Brand stretch...to do or not to do

With innovation and NPD coming under increasing focus as companies find ways to grow revenue, the related aspect of brand stretch has also become a topic of interest across the board – from entrepreneurs to corporate boardrooms.

Two key and interrelated questions which typically face us when we talk of brand stretch. i) Where to stretch ie what categories to extend into. And ii) How to stretch ie the branding approach to take (in terms of using the mother brand, creating a new brand or a sub brand etc)

 

When one looks at a cross section of brands and their extension strategies, it seems to throw up more questions than answers at first. How does Dove extend seamlessly, from one personal care category to another…while Colgate struggles with establishing its Gel products in India more than two decades after its launch? What gives Fabindia the courage to foray into organic foods and jewellery, and elicit a reaction from consumers which says ‘great idea’! Why it doesn’t seem odd that Virgin  could extend from music to airlines, AND  it also seems intuitively right when Frito launches a new brand (Aliva) for its biscuits foray, and doesn’t use Lays/Kurkure. 

Why does the same extension strategy work for one company/brand and not for the other? There are extensions into adjacent categories that are not always successful…while extensions into unrelated categories are….

Are we programmed to do MORE when we are MORE busy....?

It's a question I was asking myself every time I pulled into the local fuel station at off peak hours...because it seemed to me, that it took more time to tank up when there WASN'T a queue of cars ahead of me. Now this sounds like counterintuitive logic on the face of it - it should be faster when there's no queue, not slower, right? 

But I noticed that during off peak hours, the attendants had usually sauntered off, away from the filling machines. They hung around somewhere in the vicinity, (seemingly ready for some action)...but they were not off the blocks as fast as they were during the morning and evening rush hours. Infact, getting their attention during off peak hours, sometimes took longer than the time to tank up! 

I looked for similar 'symptoms' in other service establishments, and I was amazed at the number of places where one can see this phenomenon in action. From retail outlets to restaurants, from banks to airline counters. 

Wondering whether I was seeing ghosts where their were none, I decided to investigate this with a bit of internet research....and stumbled upon the inverted U principle. While there's been a lot of discourse around high stress's correlation with low performance, it seems low stress can also lead to low performance. Corollary: a certain amount of "stress" is essential to draw the best out of people. 

So here's what was happening at our fuel station....With a steady and continuous flow of cars in the morning and evening rush hours, it was all hands on deck  - alert, attentive, focussed on clearing the rush, and shortening the queues with a military drill like efficiency. But the subsequent lull seems to dull their speed. Moral of the story - as long as the car queue is not extending all the way to the road outside and causing a jam, the petrol station will deliver faster service when you stop during the morning rush hour, than when you stop by when traffic is lean.

What does this mean for corporates?
When more resources are 'free', things should move faster, but they don't in the real world. Since we seem to do MORE (not less) when we are MORE busy, gentle pressure at the workplace is essential to get things moving. So don't complain next time your bosses give you tight deadlines - they are merely attempting to maximise your performance.

NOTE: The ‘Inverted-U’ idea has not been proved formally. Also different peoples definitions & evaluations of stress and performance would vary in different situations/ circumstances. If there were a mathematical study on this, the curve would probably not be as smooth...

The missing link...in the "health trap"

A few days back there was a piece in a leading news daily on the withdrawal of various 'better for you'/ healthy food products from the Indian marketplace. This in itself is not a strange occurrence - failure of so-called healthy food products, even from well-known, established brands happens with episodic regularity. Within companies, the steady downward sales trajectory of such products is often accompanied by some amount of hand wringing, and some wonderment at how the marketplace performance could be so different from the research performance. And thereby hangs a tale....

Some years ago, I had written about the Indian consumers’ relationship with health being rife with seemingly paradoxical situations, all with their own “consumer logic” (click here for link to article), and the wide gap between "desire" for health, and "action" to achieve that health. While all that is still relevant in understanding why many healthy products have struggled in India (and continue to be niche), today I am going to focus on just one very critical aspect of how research typically gets done, which accentuates this missing link.

Everybody is pretty much agreed that there is of course the consumers' rational mind that comes to the fore in research. But that is only a part of the story....

Let us imagine a scenario where many consumers genuinely believe that the products which are low fat, low salt, low cal, do help them in being healthy. But what perhaps gets left unsaid in research is that low fat, low salt, low cal is more of a shorthand for 'better ADULT health': because the definition of what is considered healthy for adults, and what is considered healthy for children is often two different things. For example, while the absence of ghee/ butter in a food is seen as a healthy step in the right direction for adults, its presence, it's very richness, is felt to be a contributor towards health of growing children. 

Companies tend to look at products through the lens of adults (the target respondents in research), but the bulk of Indian households look at products, and make purchase decisions, through the lens of children in the household. 

There is a very telling information table on the share of household type compiled by Euromonitor for countries across the world. Single person household and couples without children make up only 17% of family units in India. Corresponding figure for Canada is 57% and 50% for UK/US.

In sum...
Research with gatekeepers of households tends to magnify the gap between desire and action on health related products...and leads to a bigger gap in marketplace performance. 

The solution is not in what you see to to the left. Nor is it in more research or more research with children (or other segments), but in looking at the totality of what we know, see, experience about the Indian consumers' idiosyncrasies when it comes to food and health. It always pays to go beneath the surface, and nowhere is this more true than in the area of health. 

The trap of “Excel Marketing”...?

The struggle to balance consumer expectations and corporate expectations on margins...some thoughts

Category : Blog

Imagine this scenario – you have a favourite restaurant, where the marvellous food keeps taking you back for more...time after time. And then one fine day, the tadka on the daal seems to have lost a bit of the zing (or the pasta arrabiata tastes more of onions & less of tomatoes). The first time this happens, you probably put it down to one bad day for the chef. The next time it happens, you mentally tick it off your favourites list (and if you are really upset, you go online and vent your spleen). It’s the same with packaged products we buy...

In today’s tough business conditions, where manufacturers of products ranging from cars to soaps have to grapple with spiralling input costs, it is natural (and necessary) to look at ways to manage/reduce costs for keeping gross margins healthy. And Microsoft Excel has made it very easy to try various permutations & combinations: A click of a button reduces raw material cost by reducing the strength of fragrance X in, say a hand cream. Voila! Gross margin has increased...A little more reduction and again a gain...? Perhaps not.

If the strength of fragrance X is reduced to the point that the consumer finds something amiss, trouble is round the corner, because a spark has just been provided for creation of a “lapsed user”. The irony is that Excel also helps track – though much later - the cumulative effect of a series of lapsed users into reduced sales...

So when Excel takes over Marketing, the ultimate outcome can be the opposite of what the intentions are. In the process of positively impacting gross margin, what is critical to ensure is that the product experience - which is core to the promise of the brand - is not diluted. Microsoft Excel cannot calculate the impact of number jugglery on consumer acceptability; but when the consumer expectation of “value” is met, MS Excel can accurately measure the gains for you!

Life and second careers begin @ 40

Category : In the news

Appeared in the Hindu Business Line on 17th July 2011

Click here for the original article

The desire to be on their own and pursue their passions is prompting many 40-somethings to go it on their own.

"For Richa Arora, who was head of marketing for Britannia Industries, having spent many years in the advertising business and later in FMCG marketing, strategic marketing consulting was a natural outcome."

Are Brands Moving to Multiple Brand Ambassadors? Category : Viewpoint Appeared in Brand Reporter issue of April 1-10, 2010 Click here for the original article Multiple brand ambassadors help address tricky situations which could arise due to injuries (Sachin’s famous tennis elbow), self-inflicted wounds (a famous Tiger’s infamous moves) or erratic performances (where’s Rani?). India is evolving as a consuming society. We crave diverse experiences in everything - food, clothes, entertainment and places we travel to. We’ve more brands in every category, more variants for each brand and more options. Even cricket comes in three flavours. There are soaps and swayamwars on TV and movies as different as 3 Idiots, MNIK and Ishqiya. There are multiple “Khans” (though there is only one SRK). Why would things be different when it comes to brand ambassadors?

Is the Chennai ad world ailing?

Category : In the news

Appeared in afaqs! on 7th April 2011

Click here for the original article

The city has lost many key accounts in the recent past. afaqs! explores the facts, the reasons and the consequences of this exodus.

The coffee versus toffee debate was born in Chennai. This famous ad film for Parry's Coffee Bite isn't the only campaign that the Chennai ad fraternity can boast of. In the last many years, the city's ad fraternity has churned out some very memorable campaigns for clients such as Ford, CavinKare, Citibank, and Saint Gobain.

However, the Chennai ad world is currently going through a lean phase. The city has lost many of its high profile clients in the last few years.

Elango M, general manager, Interface Communications, Chennai agrees, "Several big brands have moved out of the city over the years for whatever reasons there may be." In the recent past, brands such as Citibank, CavinKare, Ford, and Parryware Roca have moved out of the city. And, we are still counting.

What's surprising is that the city is not just losing its clients to Bengaluru - which has recently turned into the hub of the ad world in the South - instead, clients are moving from Chennai to Mumbai and Delhi, and many times within the same agency.

Francis Xavier, head of Francis Kanoi Marketing and Planning Services, says, "One of the reasons for businesses moving out of Chennai is the consolidation of the business in one spot. This was the case with Pond's, years back. The business was consolidated in Mumbai after it was taken over by Hindustan Unilever (HUL)."

A recent instance of the same would be the media duties of ColorPlus that moved from Starcom MediaVest Chennai, to R K Swamy Media Group Mumbai, owing to the consolidation of its media planning/buying duties on the part of mother-brand Raymond, three months back.

However, there seems to be more to the exodus than mere grouping and growth plans.

While some accounts moved out of the city because the brand got bought over by a company headquartered in Mumbai or Delhi, a common reason for the exit of many brands was the lack of advertising talent in Chennai.

Richa Arora, brand consultant of the Bengaluru-based Five by Six Consulting, says, "It's an interlinked phenomenon. When the total quantum of business in a city falls below a certain threshold level, agencies would naturally move out their best people resources to other cities for better resource utilisation. When this reaches a point where the quality of resources available in a city falls below the acceptable threshold level, businesses would have no option, but to relocate to move closer to these quality resources."

It is also true that it is difficult to retain talent in Chennai. While the creative, as well as business heads of Southern operations in many agencies have now shifted base to Bengaluru, the best talents prefer moving to Mumbai or Delhi - the Mecca of Indian advertising. Talents see these places as opportunities for growth.

Category watch 2010

CATEGORY WATCH 2010

Noodles, Macaroni, Vermicelli (Up 19 Per Cent)

By Surina Sayal, afaqs!, Mumbai,
February 09, 2011 Section: News Category: Advertising

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The market for this category has shown strong YoY (year on year) growth for many years now. This year is no exception.

Naresh Gupta, national planning director, Cheil Worldwide opines, "The category that should get the trophy for growth is noodles. In a single year, it has got redefined. From being a one-player-dominated category, it is now the most keenly contested one. HUL, GSK, ITC, Nestle and a host of regional players big and small (Ching's Secret, Future Bazaar, More Retail and Reliance Retail) are all fighting for this category."

Richa Arora, founder and chief strategy officer, Five by Six Consulting, believes that thanks to Maggi noodles, this category has come to occupy a very special space in the Great Indian Snacking Story. She says, "With penetration levels of nearly 50 per cent in SEC A and 30 per cent in SEC B, it wouldn't be an exaggeration to say that for some consumer segments noodles and macaroni have become a kind of a 'staple snack' as opposed to a 'variety snack'. What drives the growth of this category is its uniqueness in satisfying a consumer need for a filling, convenient snack which is hot and homemade. There is no other equivalent branded snack of a similar nature."

Adds Narayan Devanathan of Euro RSCG, "I believe that a bunch of continuing cultural truths - life continuing to be fast-paced, families continuing to be starved for time, more working women balancing work and home (ergo men still not cooking more at home), increasing proportions of bachelor and bachelorette pads - have contributed to the mushrooming growth of these products." More brands have entered the market as a natural consequence. Where there used to be one Maggi, there are now Foodles, Knorr noodle soup bowls and so on. Where there was one Bambino and Savorit vermicelli, there are multiple options in not just vermicelli but a whole lot of other pasta variants, including instant macaroni products.

Gupta also feels that with more players coming in and distribution becoming mass, the category can grow manifold. He also points out that, currently, South India hasn't been explored fully in this category. If companies like GSK and Indo Nissin Foods can make an impact, the south could give this category a new growth impetus.

CATEGORY WATCH 2010

Ready To Cook Mixes (Down 12 Per Cent)

By Surina Sayal, afaqs!, Mumbai,
February 09, 2011 Section: News Category: Advertising

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Despite being flooded with players like Gits, Shan Mixes, Aashirwad from ITC, Ashoka Cooking Mixes, MTR Express Gravies and Saras, the ready to cook (RTC) market plunged in 2010.

Devanathan of Euro RSCG offers an explanation. He says, "The world knows best how to oscillate between two extremes. When it comes to food, we either know fast food or slow food. 'Medium food', it appears, is not a very appealing concept."

He explains that is because people are always hassled and hurried from minute to minute, they don't bother about things like cooking. "We just eat stuff that's already prepared by someone else - at home or at a restaurant, or a thela or dhaba. Or, we want to vehemently protest this hurried life and completely turn the clock back, and say: "Let me prepare a meal from scratch and enjoy the journey as well as the destination." Hence the no-no to the ready-to-cook concept."

While Devanathan attributes the decline in the RTC category to human behaviour, Arora of Five By Six Consulting feels that it is because the taste factor does not come up to the mark. She says, "When it comes to preparations like daal-subzi, the consumer benchmarks it to the familiar homemade taste. That is not so in the case of snacking where the objective is diametrically opposite - experimenting with unfamiliar tastes. RTC mixes in this area (gravies and cooking mixes) do not deliver on the taste aspect sufficiently."

She adds that the RTC category will continue to remain in the realm of an emergency-urgency use product for a very small segment of Indian consumers.

Talking food: Beyond the health hype

Category : Article

Appeared in the Consumer Life section of Economic Times, 21st September 2010

The article explores the Indian consumers’ relationship with health -  rife with seemingly paradoxical situations, all with their own “consumer logic”

Click here for the original article

NEARLY 50% of all Indian adults in the 25-34 age group and 60% of those in the 35-44 age group “make conscious attempts to eat healthy”, according to a Datamonitor consumer survey. Many packaged food companies in India seem to agree, going by the intensification of efforts in the “eating healthy” space. From soya milk to oats, from sugar-free confectionery to low-fat milk, sweeteners, margarines, cornflakes, fruit juices, this space is buzzing with action. While the high visibility of packaged health products reflects the serious intent of companies, a closer look at the revenues of some of these brands show that the results have been mixed. Time perhaps to step back and ask a few basic questions. Are companies taking this whole business of “eating healthy” a tad too seriously? How interested is the average Indian consumer in health? What is “eating healthy”? Where do packaged foods fit in this context of health?

CROSS SWORD, Economic Times, 7th Jan, 2010

Category : Article

Appeared in the Cross Sword section of Economic Times, 7th January 2010

Yes, consumers can be labelled as “dealaholics” – because for many years they have been weaned on a diet of ‘Free’, ‘Extra’, ‘Sale’ and ‘More’

Ever noticed how a child who is used to watching cartoons on television while having food, cannot be made to eat when the television is off and the cartoon is missing? Or the teen who rebels against homework when deprived of the allotted internet time of the day? Addiction to deals starts early in life, creeps in slowly...and then becomes a habit, almost a way of life. That’s what we see today in the market too.

Walk into a mall with say, two shops stocking similar merchandise of footwear– one with no deal, one with a deal. No prizes for guessing where the bigger crowds will be. Whether these crowds translate into sales, depends on whether the brand is offering a true deal or a deal more in the realm of true lies (Buy worth 10,000 and get 15% off!).

But what is so addictive and attractive about deals to consumers? It goes beyond rationality and value, and is perhaps reflective of where we are today, as a society.
Consumption is the mantra we chant, shopping is the new entertainment, and deals enhance the “consumption as entertainment” quotient, by creating an (almost) magical climate for consumption. And of course, for those consumers who are still a bit abashed about their cravings, deals provide a kind of legitimacy to their profligacy (wasn’t I smart to have bought 2 pairs of shoes for the price of one??).

So yes, consumers can be labelled as “dealaholics” – because for many years they have been weaned on a diet of ‘Free’, ‘Extra’, ‘Sale’ and ‘More’.
What marketers need to watch out for is becoming “dealaholics” themselves. And instead focus energies on how to use this addiction, and channel it to the brand’s long term and strategic advantage.
Doing that is going to be a constant big deal.