Why Screenagers are a Marketers nightmare

Screenagers continuously move from screen to screen and they have plethora of content to look at. The attention span is less since they so not know what they want. The are as capricious as any spoilt child. This is a set of people who are not awed by technology but see it as a natural evolution. They thrive on technology and they are the ideal choice fro new technology products.

But as they say, every coin has two sides or rather it is like a two-edged sword. They will immediately throw away a bad product or an un-user friendly product.

Screenagers tend to be an extremely well-informed lot which enables them to see and switch from one thing to the other with great accuracy and immediacy. In a sense, their ability to process large amounts of information simultaneously is rather staggering. Even the speed with which they switch between screens is constantly rising. One screen that is facing an erosion of sorts is the oldest screen of them all, TV.

The attention spans of these people are at their lowest when they are watching television, while it’s extremely high when they are on the Internet or on the mobile. I think the 15 second advertisement will soon be history. With multiscreens comes the multitasking behaviour, which crunches attention span to five seconds or less. That is all the time we as marketers will have to communicate our message, our positioning and make an impression. TV will have to interact with the other screens and that advertising ideas need to remain alive in that scenario.

Given that they are the prime target audience for numerous brands, marketers suddenly find themselves chasing shadows. They don’t like their screens being filled up with sales pitches, they have short attention spans and time is always at a premium. If they are in a car they have no time to stare at hoardings since they are busy with one or the other screen. One of the big challenges as a marketer is to find non-intrusive ways to access them.

SMS blasts are hugely ineffective and irritatingly intrusive. The internet media was saved by Google’s search engine discovery — which led to the birth of data marketing . We need its equivalents for mobile phones, gaming consoles, etc. marketers need to pull up their socks to tap this difficult market. While mobile and the internet as media are being increasingly consumed, the time spent in communication for these screens is less compared to the Television.

A lot of interaction across screens are visual led, rather than information intensive, communication targeted at consumers particularly on the Internet and mobile phones need to be of the same nature. Unfortunately, that is not happening.

Integration of these 3 screens is the most essential for success and to understand the want of these screenagers. If we treat each screen as a different world, we have lost at the first step itself.

Catch them young is the way forward since they are at a very Impressionable years. Not just these screenagers, but the general population is moving towards digital too. Mobiles are the answer to get near the populace since that gadget is with almost everyone and is available 24x7.

The truth though is that as of now nobody knows how to deal with this situation. For years marketers and agencies have agonized over the remote and today the remote seems like a dream compared to the nightmare that multiscreening is. Because at the end of the day, the problem is how do you reach a Milind Patil, a twenty-something from one of the four metros who stares into his phone screen every now and again either messaging or reading messages.

Creative Brief for Zoozoos

Being an advertising professional in the Client Servicing department, i give creative briefs day-in and day-out. For a change, i thought let me reverse the process. Following is my attempt to give a creative brief which can result in the creative product "Zoozoos"

Creative brief:

1. Who are we? What are we advertising?

Vodafone is a Multinational company operating in 31 countries and is the second largest telecom service provider in India in terms of revenues and subscribers after Bharti-Airtel. Over the years, Vodafone Essar, under the Hutch brand, has been named the ‘Most Respected Telecom Company’, the ‘Best Mobile Service in the country’ and the ‘Most Creative and Most Effective Advertiser of the Year. They believe in innovation and thus want to promote their Value-Added Services (VAS).

Voice has become commoditized and has ceased to be a tool for differentiation. Thus there is a need to develop alternative revenue streams for the telecom service providers. This is even more necessary due to the continuous entry of new players bringing down tariffs in the process reducing revenues for telecom service providers from voice.

There is stiff competition among the players resulting in one of the lowest tariff regimes ever. All operators are spending huge amounts on promotions and brand building. TV has been the preferred media for the ad spend accounting for more than 50 %

There are three categories of VAS applications

1. Entertainment- e.g. Jokes, Bollywood Ring-tones & games
2. Information- e.g. news alerts, stock market alerts, movie tickets,
3. Mobile commerce- e.g. mobile banking or mobile payments

Objective: to create awareness about the VAS applications and induce trial.

2. Target group: VAS applications are available for people of all age groups, right from exam results for a 20 year old to devotional songs for the old.

Thus age group is 20 onwards for both, men and women, married or single.

Media habit: TV and print majorly for people above 25. College going students nowadays are exposed to high degree of social networking sits such as facebook, orkut, twitter.

(Both men and women)

Top level executives: 40 years and above

Requirements with VAS applications- high speed internet connectivity. Major users of email on the phone. High income and high spenders

Mid level executives 30- 40 years

Requirements: high speed internet connectivity. Are technologically comfortable and hence use VAS applications such as mobile banking and information search apart from email. Medium income, high spending

Young professionals between age group of 22-30: tech savvy, early adopters, high spenders on technology due to either being single or experimental in attitude.

Youth from 15 – 22 years who are studying: early adopters but spending is constrained due to dependence on parents for income. Entertainment focus, affinity for social networking and peer communication. Peers act as strong influencers

We need to get away from the pug as it belonged to Hutch.

3. Competitive framework:

Primary competitors: Airtel (1^st Leader), RCom (3^rd Challengers) in terms of subscribers. BSNL (4th), Idea Cellular (5th), Aircel, Tata DoCoMo, MTNL follow.

(As per the figures of Quarterly reports for the quarter ended June 2009)

Secondary competitors in CDMA segment: Tata Indicom

Over the years, telecom players have used celebrities. Airtel has Shah Rukh Khan as its brand ambassador. RCom has Hrithik Roshan, BSNL has Deepika Padukone, Idea has Abhishek Bachchan, Aircel has Mahendra Singh Dhoni. Vodafone does not have a brand ambassador.

Airtel has over the years gone from tangible aspects in its communication to the intangible. Most notable of which is the bridging boundaries ad “There is no war or barrier that can keep us apart, if only we talk to each other”. The signature Airtel tune by AR Rahman has a very high recall.

RCom started with ‘karlo duniya mutti mein” and initiating the tariff wars not only in terms of voice price but also handsets. Presently it is running the Hrithik Roshan ads for promoting its GSM service.

Idea cellular started off slow but its “Sirji” campaign bought it into the limelight along with the ‘walk when you talk” ad. It has always experimented with social issues.

Aircel was a regional player in south but went national with Dhoni as its brand ambassador.

4. How is the brand perceived before the communication?

‘Happy-To-Help’ campaign. Customer service was never the focus of telcos. In an increasingly tough environment, Vodafone wanted to cater to this untapped issue which is so integral to service companies yet wasn’t a focus. Telcos wanted to increase number of subscribers as it allowed them greater reach and economies of scale. It also allowed them to ask for more ‘spectrum’ with the increase in number of subscribers.

Thus the ‘Happy to Help’ campaign was evolved to give the customers what was missing. This campaign was implemented across 45 offices and 4000+ Vodafone stores and mini stores involving over 10000 employees. The communication was through employee signing off emails and service calls with ‘Happy to help’ message, the cute little girl and the pug became synonymous with ‘helping each other’.

5. Insights: Consumer insight: mobile phones today have moved beyond their fundamental role of communications and have graduated to become an extension of the persona of the user. All are witnessing an era when users buy mobile phones not just to be in touch, but to express themselves, their attitude, feelings & interests. Customers continuously want more from their phone. E.g. Your caller tune signifies your personality trait or your mood

6. Core proposition?

Intangible: Fun with the cell phone.

7. Tone

Vodafone-Essar is among the top 2 players and thus it is a leader. Vodafone ads have always been clutter breakers right from the hutch boy and pug to the ‘Happy to help’ girl and the pug.

8. How do you want the brand to be perceived post the new brand communication?

Go beyond the connectivity, low cost and voice clarity aspects. Value-added services should be the growth driver for Vodafone. Volvo has top-of-the-mind recall when we say ‘safety’ or Bajaj has top-of-the-mind recall for scooters, Vodafone should be top-of-the-mind recall for Value added services.

Understanding Mark-to-Market (M2M) Accounting rules:

Mark-to-market accounting rules have been at the fore front of assault of accountants since the downfall of investment bank Lehman Brothers and the subsequent financial and economic crisis. They have been partly held responsible for the book losses made by the banks, at a time when without it, the losses would not have been visible and given more time for banks to come out of the unholy mess it finds itself in at the present juncture. The other side of the debate is in favour of M2M rules who feel it is an appropriate way to value assets of banks and investment banks too.

Mark-to-Market, as is self explanatory, means the valuation of a particular asset class be arrived at, not based on its historical value, but based on its present market value. Thus the book value of an asset will be different at majority of times from its market value since it would be a function of demand-supply mismatch and other macro-economic factors.

This is the crux of the problem. The crisis, whose signs were visible in May 2008 following the takeover of investment bank Bear Stearns, precipitated into a full blown crisis post September 2008. pundits blamed the M2M rules for the exaggerated loses shown by the banks since they had to mark-to-market the assets which were at an all time low due to the bubble bursting and CDS liability on majority of banks.

Consider a bank with all different types of securities which include bonds, stocks, commodities, hedged currencies and other simple instruments such as fixed deposits, mortgages and credit card loans. The values of these instruments change everyday due to the various selling and buying happening in the market.

Post September 2008, the credit markets froze and there was the liquidity crunch. There were a lot of sellers wanting to sell their doubtful derivative instruments but they did not find any takers. This resulted in the valuation of majority of instruments especially bonds and derivatives taking a beating. They were sold at fire sale prices to distressed investors wanting to buy at discounted prices. Thus the banks had to book losses for instruments which were on its books and post losses. Thus the emperor was without clothes and M2M was blamed for it.

Franklin Roosevelt suspended it in 1938, and the end of the great depression started. Between then and 2007 there were no panics or depressions. But when FASB 157, a statement from the Federal Accounting Standards Board, went into effect in 2007, reintroducing mark-to-market accounting, look at what has happened.

Emotional communication from a technology company

A first impression when one reads this headline is that it is either for an insurance company since a insurance companies are one of the highest spenders after FMCG and telecom at present or it is for a may be it is for a healthcare giant such as Fortis or Apollo or Wockhardt to name a few. But most people would say it is for an insurance company.

Why would a technology company like Siemens put up advertisement with a headline meant for a product/ service for the end consumer? The body cop talks of energy efficient technology and IT solutions which are used in hospitals. Thus it is a business-to-business service. How is it related to the end consumer? Is the consumer going to check what IT solutions and equipments the hospital has before getting admitted?

I think the marketing managers are thinking of something more than the obvious. They are trying to increase the brand equity of Siemens as a brand for the end consumer although their product/ service is not directly sold to them. Just like how IBM talks of green and environment consciousness, Siemens too wants to tread that path. They want to be known as a ‘caring’ company not only for the environment but also the people through its clean technology. It wants to attract the best of employees.

If one really wants to think out-of-the-box and try to read too much between the lines, then may be Siemens wants to get into insurance or healthcare sector. And this is an attempt to sow the seeds in that direction.

Difficulty in catching the attention of the youth in this cluttered market:

Self reference criteria (SRC) has been one of the major reasons for companies failing when they have decided to open businesses in different countries with different culture and socio-economic and infrastructural parameters. Be it Wal-mart in South America or Kellogg’s when it launched in India (it failed since cornflakes are eaten with cold milk in the US and Indian people drink hot milk) thinking of India as the country with half a billion population of middle class ready for consumerism. But they failed since the Indian population behaved in a different way from the way a developing country population has in history.

A week back I met my school friends after a ling time. Some of them were working fro IT companies, some in manufacturing, some in finance and some in services. While we were talking, I mentioned about the broking firms such as Motilal Oswal and Angel broking. They were not aware of it. I asked them in astonishment that did they not see so many ads in TV or print about these companies. And they casually brushed it off saying who watches ads in TV or who reads newspapers. They never read magazines. The marketer in me suddenly woke up and I started to read between the lines. These young people do not read newspapers. They change channel during commercial breaks. They have a very small attention span and like all people while growing up, are restless.

How is it possible then for marketers to catch their attention and build a loyalty? These people, as per the latest fad, are heavily into social networking. A lot ha been said about the future of advertising being on social networking and this is the place to be. I am a bit skeptical about it. It seems to be a passing phase. Once the novelty factor wears off, social networks would also be just ‘one of the media’.

This is a self reference criteria which I am looking at. But I don’t think I would be totally off the mark. The general behavior of the youth seems to be like that. Thus it seems that it would get increasingly difficult to get returns for your advertising spends on mass media. It would require more a focused approach especially if the product/ service is for this young audience.

Love-Hate relationship between the ‘Creative’ and ‘Servicing’ in an ad agency

As the famous saying goes “Women- you can’t live with ‘em, you can’t live without ‘em”. Don’t jump to the conclusion that I am a Male Chauvinist. It’s just that I want to draw an analogy with the advertising world. Creatives and Client Servicing can’t stand each other but they can’t help it. Because without the other, neither of them can do anything. There is a Love-Hate relationship between the two. The occasions when the creative and servicing has agreed are far and few.

But without the servicing guys, the creative won’t have the client to work for and without the creatives, the servicing won’t have any one to do the creatives for. An advertising agency should be creative because that is what advertising is for. Creativity should, therefore, ideally take precedence over other things. Alas ‘ideal’ things never happen. In an ultra competitive environment where the client calls the shots and has all the bargaining power over agencies, except for the top 3-5 agencies, the client has to be taken care of. Thus it becomes a tight rope walk for the servicing guys. Neither can they offend the creatives nor can they say ‘no’ to the client for a particular rendition of the creative. And this is where the love-hate relationship blossoms (with a tinge of sarcasm).

Creatives complain that the servicing guys do not know how to sell the creative to the client. Servicing guys say that the creatives are not able to give what the client wants according to the brief. Let’s make an attempt to understand both the sides. Advertising is a service which is offered to the client. To be more precise, a ‘creative’ service. Advertising helps to promote the product of the client in a creative manner which the client himself cannot do. Thus it is outsourced to a specialist which is the ‘advertising agency’.

The process starts first with understand the needs/ wants of the client. Servicing does that for the agency. The process is then continued with the creative rendition by the creatives which is facilitated by the ‘creative brief’ by the servicing. The marketing brief of the client is transferred into the creative brief. Thus the end product does not just have to be creative but also in sync with the marketing objective of the client. The creatives have to be made aware that we are not in an art competition where the best creativity is praised. The creativity has to result in sales for the client or brand building. If the creative isn’t in sync with the objectives, how can the servicing sell it? On the contrary, the servicing guys too need to be able to convince the client that the creative rendition is the apt for the set objective.

This however is a very subjective issue and varies with each client, each servicing guy and each creative. Thus the love-hate relationship will continue to be there.

How do we define ‘luxury’ for a marketer?

For any product/ service which has become a success, the natural progression is towards becoming a luxury product which becomes a source of pride or show-off for the user. This helps the company charge a premium for that particular product. The important question is that what can be defined as a luxury? Is it a tangible or intangible quality?

Luxury can be categorized in three types- accessible, aspirational and absolute. As we go from accessible luxury to aspirational luxury, the product/ service qualities become tangible and intangibly high, the price increases, the premiumness increases, the promotion becomes more focused and the distribution becomes exclusive.

As the name suggests, accessible luxury means the product has just the right amount of differentiation to charge a premium. Accessible luxury is for a product which a person normaly uses quite often. The consumer uses this accessible luxury to just satisfy his materialistic wants. E.g. a lower middle class family going to a multiplex once a month to watch a Rs. 200 per ticket movie is accessible luxury or in terms of a FMCg product, buying a Hide & Seek biscuit over a Parle G.

Aspirational luxury has the highest number of products falling in this category. This is for the upper middle class who have the means to continuously increase their standard of living. They are the most materialistic in nature. E.g. a family renovating their house with a decorative false ceiling and having a refurbished modular kitchen which is done once a decade. This type of luxury works best for consumer durables, cars, apparels, vacations and hospitality. E.g. a dinner at a five star hotel once a fortnight or a branded jeans like Levis or branded shoes like Nike, Reebok or Woodland. Slightly higher on the aspirational radar would be brands such as Mercedes or BMW.

Absolute luxury is absolutely absolute. There is no comparison. Very few own it. Very few dare to think of it. A Rolls Royce or a Private jet like the Gulfstream. Designer apparels by internationally acclaimed designers such as Dolce Gabbana or designer shoes by Jimmy Choo. Absolute luxury is difficult for brands to achieve if it has fallen ever in aspirational luxury let alone accessible luxury category. Absolute luxury show set the user distinctly apart from the crowd.

Finally, as we go from accessible to absolute luxury, the tangible part decreases and the intangible part increases in value.

'Size Matters' for Sundaram BNP Paribas Mutual Fund:

Sundaram BNP Paribas Mutual Fund recently launched a unique offering of PSU opportunity fund where the investors’ money would be invested only in the PSU companies. Considering that presently the only option investors have is of equity, debt and commodity funds, this can be thought of as an innovation.

As an asset class, PSUs have dominant share in four sectors, energy, financials, utilities and materials. PSUs have backing of the government and India being a developing nation where infrastructure is going to be the key growth drivers especially with so much of fiscal action happening, PSUs are going to grow exponentially. The market cap of the PSU universe has risen from about Rs. 90000 crore to Rs. 15,10,254 crore in this decade as PSU stocks outpaced the broad markets as well as private sector players. Thus investing in this class of assets is sure to give handsome returns with minimum risk.

Now getting to the advertising aspect followed by Sundaram BNP Paribas Mutual Fund i.e. a print ad in one of the dailies in Mumbai last week. They are selling the might of its multinational giant BNP Paribas which is a mammoth organization. The print ad headline being ‘size matters’. Of course size matters and with deep pockets of BNP Paribas, it surely matters more. But I find a small lacuna in this strategy because of the implantation of the print ad. It shows a sumo wrestler with this ‘size matters’ headline.

A small mutual fund can bring out a similar ad with a small sumo wrestler vs. a big sumo wrestler as shown in the picture above. This is possible in sumo wrestling since agility matters and not the size. Thus a small company can write ‘size doesn’t matter’ in the ad and publish it. It could be quite a coup of sorts.

Cola wars and technology wars (between Apple and Microsoft) are known but mutual fund wars would be quite interesting. Isn’t it?

Kareena and Sony VAIO: Two ‘size zeroes’

India is one of the fastest growing markets for personal computers. Over the last decade or so, laptops have started to be the preference over desktop PCs for the middle and upper middle class due to the crashing prices of laptops per day. It was always the preferred choice for affluent class when they even bought it for more than a lakh.

The cumulative sales of laptop and personal computers in India is around seven million and is likely to grow at 9.7 per cent compounded annual growth rate for the next five years. At present, the ratio stands at 35:65 with the dice loaded heavily in favour of personal computers.

Thus all the major laptop manufactures are present in India namely Sony, Toshiba, and Compaq, Acer, Dell, Samsung, LG, and Lenovo among others. India’s own HCL too is giving these foreign players a run for their money. Apple is a big player which though is surprisingly absent. You will rarely find a Mac unless it is bought from abroad by an Apple enthusiast.

All these players have a brand ambassador for their TV promotions. Compaq has Shah Rukh Khan which I find surprising since SRK isn’t known for this intellectual abilities with due respects. He is a fabulous performer but in films which are his domain. Acer has Hrithik Roshan whose case is similar to SRK. I do not agree to him as a brand ambassador for a laptop. Toshiba has Vidya Balan which is not just surprising but almost shocking. I really would like to know the reasoning behind her as a brand ambassador. Others such as HP, Lenovo, HCL LG, and others advertise but they do not have a specific brand ambassador.

Sony recently signed up Kareena Kapoor for launching Sony Vaio's (Video Audio Integrated Operation) new 'Size Zero’ laptops. The reason for signing her is easy to understand. It is one fo the most perfect fits for a brand. She was the first Indian brand ambassador of Sony Vaio. The actress was responsible for making 'Size Zero' a household term a couple of years ago. She is the only person who embodied what the brand stood for. And the new range of Sony Vaio's 'Size Zero' laptops is compact, classy, chic and sophisticated just like Kareena.

The audience could easily relate the product and Kareena. The TV commercial made is also classy and made considering the affluent class as the target market.

Recession and the irony of its solution

As a layman who does not understand much of macro economics except for the easy and lucid explanations given by pundits on news channels, I find it difficult to understand the low interest policies by banks the world over to come out of the recession.

The financial and economic crisis of 2008 which engulfed the whole world resulted in recession. A depression was averted due to the timely and coordinated action by central banks the world over. This however happened due to the loose monetary policy by the Federal Reserve; the US central bank backed by the then Fed Chairman Alan Greenspan, an avid supporter of free markets and the present fed chairman Ben Bernanke, the then director on the fed board. They believed that recessions could be a thing of past and that loose monetary policy could stop the boom-burst cycles of economies. Also markets correct themselves based on demand-supply gaps and the central bank should act only as the facilitator rather than a regulator.

The low interest rate regime resulted in debt-fueled consumption by US exacerbated by the high savings in developing countries such as China, India and the oil rich countries who supported the high consumption of the US. These emerging economies had highest savings during these boom times of the last decade. When this consumption led bubble burst following the bankruptcy of Lehman brothers, the world economy was on the verge of collapse. Keynesian policies took front seat and fiscal action was the order of the day. This however was also combined with loose monetary policy so as to facilitate lending by banks who had taken a hair cut on their balanced sheets.

The thing that I do not understand is that how can low interest rate regime, leading to more lending, revive the economy which is in dire straits due to this debt based consumption? The US is buying its treasuries and non- conventional monetary policies such as quantitative easing are followed and the balance sheets of the central banks are broadened to facilitate lending. How can loose monetary policy be a solution when it was the cause in the first place?

In India, SBI is giving 8% loan to induce spending. Isn’t it similar to debt-fueled consumption? Isn’t it similar to what the US banks did by lending to customers with low credit worthiness? Should we not learn from this and look at other ways to revive the economy?

‘Live within your means’ is one of the famous proverbs. If all people follow this, we would not have the kind of materialism in the world. As Mahatma Gandhi once famously said “there is enough in this world for everyone’s need but not for everyone’s greed”. The crisis of last year clearly embodies this.

Per-second billing- non-impressive

Tata DoCoMo came up with the ‘differentiating’ factor of per-second billing to enter the Indian telecom market with a bang. It surely did hit with a bang but unfortunately could not sustain this ‘differentiating’ factor. Other telecom service providers followed suit and converted to per-second billing. It resulted in more problems for the service providers with more losses in revenues.

I do not think this per-second billing is going to result in addition of subscribers or a churn in subscription form one service provider to another. Currently many a subscribers avail a call rate of 50 paise per minute or 30 paise per minute among the same service providers. Many of the plans include friend talk or group talk where the rates are as low as 10-20 paise per minute. The new plans of per second billing have rates of 1 paise per second which equals 60 paise per minute. Thus existing customers would not want to change over to the new plans. Moreover, with the implantation of Mobile Number Portability, I do not think there would be any churn due to per-second billing option.

Apart from this, only the pre-paid customers who are light users will find this useful. Post paid users who are heavy users would not be much impacted since the value of reduction in price would be negligible. The plans would help pre paid users who are almost 90% of the total subscribers but thinking of the future doesn’t seem to be the right idea. The only way the service providers would earn profits was if they used VAS. And thus targeting the post paid user would be a prudent idea.

The urban areas of India are congested and there is hardly any place for a new entrant irrespective of the differentiation. The rural areas are very sparsely penetrated and better infrastructure would result in addition of subscribers there. Even though the rural population are low spenders, the volumes of subscribers could do the trick for the service providers. And low tariffs could see the populace using more communications.

Thus I think, although analysts thought that per second billing would be the game changer in the telecom space in India, it is far from what is going to happen.

Of blood baths and paid baths:

There are more than 13 existing telecom players in 23 circles of India where the penetration in urban areas is more than 75% and in rural areas is about 12%. India, till last year, had one of the lowest tariffs in the world. Since Tata DoCoMo launched its per-second billing, all other service providers followed suit resulting in price war causing red line on the balance-sheet of already loss making telcos. Now, India has the lowest tariffs in the world with more to follow to attract customers.

The Indian market is one of the fastest growing telecom markets with 500 millions subscribers and yet a huge untapped population base. With paucity of infrastructure, telcos are increasing the customer base with future in mind. No problem till now but it starts when increasing customer base becomes the only objective with no regard for short term profitability or even sustainability. Just 2 or 4 major players in GSM and CDMA segment, things were on a tight rope for these telcos. But with aggressive new players wanting to make an impact, existing players are feeling the heat. New entrants will lose money as they fight for share, but that is something that happens to new entrants in most businesses. The smarter new entrants will likely share infrastructure and outsource most of their operations—both trends that the first generation of Indian telcos discovered only earlier this decade.

Thus with time (may be a couple of years), “voice” service by telcos will become a “commodity”. All prices will be on similar terms, distribution will be similar, and all telcos are going to increase promotion with time. Thus new entrants and existing players will have to come up with value-additions for customer delight and ways to find customer retention with the launch of Mobile Number Portability (MNP).

Value-added services (VAS) will form the core part of this strategy but it will all depend on the pricing model in this case. If the 3G auction results in players spending huge amounts of money to the government, the prices of VAS would be high thus causing a hindrance to its mass usage. The revenues for the players will not accrue resulting in more time for turning the tide towards profitability.

Thus a time will come when “voice” will be given free of cost and with the telcos charging for the VASs. It wouldn’t be a surprise of sorts and wouldn’t even be a bad economic decision since it follows on the models of other great companies such as McDonalds which does not make money on its burgers but makes them on French fires and the soft drinks, Multiplexes which do not make money on the ticketing sales for the movies but makes them on the popcorn, soft drink and the other food items available for the customer, NEWS Channels or newspapers do not make money on subscription but makes them on the ad sales.

Bottomline, a time will come when the telcos will be hoping to make money by giving the soap away and charging for the bath.

Blood bath in Telecom sector in India:

If an industry analysis of the telecom sector in India is done, it would show the cut-throat competition that is going on for subscribers between the existing players. There are 11 existing players in the telecom space already namely Vodafone-Essar, Airtel, Aircel, Idea Cellular, Tata Indicom, RCom, Loop Mobile, Spice Telecom, Virgin Mobile, BSNL, MTNL. The industry has high entry barriers with the requirement of huge infrastructure, massive promotion due to numerous players resulting in high spending and almost commoditization of telecom services (we will discuss the commoditization aspect later). Apart from this, the high amount that is needed for buying the all too sparse spectrum. There are high exit barriers. The average revenue per user (ARPU) is one of the lowest in India resulting in red lines for the telecom companies.

Yet new entrants are planning to enter India with 3-4 big players namely Shyam Telecom in JV with Russia based Sistema, Unitech Wireless with Norway based Telenor and UAE based Etisalat going it alone soon to launch their services in this already congested market.

The huge untapped market potential has all these players wanting to enter the telecom bandwagon with an eye of the future when 3G services will bring in the revenue and profits. The only motive of these operators now is to increase subscribers. The existing players and the new entrants do not have much different to offer in terms of services. The only service they had to offer was voice-calls and SMSes. It has made a commodity of the voice-call or sms. Value-Added Services (VAS) which get the revenues for operators in other developed markets has yet to evolve in India. Partly because of its high cost to the customer and the sophisticated high-end cell phones required for accessing these VASes. Thus the only aspect they can fight is in terms of pricing. The Indian market is price sensitive in various products/ services and it is no different here. This has resulted in price wars, thus bleeding the already losing operators.

Tata DoCoMo with its GSM service was the first to launch ‘per-second-billing’ plan. This was immediately followed by Aircel immediately when they launched the 123 billing plan where after the third minute, the STD call would have local rates. As soon as Tata DoCoMo aggressively pursued the per-second billing plan, others had to follow suit to be in the race and not allow DoCoMo to run amok with subscribers. Airtel, Vodafone, Idea, BSNL, RCom too slashed rates and the tariffs fell to a world record low of 1 paise per second. With these new plans in place and mobile number portability to follow, a lot of churn might happen and telecom analysts predict a reduction of about 15% in revenues for existing telecom operators. The financial markets have taken note of it and scrips of many a telcos have taken a severe beating with Bharti-Airtel taking the brunt of it. The customers are benefiting from the price wars but it is profusely bleeding the already bleeding telcos. When will this blood bath end?

A time will come when price would cease to be a factor. Differentiation would have to be actually done in services offered. But in the mean time, telcos will have to bear the harsh competition. May be consolidation would be the order of the day in the coming 3-4 quarters.

SBI- the Banker to Every Indian:

The world of finance and economics is very complex and boring for the layman. India is a developing economy moving from agrarian to the service sector directly giving manufacturing sector a miss in its transformation. The extent of a developed country can be gauged from the level of complexity and maturity of the financial market. Banking forms a critical part of the financial market comprising of equities, debt, commodities and a bit of insurance.

SBI is the oldest bank in India with a rich heritage of more than two centuries. It is India’s largest public sector bank in terms of balance sheet, customers, number of branches and ATMs and number of employees as well. Yet it doesn’t have the brand recall of say an ICICI or HDFC or any other foreign bank. SBI was a sleeping giant even post liberalization. Foreign banks and even Indian private banks went miles ahead in the race of brand equity and brand recall and service. SBI stood for a government bank, lethargic in its service. SBI was not the preferred choice for customers. Its scale, backed by the government made it sustainable. But since last couple of years it has woken up to the array of opportunities and turned itself into a versatile origination attuned to the needs of the changing customer.

The Indian consumer’s purchasing power and disposable income has grown exponentially in the last 5 years. The nimble and lean foreign and Indian banks have grabbed the customer with both hands. SBI lacked in this, rather all Indian Public sector banks lacked in this. Thus there was a line of PSBs outside ad agencies for changing everything from logo to the positioning and the promotional campaign. We had union bank of India, Canara Bank, Bank of Baroda among others changing their logo and using celebrity endorsements for their promotions.

SBI of late has started with a print and outdoor campaign which is drastically different. Neither are they talking about financial products, interest rates or returns nor are they going for the emotional appeal of trust, ease in service or reach of maximum ATM. The campaign is based on the value which makes all great brands i.e. the longevity. IBM, Coca Cola are century old brands. SBI is also trying to say that if we are centuries old, we are that damn good for the people. The methodology to convey this message is quite peculiar.

Motilal Nehru, one of the early Indian independence activists, Sardar Patel, architect of the integrity of India, Jagdishchandra Bose, an eminent Indian scientist, Dadabhai Navroji, founder of Indian National Congress for independence of India, Rabindranath Tagore, literature Nobel Laureate, Dr. Rajendra Prasad, Independent India’s first President, M Visvesvaraya, Engineer and Statesman were customers of SBI. This methodology is unlike testimonial ads yet it has that flavour. No other bank can boast of such an elite clientele. Thus they are trying to say that this is the clear differentiation which no other bank can claim to have.

A good and a refreshing piece of creativity and strategy. Kudos to you, SBI and their agency.

Lux- the ‘not-so-premium’ brand:

Brand building happens over a period of time. It takes even more time if it is a premium brand. For a brand to scale up is desirable but it isn’t easy, for a brand to scale down isn’t a very good strategy unless the product has become obsolete due to technology or any other factor beyond the control of the brand manager. Scaling down is much more undesirable if it is a premium brand.

Aspirational aspect of the human psyche gives the brand the ‘premium’ effect. Till the time this aspiration to own the brand holds good; the brand retains its premium positioning in the mind of the consumer. A classic case of scaling down resulting in disaster is the Daewoo Cielo car brand in late 1990s. Sudden reduction in price made the car positioning from luxury segment to mid-level segment. The result was complete hara-kiri.

Similar is the case happening with Lux, Hindustan Unilever’s premium soap. Lux has been going through a tough time with many competitors in the same segment. Peers and Dove (cannibalization), Fiama Di Willis et al. Lux’ market share has taken a beating. Lux celebrated its 75 years in 2005 with a special ad featuring Shah Rukh Khan and 4 Bollywood actresses, Hema Malini, Sridevi, Juhi Chawla and Kareena Kapoor who have endorsed the brand at some point of time. This shows the power of Lux to get such star power in the ad. No other brand can boast of such lineage of endorsers. Lux is considered such as premium brand that a Bollywood actress is assumed to have arrived on stage when she endorses Lux.

The latest endorses is former Miss World Ms. Priyanka Chopra. Like they say a ‘Bond girl’, we can say ‘Lux girl’ for all these ladies. With this new ad, Lux has scaled down with a soap for Rs. 10/-. Thus immediately the premium positioning is lost when you can get a Lux for such a low cost. The aspiration for the middle and lower class of the populace is realized resulting in increased sales in the short term but in the long term, the affluent ladies would resist from using it.

The ad itself is pale in comparison to the sophisticated ads done earlier. The first thing that strikes you is the song used in the background. It’s a copy of the ‘Dus Bahane’ number from the Bollywood movie ‘Dus’. For a brand as renowned as Lux and its parent company being Hindustan Unilever, we expect an original sound track, not a straight rip-off. Priyanka Chopra could have been sued in a much better way.

A loser ad and loser strategy with nothing to gain but everything to lose.

End of the 'devil' for Onida?

Onida has been aggressively marketing its consumer durables on Television since last couple of months. These include TV set, Washing Machine, Microwave oven and home theatre. But there is one thing missing in the TVC. Well, no point for guessing since it is so simple. The bald devil with horns, the most important ingredient which separated other consumer durable company ads from Onida’s. The present “Tumko dekha toh yeh Design aaya” ad is usual run-of-the-mill ad devoid of any clutter breaking copy. We will discuss the ad later but before that, why did Onida do away with the devil from its ads?

The devil was so impregnated in the minds of consumers that it reminded them of Onida. That devil stood as the Onida mascot. This unique identity separated Onida from the other ‘me-too’ products. That identity has been lost now. The devil had a top-of-the-mind recall.

The rationale given for doing away with the devil was that the emotional appeal of the ‘neighbour’s envy’ isn’t applicable in the present environment. Nothing can be further from the truth. When Onida had come with that concept, it was initial years of opening up the economy where Onida stood for class and only the rich people could afford it.

Post 2000, all MNCs have taken over that space. With increase in number of salaries, people buy these foreign brands and Onida was left no positioning. Onida could not sustain its premium positioning. Sony has taken over that premiumness which is used to impress their neighbours. Thus Onida has failed in its attempt to sustain the original ‘envy’ factor.

Now to talk about the new ad, it shows a young couple (seemingly newly wed) talking about the various products of Onida in its different ads. Thus the target market seems (intentionally or unintentionally, I am not sure) to be young newly married couples without children. Had they shown a middle aged couple with one or two children in the ad, this anomaly or doubt would not have cropped up. Apart from this, young couples nowadays are well aware of the various brands and they know the attributes and benefits of all. So technologically they know the quality of foreign brands is much better than Indian. It is a very mediocre ad with no creativity.

Onida needs to rethink its promotional message and go for a much more precise and focused outlook.

Mobile Number Portability- is it the game changer?

The current market scenario in the telecom industry is bubbling with activity with new players entering an already congested market. The telecom industry is in the ‘growth’ stage of its life cycle. Thus the only objective for the companies is adding new customers and increasing its customer base. Retention of the existing customers, atleast the post-paid whose Average revenue per user (ARPU) is almost three times the ARPU of pre-paid customers, isn’t on the agenda of the telecom players. But it could soon change post the implementation of Mobilenumber portability. Some of the post-paid customers especially the corporate ones are high value customers with billing in the range of Rs. 20000-40000 per month. There is hardly any differentiation in service for the post-paid customer vis-à-vis the pre-paid ones.

Mobile number portability could alter the scenario especially for these high value customers. A churn of pre-paid customers won’t hurt the players much but post-paid customer churn would certainly hit the revenues in the immediate time past MNP implementation. These high value customers indirectly subsidise the pre-paid customers in the urban and rural areas.

India has one of the lowest tariffs and it is further going to go down with the increasing cut throat competition. The pre-paid customers do not add much value in terms of revenues although it gives the company a better reach. It is the post-paid customers who need to be taken care of. Price wars have already been started by Aircel (after 3 minutes, call STD at local rates), Tata DoCoMo with per second billing and Tata Indicom with billing based on number of calls as against the number of minutes you speak, to gain a larger share of the market. If Vodafone-Essar, Bharti Airtel and ADAG group’s flagship RCom join the price war, prices could reach unsustainable levels with a blood bath in the industry and only the big players surviving through consolidation being the only mode of survival.

MNP thus is surely going to give sleepless nights to the top management of the big players. Brand building would give way to building brand equity through better service and customer loyalty. Differentiation of services would be the order of the day in the not-so-distant future for these players. Keeping the post-paid customers happy with customised offerings would have to be the way forward. Happy customers rather than ‘just’ more customers would have to be the motto, just like in any other service industry.

As tariffs go down, pre-paid customer would find post-paid options much better which would not only increase usage for the customer but also make complete utilisation of the infrastructure for the telecom company. Only Vodafone seems to have understood the future. It is leading the pack towards changing the way people use phones. It launched with much fanfare and effectiveness its Value-added services campaign with the adorable Zoozoos. This means that they are targeting the post-paid customer who uses the VAS. This would mean more revenues. Pre-paid customers just use the caller back tune VAS. Thus Vodafone is looking at the future 5 years down the line where it wants to be ‘different’ from the ‘me-too’ players.

Relevance of colours in our lives:

Do you remember the days around two decades back when we had just black & white televisions? Colour TVs had to be imported and were a status symbol in the drawing room. Don’t we reminisce when we see our black & white photographs? It was until Kodak entered India that we got colour photographs. When we buy a consumer durable such as TV, refrigerator, washing machine, don’t we fret over the colour of it? Many a times women change the brand for want of a specific colour. Why do you think women take such a long time to chop for clothes? Colour forms the most integral part of the attire apart from the design. Don’t you take days to decide the colour for our abode? Colour denotes our personality and our style and way of thinking.

Each colour has a peculiar function to when we go socialising or even for a business meet. There goes a saying “when in doubt, wear black”. We do not want colourful attire at an inappropriate place or an inappropriate time. Black solves the problem of a faux pas.

Colours add vibrancy to our lives. It acts as a differentiator for each and every materialistic need or rather ‘want’ of ours. This ‘want’ for appropriate colour has been used by marketers since time in memorial and will continue to be used.

The ads for apparel, show fabulously dressed models with an aura of confidence to get that aspirational feeling to the customer. Currently Videocon and Sony Bravia TV ad shows colours in its ads. The Bravia ad has colour as its theme with the tagline “See more colours”. It shows colours formation in a breathtakingly beautiful way. The non-stop paint company ads lead by the India paint giants Asian Paints and Kansai Nerolac followed closely by Berger and ICI paints talk about colour.

Corel Draw software in computer for creative drawing in ad agencies and Adobe Photoshop has millions of colour combination. The vignette effect and the shine visible for the print in 2D format are exciting to say the least.

This liking for colour has been manifested in humans time and again. Colours truly enlighten our lives and make them vibrant and exciting.

Targeting of Unit-linked Insurance plans (ULIPs):

The biggest innovation for the insurance industry over the past couple of years has been the Unit-linked Insurance plans (ULIPs). It was fuelled by a booming stock market. It is seen as a direct competitor to the Mutual fund industry with value addition of insurance as well. However the downward spiral of the markets after the recent crisis has directly affected the ULIPs where the majority is invested in the Equity markets.

To be different from competition and get people to buy ULIP products, two things can be done:

1. Understand consumer behaviour and appropriate targeting-

There are 3 types of customers for ULIPs- General public accounting for almost 90% of the buyers who are unaware of the intricacies of this financial product and are conned by salespeople. These people are influenced by peers and hearsay. These are the type of people who have stayed away from ULIPS recently resulting in the dip in sales.

Second type is the informed public who account fro about 5-7%. These people have become conservative in investing in ULIP and are very circumspect and waiting for equity markets to resurrect.

Third type is the High-net worth individuals (HNIs) who account for just 1-2%. The next point will elaborate on the same.

2. Sectoral choice availability-

Presently a customer doesn’t know which sector his investment is done. He just gets daily updates in the Net Asset Value (NAV). For making ULIPs attractive for HNIs, three things can be done- give option of sector such as infrastructure, banking, PSU, FMCG or telecom or commodity markets. They can be divided according to growth fund where there are high returns but commensurately high risk too. Then their can be safe and fixed returns funds with minimum risk. And finally exotic funds with exponential growth options where the money would be exposed to high risk and complex financial products such as Credit Default Swaps (CDS), commodities, bonds, currencies among others.

Both these methods are possible. Only appropriate data needs to be collated.

Lastly Perceptual Mapping also can be done but it is from marketing point of view only and has to be done every 3-5 years or if you have changed your value proposition. Just like what Bajaj Allianz did with its digression to emotional appeal from a practical one.

Paint companies- on the prowl:

It would be difficult for you to miss the paint ads on Television. They are all over the place. No genre of channels are left untapped, be it sports, news, GECs, or even Cartoon network or regional channels.

Two Indian paint giants, Asian paints and Kansai Nerolac Paints are looking for one upmanship in this festival sector. No one wants to be left behind in the endeavour to increase the market share and imprint the brand awareness. This is more true than ever for these two companies with the global paint giant, Sherwin-Williams entering India. They have bought Nitco Paints in 2007 and are waiting for the opportune moment to start aggressive marketing campaigns. They have adopted the inorganic growth path to give them a firm footing from which to start attacking the Indian giants.

Asian paints have 3 new ads currently broadcasted. First is the ultra sophisticated and fabulously made Royale Teflon ad with Bollywood superstar Saif Ali Khan. It wouldn’t be an over praise or exaggeration if it is said to be one of the most well executed ads in India. Contract Advertising should be duly credited for this fabulous work. Second is the Apex Ultima ad and third, the Tractor Emulsion ad. The tractor emulsion competes on price. The ad says “sirf dikhne mein mehenga hai” (only expensive in looks). Both the ads have high recall value.

Kansai Nerolac launched its lead free paints ad. It is sure to increase the sales for Kansai since people are very health conscious. Kansai has also bought back its Nerolac jingle with a new creative. The creative isn’t too good but the jingle “jab ghar ki raunak badhani ho, deewaron ko jab sajaana ho, Nerolac Nerolac” has very very high recall value. This is sure to boost Nerolac’s brand equity and awareness in the market to take on Asian Paints.

Both the companies have a clear cut differentiation factor. Asian Paints has the Teflon trademark and Kansai Nerolac has ‘Lead free paints’. Asian Paints too have now started using lead free paints in their ads but in a less visible manner. Sherwin-Williams has to come up with a better differentiator when it decides to go public in terms of brand awareness.

The coming few months until Diwali ends and late November, be prepared for an onslaught of paint ads on the idiot box. Nippon paints though not a big player in India as yet too has started its Television ads which are indeed quite creative.