teachers of brands and the road ahead would be much more consumer-centric.

markathon |january 2011

MP AjabHain! MP tourism

Picture a typical advertisement for the famous Incredible India campaign and you can easily visualize the lush photography and gliding scenic views of the wonderful Kerala or the picturesque North Eastern India. The tourism industry typically uses visuals in advertising and more often than not, they end up looking homogenous. However, Madhya Pradesh Tourisms commercial created by Ogilvy and Mather, brings a twist to the tale. The fresh language and vocabulary, in the words of Santosh Desai (CEO of Futurebrands), connect with the customers and the viewers on a different level. The exquisitely done commercial using the ancient art of shadowgraphy or ombromanie (the art of performing a story using images made by hand shadows), communicates more than pictures ever could. The creative execution employs the talents of shadow artists from Bengal. Shadowgraphy is believed to be an art form that originated in India and can be found in a Tamil Classic Shilappadikaaram, but is almost non-existent today. It's an art form of storytelling that goes very well with the rustic aura of Madhya Pradesh. In the commercial, the shadows of hands and arms, take the shape of animals, birds, trees and monuments of the state, to the words of the jingle "MP ajabhain, sabsegajabhain". The TVC is the third in a series of MP Tourism advertisements, and much like the previous campaign where eyes talked about the state; this TVC is difficult to forget. Needless to say, the recall is very high. The TVC is supported by a 360-degree campaign, which utilises radio, print and digital to intensify engagement with consumers. A note from the agency said, "Like in the past, our current television commercial stays true to the fact that we Indians love our song and dance. The television jingle has been sung by famous film and television actor, RaghuvirYadav, who is a native of Jabalpur, Madhya Pradesh himself. The commercial captures key landmarks and wildlife of the state in a 17

cover story stark manner against a simple white screen. As far as differentiation is concerned, the TVC definitely carved a niche for itself. If you have not seen it yet, maybe it time you looked it up on Youtube. Its definitely a treat

markathon |january 2011 Television commercials with a viewership as high as 2 billion (naturally at exorbitant costs), were hugely popular and were typically in the 10 second duration range (compared to the usual 45 or 60 second duration commercials). As little as ten seconds of premium time costing close to Rs. 5 lakhs, and frequent advertising, meant siphoning off a significant chunk of the companys advertising budget to the IPL. However, what excited brands tremendously was the prospect of getting noticed at the live telecasting on Youtube. Companies looked at making clever sponsorship deals. Karbonn tied up with IPL to become the official mobile partner. It was to organize spectator contests between innings breaks. Premium sponsors like Royal Challengers, HSBC India and HP India used every opportunity to build brand equity. Yet, despite the large number of advertisements specifically designed for the event, except for Vodafones Zoozoo ad campaign, probably very few other ads stand out or have become viral. While DLF, Nokia, Samsung, Pepsi and MTV (through its post-match IPL parties) managed to achieve significant brand recall, experts question the real impact of cricket advertising on the perceived brand value of lesser known companies. With practically every IPL property being monetised and television viewers being flooded with visuals and promotions, one wonders if a relatively unknown brand can truly achieve brand recall over and above the din. Additionally, the image of brand IPL changes with the choice of players each season and the composition of various teams. This, coupled with the anticipated increase in ad cluttering, has led to the need for brands to assess the effectiveness of advertising. Ormax Media will be offering consulting services in Season 4 through its Day After Cricket product to gauge the impact of advertisements after the event. Whatever may be the results of an assessment of this type, the Indian Premier League will continue to remain a big property for years to come and will continue to lure both big and small brands to advertise with them. Some have gone as far as to suggest that the IPL maybe the Superbowl equivalent of advertising in India. 18

for the eyes.

Brand IPL IPL Cricket League

The IPL is no longer a professional Twenty20 cricket league alone. Advertisers look forward to the IPL just as much as the fiercest cricket fan does. With a brand value approximated at $4.13 billion in 2010, this lucrative cricketing event not just attracts large sponsors like DLF, but also lesser known brands from across the country. Smaller advertisers view IPL as a newer and faster avenue to generate brand awareness, increase visibility and enhance brand recall. In addition, lesser known brands like Karbonn, consider sporting events of the magnitude and popularity of IPL, to be apt to launch new products. Micromax, Indias third-largest GSM mobile phone vendor, used not just celebrity advertisements to advance its brand awareness, but also signed up to sponsor all IPL cricketing properties post IPL. This reliance on sporting events to establish a brand name is increasing by the day, the result being that IPL advertising is often cluttered with a large number of companies vying for customer attention, thus making it imperative for companies to use techniques to get noticed amidst the crowd.

vartalaap

markathon | january 2011

An Interview with Anjana Vivek


founder of VentureBean Consulting, a venture consulting firm

Anjana Vivek is the founder of VentureBean


Consulting, a venture consulting firm and a Guest Faculty IIM Bangalore. She is a chartered accountant who works with VCs and business leaders in the areas of business planning and strategy. Other positions held by her include Vice President, Corporate Advisory Services, Ernst & Young Private Ltd., heading the due diligence practice in South India and COO of the Entrepreneurial Centre at IIM Bangalore NSRCEL. She is an author of three books and a widely read blog and is now writing a column for DARE magazine on women entrepreneurship. In this interview, she talks about her career, learnings and gives advice to young entrepreneurs who want to market their business ideas. Markathon: A Bsc in Physics from Delhi University, becoming a Chartered Accountant, a professor in Finance and then to consulting and working with venture capitalists and investors. How have you enjoyed your journey through

these diverse assignments? Ms. Anjana: At each stage of my journey, I have discovered more about my interests and what I can do and cannot. This self-discovery is propelled by an urge to dig deeper to understand what motivates me and gives me true joy. Each role has helped me understand what I like to do and how I want to work. This is what I have enjoyed about my life journey till date. I still have miles to go on this voyage of discovery. Markathon: If you were asked to pick one moment/ incident which changed your career or the way you did business, what would it be?
Rather than one moment/incident which impacted the way I do business, I think there were a few significant events which made me take a relook at who I am and what I can achieve

Mrs. Anjana: The single most joyful moment in my professional life was when I realized I had passed the CA exam. I can still remember the thrill of that moment when I saw my results; I felt that I could conquer the world. The first was getting into a senior role in a Big four consulting firm after a few years of flexi-time work. Another was being invited to teach as a Finance Professor, despite having no degree other than a CA. Something else which stands out is a couple of mails from students who have thanked me for making an impact on their lives. It is these incidents which have strengthened my belief that hard work and merit, without compromising on ethics does indeed pay; and I thank God for giving me the courage to be myself in todays volatile business environment. Markathon: You have been associated with the Venture Capital industry in India for a long time now. What major transformations have occurred and how do you see Venture Capital in the near future? Ms. Anjana: In the past there were a limited number of VCs investing in Indian companies. VCs typically 19

vartalaap favour select industries to fund. If a particular industry was a favourite of the season, several investors wanted to fund it, and entrepreneurs in other industries found few takers. Today, things are very different. Many investors, formal and informal have entered the market. This ranges from angel investors, typically high net worth individuals and entrepreneurs who have been successful in the past, to large VC and Private Equity funds. They provide a range of services, from funding to mentoring to helping in the operations if required. The investment amount ranges from a few lakhs to several crores. So, yes in one sense the industry has grown. But in another sense, if you are an entrepreneur, it is still not so easy to get money. Sometimes fund raising can take 6-9 months and takes away precious time from business activity. At the end of this, there is still no guarantee that the money will be raised. In the future, there will be more VC funding available and a variety of investors, with different advantages and benefits. Markathon: Funding a new start up is considered to be a subjective decision. What are the 3 top things you would look at when funding an entrepreneurial venture? Ms. Anjana: a) The core founding team, including factors such as the capabilities of the team, their interest in running a venture, their ability to think on their feet and their reason for venturing into their own business, plus their value systems and integrity. Thus I would look at capabilities as well as skill sets and value systems. b) The market that is being addressed or new market that one is attempting to create, i.e. why would a customer pay for the product and/or service. The aim to make this a successful business venture (i.e. create value in the long term) etc. c) The approach taken by the start-up to create value, i.e. what makes the entrepreneurs stand out amidst the clutter? This could be their ability to be innovative or thinking differently or just their approach to the whole aspect. This could be something that is intangible and may not be easily measurable.

markathon | january 2011 Markathon: How big a role does Marketing play when it comes to the success of a new business idea? Ms. Anjana: Marketing is the key. If people do not discover that the product/service exists; then however good it is, there may be no one to pay for it.

A good product or service is the foundation, without which marketing cannot stand up. If someone tries to market without have a good quality offering, then in time this can fail. It is difficult to fool all the customers all the time.

Markathon: There are a lot of good ideas, but not all good ideas make good business. What do you think is the reason for these failures? Any common thread running across all of them? Ms. Anjana:. Many times basic things are missed out. The majority of the failures do not come from big things but from little factors that one does not pay attention to Some examples: The key to success is to offer what someone (a customer) wants or perceives she wants and not sell what you can sell. Keeping a close watch on money and spending: Billing and collecting. Often entrepreneurs do not bother to collect what is due to them and focus only on delivery and sales. Thinking short term instead of long term: Many times one may just act without thinking through the impact of decisions. It is good to set aside time to periodically measure and monitor what is happening in the business and then set in place an action plan that can be dynamically modified. Human beings measure weight, BP, sugar, cholesterol etc. periodically. Companies also need to be monitored to see if they are in good health. 20

vartalaap In summary if entrepreneurs keep aside time to think, then they can introspect and plan. This can help them fix things that are in their control. Markathon: What would be your advice to young graduates wanting to start their own business and looking for funding from a VC firm? Ms. Anjana: I have a put together a framework that helps view any investment/M&A decision. Just like you look at the PAT (Bottom line, i.e. profit after tax) in the case of a company, for any deal, this is the PBRT frame work: a) People: This is the key. So if the graduates are interested in looking for VC funding, they must first look at the background of the investors, i.e. would they be a value add to the start-up, money add is not value add. Sometimes investors can deplete value, despite them bringing money into the company. For example, if someone with a negative reputation invests in a company, the promoters will also be tarred with the same brush. So I would suggest, in the eagerness to get money today, do not lose out on your tomorrows. There are enough stories of entrepreneurs who have struggled and succeeded without much money in the initial days. b) Business: Look at the business angle, market, revenue, profits, value creation etc. In the initial days of the business, when value is yet to be created, it may be preferable to take smaller sums of money (seed capital) from angel investors and other early stage investors, for a small stake in the company. As value is created, more equity can be

markathon | january 2011 diluted for larger amounts of money from VCs. Keep an eye on value created and the value drivers and risks of the business. The graduates can attempt to write a business plan; there are several formats and tools available today. The plan may just be a summary one, on paper. Some details of what they can put in the plan are the team, product/service details, business model, financials (in a start-up much data is not there so that they can list different scenarios from pessimistic to expected to optimistic), marketing plans etc. A note on writing a business plan is available for download at www.slideshare.net/anjanavivek c) Regulatory: Many times people neglect regulations and their impact on business. The IPL saga of sweat equity, foreign investment etc. is an example of this. Think through the business structure i.e. corporate vs. partnership and the legal and tax impact of getting funding and giving away equity for mentoring etc. d) Time: Review your plans across multiple time frames for improving the quality of your planning. What are your dreams for yourself, where do you want to be in 15 years? Give reign to your imagination; this is the foundation. Then come down to earth. Where do you want to be in 3-5 years? Finally, what are the actions you need to take today if your business is to survive for 3-5 years? What is essential to do today to survive?

While no framework helps one have all the answers and no amount of planning can guarantee success; thinking helps one in decision making. After all, successful entrepreneurs are decision makers; they lead and others follow. So if one is trying to raise money, one must do ones homework on what the money is going to be needed for and who may be a good fit as an investor. One must approach a potential investor only after preparation. It is like taking an entrance exam, you need to study and have merit in order to get through.

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productolysis

markathon | january 2011

Maximum kick to maximize profit?


Jasjeet singh | MDI gurgoan
PepsiCo recently announced the launch of Pepsi Max a zero calorie no sugar cola, widening its product portfolio in the Rs.10, 000cr branded beverage market in India. Max was first introduced in UK in 1993 in a differentiated black pack. The brand has since then been rolled out in over 40 countries. It is looking to attract a target audience of 25 30 years old. While Pepsi has Diet Pepsi in this segment, it is planning to sell both the products simultaneously for now. The 250 ml Canwill carry an introductory price of Rs15, the 330 ml can Rs25 and the 500 ml PET Rs25. Pepsi came to India in 1989, its major challenge then was to introduce a Cola Culture into the country. It has not looked back since then and is successfully clocking a growth rate of over 20 percent in the country. It is currently a major player for customers from 18 to 60. After giving us the Youngistan campaign in 2008 it has decided to further segment the market and target the youth who is fitness conscious and is looking for a strong attitude quotient in its drinks and thus came Pepsi Max.

Target the Young - An Enduring Legacy


George Bernard Shaw said Youth is wasted on the young. But Pepsi has shown that it is not wasteful to concentrate on young. It has proved in the principle of catching them young to earn maximum profits. Marketers define Youthfulness as a nostalgic and fantasized state of looking and feeling young without having any of the cares and concerns that the youth actually faces. This has a strong appeal to older and younger individuals. Pepsi was one of the first to tap into this market with the Pepsi Generation campaign. The campaign was effective in eclipsing the Coke Set as a symbol of youth. Pepsi has now further decided to segment this market based to target young men between 25-35 years. Marketing to the youth is a focal point of this market strategy for three principle reasons It is a legitimate market of considerable size in its own right The purchasing pattern people form when they are young extend far into their lifetime Youth influence the purchasing behavior of older individuals in the family

Marketing - Creating Acts not Ads


Pepsi Max is being launched with much fanfare. The campaign includes creating an image of customer who is an Urbane daredevil. The tagline goes Maximum Kicks, No Sugar. Other taglines that have been associated with the product are Maximum tastes, No Sugar and Dont worry theres no Sugar. Pepsi will also start a disruptive campaign focusing on men in 2535 age groups exhorting them to maximize every moment of their lives.

Moreover youthfulness is an appeal to which many older and younger consumers easily respond. Over the years Pepsi has had some delightful taglines attracting the young. Here are a few examples - Now Its Pepsi For Those Who Think Young, Come Alive! Youre In The Pepsi Generation, Taste the difference -Generation Next, Be Young, Have Fun, Drink Pepsi and Yeh hai Youngistaan Meri Jaan!

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productolysis

markathon | january 2011

A Repositioning Strategy
Pepsi is repositioning itself as a healthy beverage company. In keeping with this positioning it has already decided to take out all its cola products from schools by 2012. In its place it will promote health foods in schools in an effort to burnish its image of being a health conscious and responsible. It had already taken a step in this direction with the launch of Nimbooz. Now it has decided to double its arsenal with Max.

zero calories. So it increases the focus on the group which is health conscious and is seeking healthier options.

Battling the demons within


Another big competitor for Max is Pepsis own Diet Pepsi. A question which comes to the mind is Why a zero calorie variant when PepsiCo already has Diet Pepsi? After all, the diet cola category is not doing very well in India. The total market share being just one percent of the total beverage sales of 650 million cases a year. But Pepsi believes Diet Pepsi 1 seems like a product one would consume when one is concerned about sugar. Another issue with diet Pepsi is its image of being a women product in India. Pepsi Max is also looking to target a large set of consumers. The same can be seen from the expansion plans from Pepsi. While Diet Pepsi is currently available at around 5000 outlets in Delhi, Max is going to be available in 30,000 outlets. Pepsi agrees that max may cannibalize its market but believes it will help the overall category grow.

Launch First, Fight Later


Globally Max competes with Coke Zero, Coca-Colas no sugar variant which is five times the size of max. Coca-Cola too has plans of entering in India soon, but launching Max first gives Pepsi the first mover advantage. If and when coke launches Zero it will have to play the catch up game with Pepsi in the lads market. A similar strategy was applied by Pepsi in the Middle East where the growth in Pepsi Max in the last year is 2/3 of the size of the whole of Coke Zero.

The Last Word


The flavor of Pepsi Max is unique. It does not taste like diet Pepsi nor does it taste like normal Pepsi. It is fair to say, that if natural ingredients are what you look for in a drink Pepsi Max should be avoided. The only natural ingredient of Pepsi Max is water which is carbonated. It also contains Gingseng (a high energy source). The amount of energy it gives after a Can is comparable to Red bull. One very interesting feedback I got was Men Can drink Pepsi Max with Pride. Guys Go play.

Segmentation versus Differentiation


Product differentiation consists of making claims that ones product is superior to competitors in serving the desires and needs of all target consumers. It refers to inducing a belief in general audiences mind that this product is somehow different. Pepsis major competitor in India is Thumbs up. Thumbs up has been traditionally targeting the youth whos looking for a strong attitude in his beverage options but is not willing to compromise on taste. Pepsi Max intends to capture into its market by injecting a lot more cola attitude and imagery. Add to the fact that Max is sugar few and has

23

war zone | eye 2 eye

markathon | january 2011

Tata chemicals has just become the first branded national player in pulses. Will entry into this segemnt, which has so far been avoided by big players, work?
The decision taken by Tata Chemicals is justified since they have a good presence in the FMCG market
Lets begin by exploring the current market condition for pulses. Indias pulses production is around 16.5 million tons for the current year while demand is around 18 million tons.This gap is currently bridged through imports. The per capita income Arun Yadav of India is increasing at a fast IIT KGP pace. As the income increases, the demand for non-cereal food, and hence the demand for pulses, is also expected to grow.After paying the cut to middleman, farmers get only 50% of what their produce costs in the retail market. The main difference is due to the inefficiencies of supply chain. Low productivity of farmers is another problem which further reduces their income. The entrance of Tata Chemicals into the pulses market can be well justified as they have good presence in the FMCG market through Tata Salt and its variants. The main business of the company comes from fertilizers and chemicals.Tata Chemicals has 690 rural outlets known by KisanSansar in the Northern and Eastern parts of the country. Tata Salt-iShakti distribution chain currently spans 1.5 million outlets. Rallis, its subsidiary, has a customer relationship programme called KisanKutumb in Southern and Western India. Together, they touch the lives of over 5 million farmers across the country.Tata chemicals can teach farmers to increase their productivity by using good seeds and fertilizers. They can also reap the benefits of having a strong supply chain. It will help them to reduce the total cost involved. Needless to say, Tata will have the first movers advantage too. All the following arguments support the move taken by Tata Chemicals but the final fate is always decided by the market itself. Tata Chemicals forays into the selling of pulses under the i-Shakti brand extending from salt. This would involve in them going for contract farming;providing the farmers with the necessary Payal Bangar production inputs like IIM S seeds,fertilizers etc. and quantity of pulses at pre-determined rates, schedule and quality levels. This concept is not new in the agro-industry, however in India contract farming has more demerits than merits that it can boast of. The primary problem that may arise is, if the farmers side-sells their products in the market rather than selling to Tata Chemicals as per the contract. The selling can be done to either a different buyer or another competing company offering a price higher than that specified in the contract. Another reason for the side-selling is that the other buyers generally pay in cash which is a more lucrative offer than waiting for prolonged periods for money to be paid through the proper channels by the company. Governance is major issue and the final profit margin will be very low.

It is not a feasible option for Tata Chemicals because of the demerits of contract farming

Another frequent problem that arises is that the farmers use the inputs supplied for other cash and subsistence crops. This will be a clear loss for the company as the crop yields will be reduced and the quality will be affected. Also, the Retail sector is not organized specially for sale of the pulses etc. hence customer perception will have to be changed. Due to these problems faced by the company it will not be feasible for Tata Chemicals to go for selling of pulses by contract farming.

Topic for the next issues Eye to Eye:Is the launch of six new World Cup flavours by Lays justified or would it confuse the brand loyal customers? Your opinion (view/counterview) is invited. Word limit is 250-300. Last date of sending entries is 20th February 2011. Include your picture (JPEG format) with the entry. 24

war zone | silent voice

markathon | january 2011

Silent Voice

LAST MONTHS RESULTS


Theme: Parle Musst Chips Relaunch

WINNER: NITIN VARMA| BIM Congratulations!!! Nitin receives a cash prize of Rs 500!

RUNNER UP

APOORVA AGARWAL | IMT, NAGPUR

NEXT THEME FOR SILENT VOICE: Cricket World Cup 2011- Indian Subcontinent LAST DATE OF SENDING THE PRINT AD: 17th February, 2011 EMAIL ID: markathon.iims@gmail.com Send your entry in JPEG format named as SilentVoice_<Your Name>_<Institute> only.
25

specials | ADdicted

markathon | january 2011

Ad-dicted
Kaushik Subramanian | iim s

PRODUCT #1: Surf Excel TARGET AUDIENCE: Mothers of children with the message that Surf Excel cleans any stains POSITIONING: Daag Achche Hai Continue in their series of Dirt is good campaign. CONCEPT:

PRODUCT #2: BIG Cinemas TARGET AUDIENCE: All Indians and make them reflect and ponder upon what patriotism to them means.

POSITIONING: 'Patriotism knows no language'

CONCEPT: This film opens with a small boy walking across some of his friends tugging along his pants as they seem to be loose. Immediately his classmates make fun of him and pull down his trousers completely. A teacher passes by and admonishes the kids. The small boy comes to their rescue and says that they were practicing for the sack race and he jumps into a puddle of mud. After the teacher leaves, his classmates feel ashamed, ask forgiveness and pull down their pants and jump into the mud. VERDICT: Thumbs Up! The ad is sure to appeal to consumers across age groups. Daag achche hain campaign has been a runaway success so far for HUL and they seem to have played the right card yet again. There are some industry insiders who feel the ad has not lived up to its predecessors in this series, but I definitely feel it has struck the right chords with the one who matter i.e. the end consumer. VERDICT: Thumbs up!!! If anything is a sign to go by, this ad has been a rage on Facebook right from January 26th,2011 the day it was released in BIG cinemas. It strikes the emotional chords of the viewers. The ad succeeds in conveying the core message, that of language being no barrier. That diverse languages and culture has no role in dividing our nation, but should unite us on the contrary. The film shows children with hearing and speech disabilities, presenting the National Anthem in sign language and through gestures. Children have acted in it, thus sending out the message that despite impairment, one has the right to sing the national Anthem in his/her own special way.

26

specials | radical thoughts

markathon | january 2011

The dance of democracy?


Varshik N. | IIM S
This column has gotten too difficult for me. It was primarily conceived as a place where the counterview would always find a space, one in which the voice of the majority would not shut it down. But it appears that the world has changed and with the rise of social networks, everyone and his mom seem to have a voice and a forum to express their own opinions. My initial conception of the column has weighed me down and made the column too narrow minded in its focus. Getting subject topics to write on has become so difficult that this is always the last column to be submitted for editing and this after the many requests and orders from my long suffering editor. Hence I have decided to make the column broader in its scope and place it as a forum to critically examine issues and ideas from a marketing standpoint specially ones that seem to have no connection to the world of marketing. As my professor once remarked, Everything is marketing! Let us use this column to explore whether that is indeed true. Ask any marketing student to name the most successful product in history and you will get a wide variety of answers ranging from the i-pad to the windows operating system to Coca-Cola. But they would all be wrong. If there is one product that has impacted the world more than anything else and changed billions of lives it has to be democracy. The product called democracy has been packaged and sold in nearly a 100 countries worldwide to a wide variety of people and today to say that there is a more widely adopted product would be a mistake. However an Economist report states that the number of democratic countries in the world has actually decreased over the years and a corresponding increase was seen in the number of autocracies. Thus the democratic way of life seems to be under attack and it is important to understand and analyze the drivers for the adoption of different forms of government. If the different forms of government were an industry, democracy is competing with other products like autocracy, dictatorships, empires etc. for adoption. It is a marketing truism that all other things being equal the product that gives the consumers what they require would be the most successful product and the product description of democracy itself seems to be tailored for satisfying the individual needs of the consumers. According to this logic democracy should have no challengers at all. But we have to understand that while democracy does satisfy the needs of a vast majority of people there do exist a small set of people whose primary buying criteria would not be individual liberty but domination over others. In an ideal world where each person is equal, these people would not have the power to affect the adoption of democracy. But if a person or a group of people who desire domination have a much higher purchasing power than the normal then they would play a significant role in the adoption of other forms of government resulting in the formation of an oligarchy. The critical thing to understand here is that throughout human history there existed an elite set of people who had a significantly greater purchasing power than the mass of human beings as such they controlled the adoption of the form of government. But something seems to have changed in the last twenty years as the number of democracies increased from 69 in 1990 to nearly 120 today. To understand this change we have to understand the changes in the components of the purchasing power in this context. Purchasing power would consist of the ability to control economic power, the flow of information and military power. Two of these components have essentially remained the same over the last twenty years but one has changed i.e. the oligarchy no longer has the power to control the flow of information and this has decreased the purchasing power of the elite and made for a more level playing field and thus the ability to choose a form of government has become accessible to a greater set of people making democracy the best product in the market. This change of power has tremendous implication especially in the Middle East where people have coordinated and orchestrated protests to enable a change of their governments. This sort of movement where the protest are not led by some leader but by the ordinary people marks a significant shift in the power equations of the world and will eventually lead to democracy becoming the dominant product of the age.

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specials | updates

markathon | january 2011 Sachin Tendulkar has reportedly been signed on by Coke for Rs 20 crore, 3 year endorsement deal. The company has yet to confirm the report but the media is abuzz with the news. Sachin will be used for Coca Colas corporate initiatives and CSR activities as he is seen as a trustworthy, reliable and responsible person. PepsiCo had earlier dropped Sachin and went in for much younger brand ambassadors in RanbirKapoor and DeepikaPadukone.

INDUSTRY WATCH
Apple / Management reshuffle
Apple CEO Steve Jobs has taken an indefinite leave from the company citing health reasons. The charismatic CEO had earlier taken leave for cancer. Steve Jobs is seen as the man responsible for turning around Apples fortunes and making it into the pioneer it is today. This period will reveal Apples resilience in working without their top man. Apples profits surged a massive 90% in Q4 of 2010. This news came out one day after reports of Steve Jobs leave of absence. Apple will have to work hard to continue this upward trend but they also have an advantage with updates on the iPad and the itouch in the pipeline.

HUL Pureit launched globally


HUL plans to enter the international water purifying market with its innovative product Pureit. With the success in Indian Market HUL now plans to introduce Pureit in to the international markets like Europe, South Africa and other parts of Asia.

Nano Revamp
The Tata Nano which aimed to revolutionise the automobile market in India faced a massive slump in the month of November with less than 600 units sold. This has made Tata Motors revamp the marketing campaign and made them lot more aggressive. There are a lot more Tata Nano advertisements in the print media as well as billboards. Tata has also offered extended warranty for all Nano cars to take attention off some of the quality issues that had arisen.

Mobile Number Portability launched


Mobile Number Portability is turning the telecom space into a hotbed of activity with every company wanting to capitalize on the service. MNP comes into effect on Jan 20th and the operators have already launched campaigns letting the customer know of its benefits. Idea was the first to come out with a campaign and since then has been followed by Vodafone. How effective Mobile Number Portability is, in terms of attracting customers , remains to be seen.

Ford Figo steering the sales for Ford India


Ford India has seen a tremendous performance in the year 2010. The company posted sales of 83,000 units from Jan-Dec 2010 on the back of a robust performance by Ford Figo. Figo is reviving Ford's fortunes in India and has helped the company post a record growth of 184% year on year. The Ford Figo has also won many awards and now Ford India plans to export the car to another 48 countries.

REPOSITIONING
Flipkart got a new logo
Flipkart started as an online bookstore but with changes in its business model, has included movies and mobiles in its product offerings. Early this month Flipkart has changed its logo along with other brand elements like colour scheme etc. The rebranding after just three years into the business is very early but was needed as they have made significant changes in their business model and is soon expected to move into selling consumer electronic i.e TV, laptop etc.

BRANDWATCH
Sachin the happiness ambassador

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specials | updates

markathon | january 2011 cricket fever in the country. The Castrols brand new television advertisement announced its Castrol World Cup ka Hero contest as part of its consumer activation programme. World Cup campaign in the country where cricket is considered as a second religion that too with the master himself, seems to be a good strategic move by Castrol.

Rise for Mahindra


Mahindra and Mahindra have launched a new Brand repositioning initiative as the company increases its global footprint. The whole campaign is focused to change the image of the company to tomorrows company. We found that it resonated with people everywhere. Everyone has the aspiration to rise above their lot, says Irani whose team visited several countries where the group operates before taking the final decision. The company is to invest Rs. 120 crore over the next three years in its new brand repositioning campaign.

Pepsis Change the Game for Cricket World Cup


With Cricket World Cup approaching near Pepsi the official cola sponsor for the world cup has launched its new campaign to catch on the riding cricket fever. According to Pepsi its all about the change and so is with the sport cricket; Change the Game campaign is to reflect the way cricket is played and watched all across the world. Taproot India was appointed to conceptualize the World Cup campaign. However JWT India is still the creative partner of PepsiCo India. ~ Jitesh Patel, Gaurav Ralhan

AD WATCH
Castrol new commercial with Sachin
Castrol India has launched its new Cricket World Cup 2011 advertising campaign featuring none other than the master blaster Sachin Tendulkar to cash on the

Articles Are invited


Best Article:Deepa Syal, IIM Shillong She receives a cash prize of Rs. 1000 & a letter of appreciation. We are inviting articles from all the B-schools of India. The articles can be specific to the regular sections of Markathon which includes: Perspective: Articles related to development of latest trends in marketing arena. Productolysis: Analysis of a product from the point of view of marketing. Strategic Analysis: A complete analysis of the marketing strategy of any company or an event. International Column: Articles covering latest marketing trends, innovative practices, branding strategies etc. in the global perspective. Apart from above, out of the box views related to marketing are also welcome. The best entry will receive a letter of appreciation and a cash prize of Rs 1000/-. The format of the file should be MS Word doc/docx. The last date of receiving all entries is 17th February 2011. Please send your entries marked as <ARTICLE NAME>_<SENDERS NAMES>_<INSTITUTE> to markathon.iims@gmail.com.

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