Thursday, July 15, 2010

Changing the rules of the game, in seconds

Rapid innovation had Indians taking to mobile services, originally seen as imprudent. Players old and new continue to woo customers with smart deals and offers..

Innovation is the name of the game: A customer checks out a touchscreen information kiosk at the Docomo Dive-In store in Vijayawada. _ CH. VIJAYA BHASKAR

Even the most diehard admirer of India knows, deep down in his heart, that as a nation we have not too much to celebrate, despite the self-congratulatory messages that we keep giving ourselves in the media, which seem to be for the consumption of FIIs. But no one can deny the phenomenal success of the telecom and the mobile market over the last decade or so. The numbers are there for all to see and exult. The Indian mobile market has done a Sachin Tendulkar on us, leaving the rest far behind. In January 2010 the number of telecom connections crossed the mind-boggling number of 545 million with a tele-density of over 49.5 per cent even as landlines accounted for a mere 36.75 million. Older Indians would probably recall the waiting, heartburn and stress in their attempts to get a landline, and the consequent euphoria on getting it after a waiting period of seven years!

I remember when I started the Bangalore office of Mudra Communications, getting the landline connection after moving heaven and earth, meant that we were finally in business! I wonder if our first account gave us as much satisfaction. After all, that was 1987 and mobiles came into the country much later, so one had no option but to wait. But it is not as though India took to mobiles as a duck takes to water. The operators struggled to sell the concept, people worried about paying for incoming calls (usually wrong numbers from lazy or short-sighted callers), the prohibitive costs of outgoing calls (Rs 17 per minute, I think it was) along with statements of “my privacy matters to me”. Now all of these have become things of the past thanks to the innovation of the mobile operators.

Who would want prepaid?

They made “prepaid” a phenomenal success. Prepaid is probably 90 per cent of the market today and even if “post-paid” users such as me crib that we are being robbed to pay them, the mobile operators do not seem to be unduly bothered. The western world scoffed saying “why would anyone want to pre-pay, unless he is a drug dealer?” Well, Indians are like that only and constantly confound other Indians and the rest of the world. Credit must be given to companies such as Airtel who quickly realised they were in the business of selling minutes. And boy, did some of us buy!

Innovations continue

Indian mobile services companies and companies such as Nokia opened up the market with handsets that were created specifically for value-conscious Indians. It is not uncommon to find sweepers in J. P. Nagar catching up with their counterparts in Malleswaram and as a result both those areas of Bangalore are less than spick and span. But who cares, certainly not the mobile companies who have provided the high points of a normally monotonous day through their connectivity! Today many of the earlier pain points have been addressed - incoming is free, which soon became “lifetime incoming free” which means that a person could receive calls on the same mobile number for life , so someone who had not paid the mobile operator for months on end could still receive calls. What a boon for the electrician, the plumber and other small traders!

Your life can change in seconds

While companies obsess about market share, it is common knowledge that market expansion is a function of more than one player not only competing with each other but also promoting consumption of the category. Take the cola market, for instance – its growth has largely been because Coke and Pepsi have gone at each other hammer and tongs, even as they have expanded the overall market. The cola wars, however bitter, helped grow the overall market.

I remember in the late Eighties and early Nineties Rasna being a dominant player with over 80 per cent share of the soft drink concentrate market. Remember that cute girl eyeballing the camera with her “I love you Rasna”? Well, the biggest advantage and yet largest threat was that they were the largest player, and were equivalent to the category. So when the cola market took on the concentrate market, youngsters moved to the more interesting, increasingly aspirational category, and Rasna had to fight single-handedly against a category with deep pockets that was willing to wait for returns.

Thankfully, the mobile services category has many players with a few others coming in or waiting in the wings. One of the later ones has been Tata Docomo which seems to have shaken up the market and made the biggies sit up and take notice with its “per second billing”. Competitors who had underestimated the game changing nature of this offering had to grudgingly follow. What bigger tributes for a newer entrant to have larger, more established players follow it?

What's in a name?

The brand name is the single, most important element in a brand's success. Enough theories exist about how it should be two syllables, sound well, be easy to pronounce … You have heard all of that and more. I am not sure the name Docomo would score on every count, but who the hell cares about theory, the proof of the pudding is in how often the cash register rings or is it how often your ringtone is downloaded? Be that as it may Docomo (which is perhaps less of a mouthful than alpenliebe) has been accepted, recalled and bought. A lot of the success has to be attributed to the advertising. The early advertising was merely intent on getting the brand name across, making it familiar to millions of Indians challenged by names foreign. The Tata name which means so much to the average Indian was underplayed, in my view at least. But the brand name was sung, the letters formed themselves into a recognisable logo and the first task of awareness was achieved with a high-profile integrated campaign that hit you whether you switched on the TV, looked up at a hoarding or opened the newspaper.

Young and aspirational

I am not sure who the Docomo user is. I am sure the user is young , technologically-savvy, can handle two SIM cards and is constantly looking for value that the brand seems to provide readily. The advertising is young. My favourite is that of the guy in the airline who, being like me, is unable to say no to leave a seat next to a pretty young girl for an older man, only to find that he has been allotted a seat where two gorgeous babes flank him on either side, and soon has one of the sleepy travellers nuzzling even closer to him even as I wonder why such happy results never follow my inability to say no! There are more commercials on the same lines - a triumphant kid emulating some of his more demonstrative football idols, hitting himself against the goal post, which he had crossed just a few seconds earlier.

My eternal favourite will be that of the traditional looking South Indian girl with a vivid tattoo which her mother approves reluctantly, or so I think; I am a parent too! It brought back memories of my son's tattoo in Tamil of the name ‘Sevilimedu' - the village we all hail from. I am not sure if we were shocked, happy he went back to his roots or sad that we had forgotten our roots till this reminder! While parents may not love this ad, I am sure the young consumer would love it. The signature tune has been a strong factor in holding all the communication together. India loves music and the “friendship express” too, I am sure has its admirers.

The power of an idea

I think the mobile market is the most exciting market to be in and people who relish a fight can learn a lot from the heady, competitive marketplace where you have to be on your toes all the time. Brands such as Airtel, Vodafone and Idea all have done their own share of innovation and have produced, and continue to produce outstanding advertising. Visible advertising seems to be par for the course, even for brands such as Virgin that have interesting advertising. Yet, I believe the value and power of advertising can be overstated. The key differentiator is the offering, as Tata Docomo has demonstrated. It changed the rules of the game. It certainly helps to have visible advertising beaming at you from every channel, particularly if the advertising is interesting.

The future will belong to brands that continually innovate and one hopes that all innovations will not be built on price cuts or offers alone. As a consumer I am really delighted that mobile service operators are falling over themselves to offer something or the other new. I only hope that they will spare a thought for a poor postpaid user like me too. And is it too much to ask for less call drops and better coverage?

(Ramanujam Sridhar is CEO, brand-comm, and the author of Googly: Branding on Indian Turf.)




9 comments:

CS Murali said...

Sridhar,

I agree that mobile operators have changed the game. Recently I came across a story that illustrates the diverse types of impact of the mobile phone. In a management conference for senior managers, the speaker asked if they were more innovative than their subordinates. They said "of course". He asked them to download a tune and save it to their phone and very few did. He than asked the drivers who were waiting outside to do the same and each one of them did!

SANKARSHANA NAGARAJAN said...

Wonderful post sir! The story of how telecom players have cut through the inhibitions of Indians and reached where they have reached today, makes an interesting read. One of the reasons of their growing by leaps and bounds is their quick grasping of the 'pre-paid' mindset of the Indians.

That brands have to continously innovate and advertise themseves is a given. While they continue to do so, it is also important for them to address basic issues of 'coverage' and 'call drops'. I remember one of my colleagues take pride in using BSNL, because his was the only phone that had had good coverage at a hill top in Sikkim and no other. I , on the other hand moved to a different house recently , because Airtel had poor signals within my building and I felt I would rather move to a new house than change my number. The strong case of my colleague may not encourage me to switch to BSNL , but the trouble of having to move houses may very well drive me to switch to a different brand.

Aditya Mishra said...

Fully agree with you, Sridhar!

Tata Docomo is known as Docomo by the most Indians, i suppose.

they and their agency have done a good job to determine an important gap! there are a lot of things happening in Telecom - Uninor is trying by its variable discount plan, Aircel playing social responsibility card by its 'save tiger' campaign, Idea by 'save trees'; airtel and vodafone trying interesting product innovations.

Docomo has been able to integrate its communication startegy with the actions in sales and customer service.

One wonders how much they spent on the campaign! Have they started earning profits?

Ram said...

Mobile operators advertising have for the last 10 years been mainly centered around the offering (which can also be read as tariff plans).
Whatever brand building they might have attempted to do the net takeoff is very product related. It is either this is free or the rates have dropped or you have a zero rental plan or you gprs free or you get sms free.
The beauty is all this have been beautifully sugar coated under the name of brand building by the use of popular personalities or mnemonics or characters like the zoo zoo.
But net net in the absence of number portability their true brand strengths haven't been put to test yet.
The real test for a brand is when there are four other brands where there is product parity and the consumer has the freedom to choose from anyone of them. Currently the consumers hands are tied and if you choose brand x today you are stuck with it and have to be loyal even if you dont wish to be.
So I would say all these mobile companies have had an extended honeymoon period and the reality will dawn at sunrise on the number portability day ! Hello!

Ramanujam Sridhar said...

Ram you are absolutely right about this, my worry though is the honeymoon period is likely to continue as the number portability gets extended time and time again.
I do not know how good number portability is going to be, what is different about Vodafone as compared to Airtel , who is no great shakes.
It could be easily a case of from the fying pan to the fire!

Ramanujam Sridhar said...

Yes interesting, the trouble of changing one's number is not easy and the operators seem to be delaying the number portability both subtly and overtly.

Aditya Alur said...

Hi


I agree with your take on docomo being a disruptive force and catching mind share in an innovative way. If you were to look at the attempts of new operators post docomo, they are now struggling to differentiate their offerings for the consumer.


Notable examples of operators getting desperate to innovate and ending up with products which mindlessly try being innovative with no real focus on consumer benefit include Uninor. Their diff area diff discount plan is a non started despite heavy advertising, MTS has had to move away from talking about voice based services and has only been advertising on speed and their data product which again is a small upcoming segment.


Case in point that im trying to make is that the innovative players will win but innovation with no real consumer benefit as always will not really catch on nor will it deliver results. What is also noteworthy is that despite newer players coming in with innovations , the old warhorses will eventually hold their ground given the strength of their brands – airtel and voda both saw an increase in et adds 3 months post docomo launch whereas docomo saw a drop/saturation in the same.


If we were to get discussing about the mobile device manufacturer space , the whole issue would altogether take another long turn.

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MK said...

Sure, Tata Docomo's example is a classic case of a new entrant capturing the market share by exploiting the unmet need of customers blatantly ignored by existing service providers. Absoloute breakthrough and a very nicely written article