Friday, December 31, 2010

Adieu, decade of turbulence!

They made for much hype, agitation and excitement - the Y2K bug, the dotcom bust, the cell phone, big-buck brand campaigns, middling service notwithstanding ….

Writing a year-end column is challenging enough but to review the decade is a bit like landing up at the Centurion on a damp, murky day straight from the airport and finding Dale Steyn thundering in and suddenly realising that you have walked in to bat without your protector! On the lighter side I was trying to recall just what are the changes that have happened in my own life over the last decade and came up with a sensational discovery.

Ten years ago I used to painstakingly write my column on ruled sheets of paper and my secretary (who is now in Australia perhaps supporting the rejuvenated Aussies) would dutifully key it in. (I used to have a decent handwriting thanks to the plethora of loving and frequent impositions that my old school, Don Bosco Egmore in Chennai, so lavishly bestowed on me.) But today, as I key in my fortnightly 1,500 words religiously on my Apple laptop, my handwriting has gone for a toss. Of course, we could argue endlessly about whether my ability to write columns has improved! But let's move to more dramatic things - the economy, the consumer, brands, communication and life in India over the last decade. What has happened and what seems likely to happen in the near future? Let's take a look at the past before we venture our opinion on the future.

Y2K to Wikileaks

Do you remember the turn of the last century and the excitement, the dread around the Y2k bug and its impact on the software business at least? Well, things have blown over and the winds of change have blown in - something more sensational - Wikileaks. God, has the media gone to town or what, with every politician and statesman making more off-the-cuff remarks than Tendulkar's numerous centuries. The decade witnessed the dotcom boom and consequent bust. I remember (painfully) that our company that was called brand.comm became brand-comm as we went away to lick our wounds after putting all our eggs in the dotcom basket. Speak of the power of brand recall, many of our clients and well-wishers still refer to us as brand.comm. But the World Wide Web has taken over and digital is the medium to be in and everybody and his brother-in-law claims to have a digital strategy.

Of course, while many are denying that digital will actually take over the Indian markets, there is no denying its potential or criticality and the smarter, savvier brands are those that are showing the way rather than following the leaders. In a sense, India had been a follower of Madison Avenue earlier and is following in this medium too, as connectivity and security issues continue to dog us. But make no mistake, India is poised to fly and is just waiting to take off despite the blocks. But India has to discover its own new model which might be a marrying of offline with online. Consider a marriage site such as bharatmatrimony.com which has offline centres where horoscopes are printed and given to anxious and yet technologically challenged parents. India has traversed the mobile space with greater speed than several others and soon there might be a union of the two to move ahead. The future will have to do with harnessing the power of the mobile.

Roti, kapda aur mobile

No analysis of the last decade in India would be complete without the telecom and mobile revolution that has swept through the country. Even small villages in India discovered the pleasures of being in touch with their relatives in far-flung places thanks to the STD booths that littered the length and breadth of this country. Today, thanks to technological innovations it is possible for someone living in the villages to do a video call with family members he has left behind in his quest for employment and livelihood.

But I am getting ahead of myself and missing the mobile services revolutions. This is something India and Indians can be justifiably proud of. Today the mobile population is close to 800 million with 16 million phones being added every month. Mobile phones from China and Taiwan have flooded the market and new brands such as Micromax are giving the leader Nokia a run for its money. Mobile service operators continue to advertise heavily - and often produced outstanding advertising. Brands that readily come to mind are Idea Cellular with their “What an idea, Sirjee!” and the Vodafone campaigns featuring the now famous pug dog and the Zoozoos. There is no doubt, in my mind at least, that mobile services advertising has overtaken the colas in creativity.

The sad reality, though, is that advertising agencies continue to create ads that are independent of the quality of the service. Of course, this strategy is not unique and continues to apply to banks as well. But to return to the mobile services business, while it has continued to be driven by schemes, price offers and tremendous advertising expenditure, there has been a game-changing strategy too. I speak of the Tata Docomo strategy of per second billing which the competitors too had to reluctantly follow, to the delight of the consumer who continues to speak as rapidly and as needlessly as some of our TV commentators.

The retail revolution

It is difficult to discuss the last decade in India without the growth of organised retail as players such as the Future Group.

Trent and Reliance followed the Shoppers Stops and the LifeStyles of the world and went into the smaller towns and realised there was a completely service-starved consumer waiting for them there. Yes, the value format was here to stay and the consumer in the smaller town was growing in confidence and affluence. On October 15, 2010 no less than 150 Mercedes Benzes were sold on a single day at Aurangabad!

After that interesting titbit, let's return to organised retail which, though it may get media attention and interest, accounts for less than 3.5 per cent of the total trade. Not a figure to be sneezed at but nothing to set the Ganga on fire either! Yet, the decade has witnessed the emergence of private labels and the beginning of the tension between brand marketers and large formats, which are pushing brands to be on sale constantly. Brand values are being diluted by each and every sale and hardly anyone visits the company showroom as they find the well-lit, air-conditioned factory outlets a far cry from the factory outlets of yesteryear where you had to check your merchandise and could not exchange it even if it was defective. How times have changed and with it, consumer preferences!

Summing up

The consumers are changing, becoming more affluent and more demanding. They are used to quality, such as the new airports. Service and consumer engagement will be the key. How good is your service offering? Price is important as Big Bazaar has demonstrated. But how well are you positioned? The Nano is struggling as it is seen as a “cheap car”.

Agencies, in their quest to talk about things like “consumer connect”, are forgetting the importance and value of the big idea, fragmenting their resources and trying to achieve too much with too little.

The decade was easily the decade of crises – whether it was the financial crisis or scam after scam that India unearthed. The media too, which was busy playing judge and jury, suddenly found itself in the dock. Crisis management was key and few of the companies seem to have mastered the fine art of crisis management. And the next decade will see more of this. After all, we live in Kalyug, don't we!

Companies that pay lip service to social media and are experimenting with it without their hearts in it or getting their hands dirty are going to be hit, and soon. Companies that harness the mobile phone's capability will thrive.

Agencies continue to bemoan the lack of talent and yet steadfastly refuse to train their personnel. First we pay peanuts and then refuse to train the monkeys that we have brought into the industry, lest they be poached. Why wouldn't clients be frustrated?

Clients, even as they understand and appreciate the need for good creative, continued to haggle on prices even as they complained about the quality of service.

Brands changed their identities, often because they seemed bereft of other ideas to rejuvenate themselves. When will brand owners realise it is more important to get the essence of the brand right rather than merely tinkering with cosmetic things?

And finally, longevity will be key. Brands that endure will have clarity and consistency. In 1999 I was in England for the best World Cup to date and Sachin Ramesh Tendulkar had to rush back to India for his father's funeral. He came back to thrash bowlers all over the park and dedicate his efforts to his deceased father. Now he has scored his 50th test century and dedicated that too to his father. So that's one factor that has been consistent through the turbulent decade.

Consistency and longevity will continue to be key in the next decade as well. Here is wishing you a great year first and a wonderful decade later!


Ramanujam Sridhar, CEO, brand – comm.
Read my blog @ http://www.brand-comm.com/blog.html
Facebook: facebook.com/RamanujamSridhar
Twitter: twitter.com/RamanujamSri


Thursday, December 16, 2010

Small wonder or big challenge?

For all the excitement surrounding what was meant to be a Rs 1-lakh marvel, the Nano hasn't been having a smooth ride..

Whatever is happening to the Tata Nano? The brand which was touted as the greatest thing to happen to the Indian automotive industry and promised to transform the life of the middle-class consumer in India suddenly seems to have hit a speed breaker. Let us just go back a little in time to the pre-launch and the announcement of the Rs 1 lakh car which was actually made by Ratan Tata in March 2003 at the Geneva Motor Show. It was hailed as a triumph of Indian innovation and showed the disbelieving Western world as to how India was able to tap the fortune at the bottom of the pyramid and how India had leapfrogged to the forefront with its dramatic new offering. The media went to town. Airport book stalls were full of books on the car and its amazing journey — Small wonder — the making of the Nano was just one of the titles.

Along with the Corus and Jaguar takeovers, this announcement and consequent hype really put India on the global map and projected the Tatas as a name to reckon with in the international business arena. Then a few things went wrong. The company could not go ahead with its original plans of having a plant in Singur, thanks to a few well-meaning politicians, which set the project back quite a bit in time. Neither were they able to hold to the original price promise of Rs 1 lakh, which to my mind is a far bigger problem than it seems. To further compound the brand's woes, a few cars caught fire, leading to nasty jokes from the competition as to how the car is the first to have an external combustion engine! The demand tanked. If media reports are to be believed, there is an inventory of nearly 20,000 Nano vehicles and a very worrying order book position. The opposition secretly gloated, much as the rest of the cricketing world is gloating at Australia's current misery.

The company too seems worried as it must be. What exactly is the problem? Is it a case of hype overtaking the brand? Is it a case of an inferior product that does not meet the safety requirements of Indian conditions and weather? Is it a case of poor positioning as the much-touted people's car can easily be seen as a cheap car? Who is actually buying that car, is it an affluent Indian buying his third car that he had read about in the business press and could talk about it in his cocktail circuit or a middle-class Indian wishing to upgrade from his current two-wheeler? Neither Andrew Hilditch nor I have a solution to Australia's current cricketing problems, but I do have some thoughts on the Nano and what it can possibly do, so let's stay with the car that started to make history and yet seems to be going speedily downhill.

The great Indian consumer

Sometimes we get caught up in the power of our own rhetoric. We believe that we know everything about the consumer; after all we have built brands and businesses. While that may be true we sometimes miss ‘the blinding flash of the obvious' as Tom Peters would say perhaps when it comes to customers. Way back in 1987 (hope you were born then) I bought my first car. It was a second-hand Premier Padmini (23 years later and 15 cars later I still remember the number of the car). That was a special day in my life and if I may add, in the lives of my neighbours. Suddenly I was somebody. A hitherto unknown individual who zipped around in a TVS Suzuki with his child in the front seat, had grown in front of their very eyes, simply because a car had entered a middle-class home. It was a manifestation of my success in life. I know how proud my parents were of me that day.

Now here is my disconnect with the Nano: Has all the hype created in stereotyping the brand as synonymous with “cheap” devalued respect for the brand? As an expert asked me, “Who would want to be owner of el cheapo?” Let's spend a moment understanding the ‘social currency' of a car in our lives. It is about status, prestige, recognition and authority. Does the Nano, the way it is perceived now, deliver on these? I wonder.

Who is the customer?

The lowest priced car has certain advantages and certain disadvantages as well. The advantage is the price (even though it is not Rs 1 lakh) is affordable to a whole lot of Indians. I know a number of affluent Indians too who have bought it as their third car! Are they the core target audience? Or is it someone who is currently riding his two-wheeler in the dust and grime, breathing in the exhaust of the bus in front of him, who wishes to graduate to the safety and comfort of a four-wheeler, however small? This actually leads me to the next concern and that is the concern, or is the right word obsession, with space. Indians live in cramped conditions and dream of more space. They want more spacious houses, space for their children to play and space to park their commodious luggage in the boot. Have you seen any Indian travel light? While the Nano seems fine for two, how many families have two members and even if they are “dinks” (double income no kids) they would find another similar family to travel with. Consumers often do not state the way they actually feel and brands can get into trouble by ignoring what the consumer is not saying overtly. In many ways one wonders if the design of the car, though excellent, is anchored in Indian needs and will address our concerns.

Public relations and the brand

I am a great believer in public relations and have seen that a disciplined, strategic approach builds credibility and image. The media coverage for the Nano has been phenomenal; I am sure running into several hundred crores, if one were to do an analysis. But what has the coverage been about? It has been in the business press about innovation, Indian ingenuity, the people's car … A lot of this is corporate PR and coverage which has limited if any, relevance to the consumer, if he happens to be a middle-class Indian currently zipping around on a scooter with aims and hopes of buying a car. And the challenge of the cars bursting into flames or smoke has not been addressed adequately by PR. PR can handle crises, soften the blow and even shift the focus to actual consumer experience. I am sure there are enough satisfied customers of the Nano. How come I have not heard about their experiences while the accidents have been blown out of proportion?

Positioning — biggest opportunity,

greatest challenge

The biggest challenge, in my view, at least, is that the brand has not been positioned clearly. The corporate position of “innovation”, “affordable car”, have all been milked. Different people have formed their own opinions of what the car is and unfortunately many of these have not been helping the brand. In the early stages the brand did very little advertising as it probably believed that it had a healthy order book and a waiting period. But advertising clearly helps define and answer some key questions — who is the car for? What is the “reward” for the consumer and what is the “support” for what we are claiming? The problem has just gotten a little more complex now, but nothing that sharp strategy and smart execution cannot handle.

It's the consumer, silly!

I too wanted to buy a Nano when I saw all the hype and my family asked me a simple question that they often do, “Are you mad?”, and I promptly desisted. How many such conversations are happening all over India? Often companies forget that business is not so much about innovation, hype and media coverage but about listening to the consumer. What do people who have bought the car have to say about the Nano? Who is not buying the Nano and why? Is there some mental block? I also think there has been a serious breach of confidence in the inability of the company to deliver a car at Rs 1 lakh. I really do not know how that is going to be bridged. And there are some practical issues that need to be ironed out, such as finance. Car finance is more difficult and messier than two-wheeler finance and the company must address this problem if it wants the numbers.

In the final analysis, the Nano seems to be an excellent product poorly marketed and even more confusingly branded. It is in the interests of the Tatas to ensure that they do not end up with egg on their face and in my view, the problems of the Nano can be handled. “The small wonder” is going through a big challenge. But it is not insurmountable.

Ramanujam Sridhar, CEO, brand – comm.
Read my blog @ http://www.brand-comm.com/blog.html
Facebook: facebook.com/RamanujamSridhar
Twitter: twitter.com/RamanujamSri

Thursday, December 9, 2010

Are you missing the digital revolution?

In the eighties, some of my classmates went to the US to study further and I was a bit envious of them. The reason? The US was going through a “sexual revolution” or so one read and here I was sitting in India where even the green revolution was a flop. When they returned a few years later a little rounder if not much wiser, I asked them eagerly about their experiences and they said rather shamefacedly “I missed it. It just passed me by”. Now
when I see the digital revolution taking over the marketing the world over, I am reminded of this incident. Is our generation, which has its fair share of industry leaders, missing the digital bus? Now why am I saying this? Consider this. What is the greatest challenge that Indian marketers are facing. To my mind it is simple “Heads of marketing in companies are in their forties, Managing directors are in their fifties, while consumers are in their twenties!” Enough and more has been said about the Indian youth market, its size, its complexities and its obvious potential as a market. What does the Indian youth particularly urban youth have similar in broad characteristics to youth the world over? They are a plugged-in community and are either on the mobile or on the net 24/7. They can bare their souls to complete strangers unlike us who are tighter than clams. They have the attention span of nano seconds and are bored easily. They are not satisfied with what they are born with and what to equip themselves with to meet the demands of the world. If that means preparing for IIT so be it. If that means taking a year off from school to compete in Indian idol, then that too is par for the course! So where is the problem?

It is all in the attitude honey

Belonging to generation X, I believe we are different. We are unable to accept generation Y as our equals and peers, as my second son says quite succinctly “Dad, the problem with you is that you are a dangerous combination. You are both a teacher and a parent. Teachers lecture and parents advise. You do both!” So maybe it is time for us to do more introspection if we are to understand youth and their medium better. Are we still in the world of print and television while they are online? The other challenge is technology. Some, not all, of our generation are technologically challenged. I wonder how many of you have seen this commercial for R world, a value added services provided by Reliance communications. As it is a few years old, let me jog your memory. There is a class of young school children who are being taught. A parent of one of the children is standing outside the class, desperately trying to get his young kid’s attention. The kid desperately looks the other side. His friends draw his attention to the fact that his dad is outside and he comes out reluctantly from the class, only to be asked by his dad how he can see the score on his mobile. The kid looks at his father disdainfully says “Bus button dhabao” and gets him the score in a flash. As luck would have it, Dhoni hits a six and the father does a gig in the corridor, to the disapproving glares of two nuns who pass by. It is a brilliant commercial which addresses the consumer insight of how children take to technology like ducks to water while their parents struggle to come to terms with it.

Opportunity beckons

I was at a seminar recently where one of the speakers asked an interesting question to a group of Managing directors of PR agencies “How many of you have Facebook or LinkedIn accounts “I am not going into the answers here. But my question is simple. If the next generation is in a different medium, should we not try to understand and harness it, for our own good? How long can we keep talking about being “technophobes” and take pride in being “pencil and paper” types? The same challenge is with advertising agencies. Today’s agency heads have been reared on the picture tube.

To them life is one long thirty second commercial. They do not understand the online medium, much less create for it. Clients too are experimenting with the medium much like radio in the nineties, without going the whole hog. I believe that while there are changes around us that we can all feel good about, I do not wish us to have the Indian mentality- “Look how much we have achieved in sixty years”. Yes, but there is so much more to be done. I think, perhaps the best expression that comes to my mind when we talk of India and the online medium is that “we have miles to go before we sleep”. And if we do not traverse those miles now, we will end up having sleepless nights.

Ramanujam Sridhar, CEO, brand – comm.
Read my blog @ http://www.brand-comm.com/blog.html
Facebook: facebook.com/RamanujamSridhar
Twitter: twitter.com/RamanujamSri

Image Source : Social Media Vision

Friday, December 3, 2010

Another Logo Bites The Dust!

Brands, which really belong to customers, would be better served if they improved the service along with a makeover..

Change of face: Airtel gets a new logo as 3G services arrive. Sunil B. Mittal at a press conference in New Delhi to launch the new logo and signature tune. - KAMAL NARANG

On November 18, 2010 I was near Hampi and opened a newspaper only to find the newspaper carrying a jacket (on its front page) unveiling the new logo of Airtel, my mobile service provider ever since I can remember. Interestingly the new logo was malleable enough to be part of that newspaper's logo in the ad announcing the logo change, where the new stylised shape replaced the ‘o'. Of course, you could forgive my ignorance for thinking that it should really be cueing an ‘a', not that anyone really bothers about what I say or write. India's leading mobile service operator was going to town with new creatives announcing the new logo not only in the paper that I talked about but in several others and supplemented the burst with TV spots for the launch of 3G services with commercials shot internationally. Media reports suggest Airtel is spending a miserly (!) amount of Rs 300 crore on the campaign. Changing a brand's identity clearly means a big investment for the marketer and big business for the advertising agency and the brand identity firm that creates the logo. In the same breath I need to mention that in my view brands are taking the step all too frequently these days irrespective of whether such a change is necessary and for the better.

video

Is change the order of the day?

Suddenly brands in India seem to be diffident about their identities and are in a hurry to shed them for newer, sexier and (naturally) more expensive ones. Over the last couple of years I can certainly recall brands such as Shoppers Stop, Godrej, Ceat and Canara Bank changing their logos (may the ones I have not mentioned kindly forgive me) as they probably felt their logos did not represent their current standing adequately.

Why do brands change their identities?

“Our logo is dated and India is full of young customers. We wish to create a new identity that will be attractive to young customers.” (And what about poor old customers like us who patronised you, old logo et al?)

“We have changed our business focus and the new identity represents that.” (At least this time we hope you know what you want to do!)

“We are offering a whole new range of services.” (Are you now!)

And so the story goes on. In my view, marketers tend to be more worried about their identity than the image consumers carry of them. To clarify, identity is easily manageable, starting with a logo, a Web page, brochures, advertising – in other words all communication that the company wishes to convey. This in short is the company's view, the way it sees itself. The image of the brand, however, is something entirely different. It is how the consumer perceives the brand and that view could be substantially different. So in my view, merely changing a company's identity (and the logo is its most visible part), may not do much to change the overall image of the company if not accompanied by significant measures to improve its service or delivery.

The “new” and “improved” Airtel logo

I am sure many of us are familiar with the slogans “new” and “improved” that FMCG brands have been using. It is a strategy (?) as old as the hills and often consumers would be hard-pressed to figure out what was new or improved about some of these brands that they have been using since childhood. Of course, logo changes are far more noticeable, particularly when they are backed by huge media spends as in the case of Airtel. Now let's come to the key question: Is Airtel's new logo really an improvement assuming that change was necessary? Of course, discussions on design usually tend to be unresolved as design is such a subjective topic and everyone knows how volatile creative people can be when their work is subject to scrutiny.

The earlier Airtel logo had a boxed-in look to it, while the new logo has a free, unencumbered feel. As one of the analysts who commented on the design said, “It is without boundaries.” In a sense that is perhaps what the brand is attempting to do as it moves across geographies and straddles continents with its new offerings, not being satisfied with merely being the market leader in India. The earlier logo was red, which, one suspects, is a brand property and it is hardly surprising that the new logo continues to be in red. Yet the bone of contention is that the design element cues another brand, Videocon, which also is claiming to be international and which, incidentally, also has ambitions in the mobile services space. But the greater concern is that the new identity seems closer to Vodafone, a major competitor of Airtel and a global brand of repute in the mobile services space.

In this context, it is perhaps relevant to look at historic competitors in another category, soft drinks, where Coke and Pepsi have battled it out for market share and brownie points, ever since I can remember. Of course, Coke and Pepsi have strong brand properties; Coke owns the colour red while Pepsi appropriates blue. It has been said half jocularly that the easiest way to make a Coke salesman see red is to whisper the word ‘blue' in his ear! Similarly a Pepsi salesman would go blue in the face if you just mentioned the word ‘red' to him! But seriously, competing brands build properties that in no way cue their competition and on this count I feel that it is perhaps not the ideal strategy to change yourself to look closer to your largest competitor.

Have mobile, will change!

Let's keep aside the global markets for a second and focus on the Indian market where I can speak with confidence, not so much as an analyst, but certainly as a consumer. I believe I have been a loyal customer of Airtel for years now. I have been wooed assiduously by the competitors and have even flirted with some of them for some time and continue to hold a second line. I remember the citizens of Bangalore cribbing incessantly about the name change to ‘Bengaluru'. “We are the constituents, did you ask us before you changed the name?” they ranted. Of course, politicians have their own agenda, which is largely independent of public opinion. But shouldn't marketers be different? Was I or anyone else asked whether we were tired of the logo? Marketers should somehow remember that brands ultimately belong to consumers and not so much to marketers. If Airtel had asked its consumers, they would have complained bitterly about the clogging of the networks and the frequent call drops. If we had a choice, we would have said stay with the logo, mate; just use the money you plan to spend on the change on the service!

Portability is finally here!

Why don't consumers change their mobile service providers and their banks? It is lethargy, really, as it is too much of a hassle to change, or at least has been, so far. And heavy users like me have another problem. We never really know how good the competing service provider is likely to be. And if after going through the heartburn and hassle of changing your service provider and your number and telling the whole world you end up in a mess, you are unlikely to be a very happy man. It is precisely this fear which has held back people. But now I am not so sure. I think I will experiment and so will a million others, one hopes. I hope service providers stop focusing their entire attention on prepaid and remind themselves that customers like me too matter!

Yes, these are interesting times, not only for marketers such as Airtel but consumers such as you and me. Companies and brands would do well to focus on things that will really make a difference to the consumer's life that are perhaps more difficult to manage, like the coverage and the customer experience, rather than the more easily manageable but relatively unimportant aspects like identity!

Do you agree?

Ramanujam Sridhar, CEO, brand – comm.
Read my blog @ http://www.brand-comm.com/blog.html
Facebook: facebook.com/RamanujamSridhar
Twitter: twitter.com/RamanujamSri