Mobi-Wars: The attack of the clones

The cycle of who gains supremacy in the mobile phone handset market has taken a fantastic turn and this time Samsung; the world leader in terms of market share, is on the receiving end this time. On terms of sheer numbers, China and India are the largest markets for mobile handsets and local companies from both countries: Xiaomi and Micromax, have taken control as market leaders respectively. While both markets are fast upgrading to smart phones, the erstwhile leaders: Samsung and Apple are headed towards choppy waters.

Xiaomi; the new king of the market in China is just 4 years old and direct entrant with Android based smart phones. Its MIUI firmware was dubbed to be an aping of Samsung and Apple, but its flagship Mi series has definitely caught the frenzy of people. With over 10Mn Mi-2 models sold in 11 months leading up to September ’13, Xiaomi has captured the Chinese and East Asian markets in a serious and rapid. The company is unknown in Europe or the Americas- but its sales from Chinese mainland and parts of East Asia are good enough to make it the 5^th largest smart phone vendor in the world.

Xiaomi is a case study in itself of how a goal oriented approach of a company which began with no manufacturing or sourcing avenues has risen to take up a gigantic shape. To gauge why this is something worth knowing, just put in perspective the following; Made in China: Cheap and unreliable. Though 90% of electronics vendors are from China but have contracts with bigger players who invest in their facilities and so the manufacturing is closed door and customised to their needs. As many as 85% vendors rejected the offer to associate with Xiaomi. So how do you win against such odds?

Founder Lei Jun, who was an already established entrepreneur and billionaire from his previous ventures in the 1990’s, hired a set of executives from Google, Motorola and Microsoft. Their efforts in developing the MIUI Android platform ensured newer capabilities every week. A strong feedback loop from beta users and other customers helped them evolve faster and at lower cost. A tie up for touchscreens with Sharp Japan in 2011 was a boost at a time when business with post Fukushima Japan was at its lowest. The faith by Qualcomm in the MIUI platform and the assembler of Apple; Foxconn agreed to set up assembly for Xiaomi.

Someone might argue that you can capture a market if you have a product at an affordable price; in Xiaomi’s case- roughly half of what an Apple or Samsung sells. But unless there is a decent level of quality offered, no one can succeed in a mature market where consumers are informed. From the launch of its first phone in August 2011, Xiaomi surged past Apple by end of 2013 and had Samsung under its heel by August 2014- yes, just 3 years.

The story in neighbouring India with Micromax is equally enthralling though. It started off as a software company in 2000 and got into mobile phones only by 2010, much the same as Xiaomi. While the urban Indian was spoilt for choice with Samsung, Nokia, LG and Blackberry, Micromax went after the bottom of the pyramid. Its co-founder, Rahul Sharma was inspired to counteract the power outages in rural India. Micromax X1 was the first phone launched with a battery capacity of 30 days.

This was a time when some 26 mobile phone brands came into India in a span of 12 months with a similar model of manufacturing hubs in China and aim to capture the low spending-high volume end of Indian market. But Micromax made a distinction for itself by offering Indians not a low end Nokia or Samsung look alike sporting a T9 keypad but the experience of a QWERTY and dual SIM options. While rural was a focus, Bling- a swivel QWERTY phone with Swarovski crystals and a mirror became an instant hit with urban women. Bling was one of Micromax's highest selling models. It was also high on experimenting with the Android platform and came up with the Canvas phablet range in 2011.

Micromax did everything right when it came to marketing itself and can be a great example of the bottom-to-top approach. Hiring Akshay Kumar as its brand ambassador, sponsoring cricket tournaments etc. built awareness for the brand across consumer bands, while a slow and steady build-up of ground network of retailers and service centres built market visibility. The carrot they offered; better margins than anyone else. If the Apple and Samsung’s of the world were out of the pocket range and the Nokia and Blackberry empires was crumbling under the Android wave, Micromax was one of the better known so called low end look- alike and do-alike in the market which enjoyed the retailer push and cost a third of a Samsung of the same specifications.  

When Canvas was launched, the advertising was one with an international look which was boasted then by Samsung and LG. This was a stage when the brand built an image suggesting that it could offer the functionality of a bigger brand at a smaller price tag. But the use of international star like Huge Jackman in its ads gave a sign that Micromax meant business and washed away its me-too perception in the market. With the launch of their assembly unit at Uttarakhand in 2013, the ‘Made in China’ tag is also soon to be cleared off its phones.

The two Asian giants are likely to encounter each other head on very soon. Micromax has gone global with Russia and SAARC, while Xiaomi after East Asia has entered India. Xiaomi’s launch on Flipkart saw its sticks wiped off the shelf in under a minute- which kind of talks of its level of awareness in India already. But one thing is for sure; even if Samsung might refute the survey figures and claims to have not lost its market share, the brands once termed the clones have attacked and the ground is set for them to assume clear leadership soon. 

G-means- the true taste of India

India is a big country- both by size and by population. Another fact is the vast diversity in terms of people and cultures that are found in India. Every region has their own food and ways and means to cook the same; resulting in a very typical taste. This would just elaborate how difficult it is to have anything single food product that can appeal to the entire Indian palette. Something which can be found in every nook and corner of the country, affordable to every Indian, nutritious and can be rated as the safest food possible.

Humko pata hai G; Sabko pata hai G- it is the modest pack of Parle-G biscuits

In case not known that Parle-G is the single largest selling biscuit in the world by volume. In 2013, Parle-G became India's first domestic FMCG brand to cross the INR 5,000 crore in retail sales. While India is the biggest market for biscuits in the world with 22% of the consumption pie; the United States comes a distant second at 13% with Mexico and China followed.  To put things in perspective, as per 2011 figures, the volume sales of for Parle-G outruns the total biscuit consumption volumes for China. How about that?

Biscuits are not a part of the traditional Indian food plate and have predominantly entered the Indian household by virtue of the British. Though we can say that some savouries like nankhatai or maska khari came into India by virtue of Mughal- Persian influence, tea time snack as a concept is so very English. Today, the cup may be having tea or coffee, but I doubt if anyone in India has yet enjoyed dipping in a Parle-G in it. The familiar package with yellow lines on white, the Parle G girl and Parle written in the red pentagon is possibly the first brand every child in India might recognise. 

It is impressive to know that Parle-G has been in production since 1939 from a factory at Vile Parle in Mumbai and not much seems to have changed since. The biscuit still rolls out from the same facility (along with a dozen more across the country) and almost entire area around the Parle East-West flyover and passing trains on the Western Railway are treated to its sweet aroma.

From the time I have known the biscuit, the only change I have seen is that the pack used to be of wax paper which has now changed to a plastic wrap. But as far as packaging is concerned, I have seen them being served from biscuit tins in my school, my PG roommate having a 800gms pack in the pantry, a `15 pack which is most popular with trekkers and small packs of `5 which is available in most retail and corporate canteen as a snack with tea. In fact, I have even seen a `1 pack with just 4 biscuits which a roadside tea stall offered.

I saw a small interview of Ajay Chauhan, the Executive Director of Parle Products Ltd on a BBC show called Made in India, and some of the things he mentioned about Parle-G which are so very true. This was not their first product and started almost 10 years after the company started. It was simple and packed with energy; the reason why during the WW II, all the Parle-G stock was diverted away from the domestic market to feed the Allied forces fighting across the globe.

Today, it is a mass product which finds it rightful place in the urban as well as rural markets; thanks to its affordable price. This is a conscious decision to ensure the value-for-money proposition never fails. By virtue of more plants to reduce transport costs, operational efficiency and waste reduction, the company ensured the price was constant for almost 10 years. So etched is the brand in the minds of people that it is not unusual that after anyone donates blood; he is first greeted with a beverage and a few Parle-G biscuits as an SOS nutrition replenishment.

Today, the market has many glucose biscuits like Priya Gold, Britannia Tiger, ITC etc. but none have managed to reach the iconic status of Parle-G. In my living memory, the competition has used celebrity endorsements ranging from actors to cricketers to push their sales; but have seen only four sparingly used, campaigns from Parle-G. While one featured Parle-G as the choice of the biscuit for the young and the old, one featured Mukesh Khanna aka Shaktiman. A feature led ad was when the wax packaging changed to plastic wraps which kept moisture away. The last seen was the ‘G- means Genius’ campaign. Even without heavy advertising, 400 Mn Parle-G biscuits are made every day and sold across 6 Mn outlets in various packaging.

While Parle-G is an endearing sight for Indian expat population each time they visit an Indian store in their vicinity, it has appealed even to non-Indians. I had a reference shared of a Japanese businessman carrying a whole bag of Parle-G back home just because it was one of the memories he had working on-site at a project while in India. In the US, a 418 gms pack is sold at 99 cents while a 80 gms snack pack for as low as 15 cents.

Parle-G is truly an iconic brand from India, which has won numerous awards globally for its quality and taste. In my opinion, biscuits many not be of Indian origins; but Parle-G rightfully is the ‘taste of India’ unlike any other. 

Kingfisher- the flightless airline

It has been an interesting few days considering the week before saw some 3 commercial airliners and a military chopper fall out of the sky for various reasons. Today the newspapers had two headlines featuring two Indian airline companies for two different reasons- Spice Jet asked to reimburse passengers on a flight delayed for over 5 hours due to technical issues and the other being a bank statement on the loan defaults of Kingfisher Airlines.

Considering the number of discount fares for far off future being offered each month, I have my suspicions on the available operating cash reserves with Spice Jet. Sadly, Kingfisher Airlines is a living case study of what can eventually happen to an airline in a high debt ridden civil aviation sector in India. Each time I fly, I see Kingfisher planes, baggage trollies, ladders, etc. parked away in remote corners of almost all major airports. The check-in counters which once boasted of a staff worthy of being ramp models are empty and as we all know; they either migrated to the hospitality industry or are rendered jobless.

An airline which was once the Captain Pompous in the Indian skies has definitely left a bad taste for employees, investors, vendors and suppliers and the travellers alike. It has indirectly affected the overall business environment as the name or the brand of any company no longer has the capacity to command over vendors. Human resource policies where employees were not paid for months together but also not allowed to change over to other jobs without forfeiting their part claims have set a very bad example. As for the airline industry, it has set a benchmark of what can happen if profitability through operations get ignored.

Kingfisher Airlines and its acquisition Air Deccan both had been ground breaking concepts in Indian aviation. Jet Airways had established a leadership position against Indian Airlines and Sahara- the three emerging as the survivors of the first batch of open skies after ModiLuft, East West Airlines, Damania shut shop. Air Deccan was the first low cost airline in India and it can be said that the skies have been never the same again. While Deccan enabled the common man to fly, Kingfisher changed the flying experience with a young and vibrant appeal and also introduced the economy passenger to services like in-flight entertainment (IFE); a service rendered only to first class passengers so far.

Deccan and Kingfisher were riding on what Southwest and Virgin Atlantic had successfully shown the world. Both these airlines had an impact on the aviation industry to a fair extent. It was evident from the fact that Jet and Indian Airlines also offered IFE and on board catering got revamped. Kingfisher also prompted some rather rash moves like Paramount Air which had a 100% first class concept. Deccan on the other hand set off a string of low cost airlines like Indigo, Spice Jet and Go Air.

This triggered a price war in an industry which was already grappling with high airport tariffs and fuel bills. In 2007, while Jet and Indian were surviving with profitability on international routes, Sahara was plagued with low occupancy and went up for sale. Deccan was also grappling with a high debt crisis and sustainability became difficult. This was possibly the place where Kingfisher pushed things a little beyond its grasp. While Jet was all set to take over Sahara, Kingfisher attempted to challenge its rival by staking claim for Deccan. The move was motivated for the international flying license granted only after 5 years in service; which Kingfisher would get 3 years in advance by virtue of the merger. Sadly, what it brought along was a lot of debt as well.

I guess it was ambition driven rash decisions which led to the downfall of Kingfisher. IFE on planes is heavy on its set up cost and has an even higher running cost. Suppose a flight has 3 channels and every seat pays Rs 150 as royalty to the content owners, a plane with 180 seats will be paying about Rs. 27000 per flight for just IFE. And let me tell you, this is a very conservative estimate. Not to forget, with IFE came the IFE equipment which adds in weight, plus cost for head phones and maintenance. What all can you push back to the customer when the market is bleeding in a price war?

Kingfisher believed that going international was the way to get into profits. The biggest reason to believe was Jet Airways could garner profits in a cut-throat scenario. Sadly, it was operational efficiency that works in the aviation sector. Both Deccan and Kingfisher were failing to achieve it. Kingfisher was notorious for attracting pilots with lucrative salaries and high incentives, lavishness across the board and thanks to the owner- sponsorship on Formula 1 cars. Sadly, all this was adding to the debt and not so much to the revenues. Then it was the ego and arrogance of Mallya- where he pledged his personal assets and his flagship UB Spirits to keep the airline afloat. His political weight also ensured that the airline; though bankrupt, was not grounded.

The license for Kingfisher was finally revoked in 2012, but the airline still is a willful defaulter on the list of its lending banks. The highly paid staff is yet to be paid their dues and has been practically rendered jobless. Those who had invested in assets against a high income at one point are fighting for survival. And as for Kingfisher, apart from loss of credibility, the group also came on the brink of losing its majority stake in its flagship companies. 

Every industry has their skeletons and ghosts which haunt their working for months and years after they happened. Kingfisher is going to be one such ghost for the aviation sector; and when I come across a discount ticket sale for tickets as much as 6 months in future, it triggers a thought on the cash-flow situation for the airlines. It is also going to be a standing example for every vendor and also employees as a brand where by virtue of its clout defaulted on payments and set arm twisting business terms. 

Selling an Idea

A few weeks back, Adani Wilmar and its ad agency Ogilvy & Mather came up with an ad for Fortune cooking oil. I saw it on Day 1 of its digital release and practically showed it to everyone I know as a master piece of an ad. Honestly at 4.43 secs, it was less of an ad and more of a short film- and there will be very few occasions you will actually see this ad in full on-air. In case anyone missed it; this is the link. https://www.youtube.com/watch?v=SFzTl3NZtsQ  

So, I guess we will all agree that this ad has a super emotional connect with Indian audiences- we can go out to any lengths at times to get home cooked food and food cooked by our mother possibly has a mix of divinity in it. It can be safe to say that we can skip a gourmet/ 5-star chef/ Michelin star rated restaurant for a morsel of home cooked food by our mother.

While the ad has caught the imaginations of people (especially from the ad world), can it boost the fortunes for Fortune Oil is yet to be ascertained. Never the less, the ad is most likely to win awards for the agency for sure.

Which brought me to a question that often intrigues me- How did this happen? The whole ad is just one statement; ‘Home cooked food is the best’. Saying it aloud didn’t even take me 4 secs and here we have an ad which has put across these 6 words in possibly the most interesting manner. How has an idea, with no mention of the brand name till the end slate, germinated from possible aim to boost sales? What would have been the discussions and thoughts while all this was possibly just- an idea. I actually talked about this to a few friends trying to understand how this might have got sold to the client (who might have invested an 8 digit budget in the production alone).

Being someone who has sat across on both sides of the table in a Client-Agency briefing; this is how I believe it went. The client offered the most clichéd of statements- “we need more sales and better recognition for our brand; make an ad.” The agency guys must have spent a few days exploring the world and came back saying: “Your brand is just a cooking oil and it needs a character. Everyone else is talking health, less of this and that. It is no longer fun to say we care for your heart… let us rather connect with the heart. We all eat food, let us take food as the platform and make some connection”. 

A few more weeks may have gone in choosing the right connect. Healthy food, tasty food, non-greasy food, hotel like food, home-like food… and the ‘Eureka’ moment- the food no amount of money can buy- Homemade food. So why are you not getting homemade food? Away from family and single, in a hostel, on a border post, travelling job… there can be so many reasons; but they are all mostly physical limitations. 

What is a scenario where you have you family around but still no homemade food? Are you on a diet? No- you are on an enforced diet, you are in a hospital.

So now we have the premise and a real life setting- a hospital where outside food is not allowed and a scenario where persistent relatives want to steal in food. This cycle is like a routine and we all might have seen it. So now how do you break the status quo? Let the person in-charge also succumbs to the homemade food and the iron hand melts into a mellow human heart. Homemade food wins hearts and Fortune gets a new place in consumer minds.

I don’t think anyone will not agree with the flow of thought as it is almost logical. The idea by itself is not entirely unique; which is another way of me saying that ‘Ideas are no single person’s domain.’ The lesson here is selling the idea across to the client. In my opinion, Ogilvy & Mather has done a fantastic job in this area- a simple idea laid down in an interesting manner. That is the difference between anyone who might have an idea viz-a-viz an ad agency selling an idea or a concept.

The closest anything or anyone can come to what an ad agency does is an artist painting a motif. Every creation is expected to be different and better than the earlier one. Both are termed to be only as good as their last work. The only differences are that for an agency, it has to appeal to his clients who commission their services and the spending is astronomical. There is a fixed budget, an end objective and time frame to complete the job. Creativity is confined within these limits.

Imagine the levels of rejection an agency might face. What would have happened if the client had refused to choose an emotional path and asked for a more rational sales linked ad? Or it had expressed concerns on how can someone talk of breaching hospital regulations; possibly face a backlash for it? Even after the concept is agreed, the execution, actors or the end result- anything can fail; and sadly the agency has its own reputation at stake if an ad fails to be noticed by the audience.

I believe this is the space where a big agency with a mix of its reputation and experience scores. Much like a consultant or expert in its domain, agencies can handhold clients through their fears. Showing rough sketches, stills, a complete virtual run before shoot; everything just to ensure that the client has complete faith on how the idea is shaping up. Unless the agency and the client both live and breathe the idea; it cannot transform into reality.

My final take- an idea needs wings to fly, this is true for any idea, concept or possible even a new approach that you wish to sell. Conviction on part of the thinker is not enough. It has to be substantiated with a mix of proven track record along with a constant reassurance. It is only then that both parties will have complete confidence on each other to deliver the good so perfectly. Maintaining this balance is the only way to sell ideas- an idea which otherwise is just a thought in our minds. 

Break the rules to be the Master in e-retail

One of my professors during my MBA has made this statement like his own- ‘Learn the rules; master the rules; break the rules…’ – not to mention his context was related to photography and the same line echoed in two other colleges where he taught. Strangely, this was very much applicable to any business entity or anyone who was looking to make a breakthrough in their field.

I don’t think I need to reiterate my fascination with online retailing and the sheer pace at which this is transforming the business dynamics. I wrote a blog last month about how distinguishing between two online retail sites is turning into various shades of grey. Almost anything and everything is now going on to an online selling model and while success and longevity of their success are the key areas I question, I will agree that it is making an impact for sure against traditional retail.

In the last one month, I have purchased customised T-Shirts, green groceries, electronics and even furniture from online sites. I have pushed by spending envelop to almost 10K ticket size at one time and I must say, I am getting increasingly satisfied with my experiences. The reason- increasingly, online sites now are going all out towards customer delight.

I was lured into buying groceries on greenkart.com simply to buy 250 gms of cherries for Rs. 25 bucks. To make sure I didn’t pay for the delivery; I added in veggies and other processed foods to get the ticket size cross Rs 400. All the stuff was delivered to my door step the next day at a prescribed time band which most suited my folks at home, something even the regular local baniya never adhered to. Sorted vegetables and fruits of good quality and well packaged along with prices lower than MRP for packed foods was definitely a surprise. So what was the winner here- Quality and Convenience.

I am not ashamed to say that even if I’m not a member of their loyalty circle; I admire Flipkart. In a matter of 4 hours on a particular day, I placed an order for a sound bar, two cell phones and a memory card. The sound bar and memory are delivered in 14 hours of the order booking and the cell phones within 36- all on standard delivery. Not to mention that I was in no haste for any of them, but the Speed of Delivery is a complete delight.

In comparison, Snapdeal was more on the assigned delivery time and Fabfurnish was delayed but within their timelines which talks of working days (the site has no mention if a week is 5 or 6 days).

What has been fascinating though is the kind of differentiators coming up the market every day for these sites so as to build that ‘Wow’ factor and score more customers. Like for instance; Groupon is a ‘Deal-of-the-day’ site but has always come up with areas of making its presence felt in the uncanny manner. Last year, at the peak of the onion crisis, Groupon gave away a kilo of onions at Rs.9; this year they are offering a Rs. 100 cash back for booking railways tickets on Spice Safar.

Amazon is not left behind; as they have introduced eGift Cards as a means to eliminate the need for thinking your brains over for giving someone a gift. Innovative; well Amazon always give vouchers in case of a make good; but now they are roping in customers through their existing customers.

Lastly, I got an emailer in my box today from a site called trophykart.in which is an online portal to sell trophies, mementoes and medals through an online site. This many not be a mass consumer product category; but has huge potential as for business units and corporate houses. I have personally worked on projects where I was expected to get some kind of trophies for people to be felicitated. The problem was that even in Mumbai there are a few reputed suppliers doing the job and as a result, it is more of a sellers’ market. Payment terms and deliveries were never up to the mark for meeting expectations and overall it was a convincing game people had to play to negotiate. This site has the potential to overcome these hassles as payment over a card of bank transfer is possible. One area I feel will not be addressed samples- as there are at times multiple levels of approvals and physical appeal required to get the design across.

What will work, what will not- it is still unclear to me. But at present one thing is for sure; everyone is looking to build that edge on the competition as the battle for survival intensifies. This is one game where ‘this is not the way things function’, is a taboo. The Master here is one who will challenge the rules and break them to surge ahead to forge new rules.  

Hindustan Unilever Ltd: A segmented universe to an asteroid belt

I don’t think anyone in India who is anyway related to marketing does not dream to be working for this organization- Hindustan Unilever Limited (HUL). It is hardly a wonder that it was voted the No. 1 employer of choice by B-School students across India in for the fourth year running in 2013. Not to mention, it is always an interesting bit to keep track of to get some indication of the market dynamics.

Amongst the biggest spenders on advertising in India, HUL is also amongst the companies which has a long history of presence in India since 1933. If god said, ‘Let there be light’, Unilever broke the dawn of brands in India with Sunlight. I guess the choice of category to enter India was spot on considering use of soap for washing clothes was basic to any household in India. It was merely an act of deviating people from the task of making soap at home with something now available at a shop in ready form.

This might have been the easiest of tasks as far as we talk of migrating customers to switch from traditional Indian ways to branded packaged products. Personal care products used aspirational value through association with film stars (or some of it was taken from the colonial rulers of the time). Competition was always around with Indians companies like Tata Oil Mills (TOMCO) and Godrej soaps also making a mark on the market, while global giants like P&G came into India in the 1950’s to capture its share.

Today, HUL has a dominant presence in the Indian market across four key verticals of Personal Care, Home care, Foods and Water purification products. Significantly, most of its dominant brands are home grown. It is some fringes in personal care like Lakme, Hamam (both acquired from Tata) and Foods (Kissan and Modern bakery) are acquisitions. A definite mention required- PureIT water purifier is the only product which bears the mother brand - Hindustan Unilever Limited mentioned across its face right up front.

A recent look at the brands under the personal care range put up a few questions in my mind though.

Look at the range of soaps HUL has today- Axe, Breeze, Dove, Hamam, Lifebuoy, Liril 2000, Lux, Pears, Rexona, Aviance Marine Soap. Of which I’m sure, other than Axe, Dove and Aviance, all have at least two or more variants, taking my available options to a conservative 20 (Lux has in excess of 5 for sure). While this might sound impressive, I see this as a segmentation challenge and a daunting marketing task. I agree, some segments are well defined here- Axe is for men, Dove and Aviance for skin care, Lifebuoy is hygiene, Liril 2000 and Rexona both talk of freshness, Pears is glycerine based and Lux is a beauty soap. I would have guessed Breeze and Hamam hold the bottom of the pyramid market for beauty and hygiene.

But when I went into a price comparison from an e-shopping portal, I was totally confused. For a 75 gms bar, Dove was at Rs. 46, Pears was Rs. 36 and Lux variant was Rs. 27. Liril 2000 was priced at Rs.29.In the 100gms bars, Hamam was Rs.26 while another Lux variant and Rexona were Rs 24. Lifebuoy was for 125 gms Rs. 24 which was actually the cheapest in the weight to price comparison. I could not get any indication for Aviance. Bottom line; was there a price segmentation or the entire affair was running only by means of product variants? Besides, the category is not isolated of competition with Vivel and Fiama Di Wills from ITC, Cinthol and Godrej No. 1 from Godrej and other players like Santoor, Himalaya and Nivea also flooding the market.

A look at the shampoo segments was equally appalling. HUL has Clear, Clinic Plus, Sunsilk, Dove, TRESemme and all their variants against a battalion from P&G, Nivea, Garnier, L’Oreal, Pantene and Himalaya all vying for the same purse.  

For the moment, I’m a confused customer when I have to buy bathing soap. I really cannot differentiate the products if Lux, Rexona, Breeze and Fiama Di Wills are placed before me. As a buyer, a difference of under Rs.5 doesn’t even register. On a given day, if my choice of soap is not available at a retailer, I don’t think brand loyalty will cause me not to defect to another brand. Customers today will be spoilt for choices of variety in terms of product features, packaging and all at a price they are willing to pay as per their need of the hour.

A question I pose- is there brand loyalty alive in products where product variation and price differences have shrunk to almost negligible?

I guess segmentation in recent times has virtually come down to retaining a customer by offering a yes to every need posed. You want fragrance, glycerine, hygiene, moisturizing, herbal; name it and I have a soap which can satisfy your need. If more than one- that is also possible. Add to it price promotions and bundled offers, and a customer will take no time to switch to a new brand. Every need today will have a bombardment of choices thrown at it. I guess HUL or any other company these days, is willing to offer a chance for a customer to look at any other shelf for anything they need.

The universe for a customer was once possibly as well segmented as the solar system. Every brand possibly had its own unique place which the others did not share. I guess it is the mass consumerism in India that has promoted all this competition which has made it more of an asteroid belt.  

How do brands die

I have often mentioned that being born in the 80’s and living through the years after has offer me and my generation an un-paralleled advantage- We have seen the world change in bits and pieces, day-by-day. Technology from my childhood is obsolete in most cases today; the one still around only have classical value. What the changes have also resulted in has been the fall of dominant empires and rise of new ones which replaced them. Some like Sony who changed with times still hold their stature. I don’t think people rate the technology of a Bravia, Vaio or Xperia lower to the Walkman at some point in the 80s. Sadly, the ones which got lost in their own glory to forget the art of adaptation went on to immortalize Darwin.

One of the most appealing and fascinating gadget my father had was an SLR camera from Minolta as well as a point-n-shoot Nikon. But what had to be treated with immense respect irrespective of the make was the camera film. So it didn’t matter if Sakura was now Konica, Fuji was cheap or Kodak was expensive- if by chance the film from any one got exposed accidentally opening the reel cover, down the drain went the memories. The films also demanded respect as you could click only 36 shots per reel (yes, there were some shady ways to do more on the same reel), so taking a picture was like a responsibility.

I took some time to read up on Kodak for making a case study and realised that Eastman Kodak was the oldest and the biggest player in the camera film plate arena for close to 100 years when I might have held a camera. It was a legend that had over 90% market share at one point thanks to its smart selling strategy of cheap camera units and milking the film and photo paper cows. Along with Gillette and its shaving blades, this was another great example of making the big profits on the consumables- something still followed by a lot in the market.

After the patent for the film plate was taken, a folding Kodak pocket camera in 1890, which was pegged at a very affordable price of $25. The main stay was the $10 to process and print the pictures which in combination with the camera paved the road to greatness. I’m not sure when BTL marketing was officially recognised, but in 1897, Kodak sponsored an amateur photographer contest and saw 25,000 participants. In 1904, Kodak held a Grand Kodak Exhibition featuring 41 photographs to attract an audience for the art. This connect is so natural that I cannot imagine if this marketing proposition might change for such events today.

The ads were so powerful to take the photography to people other than professionals - “You press the button- we do the rest”. Not to mention, signage’s along the roads reading, ‘Picture ahead’ with the well-recognised Kodak name under the sign is fabulous use of ambient media. The term "Kodak moment" might be used for eternity for every memorable picture. This was the strong brand connect that Kodak has in the memory of every individual. Sadly, I feel it won’t be wrong to say that no one uses Kodak in taking pictures any more.

The demise of the brand to the levels of bankruptcy in 2012 has been a classic case of treating it as a product offering and forgetting that the brand was a living being with a personality. Much like a human being, it has to adapt to changes and transform its role in the life of people to maintain its relevance. Yes, handling competition was important- so was transition into technology that could change the business dynamics. Kodak had developed a digital camera in 1975, the first of its kind. But the product was dropped for fear it would threaten Kodak's photographic film business, which was already facing threat from Fuji by means of its competitive pricing.

Marketing Myopia, as my marketing professor preached was like being so much in love with your products that you become completely ignorant of what damage this obsession leads to your own self.  The outlook from the management always remained that profit for Kodak was in making money on the consumables side as the optics was just a one-time buy. Digital imaging transformed this myth and when Camera phones came out, Kodak went into the business of vendor driven memory chip business.

Kodak had a fabulous connect with people and their memories. They had done everything right from the very beginning to reach a stature no one else can possibly manage. All they needed to do was possibly maintain that connect irrespective of selling films to feed their camera. If the phone got a decent camera, the logical move was to bring out a super camera that could also be a phone. Photograph= Kodak; that was the least or most they has to ensure. Sadly, they missed the bus and ran out of business.

What all this only signifies is that brands are like living beings interacting with their users. People wish to be associated with a brand for a part of its persona that builds these bonds. If the threads of this bond are not recognised and the relation turns into a transaction; you might just be the next Kodak.