Adapt to Change

http://digital.impactonnet.com/209599/Impact/9th-ANNIVERSARY-SPECIAL-2013#page/90/2

Looking back .. Looking Forward - The Year of Empowered Consumer - Hindu Business Line

 

     1.       Legacy politics provided way to fresh blood
 

   This could very well find place among the best marketing case studies for 2013. AAP mobilized the disillusioned Indian voters specially the middle-class and significantly first-time youth voters. Grass-root politics took a new definition. But reactionary politics is one thing and consistently developing proactive long term sustainable strategies is another. How this succeeds as it evolves in the next few quarters may go a long way in redefining politics in India.

 

     

 2.       2013 was the year of arrival of 'Purpose' based marketing

The trend on ‘purpose’ over pure ingredient based campaigns that started as a trickle with ‘Daag Achche hain’ found itself reflecting in reflected in a slew of brands that have taken up issues like progressive parenting (Bournvita), widow remarriage (Tanishq), barriers between India and Pakistan (Google). More and more brands have been able to make the bold departure from the conventional. 

3.       Consumers became deeply engrossed with the overall negative economic sentiment

  The current state of the economy - high inflation, rising fuel prices and interest rates had their impact on the end consumer. Never before was the lay consumer following GDP & Inflation rates so closely. The conventional symbol of India’s appetite for consumption – Car sales, took a hit for the first time in 11 years

4.       DIGITAL garnered a larger piece of pie

   More and more marketers increased their digital spends and actively experimented, and rightfully so, with digital marketing. From creating content, to launching communication on digital first, from contests on social media to using the medium to track and target prospects better ....marketers preoccupied themselves more with this medium than ever before. The trend is only going to strengthen next year with more digital specialists becoming a permanent part of the marketing team. 

5.        ‘Mobile’ got a shot in the arm.

   Growing four times faster than the global average, India overtook Japan as the 3^rd largest smartphone market in the world. The ‘Google-Airtel’ freezone, a service that allows you to access Google mobile services on the go at absolutely no data costs is an early indicator of marketers picking on this. The consumer is showing a mirror. It’s now for marketers to interpret this effectively and design relevant & effective solutions & apps for their categories.

6.       MEN emerged as significant shopper base. 

   Gone are the days when we could confidently say that men hate shopping. They are actively buying and consuming a whole lot of brands / products - from deos to fairness face washes, from clothes to shoes, from gadgets to lending a helping hand in monthly grocery/household purchases, Marketers would be better placed to learn their unique shopping patterns, subliminal selection techniques, and their aspirations to extract more value from this consumer base, going forward. 

7.       Uncontrollable & Empowered Consumers

        Time and again, a lesson that marketers realised was that today you can't control your consumer no matter how powerful your message may be. Social media emerged as a strong medium to raise voice, show dissent, complain about brands and gather momentum with fellow friends and friends of friends, to publicly mock brands that made mistakes/did wrong. It is a clear lesson for brands to think twice before launching an initiative and to handle tactfully and 'quickly' any faux pas they make. While many a brand would have experienced this – a societal manifestation of this in the Indian context was the common citizen’s furore on the Nirbhaya episode that shook the conscience of the whole nation in 2013. 

8.       Fewer innovations in products

 

       2013 saw most innovation and action take place in the field of service delivery and not in new      disruptive products. The world did not get to see much that could deserve status of the next Smartfphone, the next iPad or the iPhone. More & more work happened in incremental innovation in new customer interaction channels, a distribution system or a technological concept or a combination of all of these. The incremental innovation by Flipkart and possibly some other e-tailers of sending step by step shipment status updates to customers after payment goes a long way in assuaging any apprehensions they would have on merchandise delivery very relevant keeping in mind the dis-intermediated nature of th

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