Nielsen Consumer 360 Conference - "What Makes India Buy"

The Nielsen Consumer 360 Conference, an annual marketer's conference was organized last month at The Leela in Gurgaon. I was part of the session "From Understanding to Outstanding: What makes India Buy". Including the videos and the images from the session
Video Link

                                                           

The CII Marketing Summit was held on 27-28 November 2013 in Mumbai

I was part of the session: Navigating the Slowdown - Increasing Consumption. Here’s a glimpse from the summit and a summary of my session

Session Summary:
GDP growth over last 4 quarters has slowed down to touch 4.4% in Q1 FY 14, the slowest pace in past 5 years. Several sectors such as manufacturing (-1%), utilities (4%) and pharmaceuticals (4%) also reflect this trend. Most economists continue to be circumspect about the timing of the recovery and uncertainty can continue to linger on for couple of years. Yet in the past, successful companies in Europe, Latin America and India have grown by upto 10 percentage points faster than the competition in such times.
Sales & Marketing is typically the biggest lever that will enable a company successfully navigate a slowdown. Careful alignment of strategy with the fast growing segments, solid key account management, and increasing sales productivity are key to success in a B2B setup. Similarly several opportunities to grow in a B2B2C setup exist by changes in go-to-market strategy.

 Panel Discussion Points:
What are the key changes in customer decision journey/consumer behaviour during slowdown
There's a fairly large similarity in how consumers react during slowdown across the world. These changes are:
- People do tighten the belt and ponder every purchase with extra  care.
- They worry more and tread more cautiously, even if they are actually quite well off.
- Postponement of big ticket purchases -People do put off buying that new car
- And reduce discretionary expenses - may think twice before dining out.
- Most often do not want it to show that they are struggling - this is important to their self image.
- People make purchase decisions as per budget. There is a Deal-seeking tendency.
- Down-trading
- More painstaking search with a lot more product/service comparison - be it online, through friends or           checking physical stores.
- Looking for value-adds besides base product - to 'justify' the purchase to oneself
- People are more cautious about the future. So, they adopt the saving strategies in all circumstances to            make better future. A country like India, known to be a country of savers (second highest household            savings rate in the world after China), tend to reduce consumption in their effort to maintain savings                 rate.
-However, even in financial decisions, risk taking ability reduces significantly and there is greater preference for guaranteed return or low risk financial instruments

What are the key marketing and sales practices and capabilities that are most relevant to focus on to address these changes?
-Going deep instead of wide - Spending a lot more time and resources on current customers, rather than hunting for new buyers should be marketers’ choice. A strong relationship with existing customers makes it easier to get more business from them rather than spending time converting a fresh prospect.
-While quality and excellence is a way of life at Max Life Insurance, we have specifically begun to reward those employees who do commendable work in relationship-strengthening and customer retention.  For instance, those who manage to persuade customers to stay, when they've come to surrender, those who manage to convert an irate customer into a positive propagator of the company,  those who go out of their way to help customers get their claims sorted, in times of grief  - all these people make it to our exclusive Annual Book of Service Excellence. There is also a special emphasis on long-term customer retention through Annual Client Review, persistency as a major vector for R&R etc.
-Getting more bang for buck in media spends - deploying money more efficiently; curtailing traditional media spends but staying the course or investing more in digital media.
-Borrowing other category practices - For instance, this year saw mobile phone brands apply the strategy used commonly by automobiles and durables ..that of EMI. To increase sales, Apple offered their latest iPhone on EMI. Similarly attractive exchange offers to switch to the latest tablet or phone were also visible this year.
- Tanishq – spoke about affordable jewellery in their communication

How do marketers create/stimulate market demand in the current environment?

- Bundling freebies - Real Estate, one of the quickest sectors to get hit in tough times, has begun offering several add-ons to clear unsold inventory. For instance, buying property comes with free gold coins, free foreign trips, free parking, cash back of monthly rental, payment of stamp duty and registration charges or offering fancy interiors as part of the package.
Bundling complementary products with some discount on bundle as compared to buying products individually encourages people to increase consumption.
- Price-offs - Commonly deployed by FMCG companies, we have already witnessed large brands in categories such detergent, soaps, tea, biscuits, giving discounts on MRP.
- Smaller pack to retain / reduce price point – Brands such as Maggie has come up with smaller pack to retain existing customers and to bring in new customers in. With the intent of cost effectiveness they have also launched bigger pack which can serve the whole family with greater value for money.

How do you balance immediate focus with long term opportunities during a downturn?
- In our business, it actually makes sense to think long-term and apply that thinking to short-term. When the insurance industry faced its worst downturn during 2010, the company's strategy was to take a hard look at the portoflio mix. Rather than trying to salvage the negative sentiment on ULIPs, the focus was shifted to traditional insurance products.
- We also realised that consumer choices change significantly and quickly and thus it is important to understand those through consumer research. Max Life was the first company to identify risk aversion and preference for safety while ready to compromise on returns. This was another reason for us to refurbish our traditional products portfolio and retrain our distributors to explain traditional products to the consumers.
- This paid not only in the immediate term but also continues to pay over the years, since long-term savings and protection solutions are a genuinely good proposition for customers.

What innovations are possible from a marketing and sales standpoint to mitigate a slowdown?
- Creating excitement with new concepts - While discounts and sales have existed for years, Indiatimes has brought the international concept of night sale into India. 'Indiatimes Midnight Sale' offering deep discounts on a varied assortment of products, attracts the consumer who would otherwise not have looked at opening her digital wallet.
- Unconventional door-openers - Life Insurance requires a long term financial commitment from consumers which they would not be interested in making in uncertain times. Hence rather than start a conversation with why you need insurance, we get advisors to use innovative tools to get a foot in the door.  For instance, pitching a scholarship program for their child (through our igenius program).
- Experimenting with smarter ways to attract people - In our industry, advisors are core to sales. But they are also the most slippery lot, given the drop in seller commissions in the recent years. For the past 2 years, we have been experimenting with a TV show strategy to attract and hire new advisors instead of the traditional but expensive print recruitment model. This has been quite successful for us.

They won’t buy just because it’s Diwali

Cautious spending. Slower offtakes from retail shelves. Malls high on crowds entering but low on shopping bags while exiting. Not the signs of a typical festive season. However this season is anything but typical. With inflation and economy taking a toll on everyone, these are tough times not just for consumers but also for brands.

What used to be a sure-shot windfall time for companies, has now become complex and uncertain. While we continue to see the usual marketing gimmicks of huge discounts, assured gifts and exchange offers on display, there is serious doubt among marketers if these will translate into the required number of sales.

But all is not lost. What brands need to realize is that they will have to play by a different rulebook this time. A rulebook that no longer allows them to use the same old tactics, but requires them to work much harder and probe a lot deeper.

So what do the rules look like?

Rule No 1: Do not spend; invest. Some brands believe that spending big bucks only in this season is all that’s needed to make consumers drool. Guess what, this spending in all likelihood is going to get wasted. Instead, invest in your consumers. Build affinity, relationships and a strong value proposition by constantly engaging with them. Only then will the rewards come. A packaged food brand that tries to entice with tasty gulab jamun and kaju barfi only 6 days of the year, will face stiff competition from brands that have built trusted associations of taste, hygiene and gift-worthiness over a period of time.

Rule No.2:  Do not vacate your core. Festive marketing needs to be an extension of your brand’s core philosophy; not fractured from it. For instance, a brand known to be premium and aspirational can’t suddenly become too easy to grab in festive season. Or a brand that stands for quality cannot stoop to low levels just because it wants to be present at a certain price point.

Rule No.3: Truly blend in. Putting a diya or rangoli visual in your communication is not blending in. But when the young girl in the chocolate ad puts the rich dry fruit collection box on the dining table as she comes home to family, it doesn’t seem so artificial. The larger message is not about the chocolate but about sharing love and spending time with your loved ones. The brand manages to become a part of the ethos of Diwali - family time, bonding, togetherness, and hence works.

Rule No. 4: Let the starting point be the occasion, not your brand. Often brands end up advertising services and products that have nothing to do with the occasion. Just because this is the season for indulgence doesn’t mean that consumers will pick up anything. So begin by looking at the characteristics, values and needs that come alive at the occasion, and see if there’s a role for your brand. A mobile phone /digital camera brand highlighting great quality pictures in low light is solving a relevant need, while an e-commerce brand that promotes sunglasses and books on discount, under the garb of Diwali dhamaka is not.

There could be many more rules, and you could make your own. But the key is to realize that this season, shortcuts won’t help. Festivals were and still are a fantastic opportunity. They allow brands to interact with several age segments simultaneously.  They give them a chance to widen their TG and get new consumers on board. They allow brands to share their message more easily as consumers are in a receptive and upbeat mood. They can even help brands get a positive rub off from the good vibe that’s in the air. The only thing to remember is to adopt strategies that are relevant to the occasion and make efforts that are genuine. Then nothing can come in the way of your brand enjoying a sparkling Diwali. 

http://articles.economictimes.indiatimes.com/2013-11-01/news/43592928_1_brand-diwali-dhamaka-family-time

Plan in Advance for Secure Retirement - Deccan Chronicle

“At 50,” said author George Orwell, “everyone has the face he deserves”. The aging face tells a tale— and no story does it tell more eloquently than the story of financial security. Worry lines are almost always incumbent upon financial problems and no Mona Lisa smiles possible under brows burdened by money worries. Thus, the retiree or the impending retiree shows his preparedness for retirement in worry lines or smiles.

Amit Chandra (not his real name) returned home from a dinner one Saturday about six months back when he felt a sharp twinge in his stomach. A visit to the family doctor the next day did not result in any relief to the persisting discomfort; it led, instead to a referral to a specialist at one of Mumbai’s best known hospitals. Just 48 hours after he was being toasted by friends at his retirement party, Amit was arranging for funds for an emergency operation — to stop the bleeding from an ulcer.

Sufficient health insurance cover ensured that Amit could afford the best treatment. But the worry is about the subsequent incidental expenses — among other things, the expenses of the special diet now needed the cost of repeated visits to doctors, and the higher electricity bills from the demands of the increased use of the juicer, mixer, air-conditioning and geyser. His daughter and son-in-law are anxiously re-organising Amit’s(small) investment portfolio, hoping to ensure that Amit and his wife have enough to live on and pay for the ongoing medical expenses. It’s becoming clear to them that they will have to help support the older couple. The worry lines have begun to appear also on their faces, extending from the faces of Amit and his wife, who, incidentally, suffers from asthma.

Retirement planning is rare in India, where financial dependence on children is high. Pension plans set up by employers are considered sufficient — though, all too often, these packages take a miserly view of inflation.

Amit was with a university for most of the 32 years of his working career; his monthly pension is around Rs30, 000, a meagre sum for living in Mumbai, and an impossible sum for their health-related needs, care that no health insurance plan will cover indefinitely.

Perhaps late for Amit, his experience has been a lesson for his daughter and son-in-law — benefit plans ordained as mass products by employers are just not enough. If retirement needs are specific to the individual, then retirement plans must be too.

There are various financial savings options to plan for ones retirement. The Pension Fund Development and Regulatory Authority, set up in 2003, regulates three broad types of pension schemes — the government pension schemes (such as the one that covers Amit Chandra), the National Old Age Pension Scheme for people living below the poverty line, and the private pension schemes / funds.

Pension plans from life insurers could be another lucrative option, which not only lets you plan for retirement in a structured systematic and disciplined manner but also provides protection against uncertainties. So much so that there are plans today which even ensure a guaranteed financial support for your spouse’s retirement even in your absence. These plans offer a wide range of options in terms of various benefits and payment schemes. Subscribers can opt for a payment plan based on their financial capacity, their projected needs after retirement and on the basis of the age at which they plan to retire.

A pension plan can be purchased on a one-time lump-sum payment (a better choice for those close to the age of retirement) or deferred payment of regular annual premiums over a period of time, which younger people can opt for more comfortably. The benefit of income after retirement can be disbursed immediately upon the subscriber’s retirement or, alternately, the subscriber could choose to defer the payment wholly or in part till such a time as he or she requires it; the monthly annuity would be calculated accordingly. Plans also allow for life-time annuity payments or payment for a guaranteed period of time. Some plans also offer the return of annuity amount to nominees, leaving behind a legacy for them.

Today, Amit and his wife are considering selling their two-bedroom apartment in Mumbai and moving to a smaller, cheaper town — they are not sure where! They still need a place where advanced medical care is available. This unhappy choice also means that will not spend their golden years comfortably in the security of a familiar neighbourhood, with an established support system run by long-known people, among old friends and regular acquaintances.

For Amit’s daughter, such an unhappy choice is no choice — she and her husband have begun to plan their future on realistic projections of pension needs and various eventualities, working inflation into their calculations. She’s working on her Mona Lisa smile!

By-

Ms. Anisha Motwani,

Director & Chief Marketing Officer

Max Life Insurance

Life Insurance: All you ever wanted to know

Confused about which life insurance plan to choose? Here’s a handy reckoner to help you choose the right plan.
Latte, cappuccino, or espresso?With milk or without?With sugar or without? One picks and chooses carefully to get one’s favourite cuppa customized to one’s taste. I’m sure there are other areas in one’s life one is equally picky about, say for example, which smartphone one flaunts, which sunglasses protect one’s eyes from the glare and so on and so forth. Yet, the same alacrity seems to be missing when one is making one of the most major decisions in one’s life – choosing a life insurance plan. Why? Especially when it’s the only way to financially protect one’s dependents and still fulfill the financial goals even in the event of one’s death.
While it can be a bit daunting initially since one is on unfamiliar ground, it is actually just a matter of getting in touch with the right advisor who will demystify the seemingly complex world of insurance and educate you about the plans that would work best for you. It is imperative that you understand the terms of insurance, weigh the options carefully and make an informed decision about the coverage that is right for you and your family. Basically, life insurance and living benefits insurance can be of two types: insurance that only protect your dependents, and insurance that protects your dependents and provides a savings and investment avenue as well.
Life insurance doesn't have to be complicated, and there are lots of ways we can help you make the right choice.
 First Steps
Before you begin the process, it is vital to get in a trusted advisor and discuss your needs and understand which options work best for you. It is important to establish what your need is and have a goal in mind. Once that is done, evaluate which life insurance policies suit those needs the best. Compare between policies to zoom in on the one best suited to you. Another important thing is to evaluate the rider options. Riders are attachments to your policy which entitle you to added benefits.
Equally important is to evaluate the company you are buying the policy from– you need to check for customer service feedback, claims settlement ratio, financial stability, distribution reach, payment facility provided etc. Once you understand the implications and repercussion of what you are buying, you will be able to choose the right policy. Once you receive the policy documents, go through the documents to review all what you have opted for. Also, re-visit your plan from time to time as needs and goals change overtime.

What you need to understand:
What types of insurance are there?
Understand what types of life insurance plans are available as it is important that you find out all you can about the kinds of cover available and understand the terminology. For instance, term life insurance policies offer death benefit only, whereas an endowment offers death benefit and also provides an avenue for safe and systematic savings.
What are the key drivers that make you save?
If you are looking at long term goals, then life insurance is probably the best solution as it allows for both savings and protection. Key drivers for savings could include your children’s education, their marriage or similar needs for which you need to think and plan long term and invest in a plan that matures and gives you the financial reprieve when you need it most. If you have already planned for your children then you may need to consider your own retired life, and plan accordingly.
How much cover should I have?
The cover you need is directly proportional to your personal life situation as well as the lifestyle you and your family want to lead. Typically, the rule of thumb is to have a cover of 10 times your annual income.However, there is no hard and fast rule here. Each one has different goals and varying premium paying capability. One needs to be realistic though.
The first step in figuring out how much is right for you is to estimate how much your family would need to continue its current lifestyle if your absence. It is also important to understand what stage of life you are in – a single person has very few responsibilities; as a parent you would have different responsibilities; and if you are approaching retirement your needs will be vastly different.
So say, you are 38 years now and you want an income of Rs 75,000 per month when you retire at 58 years. At the same time in case of your untimely demise you might still want to ensure your spouse to have a hassle free retirement. How do you choose the right plan? This is where agent advisor plays an important role. Get your trusted advisor to come in and discuss the best options available that will give you the income you want. Understand the implications clearly and once you are sure which plan works best – in terms of ease of payment (premium) and benefits provided – go ahead.
How do I know it’s the right policy for me?
Once you have an estimate of how much insurance/savings you will need, it's time to think about the type of policy that best fits your needs. Usually there is no one policy that can meet all your life insurance needs.
You can choose a policy depending upon the risk profile and how much time you have to attain the financial goal you are planning for – If you have a mammoth capacity for taking investment risks and your financial horizon is over 10 years, you may choose ULIPs with an equity bias. These policies are subject to market risks and they allocate your premium amounts in equity and debt depending on the type of funds you choose ranging from equity, debt and balanced fund depending upon you risk profile.
For the risk averse, traditional plans make the most sense. For instance, if you are a parent of a growing child, a single plan may not serve the purpose of providing for your dependents. You will need a plan for their future needs as well and something specific for the child's education needs. A combination of products works the best. Likewise, you may initially have a policy with no additional cover for disability due to illness or accidents, but later in life you may feel the need for such a cover.  

Should I throw in a cover that includes various untoward incidents that may happen?
Policies with such a cover, say for disability or critical illness, are often viewed as ‘expensive’. Some see it as money spent on policy features they hope or think they will never use. Yet without adequate insurance, you run the risk of financial disaster should anything untoward happen to you. The key is to buy the right type of insurance with the right amount of cover at the right time. Don’t get sidetracked by anything – match the right insurance cover for the right stages of your life.
Make it a habit to review your life insurance needs and change your life insurance cover whenever there is a change in the financial situation, such as a rise in your income or a rise in financial responsibility by way of an additional family member or the need to take care of aging parents or a large house loan. Each of these situations calls for review of insurance cover to ensure you are adequately covered at all times with the right insurance policy.
Here’s to a more empowered and insurance savvy you.
http://www.financialexpress.com/news/life-insurance-all-you-ever-wanted-to-know/1169882/0